US Elections, Google, Basel III Are 2H Keys

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 industries, currencies, and commodities. This podcast series examines the intersection of business policy and law, and today we'll be looking at the litigation and policy catalysts that our team is watching in the second half of twenty twenty four and that we think will impact companies across a number of different sectors. My name is

Elliot Stein. I'm a senior litigation analyst covering litigation in the financial sector, and I'll be your host for today, July tenth, twenty twenty four. If you have any questions about any of the matters that we'll be talking about on this episode, please don't hesitate to reach out to us at your convenience with questions. So we'll be discussing

a handful of sectors today. First, we'll start with financials and we'll bring in Nathan Dean, our senior financials policy analysts, to discuss the US elections in November and their potential impact on the Inflation Reduction Act and the energy and healthcare sectors in particular. And then Nathan will also talk about the Basel three endgame and what it means for

potential capital requirements for banks. Sticking with financials, I'll discuss litigation that I expect will strike down the CFPB's credit card late fee rule, and I'll also talk about what we're watching in the SEC's case against Coinbase, and then i'll also mention a few money laundering probes of big banks that we're watching. After that, Jenrie, our senior anti trust analyst, will give us an update on several cases against Google, as well as FTC lawsuits to block deals

like Kroger, Albertson's and Tapestry Capri. Sticking with anti trust, justin Teresi, we'll discuss the thirty billion dollar visa and MasterCard interchange fees settlement with merchants that will need to be reworked after a court order recently, and Justin will also talk about a potential doj antitrust lawsuit against United Health, and he'll also talk about the proliferation of cases alleging price collusion between real page and landlords in the real

estate rental market. After that, Matt Schttenhelm, who covers TMT policy and litigation, we'll discuss potential internet legislation, including a law to protect kids online, and Matt will also discuss TikTok's litigation to up end US lawmakers sale or ban law, and then he'll also walk us through litigation in California

that could bring Lift and Uber a big win. Sticking with tech Tamlin Basin, who covers techip litigation, we'll discuss pegasystems pending effort to slash Appian's two billion dollar jury award. After that, Holly Frome will discuss litigation concerning Zantac, Johnson and Johnson talcum powder, and the forever chemicals known as pfas.

And last, but not least, Dwyane Wright, who covers healthcare policy in Washington, d C. Will discuss the Biosecure Act, which aims to bolster US manufacturing at the expense of China, and also a medicare advantage shakeup that could benefit Humana and United Health. So all of this research is available on the Bloomberg terminal at bi GO. And with all that out of the way, let's get started with the content. Nathan,

let's bring you in. The biggest catalyst in the second half of this year in our coverage world is probably the US elections in November. Why don't you come in and tell us what you're watching related to the elections.

The next major date is around July twenty first. This is when the Democrats are going to probably hold a virtual role call that state is not sent in stone, but think of it around July twenty first, this virtual roll call will essentially be a meeting to nominate President Biden and Vice President Kamala Harris to the ticket in order to get that onto the ballot in the state of Ohio, Ohio law states that the nominee has to

be picked by August seventh. And because the Democratic Convention in our third catalyst is on August nineteenth, which is when the Democrats meet in Chicago, you know that July twenty first date is important because then it would put President Biden on the ticket. The third date, the August nineteenth, that's when President Biden and Vice President Kamala Harris would

be formally nominated. And I think a lot of the talk of whether President Biden and whether would he continue to run or not will drop at that point if he is formulated nominated. And then finally on September second, you have the second debate between the presidential candidates leading until the election to number fifth. So that's just some dates to keep in mind. Now in terms of the election, how to think about that, Well, you know, a lot of things can change, and we're actually working on a

fairly large and comprehensive report on the election. But one of the things we are telling our clients to look at is the Inflation Reduction Act because it is so important in terms of future growth for clean energy, pharmaceuticals,

other types of utilities, construction companies, and so forth like that. Now, the way that you should think about the tax of the Inflation Reduction Act is unlike the Infrastructure Investment in Jobs Act, which was this bipartisan infrastructure bill that had five hundred billion dollars in new spending, this is seven hundred and thirty nine billion in terms of tax changes in enforcement. So the IRA is carrots and incentives, if you will, rather than direct monies going out to boost

the economy. Now, our thesis has to always been that the IRA will not be fully repealed. The votes are just not there. A lot of the beneficiaries of the IRA are GOP states.

Justin did a lot of work on this on the terminal in terms of looking at what the impact could be for Tesla, Rivian, even Ford and GM because if the EV tax credits, if you will go away as part of this tax reform effort, a big charge of the IRA could be at risk.

BASO three endgame. This is the proposal that came out in twenty twenty three that would raise as proposed capital requirements for Bank America at JP, Morgan City Group and so forth. Nineteen percent under the proposed that's a dramatic increase. Now, the FED has always said that broad in material changes, and I'm using that in their quotes broad in material

changes is coming because that's their words. And we finally got confirmation from FED Chairman Jerome Poll when he testified to the State Banking Committee on July ninth that a reproposal is coming. Now it is not going to be a reproposal of the entire rule, but rather they are going to repropose certain portions of that rule. Now, we think that's going to come out in September. Look for that September timeframe. We think it will be a sixty day comment period, so look for comments to go into

say late November early December. But what this does mean is that the BOSO three endgame is not going to be finalized in twenty twenty four, and it's going to be punted to twenty twenty five.

if they disagree, essentially just means stagnation, nothing happens. So ultimately, I think what will happen is is that this reproposal will come out. Obviously, it's depending on President Biden winning the election. And President Trump wins, the head of the OCC would almost immediately flip and they would not be

on board with this. But if President Biden does win, you're looking at a much less dramatic, less much less impacting Bossel three endgame rule being finalized, probably in the second.

days ago. We expect a lot of those lawsuits to succeed. I want to focus on one of them, and that's a lawsuit by bank trade groups challenging the CFPB's credit card late fee rule. I've spoken about this case on this podcast previously, but I want to give another update because it's a pretty active docket and there's things happening all the time. I'll give some background first. The CFPB, of course, is the Consumer Financial Protection Bureau that's the

main regulator for the consumer finance sector. In March, the agency issued a rule that would effectively reduce the typical late fee that credit card issuers charge from thirty two dollars down to eight dollars. That would eliminate roughly billion dollars in credit card late fees for credit card issuers

with at least one million open accounts. So think of credit card issuers like JP Morgan, American Express, City Bank, Capital One, Bank of America, Discover, Synchrony Financial, etc. The bank trade groups are challenging the rule in court, and they've succeeded so far in putting the rule on hold. They've also succeeded in rebuffing CFPB efforts to move the

case to Washington, d C. From Texas. Texas, of course, is a much more favorable jurisdiction and venue, So as of right now, the case is in Texas Federal Court, which we think will ultimately help the bank trade groups in terms of things we're watching in two h In this litigation, First, the CFPB is trying to lift the preliminary injunction of the rule that the court entered earlier

in the case. That injunction was based on a Fifth Circuit decision in twenty twenty three that found the CFPB's funding mechanism on constitutional But since then the Supreme Court has reversed the Fifth Circuit on that issue. So the banks now need to show that they're likely to prevail in this litigation, but you know, for different reasons, and I think they have good arguments, namely that the CFPB

exceeded its statutory authority in issuing the rule. The argument here being that the CFPB didn't sufficiently consider factors it was supposed to under the relevant statutes, things like post charge off costs, the turrent effects, and cardholder conduct. So you know, the judge actually found these other arguments compelling when he issued the preliminary injunction a couple months ago, but he didn't actually need to reach the merits of

them because he ruled on a different basis. But as a result, I think he will now have to decide on these other arguments, and I think he'll agree with the bank trade groups, and as a result, you know, I think the bank trade groups will use the same arguments to ultimately prevail on the merits of the higher litigation, which is why we think they'll win ruling striking down

this CFIB rule, likely by year end. So that's one of the things we're watching in two h The next case I want to talk about is the SEC's enforcement action against crypto platform Coinbase. Arguably one of the most important cases in crypto and it raises a lot of very interesting securities laws issues as background. Again, the SEC sued Coinbase in June of last year, accusing it of violating federal securities laws by essentially allegedly operating as an

unregistered securities exchange broker and clearing agency. Coinbase has a lot of money at stake here, potentially billions of dollars representing what the SEC has alleged to be ill gotten gains that the agency wants to disgorge. In March, the court dismissed one of the SEC claims against the company, but it did allow the rest of the case to proceed, including the SEC claims that you know, trading of digital assets on the coin base platform constituted transactions of unregistered securities.

This is one of the biggest unresolved legal issues in crypto. That is, you know, when do digital asset transactions constitute securities transactions which the SEC could then oversee. Of course, Coinbase is currently asking for an immediate appeal of that March ruling, and that's sort of the next thing we're looking for in two h We think Coinbase is a good chance of being allowed to appeal immediately, you know, rather than having to wait until the end of the case,

as you often have to do in federal court. And the reason I think that is that, you know, the legal question at issue really permeates so many crypto crypto cases currently, including you know, other SEC cases against companies like Binance, Ripple, Krack and Consensus and others. So on the merits, you know, I think Base is likely to prevail ultimately, but you know, a Merit's ruling is probably not coming this year. It could come next year, but I don't think it'll be by this by the end

of this year. And you know the reason I think that is, I think the sales of digital assets on secondary markets on public exchanges like those on Coinbase don't really fit neatly into the Howie test, which is you know, comes from a Supreme Court decision in nineteen forty six and is used to determine what constitutes an investment contract, which is a security. That was actually the main takeaway from a very recent decision in the SEC versus Binance case.

There was also, you know, the takeaway from the Court's decision last year in the SEC's case against Ripple, and essentially in secondary transactions, you know, I just think there's less likely to be a common enterprise or reasonable expectation of profits from the efforts of others, both of which are key elements of the Howie test. So, you know,

this area of law is still developing. But the next thing to watch in this particular case is whether Coinbase can appeal immediately appeal the decision in March that allowed part of the SEC's case to go forward. And then just lastly, I know I've been talking for a little bit, but the last issue I'm keeping an eye on. These are a few money laundering probes of various large banks.

A probe of TD Bank Toronto Dominion is probably the highest profile one that we're watching, following the banks four hundred and fifty million dollar provision at the end of April for the investigation. Now, these probes are handled confidentially, so we don't get updates like we do in litigation.

There's no docket to track, but based on what we know so far as well as comparable cases, I think TD Bank could face a potential fine of between six hundred million dollars and one point one billion dollars, and I think the fines could come by year end. We're also keeping an eye on a probe of Morgan Stanley

by several federal agencies. Again, the timing here, you know, of a potential resolution is a little less certain, and I think, you know, given the conduct here, I think it's less egregious as well, so I think fines are likely to be under five hundred million dollars from Morgan Stanley. And then finally, we've been tracking a US money money laundering probe of Swedish bank sweat Bank for a few

years now. You know, the probes themselves have been going on since like twenty twenty, maybe even earlier, and so I do think a resolution by by the end of this year is a distinct possibility. And my estimate of a fine for sweat Bank is between three hundred and eighty five million dollars in about seven hundred and seventy million dollars, and that's based on the bank's profits during the relevant period and a settlement by Danish bank Donska Bank with US authorities from a couple of years ago.

So a lot of things we're watching in terms of litigation and also enforcement actions. I'll stop here, but feel free to reach out to me with any questions about these matters or any other matters concerning litigation in the financial sector. All right, So with that, let's move on to a different area. Jen, Let's bring you into talk antitrust. As always, you know, there's a ton going on. Let's start with Google. There's a pair of DOJ cases against

the company you're watching. There's the Epic Games case, why don't you come in and tell us what you're watching?

what that is later, and it's play store. And there are lawsuits targeting all of these businesses that are ongoing, and they all have important catalyst in the second half.

So let me start with search. So the Justice Department had to accuse Google of monopolistic conduct in search and search advertising because mostly it pays third parties billions of dollars every year to set Google Search as the default search engine pretty much wherever you have an Internet access point, so like behind Apple Safari browser or behind Mozilla's Firefox browser. And the DOJ says this forecloses search engine competitors and importantly it denies them the ability to get the scale

they need to improve. Most people like Google Search better, let's say, than Bing, but they say, well, search engines learn and improve with every single search that's done, and if they can't get in there and do the searches, they can't improve. So in this one, the trial ended in late twenty twenty three and the closing arguments were in early May, So I do expect a decision soon. I mean it could be any day. I sort of think it's going to be later this year, but likely

this year. We're slightly leaning toward the DOJ winning this one on liability only, and if that that's the case, we have to restart proceedings on remedy. I mean, discovery has to be done on what the proper remedy is. Expert work has to be done. There will be another hearing, So that's very much a next year event. Now let's talk about Google's Playstore. So Google lost in a jury trial in December of twenty twenty three against Epic Games. The jury had decided that Google's refusal to allow, or

at least google would make it difficult. I shouldn't say they completely refused to allow third party app stores on Android devices and third party payment processors within its own playstore. That this conduct is unlawful, and so that's the decision

even though Google is appealing. Now the judge is going to have to decide on the remedies, and that phase is ongoing, and I really suspect the judge is going to order the company to allow third party app stores on Android devices and allow for alternative payment services within the pay store. The judge might even go as far as requiring Google to share its whole catalog of apps with third party app stores with developers' permissions for some amount of time to sort of give a leg up

to these new third party app stores. That decision is probably going to come out this year, but I should say that given that Google's appealing, that if there's a remedy, it's going likely going to be stayed. And now, last is this ad tech stack matter. This is a really complex market and there are actually three different lawsuits over ads tech stack, but I'm just going to talk about one by the DOJ in a group of states because that's going to trial in the Eastern District of Virginia

in September. And the judges acted really really fast in this case, so a decision this year is even possible. But because the matter is very complex, I kind of think first half twenty five is more likely. So the ad tech stack group of technologies include two where Google allegedly has dominance, a publisher ad server and an ad exchange, and they obtain these technologies be an acquisition of a

company called double Click. Now, the publisher ad Server acts as a manager for large publishers AD inventory that's impressions websites for ads, and the AD exchange is a real time auction marketplace that matches up multiple buyers and sellers on an impression by impression basis. Now, there's this really long laundry list of very specific and kind of detailed

and complex anti competitive conduct. The DJ alleges Google has engaged in all of which kind of results in a manipulation of the whole process by Google to benefit itself, take fees all along the way, and it access to the detriment of publishers and advertisers. And this is an important case because the DJ is really gunning for a structural remedy the divestiture of Google's publisher ad server and

or at exchange. Now that's a really tall order for a judge, and this is a really complex, complex case. I think it's probably unlikely that that would be the remedy imposed, though I do think that there's a good a good possibility here of a finding of liability, as I said, probably next year. Now, let me really quickly just get into a couple of merger trials happening in second half. First, the FTC is trying to stop Kroger and Albertson's closing their deal, and that's going to go

to trial in mid August in Portland, Oregon. This really traditional deal. It just combines two competitors, and there are some overlap areas where the concentration is just too high between these two companies. You guys, if you're out there grocery shopping, you might think, well, I don't see either of these companies. But each one owns about fifteen to twenty different brands, So there's a good chance where people are grocery shopping that store is owned by a Kroger's

or an Aupresense. So the main issue here is the remedy. The companies are offering to sell a bunch of stores and a bunch of other sort of ancillary facilities to a company called CNS. Now, I think there's an issue

here with the remedy. The FTC didn't accept it, and I think the judge could have troubled accepting it because CNS is not a grocery store operator for the most part, it's a wholesaler, and the judge is going to have to get comfortable that this company has the incentive and the ability to go forward and viably compete pretty fast

with these stores. And as a wholesaler that doesn't really run stores or have that expertise and has already has some documents questioning whether they have to keep all the stores they buy, I think there's some problems now In real time, Kroger's is sort of sweetening the pot. They recently announced that Albertson's COO would move over to CNS post divestiture. And that's good because the more they beef up CNS to show expertise, to show commitment, I think

the more likely they can win in court. And I do think a decision will be in four Q. Very last one. Let me try to wrap this up. This is Tapestry and Capri. A real surprise that the FTC is trying to block this deal. These two companies own fashion brands. Tapestry has coach Kate Spade and Sewart Whitzman, Capri has Arsace, Jimmy two, and Michael Cores. The FTC has a problem with this case because they say that it brings together handbag brands in the affordable luxury category

and it's an overly concentrated market. They are each other's primary competitors with Coach Kate's Bade and Michael Core's. Now, I think they have a real problem with that market definition. Cases like this can be dispositive because the sphere of competition basically defines what the concentration is, what the market shares are, and whether or not it's a problematic market share. And I think it's very hard to put parameters around

a market like affordable luxury. Where did the price point start and where.

nearly two decades. First kind of reached its MDL status back in two thousand and five, and as we had discussed, you know, a couple of calls ago, you know, namely, larger retailers like Target and Walmart were really opposed this deal because they said they just didn't woantn't benefit nearly as much as smaller merchants in terms of being able to band together and negotiate people, were interchange fees to be charged them as a group, and all these other

facets of the deal that they said they already were getting on their own through their own negotiations with Visa MasterCard.

So we thought that was going to be a hurle, and the court really agreed with that that sentiment, and what it said basically is that, you know, a lot of the aspects of the deal were merely just clarifying policies that already existed in some places, and there was a real lack of changes made to many of the rules that are issue in the litigation, such that the limited lower intercharge rates that were part of the deal for a five year period really didn't make up for

the lack of permanent changes to rules that the larger

retailers are really looking for in the litigation. And when I say that, you know, the big rule that really wasn't modified as part of the settlement with the honor are all excuse me, honor all cards rule, which basically says that merchants who accept Visa are a master card, that you have to accept all visas or all master cards, right, so basically, you know, I have to take all of those cards without regard to varying interchange fees between different

cards with that Visa and MasterCard logo on it, So kind of stepping back here. You know, this deal was valued at thirty billion dollars with all the fee concessions that are going to be made over a five year period. But you know, we don't really know what an acceptable deal looks like for the court moving forward. And the judge really said just as much during a June thirteenth hearing too that she too doesn't really know what terms would make the deal more palatable for preliminary approval by

the court down the road. But we really think in two h here the parties are really going to go back to the drawing board and probably try to develop another package to bring before the court, because the risk of bringing this case through to trial, and really it is almost trial ready at this point, is very high. For Visa MasterCard. We just don't know what a jury verdict would look like if they found liability here. The actual damages could far exceed what was already on the

table before. With a thirty billion dollar at valuation of the deal, you know, even if the deal is even a bit higher here going forward for a next attempt. Really a jury verdict, you know, could be substantially higher than whatever the next try is too. So that's I think really on the mind of Visa MasterCard here is they try to hammer out something new moving forward. So

look during the page a bit here too. What we're seeing, you know, on the antitrust front is a collection of private at lawsuits and mostly class actions here involving AI pricing algorithms or artificial intelligence pricing algorithms and how they're kind of being deployed in different industries. We think the trend here is that we're probably going to see more

of these lawsuits popping up. The big one right now that's really in focus is a case against real Page, which is a software It's a software company that really has this revenue management system the landlords can use to kind of get the best rate, if you will, for the rental prices that are being charge in a residential market.

The issue here is that what's being alleged is that different landlords, different competitors, horizontal competitors, are kind of they're pooling their non public data through real Page, which then produces a pricing recommendation for residential rents based on the AI algorithm that's at play.

Quite often plaintiffs say that's not the case, but for purposes of emotion to dismiss the case has been allowed to move forward in an MDL. So that is a bit concerning there. From the standpoint of this technology moving forward, I think really what we're going to see here is this case developing through discovery.

The Arizona suit is currently in emotion to dismiss stage of the case. The DC suit is proceeding past emotion dismiss. The claims there similarly have survived those attempts in DC. What we've seen so far is this algorithm algorithmic kind of antitrust issue is also at play in the hotel industry. There are allegations that similar are similar software is being used between hotel competitors kind of get the best rates

they can for hotel rooms. A case in Las Vegas was dismissed for still waiting to see if some of the other suits will survive emotion to dismiss in other places. But I think again the big takeaway here is that plaintiff's lawyers are really trying to sharpen their knives to see if there's a formula that can support these cases not just through emotion to dismiss, but also through some

ary judgment and on to an eventual settlement. Here, the actual antitrust laws at at issue here the Sherman Act, it looks like really, under current law, we don't see that that that kind of per se violation that would give automatic liability, if you will, for for use of these pricing algorithms. The law doesn't seem to really cover

it in that context. Yet there's legislation in Congress that would change that, especially their specific legislation that looks at banning the use of these algorithms in a residential rent context, other legislation that would make use of these algorithms in any context a per se violation of the antitrust laws.

their investigations in the AI space again. DOJ is reportedly concentrating its efforts on the videos position as the leader and semiconductors the power AI, and the FTC is focusing its efforts on Microsoft and its investment in open Ai. We just saw on news today that Microsoft will be stepping away from its role from a seat as an

observer on open AI's board of directors. Probably a preemptive move there to to stay away for a little bit of corrective action that would ultimately be suggested from FTC down the road. But we do think a lawsuit against United Health and it's likely in the coming months prior to the election, probably by October if it's going to happen this year. Don't want to get too close to

the election, But what's that issue? There is vertical consolidation by United Health and the healthcare space, So really what's happened is Health similar to competitors Signa and at what we've seen is United Health acquired Optum Health, which is you know what the what all of these folks in the space seem to be doing, and now owns Pharmacy Benefit Managers PBMU under the optim Health line, as well as a large national network of physicians offices too, So

everything's really big being consolidated into this one kind of healthcare conglomer at every aspect of healthcare under one roof. But the problem with that, no surprise here, is that by doing so, you know, the health is probably or probably at some point will be teamed to and steering patients toward its own services rather than unaffiliated doctors or pharmacies, and so doing reimbursements with then stay on the company's actual balance sheets rather than leaving the company and going

to other actors in the healthcare space. So it's just a roundup of some of the things we're looking at my side of the shop here for endit trust in two age as well.

kids online. The Kids Online Safety Act has nearly seventy co sponsors in the US Senate, It's cleared a key Senate committee and is a waiting time on the floor. In the House, it still needs to get through committee, but with that much bipartisan support, I think it has a decent chance to get through. So far, it's been tripped up in the House because of its ties to a larger comprehensive data privacy bill. I think, you know, it's still still difficulty separating the two, so it's far

from a sure thing, but it's worth watching. And so this could sort of break the dam in terms of allowing Congress to finally start regulating these companies. I don't think legislation aimed at kids is the most disruptive legislation, but still the companies would like to continue keeping Congress out of regulating it, and this could be a first step. It's worth watching in the second half of this year.

The second thing I wanted to highlight in terms of impacts in the second half in the Internet space is the TikTok legal case that should play out over the second half. If TikTok doesn't win this case, it's effectively banned in the US on January twentieth. And if, obviously, if it goes away, that's a big win for TikTok's competitors Meta snap Alphabet, for example. So the case will

be argued September sixteenth. The parties asked the court to decide it by December sixth, and so if TikTok loses that decision, it's only chance to remain viable on January twentieth, will be an emergency petition to the Supreme Court. And so my take on how it plays out, I do think courts are going to be inclined to defer to Congress on national security matters. But what stands out to me when I look into the briefing on this is just how sparse the record is that Congress built here.

Congress went so fast that it basically built nothing into the record, it didn't show it considered alternatives, that it evaluated the risks, and I think that could be tough for the government to overcome in this first litigation. I think the DC Circuit in particular could make Congress try again and at least show it took a harder look at the details. So that's worth watching in the second half.

And then one last note. Uber and Lyft are awaiting a major decision from the California Supreme Court that's crucial to the business model. That should come down in the second half here too. This concerns a state voter initiative from twenty twenty that said that gig drivers in the state are contractors, they're not employees. But a lower court struck that down and that threatens severe cost tikes for

the companies. I expect the Supreme Court in California to issue its decision late this month or early August, and almost certainly by August nineteenth, and I expect I think it will be good news for the companies. I expect the courts to say that that Proposition twenty two remains valid good law despite what that lower court said, So watch for those catalysts in the second half back to you, Elliott.

period we've been tracking in this case. One of the reasons is that this is the largest damages award in a trade secrets case ever, whether it be a state or a federal court, and that comes from from companies that are really not that big. So, for context, the damages award was about twenty five percent of the pre verdict market cap of the combined companies. No other award in history has been above sort of five percent, so so that just sort of shows you how far of

that liear this was. Now Pega Systems appealed and the oral argument was held November fifteenth. The arguments really reinforced our view that this award would be significantly reduced, primarily because of a burden shifting decision made by the District Court that we think winninggainst both the Virginia statue and case law. Now we believe there is a strong like like the appeals Court is going to reverse and reman

for a new trial on damages. There's also a chance that the court entirely overturns the finding that APN had established trade secret protection and misappropriation in the first place. If it does that, then that would entirely eliminate the damages award. Now, we had been expecting a decision in one age, but that was based on how quickly the

court was working through decisions in twenty twenty three. Now, that was the very first full year that the court was in existence, so it's not all that surprising that the timing has been pushed out now that the court has a little bit more of a backlog. However, that makes said we do fully expect a decision to come in the second half of this year.

the court has to first opine that the testimony is reliable. Previously, the federal court found Planets experts reliable and allowed them to testify, but the court has revisited that ruling is reevaluating whether that testimony should come in. If the court allows the experts to testify, a trial may be held in twenty twenty five, absent a deal or stay. We should know more about the Court's rulings on expert motions in late to EAH when we think there will be

a hearing on them. And earlier I said there could be a stay. And the reason why I say that is because while this litigation proceeds in the district court, Johnson and Johnson continues to explore bankruptcy options. By way of background, its subsidiary had previously filed two Chapter eleven filings,

and both filings were on separate occasions. Both filings were dismissed, the first after an appeal and the second by the bankruptcy court because the courts found Chapter elevens were filed in bad faith given that the subsidiary that held all the legal liabilities related to TALC was not in financial distress.

As Jane Joy reportedly explores, a third bankruptcy filing, more claimants seem to agree to the roughly six billion dollar proposal it has floated to result current in future ovarian cancer claims, but it remains to be seen whether a third bankruptcy attempt would be successful. In the meantime, state trials State court trials continue and are scheduled throughout two h In Zantac cases, a Delaware court in May allowed

plaintiffs experts to testify by way of background. Tens of thousands of planets filed lawsuits against manufacturers JSK, Bow and Jeriffizers and other makers of Zantac, claiming an ingredient in it causes various cancers. Over fifty thousand claims were filed in federal court. Federal cases were consolidated in a multi district litigation in Florida. Plane just chose only to pursue

five types of cancer they said Zantak caused. In December twenty twenty two, the federal court there barred plaineff experts from testifying as to all the so called designated cancers, finding the expert testimony unreliable, so she dismissed the cases because those cases couldn't be prosecuted without an expert. But the federal court's ruling was not binding on state courts,

so many cases alleging not just the designated cancer. Those five designated cancers, but other types of cancers as well, were filed in state court in Delaware, where some of the defendant companies were headquartered. Over seventy thousand cases were filed there, and in May, the Delaware Court issued a decision finding plaintiffs experts reliable as to all of the cancer's plaintiffs alleged. The defendants have requested to immediately appeal

that order. Normally, such orders that don't end cases are not immediately appealable. The challenger needs permission to appeal the court's permission to appeal. The defendant asked the lower court for permission on July first. The lower court rejected their request. The defendant has now the Delaware Supreme Court for permission to appeal. We think it may grant their request in two h and if it does, it may issue decision

before the first Bell Weather case goes to trial. If it doesn't, the manufacturers could face potential headline rest which

with potential negative verdicts before the appeal is decided. In litigation against three and DuPont Comors and others over alleged p pass contamination discovery on personal injury trials to continue through two h By way of background, those companies and others were sued because they allegedly manufactured so called pfas were forever chemicals that do not degrade and contaminate water and

are now in the blood of nearly every American. In mid two thousand, a science panel commissioned in connection with a lawsuit over a DuPont manufacturing facility, link those chemicals to six diseases, to which include cancer. Law are cancer lawsuits were filed over specific products so called aqueous film forming foam, used at military bases and commercial airports and elsewhere to put out fires. US alleged that a triple F as it's called, resulted in water contamination and personal

injuries as a result of the consumption oftaminated water. In June twenty twenty three, before the first Bellwether trial on water authorities who alleged contamination was held three and reached a ten million dollar deal to resolve those cases. Those water authorities had sued for remediation. Remediation not ten it was ten to twelve billion dollars, and that deal was approved by the court. Earlier this year, DuPont also reached a settlement for one point two billion dollars that was

also approved by the court. The next phase a litigation will focus on personal injury cases. As of April, there are around five thousand personal injury cases, over half of which were cancer cases, but that number could dramatically increase depending on trial results. A pool of cases has been selected to be worked up for trial. Discovery will proceed through too, eh and we think by next year we could get a decision on whether plaintiffs experts will be

allowed to testify. And with that, I'll turn it back to you, Elliott.

equipment or services. Some of the companies that have been mentioned uji Apteci Biologics, among others China's bgig No Mix, which is notable because it is on the Commerce Department's export control list over concerns that it collects genetic data

and contributes to Beijing surveillance efforts. So this is all part of a broader national security effort that could also bolster US manufacturing at the expensive China's The comments provide new momentum for Bioscure Act after it was omitted from a Defense authorization bill and that generated headline noise about maybe the Bioscure Act is dead and is not going to happen. We think it could get a standalone vote

over the summer or potentially after the AUX recess. It's also possible in the Senate they could add the Bioscure Act during floor debate, but at the end of the day, the big thing to watch is the Lane duck session, and this could be or we think this is on the pretty high on the list of priorities, or a catch all bill. There's enough support for it in both chambers.

The bill, or at least a version of the bill, has passed the House and Senate committees overwhelmingly, maybe one or two votes against, and it's been modified in a way to provide a runway for the drug makers to find other sources in terms of getting their drugs developed and onto the market, basically until twenty thirty two to

come up with or rejigger their supply chain. So I think that has made some headway and ease some concerns from lawmakers about supply chain issues, and so it bolsters our view that this is going to happen this year.

provide some clues on how future negotiations can work. Where the or at least this administration might end up in terms of price, though you know, if a Republican ends

up putting the White House, that could change. I think it's worth noting the president or former President Trump hasn't said anything about the or said much about the health pieces of the IRA He once supported negotiation before opposing it as president, and he has his own proposals in terms of tying prices for drug sold in this country

to those in other countries. The bill does have a lot of latitude for I'm sorry, the law does have a latitude for a future President Trump to set deeper discounts or be more favorable to pharma.

companies just decide to exit. The other piece for watching is the IRA impact, because there is the part d redesign. The negotiation piece gets all the attention, but the redesign is important because that caps out of pocket costs and shifts the financial burden in the catastrophic phase, which is basically the limit the area where the government typically paid most of the drug costs for some individuals. But it's shifting to health plans. So how this coupled with the

low payment rate utilization trend changes. How will this affect benefit package design and pricing prem A and Part D plans will be interesting to watch, And the fact that it's October first, one month before the election, will be interesting in terms of pricing and how seniors react to potentially needing to find new healthcare plans.

talked about today. We also encourage you to listen to other episodes of Votes and verdicts on whatever platform you'd like to get your favorite podcasts, and with that, thank you again for listening and have a break down