Hello, and welcome to the Votes and Verdicts podcast, hosted by the litigation and policy team at Bloomberg Intelligence, the investment research platform of Bloomberg LP on the Bloomberg terminal. Bloomberg Intelligence has five hundred analysts and strategists working across the globe and focus on all major markets. Our coverage includes over two thousand equities and credits, and we have outlooks on more than ninety industries and one hundred market indices,
currencies and commodities. This podcast series examines the intersection of business policy and law, and today we're recording our weekly check in on the litigation and policy catalysts that we're watching and that we think will impact companies across a number of different sectors. My name is Elliot Stein. I'm an analyst with Bloomberg Intelligence covering litigation in the financials sector. I'm joined today by three of my colleagues, Holly from,
Matt Schuttenhelm and Nathan Dean. And today is May eighth, twenty twenty five. And because things move so fast, we should time stamp it as well. It's two pm Eastern time. You can find all of our research on the Bloomberg terminal at bi go and more specifically on our dashboard bi laws Go. That's for Bloomberg Terminal subscribers. But why don't we jump into the content, Holly, Let's start with you.
You've been covering a lot of things related to tariffs, including the lawsuits, the several lawsuits at this point challenging the US tariffs on other countries imports from other countries. I know there's a hearing next week on May thirteenth in one of the lawsuits in the Court of International Trade. I know you're going to be watching that. I'm going to try to watch it as well. Definitely sort of in an area of law that we don't have a
lot of precedent. Maybe tell us about the case and what you're expecting in the argument.
Sure, thanks, Elliott.
So the challengers, there have been about seven lawsuits filed, and most of them are filed in the US International Trade Court. Some of them are filed in other jurisdiction district courts around the country, but they mostly argue the same things. And what they're saying is that the President Trump's terroriffs are unlawful because the statute he relied on, which is the International Emergency Economic Powers Actor or AIPA
doesn't authorize the terroriffs. To the emergency he's cited as a basis for the terriffs is not a real emergency who want, namely the trade deficit. They're saying that that's been in existence for fifty years, and the executive order which in which he imposed the tariffs even said that that's a persistent problems.
So it doesn't.
Arise to the level of emergency that prevents presents an unusual and extraordinary threat as the statute requires.
And three, if AYIPA does authorize the.
Tariffs, it's an unconstitutional delegation of power. So what we're watching now is that several of the challengers in the different lawsuits have filed separate motions for programming injunctions seeking to stay the tariffs, and one of those motions is going to be heard before the International Trade Court on
May thirteen. So that's the next sort of catalyst that we're watching, and we think that that can inform probably the other pulmary injunction motions that are going to be heard by that court as well.
Was this the case where there was a tro that was denied? That's right, and I mean does that give us any clues as to what's going to happen on the preliminary injunction motion.
Not necessarily, because the grounds to the court relied on to deny the TIRO was that the challengers didn't present immediate irreparable harm. So the way the TIRO works is that it puts it restrains that it would have restrained the terffs for fourteen days.
And what the court.
Said is that none of these challengers have said that they've even paid a tariff yet or that they would have paid the tariff within the next fourteen days. So it didn't go to the merits of the argument. So in terms of the merits, it definitely doesn't speak to that.
But in terms of irreparable harm, and because that's also required to get a preliminary injunction motion, the challengers may be able to say, you know, we're not able to show harm in this fourteen day period, but it's coming and so that may be, you know, an distinction that makes the outcome different.
Right, they don't have to show as much of an emergency as it did on the t RO application, But I suppose it's it's possible that they still win on irreparable harm, and we still don't get much insight on likelihood of success of the merits, but I guess we'll see next week, right.
That that could be the case. Yeah, we will see next week. They also file the summary judgment motion, So that's sort of like a belt in suspenders, like, if we can't if we can't show our repeable harm, at least we went on the merits, we should get a judgment. So so they've also filed that motion also.
So it's more so that that does suggest still have to reach the merits, right, given the summary judgment motion?
Right?
And how long do you think so this is like a three judge panel, right, that's right? And and how quickly do you expect a decision?
I think it's going to be relatively quickly because the country is, you know, watching for this decision. A lot, a lot depends on this decision, and it's impacting almost everyone. So I think they're going to push it out relatively quickly. So I think it could come as early as too Q and then and then you know, whoever loses, well, you know, we're anticipating that they're going to file an immediate appeal.
And that goes to the Federal Circuit, right, that's right? All right, Well, that that's going to be a fun one to watch. You're going to go to court, you're going to you're going to live stream it.
I'm going to watch the live stream.
Yeah, I think I am too. Hopefully it works.
Yeah, that's always dicey.
And what about the other case. I mean there is like, well you said, at least a half dozen other cases, right, and are there any other catalysts in those cases?
Yes?
So there are there are seven cases total that we found some where there could be more, but there are at least seven, and four have filed I believe it's four at this point have filed motions for preliminary injunction. So we have the hearing that's coming up on May thirteenth in the Boss case, which is before the International Trade Court. Then we have there's a hearing on May twenty seventh before the court in Washington, d C. The
Federal District Court there. And that's an interesting one because the challengers who file, who are challenging the terriffs, filed it there saying the US International Trade Court does not
have jurisdiction to hear the claims. The lawsuit because they're saying the Court of International Trade only as jurisdiction to hear disputes arising out of a law that provides for terroriffs and that authorizes tariffs, and they're saying this law ayep IT does not authorize tarriffs, so the US International Trade Court does not have jurisdiction. So they filed they filed the motion for preliminary in junction, the government filed a motion to transfer, and those are being heard on
the same day on May twenty seventh. And it makes sense because if the court finds that aep IT doesn't authorize the tariffs, that goes to the merits of the case as well, in.
Which case in which case the transfer would be denied.
In those cases, the transfer would be denied.
And so the court would have decided something on the merits, which is that ayep IT doesn't authorize the terrorists.
It would then just have to decide.
Whether there's a reparable harm such that it grants a preliminary in junction or it has has a grant summary.
Judgment in the case that's being argued next week. Has this issue, the issue of the court's jurisdiction come up, because I would I would think that the court has to determine that sort of in the first instance, it.
Hasn't because the challengers sort of, you know, they filed there, so they're conceding that the court has jurisdiction. What they do is sort of like this nuanced argument that IPA may allow for some terrorists, but it doesn't allow for these terrorists. So they don't really say that, you know, very directly, but that's the implication, is that it allows for some terrorists, but it doesn't allow.
For these terrorifts.
This like wide skill application of terrorists, and it doesn't allow for terrorists when there's no unusual or extraordinary threat. Preliminary injunction motion file just yesterday May seventh, by twelve states, led by Oregon, that are challenging reciprocal terriffs and the tariffs Tanate of China and Mexico. They got the offer to opine on what's happening in the Bus case, which is the case that's.
Being heard May thirteenth.
So I think it's you know, it's likely that whatever happens on May thirteenth will affect this Oregon case as well.
And inevitably all these cases at least one of them is headed to the Supreme Court. I think so some sort of official final ruling on this issue.
I think so. I think that's a safe thing to say.
Yes, yep, cool, anything else on these cases.
No, that's it. We'll be watching.
We'll be watching to see what happens on May thirteenth, and you know, hopefully we can get some sort of guidance about which way the court is leaning. They don't always show their hand oral argument.
Sometimes they do.
Sometimes the questions that they that they ask, can you show that you know, they're concerns about some things. But I think it will definitely be interestingly we'll be waiting for that decision.
Yep. All right, great, thanks Holly, and I should plug now as well. For those of you who are on a Bloomberg terminal, you can access all of Bloomberg Intelligence's tariff related research at BIS based tariff Go and just recently we launched a bive Tariff Impact Matrix, which lists almost three hundred companies across twenty different industries and shows you how the tariffs will impact each of those companies.
It shows you what their average tariff rate is based on their exposure to different countries and the rates of tariffs impose on those countries, and then it shows you how much the cost of goods for those companies would increase, how much their operating income would suffer as a result of the tariffs, and how much they would have to raise prices within the US and globally to offset the impact of the tariffs, sort of in a worst case
scenario without taking mitigation efforts into account. All right, so let's move away from tariffs at this point. Matt, let's bring you in. Matt covers TMT litigation and policy for US. So. Last week, FCC Commissioner Simington I think wrote an op ed saying that the FCC needed to hit the broadcast networks quote where it hurts most financially end quote and to do so, he said, the FCC should cap how much local TV stations have to pay the big national
TV networks for their programs. Can you tell us more about what this proposal means?
What?
Why is that coming up now? And you know, give us your overall view on it.
Yeah, it's just going to be a fascinating chapter at the FCC for broadcasters for a number of reasons.
Because this FCC is.
There very aware of the need to deregulate in the space. Broadcasters have been regulated in ways that the Internet and new media aren't regulated, and it's and it's very difficult for that business. And so on one hand, the Republicans
at the FCC want to ease those rules. At the same time, though President Trump is not thrilled with how the national TV networks are operating and and so there's frequent criticism of of their their content as fake news, and the the Republicans at the FCC are very conscious about making sure they don't offend President Trump on this, and so they want to go after the big networks, but they want to protect the local TV stations that that own it.
So it's a fine line.
And I think what you saw from from from Commissioner Symington last week with this proposal was very much aimed at the political side of keeping President Trump happy by going after.
ABC, CBS, NBC.
Fox, and UH and and with the proposal, that would be very good news for the local TV station owners. And here you're thinking about smaller companies next Star, Tegna, Sinclair, who don't produce that big national TV content, but they own TV stations in local markets all across the country.
And so basically Simington's proposal would say, look right now, those ABC, CBS, NBC, Fox, those big guys are taking fifty percent of the cut in these deals, we're gonna cut We're gonna limit that only thirty percent they can get. So it's it's a big increase for those local TV station owners if the FCC can do this, and if the law.
You were going to finish your thought, but good time to ask can they do this?
That's exactly the problem. The FCC is confined by the Communications Act, which historic Brendan Carr is. He's made the point that look, there's there's this standard in the law called the public interest standard, and that broadcasters have to act in the public interest, and courts you can go back to the nineteen forties and find Supreme Court decisions that that read that clause in the statute to delegate very broad discretion to the FCC to regulate broadcasters in
the public interest. And so what what I think the Republicans at the FCC are going to try to do as they defend proposals like this, is say those two terms public interests, we can squeeze into that some new novel regulatory approaches and go after the networks to try to do that. Now, is that going to work? I'm
I'm really skeptical. To me, it's about the worst possible time to be doing that, as you know, Elliott, like with the with the rise of you know, the Lowe or Bright cutting into Chevron deference.
This is a tough time.
I was just about to ask, how's that going to square with lower Bright?
Exactly?
Do all the trends in the court are going the other way that to say that regulators can't take old statutes that have these vague terms and then squeeze in major, disruptive new regulation, and that that is precisely what what this is is taking the words public interest and and squeezing into it a whole new regulatory scheme in a statue where we're sitting next to it, there's specific language about what the FCC can regulate and what it can
and and so when when the broadcast networks challenge this, they're going to have a very strong argument that this is the sort of major question, uh that that Congress could address if it wanted to, but it never has. And and if you you search for the law through the law there's nothing in the law that allows them to do this. So I think the FCC will probably push the envelope on.
This and and stretches. It's at the already as far as it can go.
It might even adopt, you know, vote to adopt these rules and take its chances in court.
But will it get through the courts. Probably not.
There's a chance they get a good draw on judges and they end up in a good circuit, but most likely with the Supreme Court sitting behind that. Even with this being you know, maybe fitting in some way sort of a deregulatory approach that at least the politics might might cut in a way that some justice is like, I still don't think that they're going to go for this.
I think you got to go to Congress.
It doesn't really sound irregulatory.
It's really not. Yeah, it's good for the little it's good for the little guy.
It's more of the politics, I think than it is the deregulation. It's it's regulation that that doesn't exist now. So I don't see see the justices allowing this.
What's the composition of the FCC right now?
Right now it is two to two, evenly divided and so we are awaiting. President Trump has nominated did Olivia Trustee to be his third Republican commissioner at the FCC. She cleared the Senate Commerce Committee. We're just waiting for a final vote on the Senate floor, which I think will probably happen this month, maybe maybe June. So I think the FCC is going to get rolling on all these momentous rulemakings regarding broadcasters, if not in the second quarter, early in the third.
And you expect to vote at the FCC to sort of be along ideological lines on someone like this too.
I would think so, I would think this is this is going to cut on party lines on something like this. You know, we've sort of clearly now moved away from the days of the FCC being an independent agency where they don't have to keep the president happy. They could
they could act independently without risk of being fired. Brendan Carr at least is acting like he works for President Trump, and I think the other Republicans at the FCC, you can see the trend in the law, and for that reason, are very likely to support these sort of politically driven issues in the way that President Trump would want them to.
Got it and so you think a rule finalization towards the end of this year.
I think that's right.
I think they're going to go through the full APA process on this and then so you would see the finalization toward the end of these year or maybe early next year, and then a legal fight mostly next year.
Got it, all right? Well, be fun for you to cover the whole process absolutely. All right, great, thanks Matt. Yeah, all right, Nathan, let's bring you in. Let's round out today's discussion with some crypto talk in DC. I know Congress is taking up a stable coin bill, there's a build over crypto market structure. For a while, it looked like there was some bipartisan support for these, especially the stable coin bill. Now I'm not so sure. What's the latest.
Yeah, so you know earlier you said your recording is it is currently two twenty and twenty three seconds according to my watch Eastern time. I don't know if it's standard or whatever.
But it's daylight time.
The reason why I bring that up, though, is that the Senate vote on cloture is happening as we speak, and this is on the stable Coin also known as the Genius Act. This is a bill that would require stable coins to be backed up by one hundred percent high quality liquid assets, and also give stable coin issuers, both bank owned and non bank owned issuers, the ability to register with appropriate regulatory authorities. And it looks like
that vote is going to fail. As of our account right now, forty two senators have voted against it, and as a result, the bill's not going to move forward for now. The opposition coming from the Democrats is largely tied to AML Bank Secrecy Act other type of national security Plus you have the also opposition to the idea that President Trump is and his family is actively involved in the crypto space and then they would oversee the SEC and the CFTC and the regulators and so forth.
So you know what we think is going to happen is is that Senator Thun, the majority leader, is going to try again next week. The reason why I'm still optimistic this bill can happen is because, unlike situations where they went into a vote and the vote failed, they had been negotiating. They be in the Republican's Democrats have been negotiating on that pretty much the entire day plus
most of last night. And you know, you don't spend twelve hours negotiating with the other side if you don't think a deal can actually be made, and so I think they are still you know, I think this political hiccup doesn't derail the process. I think they do come together and they get something done. May not happen next week. You know, we've been telling our clients that we think it can get done before this summer. But again, we do think that the stable Cooin bill can pass. We're
at a seventy percent chance. If it passes, the Senate will go to an eighty percent, and just remeinder folks like we do ours and increments in ten and for me to go to eighty percent, I actually have to feel really good that a bill is going to pass.
So just go ahead.
Well, I was just going to ask, how how do the Republicans delay the concerns of the Democrats on all those issues that the AML stuff, and then more importantly probably for them, the Trump issues.
So the Trump issues, I don't think you're going to be able to get around. I mean, it's just at the end of the day, President Trump's family is active in the crypto space, and there's nothing that I think legislatively that they Republicans can do to get the Democrats on board when it comes to that, But I also don't think all the Democrats are united in that opposition due to President Trump's family as well as I'll talk
about in a minute. There was another joint hearing this week of the House Financial Services Committee and the Agricultural
Committee to discuss a crypto legislation on market structure. Ranking Member Maxine Waters voiced an objection, and most of the Democratic members stood up from the Financial Services Committee and walked out, But the Democratic members of the Agriculture Committee and few of the Democratic members the House Financial Services Committee stuck around because stable coin issuers in particular, and crypto is becoming more of a bipartisan affair than it
was just even last year, and so there are going to be Democrats out there who are going to vote for this bill even with President Trump. You know, is family being involved. When it comes to am L and the system and safety and soundness stuff. We're talking about technical provisions here. We're talking about, you know, things that will most likely change under rule making, but we're talking
about language to those regulators. And sometimes it even gets down to the differences of may versus shall and so I think, you know that to me says it can
be resolved. They'll probably put in language in there that says that the Federal Reserve or the occ would have to constitute this rulemaking and that they would have to include language essentially for a bank you're going to have to follow bank secrecy rules AML rules anyway, So I think once they come out and they put language in there that says, you know, by you know, without a system of a doubt, you know AML. And I almost said system of a down because I was listening to
them on a lunch break. But yeah, so without a doubt in the world, you know, I think they can get they come to an.
Agreement on this.
So I'm not saying it's going to pass next week, but I do think it ultimately passes. Now, the bigger question is this Crypto Market Structure Bill. Now, they haven't come up with a name yet yet for it. It's still just to quote a discussion draft. So this is obviously going to change between now and when it even gets a House Financial Services or a House agg vote. This is coming from both of the committees because remember Financial Services and the sec overseas Securities CFTC and the
House Agg Committee overseeing commodities. Bitcoin as a commodity, but some of these tukens could be considered it securities. Now, the long story short in this bill is that it looks very similar to the Financial Innovation of Technology Act from last year. It defines what an SEC, and in a security is, what the CFTC and the commodity is. From most parts, the crypto world wants to be under
the CFTC's jurisdiction. Commodity rules are a little bit more principle based as opposed to prescriptive base allows a little bit more flexibility, which is why the crypto world for the most part wants to be under the Commodity Futures
Trading Commission. But it also allows companies to register as a digital commodity exchange or a broker or a dealer, and you know, will increase costs, but for a company like coinbase or Robinhood, you will gladly pay those costs if it means that a future SEC is not going to come three four years from now and hammer you with an enforce in action. Because even though the courts may rule on your side, you still got to spend
money defending these things so it gives regulatory clarity. There are going to be some folks in the crypto world that don't like this, namely the people that feel that, you know, regulation is something that you know, shouldn't you know more of like the decentralized folks who really just you know, it shouldn't be an American thing. It should be a decentralized thing. There shouldn't be much government interaction. They may not like this, especially the small mom and players,
because you are going to have to spend money. But I think this bill is going to take more time to cook. The short story long on this one is that I think it's going to take at least another six to nine months. You know, you'll see the House move faster, but the challenge is going to be in the Senate on this one. So I think you'll see
the House move this summer on this. They could potentially pass this thing by the August recess, if not quickly thereafter, and then I think it's stagnates in the Senate for a while because if it's this challenging to get a simple stable coin bill, it's going to be even more challenging to get Senator Elizabeth Warren and another her allies on board with a bigger crypto bill.
And right, and if for some reason the stable coin bill doesn't get past, then that really bodes ominously for the.
Life if the Senate. If I'm wrong in the stable coin bill. First, if I'm wrong and you come into the office, I'll buy you a Bloomberg coffee. But if I am wrong about the stable cooin, not a great deal. And for what it's worth, Bloomberg coffees are free, you know,
so good, but yeah, yeah they're good. But if I'm wrong about the stable coin bill, then this crypto bill, I just the odds of that's going to drop even dramatically, much more, because even though there are enough Democrats, there are Democrats out there that think that crypto legislation needs to happen. You still need sixty votes in the Senate. You got to get past the filibuster. And until then happens, you know, it's going to be a challenge.
Got it all right? Great? Anything else?
No, I'm just going to go listen to system of it down.
That sounds great. So hopefully next week on this episode, we'll have some updates from our anti trust analysts Jenri and Justin Taresi. They have been in court the last couple weeks following both the FTC versus Meta case and also Justice Department against Google over search remedies, so we should have updates from both of those cases next week. But with that, I think we'll wrap up this episode of Votes and Verdicts. As always, thank you for listening.
If you have any questions about any of the matters we discussed on this episode, please don't hesitate to reach out to us at your convenience with any questions. As a reminder, you can find all of our research on the Bloomberg terminal at big or on our litigation and policy dashboard at BI laws Go, and we also encourage you to listen to other episodes of Votes and Verdicts on whatever platform you like to get your favorite podcasts. Thank you for listening and have a great day.