This is Bloomberg Law with June Grossel from Bloomberg Radio.
Jill and I Kamlin Doug.
The entire administration doing everything we can to advance equality for the LGBTQ community in our nation.
The entire nation. The Biden administration made LGBTQ rights an important part of its agenda, including a Title nine regulation protecting transgender students that was touted by administration officials as a signature achievement. But President elect Donald Trump has promised to undo protections for transgender students with a.
Stroke of my pen on day one. We're going to stop the transgender lunacy, and I will sign executive orders to end child sexual mutilation, get transgender out of the military and out of our elementary schools and middle schools, in high schools well.
A federal judge in Kentucky has beaten Trump to the punch, striking down the Biden aministration rule barring discrimination based on sexual orientation and gender identity in federally funded schools. Judge Danny Reeves scrapped the entire fifteen hundred page regulation after deciding it was fatally tainted by legal shortcomings. Joining me is Samantha hunt a lawyer and equal Justice work fellow
at a better balance. Samantha tell us about this Title nine regulation that the Biden administration put in place.
So I think to understand that question, it's important to know what Title nine is. So Title nine is a federal law that protects students from discrimination on the basis of sex, including discrimination that students face at school because they are pregnant. And since the original passage of Title nine in nineteen seventy two, discrimination on the basis of things like pregnancy, childbirth, rental status have been included in
the scope of the statute. So what the twenty twenty four Biden regulations do is that since the Department of Education is a federal administrative agency, this means that the agency often can issue regulations called rules to interpret the meaning of Title nine, and that just means that the agency explains what it believes the scope of Title nine is and the protections that it offers. So these regulations alert recipients of federal funding, in this case, schools, about
what their obligations to students are under the law. The Biden regulations clarified protections for students across the country, including for pregnant students, for student survivors of sexual assaults, and for LGBTQIA students by explicitly defining Title nine scope of protections. So, for example, the regulations clarified what kinds of modifications that pregnant students can access so that they can learn while
caring for their pregnancies. These regulations are really important. We at a better balance run a free legal helpline and we often hear from student callers we're facing issues getting really modest accommodations that they need so that they can learn while caring for their pregnancies. And what these regulations did was it made it more explicitly known what schools
are required to offer them. So, for example, the regulations make it a lot easier for students who give birth to request the scheduled exams if they miss one while they're out recovering from childbirths. And these regulations essentially make it easier for students to get access to protections that Title nine has always been meant to cover.
With the controversy over transgender rights that's blown up, what does it do as far as transgender students.
That's a great question. So a lot of this case focuses on the concept of gender identity. And what the regulations really do here is it clarifies that the protection against discrimination and harassment on the basis of sex includes on the basis of sex, stereotypes, sexual orientation, and gender identity. So what it really does is it just makes explicit for the first time that students like transgender students have
these protections. Now, we have always argued that transgender students are protected under Title nin but what the Biden administration did with these regulations is made it explicit. And so by doing that, making it easier for students to assert their rights and get the protections they deserve.
So now a federal judge in Kentucky has vacated the rules. He said that the rules turned Title nine on its head, and he did this on several grounds, so let's take them one at a time. He said, there's nothing in the text or statutory design of Title nine to suggest that discrimination on the basis of sex means anything other than it has since Title line's inception. Tell us about his reasoning there, and whether you think it's wrong or right.
So the court.
Held that the Department exceeded its authority by interpreting on the basis of sex to include gender identity. The Court believes that on the basis of sex really narrowly means that schools receiving federal funding may not treat a person worse than another similarly situated individual on the basis of a person sex signed at birth, which in the Court's view means strictly sis gender male or female. We think
the Court got a lot wrong here. We disagree with the Court that bias stemming from a student's gender identity is not a form of sex discrimination. It very clearly is, because bias based on how a person identifies or expresses their gender, or on the sex or gender of who someone loves is inherently rooted in stereotypes and assumptions about sex based roles.
He also shot down arguments that the federal government made that the Supreme Court's decision in the Boss Stoc Case, which protects employees against discrimination because of sexual orientation or gender identity, that that applies to Title nine here right.
And we disagree with the Court in holding that Bostov versus Clayton County is not comparable in its application to Title nine. So in Bosstoc. The Supreme Court addressed a nearly identical question as the one in this case, holding that sex discrimination under another federal law, Title seven includes by death definition discrimination because of an employee's sexual orientation
or gender identity. We think that this decision is on the wrong side of history in that regard, and we also think it is a break from precedent, because the Supreme Court has held that bostoc has always included gender identity.
Another ground is that the Education Department exceeded its authority, and here he cites that decision last term in Low or Bright, which limited the regulatory power of federal agencies.
So the Court did hold that this apartment exceeded its authority by interpreting on the basis of sects to include gender identity. Once again, we disagree. Even absence the force of law that Chevron previously gave to rules, we believe that courts have held over time that gender identity is included within the scope of Title nin and that's evidenced by the fact that a very similar question was answered
in Bostock. And so the Court is really breaking with precedent here by holding that the government exceeded its statutory authority to interpret its own regulations.
And there was even a free speech ground. He rejected the rule on free speech grounds that it violated teachers' rights by requiring them to use students' preferred pronouns.
So, yes, the court held that the regulations are violative of the Constitution a couple of ways, And one is that argument that requiring schools to protect students against discrimination based on general identity might in some case lead to a student accusing a teacher who uses their wrong pronouns of sexual harassment. And we think that that's just not true because to investigate sexual harassment, the Biden administration's regulations still requires a conduct be severe or persuasive and to
limit the student's access to their education. So we think that that argument doesn't really have any basis here.
Changes only took place in twenty four states because the rest of the country judges had put the rules on hold. I mean, it's a short period of time. But did you see any significant difference because of these new rules.
The answer to that is yes. And that's another piece that we think the district court got wrong here. They said that this isn't going to disrupt students in their educations because in part half the states had already issued injunctions regarding the regulation, and we see that simply not true.
A better balance runs a free legal helpline and we get students to call into the helpline looking for access to modification so that they can care for their pregnancies while also learning and not being excluded from their academic programs. And we have found that absent the clarity that the Biden regulations provide about what kinds of modifications pregnant students can ask for, it becomes a much larger fight for students to get what we believe the law has always afforded them.
So the stakes are.
Really high for students who need access to clarified protections to make it easier for them to get what they need from the law. And we've been doing this work since before August first, when the Biden regulations went into place, and we've seen time and time again that absent that explicit clarity, students face huge battles before they get what they need.
Where does it stand? Because the US Court of Appeals for the Sixth Circuit heard arguments in October on this judge. Judge reeves preliminary injunction, but it has yet to rule, so where does this particular case stand right now?
So I think what we would hope to see is an appeal from the federal government challenging this decision and either asking for a reversal or at least asking to
narrow the decision in scope. We think that a nationwide vacator is really dangerously overbroad, so we would hope that the federal government would see it has an interest in protecting itself against national vacators, and we hope to see some sort of appeal, either for a reversal or for a limitation in either geographical or subject matterscope.
President elect Trump has promised to undo the regulations protecting transgender students, so will that put a stop to this whole effort. I doubt that Trump administration is going to appeal. This judge is ruling, and the Biden administration doesn't have time to appeal it, does it.
That's a great question, and I think it's hard to say what exactly will happen. You know, we'd of course like to see the federal government appeal the decision, at least for the scope of the vacator. Like I mentioned, a nationwide vacator is a dangerously overbroad decision and a break from precedent, and I would think that any federal government administration would have an interest in opposing that kind of nationwide vacator from individual federal district court.
Let's say the Trump administration unravels the regulations. Is it possible for students who are affected by that to sue? Oh?
Right now, it's hard to say what would happen because at this point, since the regulations have been vacated, it's like they did not exist, and so there's not much unraveling to be done at this point by the Trump administration. I think what would happen, or what we would hope to see happen, is that there would be some sort of appeal to reverse this decision first, and then I think it would open the door for other next steps that remain to be seen.
There's been a wave of state legislatures passing laws against transgender youth. What's driving more than half the state's opposition to these rules for students? There always seems to be this focus on transgender students using bathrooms that align with their gender identity.
You know, I think you would have to ask the states that filed the lawsuits about their motivations, but I find it difficult to understand why a state would want to make it harder for its students to learn. And even though there's been a lot of focus on transgender students and their rights to use the bathroom at school that conforms with their gender identity, these regulations do so much more than that. They protect pregnant students from discrimination
at school. They protect student survivors of sexual assault, and I just find it hard to imagine why schools wouldn't want students to feel safe, seen and.
Heard at school.
Part of is it set new rules for how schools handle complaints of sex harassment and assault right yes.
One example of the changes is the sexual harassment portion. So before the Biden Raror regulation, schools were required to investigate sexual harassment if the conduct was both severe and pervasive and if it effectively denied a person equal access to their school program. The Biden regulations lowered the standard to require schools to investigate if the conduct was so severe or pervasive that it denied or limits a person's
access to their program. The rule also changed the complainant status, so before a school only had to investigate a complaint if the complaining student was trying to access their education at the time the complaint was filed. The bi and Error Regulations change this to require schools to investigate if the student was trying to access their education at the time of the inctudent.
And this had nothing to do with transgender athletes, that's correct.
This rule primarily focused on discrimination and harassment standards on pregnant students and on postpartum students, making sure that they have access to education and to modifications they need to learn, and by explicitly addressing that sex discrimination under Title nine includes discrimination on the basis of things like gender.
Identity, students still have rights under Title nine. What would you recommend for transgender students who feel they're being discriminated against based on their gender identity? What can they do?
So? This decision is devastating for students across the country because without these vital protections, students have to fight so much harder to get access to what they need so that they can learn free from discrimination and harassment. But what is important to keep in mind is that while the decision vacated the twenty twenty four Regulations, Title nine still very much exists. And offer students protection under the law.
We are going to be in the fight with students who need access to the things that they need to learn. We encourage them to call our helpline. We encourage them to reach out to us for resources if they're facing difficulties with their school. I think it's just important to note that ideally a student wouldn't need a lawyer's help to get what they need so that they can learn at school. They would just be able to go to
their Title nine coordinator. But we've seen that without the explicit clarity that these regulations provide, it makes it much harder. But they still have rights under Title nine and we can still help them get access to what they need.
And tell us a little about your organization. A Better Balance or a.
Better Balance is a national legal nonprofit organization that helps workers care for themselves and their loved ones without compromising their financial security. We help workers who need assistants getting access to pregnancy modifications, getting access to paid thick time,
paid family leave at work. And what my work does is expand some of that practice to be focused on students, so we also help pregnant and postpartum students get access to modifications they need so that they can fully participate in their school programs while caring for their pregnancies. Our helpline is free and confidential, and so when students or workers call us, they know that they have a private resource. And the helpline number is one eight three six three three two two two.
That helpline sounds like a valuable resource. Thanks so much for coming on the show, Samantha. That's Samantha Hunt of a better balance. A Florida federal judge ruled today that the Justice Department can publicly release volume one of Special Counsel Jack Smith's final report on the federal criminal investigations into President elect Donald Trump, detailing Trump's alleged efforts to
overturn the twenty twenty presidential election. But Judge Eileen Cannon extended an earlier order that bars the government from sharing the second volume of a special Council's report that relates to the investigation into whether Trump mishandled classified documents and obstructed efforts to retrieve them by the government. Joining me is Bloomberg Legal reporter Zoe Tillman. So he tell us exactly what Judge Cannon ruled.
So the first part and arguably sort of most significant is Judge Cannon said, I'm not going to stand in the way of Attorney General Merrick Garland releasing the first volume of former Special Counsel Jacksmith's report, and volume one concerns the investigation into Trump's efforts to overturn the twenty
twenty election. Of Federal Appeals Court previously had refused to intervene to stop Garlands from making a public Judge Cannon said, this really based on what the government has told me, has nothing to do with the classified documents case before me, so I don't really have any basis to step in here. The second part of her order, though, involves Volume two, which deals with the classified documents case, and what she said is I'm not ready to rule on this yet.
The Attorney General doesn't plan to make that part public given that there is still pending proceedings in that criminal case, but he does plan to show it to Some members of Congress and Trump's former co defendants have argued that's enough of a risk to their interest in the case that the judge should stop that from happening as well. So Judge Cannon said, I'm going to block Garland from
doing anything with that section. For now, I'm going to hold a hearing on January seventeenth, three days before Trump is inaugurated, and then presumably enter an order on what she thinks should be done with that volume.
Is it unlikely that this is going to be the last word on the matter. Might the defense lawyers seek to challenge this all the way up to the Supreme Court?
So far their mum on what they plan to do, But it's certainly possible. You know, right now, the ballgame is Volume one, because the Justice Department has already said that Garland doesn't plan to release Volume two. You know, whether members of Congress might you know, end up making
parts of Volume two public after they see it. That's sort of several steps down the road where right now, you know, to the extent Trump's former co defendants in the case, who have Trump's support in this, if they want to stop the public from seeing at least some of Smith's work before Trump is inaugurated, at which point he would have the ability to keep it all under wraps,
you know, they have to do something. Judge Cannon's earlier injunction expires at midnight, so as of Tuesday, there is nothing legally stopping the Justice Department from making a public So whether it's trying to go back to the Eleventh Circuit, which has already said no, or silence kind of emergency application of the Supreme Court, those are their options at
this point. And I should say also, you know, the Justice Department may want to get a ruling sooner on Volume two and not wait several more days to see what Judge Cannon's going to do.
Special Counsel Smith, though, transmitted the report and is out of the picture now.
That's right.
Judge Cannon, in her earlier order robuffed a request to stop Smith from giving a copy even to the Attorney General. So that has happened when the Attorney General formally gave notice to Congress that he had it, and Jack Smith, as of late last week, had, in the Justice Department's words in a footnote quote unquote, separated from the Justice Department sort of a very unceremonial departure for someone who has been such a significant figure in all of this
for the past two years. And so he's gone and this is now up to Justice Department lawyers to fight out in these final days of the Biden administration.
Does everyone assume that when Trump takes office and there's a new Attorney general, that they're going to drop the classified documents case against these two co defendants.
That's right. There is an expectation that, you know, it'll be a direction to drop it. Whether there will also be some kind of clemency action for them that would head off some future investigation or prosecution, that's sort of unclear.
That would really mean the end of the case for sure. Thanks so much, Zoe. That's Bloomberg Legal reporters, Zoe Tillman. Coming up next will the Supreme Court keeping in junction in place that blocks the Corporate Transparency Act. This is Bloomberg. The Supreme Court is expected to rule soon on the nationwide injunction issued by the Fifth Circuit Court of Appeals that blocks certain ownership reporting requirements under the Corporate Transparency Act.
The CTA requires companies to disclose their true ownership. Finsen estimates that thirty two point six million existing US businesses plus another five million newly incorporated ones each year will need to file reporting information, and that businesses will spend one hundred and fifty million hours and thirty billion dollars
coming into compliance. The federal government made an application for a stay of the injunction on New Year's Eve, saying it would be harmed because the injunction cripples the Treasury's efforts to enforce the law while sowing confusion. But a group of twenty five Republican Attorneys general filed to brief supporting the plaintiffs who sued over the CTA reporting requirements, agreeing that the act would create a substantial compliance burden.
Joining me is Joseph Liniac, a financial services partner at Dorsey and Whitney. It's a bipartisan effort passed in twenty twenty one. Explain what the Corporate Transparency Act.
Is the best way of viewing it is. The Corporate Transparency Act is an expansion of existing law that's been in place for many years, whereby banks and other financial institutions when they make a loan have got to identify who owns the borrower if it's a company, and identify
a senior officer. There was a negotiation that took place over several years where the banks were complaining and I think reasonably that the burden of this disclosure scheme fell on them and actively solicited the government to take over
summer role of the rules. So in an omnibus bill for the Defense Department, they included the Corporate Transparency Act, which established for the first time the requirement that, besides getting a loan from a bank, if you organize the company, and for the most part it's going to be smaller sized companies, you have to identify who owns twenty five percent or more of the company, as well as who
exercises what's known as substantial control over the company. Now, a company is generally going to be an entity that requires registration with a Secretary of State or comparable office, and fincend is the enforcement agency. They issued regulations I believe in twenty twenty two establishing the requirement that several
categories that people begin to register. They identified who the exemptions were, and effectively the beginning of this year, meaning January first, twenty twenty five, about thirty million entities were required to register with fince N and several lawsuits were filed. So right now we're in this giant mess waiting for the Supreme Court to take some action.
So the first lawsuit was by Texas Top cop Shop explain some of the arguments they raised against the CTA.
They were saying their privacy rights were violated, but those constitutional claims were effectively not addressed by the court. What they argued was that this was unconstitutional because it wasn't supported by the Commerce Clause, in which Congress regulates both interstate and foreign commerce. And the Court agreed with them and issued, in a somewhat surprising manner, a nationwide injunction against anyone having to comply with the rule until such time as an appeal could be held.
But what were the government's arguments about why this law should go into effect.
I believe the government, frankly, has got very very strong arguments. The ability for Congress to pass the law impliedly means that it's constitutional, and there's a very very high burden that has to be met in order to just say, read the law it's facially unconstitutional. That's number one. But more importantly, the Department of Justice pointed out the Commerce Clause and the Necessary and Proper Clause of the Constitution clearly gives Congress the right as well as the executive
to be able to legislate and enforce laws. And this was just really an extension of what previously had been in place, and while there may be some conflicting rights here, the ability of government to be able to prevent money wandering, financial crimes, human trafficking, to be able to regulate taxation and avoid tax frauds, and other enumerated powers either held
by the Congress or by the executive. I think importantly the focus here is lift the injunctions so we can proceed and we can let litigation and regular course go through, ultimately maybe coming back to the Supreme Court to rule
on the constitutionality issue. As a side note, one of the things which has been raised and that this has been a concern by both political parties, depending upon who is in charge of the willingness of some courts to issue nationwide injunctions and doing that really interrupts the flow of litigation around the country, where you can have different circuits with different opinions, but if you have a nationwide injunction,
all of a sudden, everything just simply stops. And the Supreme Court itself, through one of its committees, has indicated to the circuits, you really should not be doing it, but they've gotten pushed back, particularly from the Fifth Circuit, saying we've got the right to issue nationwide injunctions, and I think that might close the Supreme Court to weigh in on this and to issue instructions to the lower courts as to when they can or should issue these
national injunctions, which can be particularly punitive to the ability of government to be able to regulate.
When the Trump administration comes in, I mean, are they likely to have a different viewpoint on this law?
Good question, and at least in my experience, the dividing line on these types of issues is between individuals who feel strongly about national security and law enforcem and those
that do not. Now, you may have a business component where people just think it is unfair that we have to provide this information to the government, But I think the dividing line is really law enforcement advocates and those that do not feel that that is a priority and law enforcement they believe that this type of information is very very helpful to avoid again money laundering, because if you're able to make an investment in the corporation and you don't have to identify who you are, and you
may be a nefarious character that facilitates money wandering. And that's something which the government feels very very strongly.
About we'll see what happens of the Supreme Court, Justice Alito has requested a response from the plaintiffs to the government's motion to stay the injunction by four pm Friday. Thanks for joining me. That's Joseph Liniac of Dorsey and Whitney. And that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news on
our Bloomberg Law podcasts. You can find them on Apple Podcasts, Spotify, and at www dot Bloomberg dot com slash podcast Slash Law, And remember to tune into The Bloomberg Law Show every weeknight at ten pm Wall Street Time. I'm June Grosso and you're listening to Bloomberg