Ep 211 — Go Woke, Go … KA-CHING!

We're all on one side or the other. Uh-huh. And I spend a lot more Costco than I ever did a target. And so do a lot of other people. Yeah, great. So when you look at the numbers, in 2025, Target sales were down 2.6% market analysts called it a challenging year. That's 2025. For yeah. Costco sales were up 8.1% in the same time. Right, go woke. Don't go broke. Right. Welcome to La Enquea, where Kalshi is getting sued over the assassination of a runs leader. And Thropic is suing the Trump administration for the woke. And Hambondi continues to be very bad at her job. We've got a lot to cover, so let's get after it. Hey guys, I'm Liz Dianne with me as always is Andrew Torres. Andrew, how are you? I am fully recuperated question mark fingers crossed from the cold that laid me low. How are you doing this? I'm okay. I'm feeling a little, my voice is a little weaker than I would like it to be, but we persevere. Indeed we do. And I've got to say, I use that time to work on the magic together and show which, uh, should be coming sometime later this week. I'm really excited for that, especially because I see there's a note in our script and it just says MTG coming this week. And I was like, oh my god, is it Marjorie Taylor Greek? Is that a fishback? No, no, it's, it's the good MTG. Oh, all right. That's better. So, okay, today we're going to talk about Carrie Lake getting called a loser in court. Again, along with Attorney General Hambondi, she also loses in court. Those are cases about the appointments clause that they're not just going to be about ad hominem attacks. I mean, we're going to do that too. Yeah, well, we always talk. But we're going to break down Anthropics lawsuit against the Trump administration for designating it a supply chain risk and we will make fun of the DOJ for its humiliating U-turn in the case targeting the, quote, liberal law firms. Yeah. And for subscribers, we're going to talk about the Department of Justice pulling out of the antitrust suit against live nation because you know, if you think about it, letting the largest owner of concert venues run ticket master is just working out great for consumers. Amazing. Love a particular service fee. Yeah. But first, okay, first up, the war powers resolution failed in both houses of Congress. Yeah. We could have put a stop to this madness. Maybe it is sheer madness. The president is now going to cite this vote as tacit approval for his illegal undeclared war in Iran, except that he keeps calling it a war. I mean, it's pretty clear that the stock market thinks it's a war. And the oil company. Oh my God. Listen, you guys got to listen to the dumbest damn thing I have heard in at least 24 hours. This is Fox News' Brian Kilmeade explaining why all those oil tankers idling in the Arabian Sea and the Persian Gulf should just sack up and cross the straight of Hormuz in Trump's as he'll reinsure them if they get blowed up. The administration announced $20 billion maritime reinsurance plan. So he's saying, hey guys, even though we get the oil, the market's flush, this is fear. I'm still going to ensure your ships. So go through the straight. And that's just part of it. If you want to diminish the Iranian threat, if you want to make sure that this ends up with complete Iran capitulation, sow some guts and go through that straight and do it. Yeah. I'm really looking forward to the next episode of Fox and Friends coming to you live from a raft in the straight of Hormuz. Don't worry, Brian. If there's a drone strike, Trump says he's got cash for your family. Uh, God, these people are idiots. Okay. So oil is at $100 a barrel. More or less, it was up. It's maybe a little bit down now because Trump made some weird noises like that the war was almost over. I don't know. I mean, Trump's one actual achievement was getting gas prices down. If you consider that an achievement, which I don't, but okay, buy their own metric, low gas prices was a victory. And now they're going to piss it away on a war of choice. Well, speaking of idiots, Trump has also decided that Congress is working too well these days, right? It's definitely an article one crisis. And the crisis is that too many bills are getting passed. Uh, yeah. The Congress understand it or has checked in. Yeah. So Trump said on Saturday that he will not be signing anymore bills until Congress passes the SAV Act and disenfranchises millions of voters plus some new anti-trans stuff that he stuck in there. Uh, okay. I'm, look, Congress is totally dysfunctional. They can barely pass a budget. We're not passable. Right. All the land securities unfunded, except for that like $7, $2 billion slush fund from last year. I mean, you know what? President doesn't have to sign anything. See if I care. Yeah. Two votes. Okay. We live in the weirdest time. Yeah. So okay, here in our own backyard in Maryland, it looks like an immigration surge is imminent. There have been a lot of sightings of fleets of DHS vehicles parked and parking lots as if they're kind of staging. DHS is renovating a 825,000 square foot warehouse in Hagerstown. The state sued two weeks ago to block this potential concentration camp on environmental grounds, although I would note that we have not as yet moved for injunctive relief. So make of that one what you will. But because Maryland currently lacks such a concentration camp, the temporary holding facility in downtown Baltimore is being used to detain immigrants for days or even weeks in these really horrible inhumane conditions. And that lawsuit is moving. Yeah. We've talked about similar lawsuits in New York and Los Angeles with regard to what the government euphemistically calls temporary detention facilities. And basically what ICE is doing is cramming these holding cells that were meant to be used for processing individuals for a couple of hours full of these are rooms that are supposed to hold a few people for no more than 12 hours. They do not have showers. They do not have beds. In many cases, they do not even have chairs. They have open toilets. And ICE is just stashing people in there without adequate food, hygiene, bedding, medical care. Not for nothing. These folks have also been systematically deprived of access to counsel. But in every jurisdiction have ordered the government to provide immigrant detainees with conditions that comply with the Fifth Amendment. Right. The fact that courts are saying holding immigrants in these conditions is illegal is why they want to build concentration camps in every state. Yeah. That's exactly right. So here in the District of Maryland, Judge Julie Rubin issued class certification and granted a preliminary injunction ordering the government to provide 31 square feet of floor space exclusive of any space within an eight foot radius of the open toilet. They also have to provide hygiene, medical care, and telephones. I bet is the bare minimum. And Judge Rubin noted that this is a crisis entirely of the government's own making sense. It's holding these people on that theory of mandatory detention that has been roundly rejected by hundreds of judges. Particularly since most of these detainees are people who showed up for immigration check-ins. As they were told, or got picked up on the street because they've been regularly checking in as part of being on the non-detained docket. These are clearly not criminals. Yeah. I do wonder what they're going to do with those monstrous, internment facilities, if and when courts ruled that the theory of mandatory detention is illegal and they have to let these people go and go back to their families. I mean, we've talked about the Fifth Circuit being the only court to bless this deliberate misinterpretation of the asylum statute to apply to people who've been in the interior of the country on this non-detained docket for years and sometimes decades. I mean, the government has deliberately avoided getting a ruling from another circuit court because it's almost certain that they would lose. But eventually, the four circuit is likely to say, no, you can't lock up these people indefinitely. At which point, what are they going to do with the Hagerstown warehouse and all of the other ones that they're building? I mean, the private prison companies have been repaid for their investment in the Trump and Hagerstown, many multiple times over. But I'm not sure there's a plan. I guess the plan is to try and get the Supreme Court to bless that theory. I mean, assuming that the Roberts Court wants to go down in history as the Supreme Court that made Korematsu great again. Yeah. I should say, for our listeners, Korematsu was the case challenging Japanese internment during World War II. It is held up along with the Dred Scott decision as one of the great stains on the Supreme Court's legacy. I mean, I don't think that would happen here, but I can't say I'm 100% confident anymore. God, that's grim. Yeah. Okay. Let's go to a different kind of grim. Two gamblers, I guess they call themselves traders or investors to generals. I don't know. These two dudes are suing the ubiquitous trading site, Kowshi, in federal court. In California, on behalf of all the dudes who didn't get the payout on their bet, I mean, contract swap that Ayatollah Ali Hamani would leave office as Supreme Leader of Iran before March 1. Liz, I get the sense that you're not placing same game parlay's on Fandall. Look, I admit, I take a dim view of gambling personally. It is always kind of squicked me out. I'm not trying to ban it. I'm not judging you if it's your thing. My kids certainly enjoy playing in this prediction market. But when you and I were coming up, Andrew, people who were so into gambling that they invented new things to gamble on, we're not looked up to as like innovative entrepreneurs. And that was before they started encouraging people with inside knowledge and skin in the game to start placing bets, which certainly seems unfair to me. I mean, there's this insane article on the Wall Street Journal this weekend about Kowshi and Polymarket offering fraternities a bounty on every new account they signed up. And they were getting like $30,000 in that same article. Jeff Bezos's stepson belongs to a frat and his frat brothers made tens of thousands of dollars betting that Bezos would not attend a specific football game, which they knew he wasn't going to attend because this stepson told them for sure that he wasn't. I have so many thoughts here. So as you may know, I love poker. I have spent time in casinos. And I think there really is a relevant comparison here that you're making to gambling. We have talked about the Department of Justice's criminal indictments of various prominent athletes who have been alleged to have influenced prop bets. Probably going to be dropped any day now. But some of these are really high profile players. Like for example, Cleveland Guardians, Closer and three time all star Immanuel Clayz. Right? I mean, he's alleged to have taken these kickbacks on $10,000 and $20,000. But like, why is a guy who just signed a $20 million contract taking these penny-any kickbacks? And I think the answer is, because it's too easy. So Clayz, just to situate this, is one of the hardest throwers in baseball. He's hit 103 miles an hour with this fast. But he's really good. So one of the things you can do is you can get on Fandall and you can place a prop bet on whether the next fastball that Clayz throws is going to be over 98 miles an hour or under 98 miles an hour. And like, you know who could control? Yeah. Right, Immanuel Clayz. Because it's really hard to throw a ball 97. Right? I throw about 37, right? Most major league pitchers can't throw 97 at all. So it doesn't look suspicious if like, this one just kind of happens to come in on the under, right? And that is, I think analogous to why Oregon Senator Jeff Merkley and Minnesota Senator Amy Klobuchar have introduced a bill that would just ban lawmakers from trading on Kowshi and Polymarket. Outright. Because again, it's just too easy. Yeah. Over the weekend, we learned that an anonymous user on Polymarket made a half million dollar bet that the United States was going to strike Iran hours before we did just that. I mean, nobody can prove that that was someone connected to the administration, but it was somebody else like they're doing it the hard way, right? It would be Immanuel Clayz levels of easy for a person with that kind of knowledge to just cash in. So in any sane society, I think Merkley's bill would pass 100 to nothing. Yeah. That's an interesting qualifier. Because in our society, Kowshi and Polymarket are both sidelining up to Trump's kids. I believe that Don Juniors on the board of Kowshi or something like that. And that's a really good way to ensure that you don't get regulated or prosecuted because in a personalized regime, that's how you protect yourself. Well, when you put it that way, okay. So obviously, Kamini left office before March 1st because the United States government assassinated him on February 28th. The plaintiffs in this lawsuit alleged that there was hidden fine print language in Kowshi's terms of service that said there was no payout in case of death. So I guess Kowshi paid out when we black bag, but did not murder Maduro, but this time we said no. I hate this time so much. I hate that everything is gamified. I hate that the government treats for like a video game. I hate that there's nothing stopping people with insider knowledge from betting on this stuff or manipulating world events to enrich themselves. To be fair, not everyone finds jigsaw puzzles as thrilling as you do. I love jigsaw puzzles. No one ever went bankrupt off to jigsaw puzzles. Do they have hotline numbers for people who've gotten in too deep with Big Saw? No, they do not. One day, we're going to have to find you a jigsaw puzzle based lawsuit to do your own deep dive. Yeah. Okay. This lawsuit alleges a raft of claims, including breach of contract, fraud, negligent misrepresentation, as well as several state law claims that are specific to California. One of them claims treble damages under California penal code section 496C, which allows civil suits against people who receive stolen goods, which I guess is a good explanation as to why this case is being filed because treble dammit. And that would be a shit ton of money. Yes. I also suggest that maybe they may not be very successful. I mean, look, the firm that invents a new kind of mass tort lawsuit always makes that right. High risk, high reward. Think about the tobacco lawsuits that was going to be a crazy lawsuit until it, you know, added billions of dollars. Yeah. Although I agree trying to use a lot of talks about people at swap meets who sell stolen goods and try using that against an online gaming. I mean, oh, sorry, trading on online trading company. Tick-sop puzzle. Yeah. Right. Like, it does seem like a stretch to me. Okay. We are going to come back and talk about the revenge of the three hat dance and what a pathetic loser carry lake still is. But it is Tuesday. So time to thank our new subscribers on substack. Thank you to Owen Thompson, S Foster, Brandon Lockhart, Mike Mickalitzi and Dave Dusenberry. And a special thanks to those of you who signed up on Patreon over at patreon.com slash live chaos pod. Thank you to Katie Nolan, Chris Hilton, for I am burdened with a glorious beard. Shame ham works on contingency. No. Money down. Just in fatig. Patrick Martin, Christie and the coffee emoji. And from last week, I tracked it down. That subscriber's name is now penis law is hard. You can put it in the hands of your lawyer, but it won't stand up in court. Wow. So if you too would like a shout out, would like either of us to have to read something slightly risque out of the air or try and figure out how to pronounce an emoji. You know, how to do that. Just head on over patreon.com slash live chaos pod. Give us a little as a bucket episode. You will keep us on the air. You will slightly embarrass us and we will have it forever. Have fun forever. Andrew. Is it good when the first page of an opinion has three separate footnotes to the declaration of independence? Well, I think that depends on which side you're on. Fair. If you're the one larping as King George, I think it's not great. Yeah. OK. So if you didn't get that from Liz's intro, we are talking once again about presidential appointments and that starts with the Constitution's appointments clause. It's easy to remember. It's article two, section two clause two. And the appointments clause says, the president shall nominate and buy and with the advice and consent of the Senate shall appoint officers of the United States, whose appointments are not here and otherwise bred for. And for which shall be established by law, but the Congress may by law vest the appointment of such inferior officers as they think proper in the president alone in the courts of law or in the heads of departments. So principle officers and anyone else designated by Congress must be appointed with the advice and consent of the Senate. And those officers are what's known as P.A.S. and that stands for President Appointed Senate Conferring. I don't ask me why it's not P.A.S.C. It just is. OK. So one of the big fights in the Trump era is over P.A.S. officers. His Trump does not want to bother with the advice and consent of the Senate. He just wants to jam in whatever cronies floats his boat on any given debt. Which is weird because Congress approves pretty much every psychopathic free key nominate like Secretary of Health and Human Services, Robert Kennedy, right? Who is now staffed that administration with a bunch of anti-vaxxer grifters and other loons. So obviously Trump gets his way except for U.S. attorneys and judges because of the Senate blue slip rule, which is why we talked so about so much litigation over those U.S. attorneys. And we're going to talk about that today. But first let's talk about Carrie Lake and the U.S.A.G.M. order, which we wrote about at the blogs and to sort of situates the debate. We'll link to the post in the show notes. But briefly, Trump said after he won in 2024 that he was going to put Lake in charge of voice of America, Lake, you will remember is that loon from Arizona who kept refusing to accept that she lost elections and then hitched herself to the Magistar. But before that, she was a local newscaster, which I guess qualifies her to be in charge of all overseas media, except then Trump fired the members of the International Broadcasting Advisory Board, which meant that there was no quorum to confirm Lake, even if those board members had wanted to. So instead, Trump put Lake in charge of the U.S. Agency for Global Media, which is the parent company of all our foreign media outlets. That's the O.A. and Radio Free Europe Radio Liberty, Radio Free Asia. There's a bunch of those outlets. So in 2022, the Senate had confirmed Amanda Bennett as CEO of U.S.A.G.M. because that's principal officer, right? And as you saw from the appointments clause, requires Senate confirmation. Senate is an incredibly accomplished journalist who previously led the voice of America. But she knew things were going to go to shit under Trump, and so she resigned when he was inaugurated in January of 2025. In March of that year, the administration made a long time U.S.A.G.M. employing in Victor Morales acting CEO. And that was probably kosher under the Federal Bacon Seas Reform Act because Morales had been employed at the agency during the 90 days prior to the departure of the Senate confirmed head. At that same time, though, Carrie Lake was made deputy CEO of U.S.A.G.M. and Morales executed a memo, purporting to delegate more or less all of his powers to Lake. And that was not kosher. Yeah. So this question of delegating authority is going to become a huge issue in 2026. You flagged this early on, right? Trump spent all of 2025 getting the power to fire anybody he wants. But that doesn't imply the power to stick anyone else he wants in there to fill those spots. The administration seems to believe that it does. And so they continue to ignore its obligation to seek Senate confirmation of these P.A.S. officers. And just to complete the procedural picture in July, Morales wandered back to his old job. And Carrie Lake declared herself the acting CEO of the U.S.A.G.M. for Global Media by operation of that same Federal Bacon Seas Reform Act. And I should say that that is five U.S. codes, section 3345. That allows the first assistant to take over the top spot on a temporary basis when a Senate confirmed officer can't do his duty. And you're thinking, but wait, Morales was never confirmed by the Senate. You are right. And if you're thinking, wow, that sounds like the same trick P.A.M. Bondi tried in the U.S. attorney's offices. You are right again. Yeah. So Lake immediately started burning down the agencies in accordance with this March executive order by Trump, which demanded that dozens of Congressionaly created and Congressionaly funded agencies be shut down as much as possible. So Lake canceled most of the programming. She fired the staff. She withdrew from leases. She canceled contract. But she's been at least partially thwarted by Judge Royce Lamberth, one of the famous old bulls we always talk about. He was a Reagan appointee to the U.S. District Court and the District Court. Yeah. Judge Lamberth ruled that Lake couldn't refuse to spend money and she couldn't shut down broadcast, which were mandated by Congress. And then this weekend he ruled that she had actually never held any legitimate authority because in the first instance, as we said, there's no law allowing Morales to just hand her his job. He couldn't have done it if he was Senate confirmed. And he certainly couldn't do that as a placeholder. Right. Because if you could just delegate the responsibilities of the position to somebody else, what would the point of the appointments clause be? Like in every agency that the president could do this same two step, right? Step one, pick some long standing lower level employee who will do whatever you ask and then make him the acting head and then step two, have him hand off all of those acting powers to some unconformable loon. Right. And in the second instance, Lake could not ascend to the acting CEO under the Federal Vacancies Reform Act because Morales wasn't Senate confirmed. So everything that she did in her official capacity was ultra virus and void. Carrie Lake is undefeated at being a loser. Okay. So now let's talk about the US Attorney's case in New Jersey. We have talked about this case for a very long time now. This is one more Pam Bondy did that whole three step. Riggum Morales to shoehorn Alina Haba into the position as US Attorney despite the fact that she was never going to be confirmed by the Senate because New Jersey has two democratic senators, Cory Booker and Andy Kim and they were never going to consent. They were never going to turn in their blue slips. So what Bondy did was make a facially illegal appointment under the law which govern special counsel specifically. That was hat one. Then she made Haba her own first assistant and tried to have her succeed herself under the FERA that's had to and Bondy tried to delegate to Haba all the powers of a US attorney under the special counsel statute. So that's you can see the similarities here to what they did at US AGM with Carrie Lake, right? You know, there's this delegation thing. There's the FERA. So in the cases of the US attorneys, we talked about this a lot. Judge Matthew Brand and the third circuit said, no, none of those laws work like that. Yeah. And Bondy doesn't give up that easy. And I should add, she's now in this multi front war with the judiciary, right? Because 28 US C section 546D says that if a US attorney's office is vacant, then the judges in that district can nominate a temporary replacement to fill that vacancy to make sure the job gets done until the Senate confirms someone and they pretty much uniformly picks up buddy who has relevant experience who they can trust not to screw it up. But every time the judges have done that, have exercised their 546D powers to nominate someone when Bondy wants an incompetent idiot in there instead, Bondy has then immediately fired the person that the judges chose. And by the way, no previous president has ever tried to do that, right? As said, oh, the judges at this district want this competent longstanding prosecutor run the district, no, you're fired. And so the reason why Judge Matthew Brand from Pennsylvania is presiding over the New Jersey US attorney's office cases is because Bondy fired Desiree Grace, who was the district's judges choices to fill that vacancy. Right. So now Bondy says, okay, Judge Brandt, if I can't delegate all the powers of the US attorney to one person, I will divide that power among three people. So there, which is administratively a mess. And of course, I didn't end the matter because the same defendants who said, you can't prosecute me because Alina Haba was illegally appointed came right back and said, you can't prosecute me because this triumvirate structure is illegal too. So Judge Brandt please dismiss our cases. Yeah. And let me say, I like Judge Brandt a lot. Yeah. I think he's very, very smart guy. And I think he's kind of like intellectually giddy at finding himself in this position. Right. Judge Brandt was the first judge to say that these appointments, right, the Alina Haba, the three hat dance was illegal. And his original reasoning was then the basis for subsequent rulings across the country on other losers, right. And that's now essentially settled law at the district court level. And I kind of think if I put on my amateur psychologist hat, like that, Judge Brandt is is championing it the bit to go a little bit further out partly because it's a, it's a boost to you to be the model that other judges follow. And partly I think because Bondi keeps squaring up on him so we can't put it. So let me see if I can't steal man, Pam Bondi's argument goes, it goes like this. After 28 USC section 509, all functions of other officers of the Department of Justice and all functions of agencies and employees of the Department of Justice are vested in the Attorney General. And then under the next statute, 510, the Attorney General may from time to time make such provisions as he considers appropriate, authorizing the performance by any other officer employee or agency of the Department of Justice of any function of the Attorney General. So Bondi's argument is that the Attorney General has all the powers of the Justice Department and she can delegate any of them, however she sees fit. There's that delegation question again. In admittedly, Bondi has a better claim than Lake, but still no, right? Because if Bondi could delegate the power of a US attorney, then the appointments cause would be a nullity, right? She could just delegate the authority of every US attorney and the president would never have to get anyone confirmed and that can't be right. Or as Brant suggests, if Bondi is the entire personification of the Justice Department and can delegate anything, she could delegate her entire authority, the all the powers of the Attorney General to like a paralegal and go play golf all day, which is reductio ad absurdum, but it's not wrong. It does demonstrate that this theory of Bondi's unlimited delegation authority cannot be right. So, obviously, the US attorneys are separate entities from the Attorney General. They aren't working at main justice under her and she cannot just park three people in New Jersey, divide the responsibilities of a US attorney between them, fund them with money allocated for US attorneys and then say, no, they're not violating the appointments clause because I have given them this authority, I with my unlimited delegation power. So, Judge Brant says this triumvirate structure is no more legal than Habba holding herself out as US attorney. Right. And I think we expected that rationale based on Judge Brant requiring additional briefing on the funding and the logic of his prior rulings. But now, the question is the remedy. And here's the part where I think Brant might be it should go a little farther. I agree. So in the previous case, the defendants did not get the remedy they wanted. They failed to get their cases dismissed because the assistant US attorneys that were working under Habba were acting legal. Right. That is, they were acting under a delegation of power from the Attorney General in DC and not the US attorney in their particular state. So it didn't matter that Alina Habba calling herself the US attorney for New Jersey was not legally appointed. Well, I should say it did matter for James Comey and Tish James in the Eastern District of Virginia because Lindsey Halligan was the only one who signed their indictment. So when you took her away and said she was not legally appointed, there was nothing left there that they had to go back to the drawing board. But in every other case, the prosecutions were saved by the presence of these line attorneys who had proper authority. And now Judge Brann is saying, well, Pam, he really forced me to think deeply about this question that no one's ever had to think about before you. You maybe spend a whole lot of time investigating the powers of the Attorney General to delegate authority to non-Send it confirmed officers. And I'll be getting to doubt whether those assisted US attorneys really can save a prosecution when the US attorney or person calling themselves the US attorney supervising them is themselves illegitimate. So let's brief that question right now. Yeah. Let me just kind of draw that out in case it was a little bit confusing in every other one of these prosecutions across the country. The defendants have said, please dismiss our case because this prosecution is illegitimate because there's no legally serving US attorney. And every court to consider the matter thus far building on Brann's first decision. Remember, he was like, I took the first crack at it. Building on Brann's original ruling. They all said, but the prosecution survives because the line attorneys were working under a valid delegation of authority from the Attorney General herself. And now Brann said, on further inspection, I don't actually think the case law, is all that persuasive. And now you've forced me to delineate how far the attorney general's delegation authority extends. I'm not sure that it does extend to those line attorneys. So it's not clear to me that these prosecutions are still valid. Yeah. Can you can you play that out a little bit? Well, I mean, I don't know because I think we'd be an uncharted territory. And I think that that's going to be a bridge too far for any appeals court. Right. I mean, the theory is that none of the prosecutors, none of the line prosecutors have any authority to try these cases if the US attorney is invaledly appointed. And I just don't think that can be right. But I mean, look, let's just finish with what he said. He said he's not going to decide that issue now. He's going to have further briefing on it. However, the court will not count. It's another novel attempt to game Congress's statutory scheme, which I have by now spelled out in pain's taking detail. The work of the US attorney's office in New Jersey is simply too important to continue throwing novel leadership plans on the wall to see what will stick. Compromise is part of this system. And I implore the government to take that approach. If it does not, it is on notice that a third attempt at unilateral office filling will be met with extremely strict scrutiny and any deficiency in its method will be taken as bad faith and result in dismissal of cases at any stage. That is remarkable as a threat. And look between the lines, right? This is this is Judge Brandt saying, I told you you couldn't have Alina Habba. And I made that as painless for you as possible, right? I said, I'm not going to invalidate her prosecutions. I'm going to let you go forward. And then you seized on one footnote in a 79 page opinion, in which I said, I'm not opining as to whether you might be able to delegate the powers to a bunch of different people. And you use that to come up with this crazy triumph or it's structured to get around the same thing. Try it a third time and see what happens. Yeah, I mean, I think that they will. I really do, right? I mean, there is a way around this. There are multiple ways around this. We didn't get into it. But if Trump puts forward another nomination to the Senate, while that nomination is pending, he gets to make another kind of interim. He can elevate somebody else from in the office to serve as an interim attorney. He could do it that way. He could work with the judges in New York to like put somebody rational in there. But he just refuses to do it. And I mean, I think he is tempting, tempting fate here with this. Okay. We are going to take one more ad break, unless you're a subscriber at patreon.com slash log on KS pod or law and KS pod.com. We will be right back to discuss a humiliating U turn by the Justice Department and our endless culture war. And we're back. So in February of 2025, you will recall that the Trump administration issued a raft of executive orders targeting law firms whom the president associates with Democrats. He used the power of the government to retaliate against these law firms by taking away their staff security clearances and rescinding government contracts, announcing bogus investigations. And he declared that their lawyers and power legal would be actually physically locked out of government buildings, including courthouses and, you know, maybe post offices. Nobody could tell, right? Right. These were open ended menacing orders. There were 13 of them in total. Nine of the big law firms caved and agreed to do a collective $1 billion in conservative pro bono, whatever that is. Four of the firms decided to fight. Yeah. Those four firms are Wilmer Hill, Jenner and Block, Susman Godfrey and Perkins Cooey. Instead of caving, they sued. And of course they won. All four of those firms got district court injunctions from four different judges to whom were entered by very, very conservative George W. Bush appointees. That's because the law is super clear here. And more to the point, judges mostly come out of big law firms, right? They have friends at those big law firms. They're used to the high level of practice in their courtrooms from lawyers at these co-factory law firms. I don't care how right wing and how pro Trump you are as a judge. Judges were never going to sign off on a regime where the president can intimidate big law firms that he doesn't like. This was never winnable by Trump. Right. I mean, we've talked a lot about the shadow docket orders. Trump tried it. Yeah. He ran to the Supreme Court, and asked for a stay. And the Supreme Court said, no. So the executive orders never went into effect. And the government appealed to the DC circuit, but they kept kind of filing motions to extend time because they knew they were going to lose. They did not want to litigate this and have another round of losses. Right. Which is why on Monday, March 2nd, the DOJ finally filed a motion to voluntarily dismiss that consolidated appeal to the DCs. They tapped out like, we had a good laugh in the docket alerts on the show. But like, this is a perfectly rational decision. Like, you take their relatively quiet L now, or OK, law and chaos makes fun of you. But like you avoid getting publicly humiliated at the DCs. Or only a complete idiot would decide to fight these cases. And yet the very next day, the Justice Department filed a motion to undismiss, respectfully moving to withdraw their motion to voluntarily dismiss these consolidated appeals. I have never, ever, in many decades of practicing was you did anything like that. And I want to be really precise about what's so weird about this. Because lawyers accidentally file things, lawyers change their mind. And that's what the DOJ is trying to characterize. They're just saying, oh, look, our client changed his mind and he's a demented mind. And in a vacuum, right, if you file something and you take it back before the other side has had to file an opposition or before the court can act on it, then there's probably not a lot of prejudice. I mean, not a lot, but not zero. Right. And let me be concrete about that, right? Like as a practitioner, suppose I've got a discovery deadline and a week beforehand, the other side says, you know, they file a notice of dismissal. But I might, I would. There's just, there's just charging my clients for producing that discovery. And then if a few days later, they undisclise the case, even if I haven't filed anything, I get a pick back up. I've lost those days of work, right? Like, so not a lot, right? But in that case, it's really easy for the judge to remedy the prejudice that I've suffered, right? Like, I'll move for a week extension to file my discovering the party that, you know, asked for the oopsie doodle doover, like they're not going to fight mine. They're not going to oppose my motion to extend time. Here's the thing. It's weird. It's laid out actually in the statement that a Pellies Council put on the record that was part of this motion to withdraw. They say, we oppose the government's unexplained request to withdraw yesterday's voluntary dismissal to which all parties had agreed. Yeah. So this was not just Trump changing his legal strategy and then it's that DOJ lawyers told Council for four different law firms, we don't intend to pursue this anymore. And then the next day, they filed a motion of ha ha just kidding, right? Like, that is one lawyer, in this case, probably associate attorney general Stan Woodward. I would say deliberately misleading opposing Council. I mean, I don't know whether he deliberately misled them, right? You like, shit in, shit out, right? You maybe got the news at the same time they did, you know, look, Woodward used to eating a lot of shit. He was a good boy. He was one of Donald Trump's personal lawyers. He represented the two accomplices in the Mar-a-Lago stolen documents case. He's got a he's got a long history. But to be clear, no matter how weird or rude this was, I do not think it's going to affect how the DC Circuit panel addresses the motion. Everybody's basically pretending that Woodward didn't just wet a massive fart rip in the litigation elevator. Like, they're going to grant the motion to undismiss in one sentence order. And then you'd discase into the son after oral argument as they were always planning to. I agree entirely, although if you want the counter argument, right, it's that the DOJ filed that motion to withdraw on March 3rd. And as of this recording, nobody's acted on it. I mean, I look, as I said, they're pretending they didn't. I would be nothing into it, right? The panel has at least two Biden appointees, Michelle Childs and Florence Pan on it. I think I think it's Brad Garcia's the third lawyer. I can't remember. I have been meticulously through that docket and the orders were only entered by Pan and Childs. So don't know who's the third person. Look, he's going to lose. And they know that the Trump administration is going to appeal to the Supreme Court. I think we all know how it's going to come out. But the Supreme Court really hates to do things that are displeasing to Trump. Yeah. So if they dismiss this case on this kind of procedural technicality and Trump appeals, the Supreme Court, the Supreme Court will absolutely reverse it rather than or send it back for rehearing rather than piss off Trump. So like, there's no point in that. I agree. A hundred percent. But at least I want to highlight something that you said in episode 209, which is when we first talked about the government voluntarily dismissing this case before it changed its mind. And that is it's Brad Carp, who was the former managing partner at the law firm, Paul Weiss, who resigned in disgrace. He was the guy who negotiated the first, you know, Vichy law firm settlement with Trump. Yeah. Talk about a partner in the elevator. So under Carp's leadership, Paul Weiss agreed to ditch its DEI initiatives and do 40 million dollars of conservative pro bono. And because they went first, Carp and Paul Weiss became the face of Caving Law firms. And lots of partners left Paul Weiss reportedly because they did not want to be associated with this project, which is, which is symptomatic of every goddamn thing in the Trump era, right? The city center was a place beloved of Democrats and Republicans alike. And then Trump slapped his name on it and he made it mega and all the acts. It had booked flat because nobody wants to be associated with them and then ticket sales cratered. And everything is just polarized. It's either mega coded or it's anti mega coded. And Trump, because he is Trump, thinks he's going to slap the mark of Satan on a product by saying is, you know, the enemy of mega or it's woke or whatever. And then the target of his anger is going to wither and die. But he fails to appreciate that his thumbs down is functionally an endorsement for the quarter of this country that hates him. You know, I mean, yes, there is mega brand loyalty, but there's also anti mega brand loyalty. So companies that stand up to Trump also get a huge boost as well as a massive slug of free advertising when he targets them. I mean, can you can you talk a little more about that? Yeah, I mean, look, look, remember target thinking that they could like quietly get rid of their diversity initiatives after, you know, mag a through a fit about the pride onesies and nobody would care, right? That massively damaged target, right? Target's brand was kind of like Walmart, but not evil and with better lighting. And they did it on fire, right? I too was a young mother pushing my cart through the aisles for funsies and like, you know, getting crackers to my kids. And now I go there, like less than once a month. Instead, I joined Costco because they refused to ditch their DEI programs because everything is culture war now. And we're all on one side or the other. And I spend a lot more Costco than I ever did a target. And so do a lot of other people. Yeah, right. So when you look at the numbers in 2025, target sales were down 2.6% market analysts called it a challenging year. That's 2025. For yeah. Costco sales were up 8.1% in the same time. Right. Go woke. Don't go broke, right? Which I think is 2026 is going to be different from 2025, right? Because it's clear that defying the Trump administration can be a really good business decision. There's a lot of commercial upstide to standing up to Trump. And there's a lot of downside to caving, right? Target has not become beloved of the mega people. They haven't flooded the aisles. But okay, we're going to talk about that. And we're going to talk about the lawsuit by Anthropic because these two things are the same after our last ad break. And we're back. Okay, Andrew, let's talk about what a smart business decision, as well as a smart legal decision it was for Anthropic to tell the Trump administration to pound sand. It sounds good to me. Yeah. So for background in 2025 and Thropic signed a $200 million deal with the Pentagon to develop a version of its AI model clawed for military use. And that deal and Thropic had two preconditions. Right. First, the Department of Defense couldn't use clawed in lethal, autonomous weapons systems for yet drone strikes. And I could, it would love to go down a huge rabbit trail here about human on the loop versus human adult. And maybe another subscriber bonus episode. Anyway, okay, that's condition one. The second condition was the clawed could not be used for the mass surveillance of Americans. And then a little over a week ago, it all blew up when Secretary of Defense Pete Hegseth demanded that Anthropic change the terms of its deal so that the Defense Department could use clawed for quote all lawful uses, which would now presumably include surveilling Americans and lethal autonomous death robots. Yeah. And Anthropic said no, but at least at first Anthropic didn't say hell no, right? They said, look, let's negotiate. But if we can't get to a point under our deal where you the federal government will honor those two conditions in our contract. But we will even go so far as to transition your use of AI to one of the other providers that are also under contract and presumably lack our ethics, which, you know, spoiler alert meant open AI and chat GPT. Right. But rather than negotiate with Anthropic or just cancel the contract, the Trump administration lost its shit. It started with Hegseth calling Anthropic CEO Dario Amodia, a liar with a God complex who is okay putting our nation's safety at risk. And then Hegseth explicitly threatened if Anthropic didn't get on board and give the Defense Department what they wanted, Hegseth would make it pay a price either by designating it as a supply chain risk under 10 USC Section 3252 or forcing it to supply clawed under the Defense Production Act. We broke down that contradiction, right? To risky a national security risk, which you must give us. Okay, whatever. We talked about that in the subscriber bonus to episode 208, right, which came down right after Anthropic told Pete Hegseth that they were not going to get on board. But before Hegseth responded. And then on true social, Trump called Anthropic an out of control radical left-wing company of left-wing nut chubs and said, Anthropic better get the act together. He would use the full power of the presidency to make them comply with major civil and criminal consequences to follow criminal counts. Okay. But those consequences turned out to be Hegseth making good on his threats. Hegseth designated Anthropic as a supply chain risk to national security and proclaimed that quote, effective immediately no contractor supplier or partner that does business with the United States military may conduct any commercial activity with Anthropic, after which the Trump lackeys running the GSA, the Department of the Treasury, Health and Human Services, and other executive branch agencies all purported to terminate existing contracts with Anthropic, cut off the use of cloth. At the same time, open AI jumped into the void and said that they were perfectly happy to take that no conditions deal that Anthropic had just rejected. Well, it should be fair, Sam Altman said that he had negotiated an entirely different deal and everything was fine. I don't think anybody was fooled. But then I think Trump and Hegseth thought that they were dealing a death blow to Anthropic and not as kind of what I thought. But that's not how it went down. Claude, which is the Anthropic LLM, that downloads were up 37% on February 27th of the day after they told the Trump administration no. And downloads were up another 51% the day after that. Claude rocketed from being outside the top 20 in downloads on the US App Store to being number one ahead of chat GPT. And that's where they are today. Number one in all apps. And it opened and I paid a price. A senior member of its robotics team, Caitlin Kalinowski, publicly resigned because she said surveillance of Americans without judicial oversight and lethal autonomy without human authorization are lines that deserve more deliberation than they got. And uninstalls of chat GPT are up 295%. One star reviews are up 775%. So it's clear that Trump, wittingly or unwittingly, has associated OpenAI, which was the dominant market leader with MAGA and has associated Anthropic with anti-MAGA. And that maybe is going to work out pretty well for Anthropic. And as a bit of foreshadowing, I'm not sure OpenAI wants that association. No, I think they probably don't. Yeah. And let's drill down a little bit on the commercial implications. Previously, Anthropic through Claude had carved out some niches in the market, but the big picture, consumer AI in that market, OpenAI has 80%. Everybody else, all of the various competitors, are squabbling over that remaining 20% trying to differentiate their product from chat GPT. And now, as you pointed out, the Trump administration handed Claude that differentiation, right? We're like chat GPT, but less evil, less market. Not Walmart. Yeah. And I want to try and predict the future, but my guess is that that might turn out to be worth a lot more than the $200 million government contract that Higgs have purported to cancel right? And I mean, I have joked a bunch about Target and Walmart. I think that's really apt here. Right? Like, let's be clear. Anthropic wanted that contract. They just wanted it with some very, very shallow guard rails in place. They were definitely willing to participate in the invasion of Iran. They just didn't want to have, you know, they didn't want to be the ones responsible for the targeting decisions. Right. And they made chat GPT into Walmart, but Target was never that nice to start with either. Right. Target was only Target because Walmart was Walmart. Yeah. Anyway, but there is this advantage, which is that Anthropic has now sued so it might get to have his cake and eat it too because they might win and still have gotten this good publicity, right? Like, they might not get this $200 million contract, but they probably maybe will be able to defeat this supply chain designation, which locks them out of all government business and guess which law firm they hire? They hired Wilmer Hale, one of the four firms, which beat Trump in court to represent them. Yeah. You got your peanut butter in my chocolate. I want as we talk about the merits of the lawsuit that Wilmer Hale filed on behalf of Anthropic to quote from one Liz Dye from that subscriber bonus to episode 208, which again, we recorded before Pete Hegseth designated them as a supply chain risk. It's the very definition of arbitrary and capricious. I mean, if DOD actually went through with this, Anthropic would have essentially the best administrative procedure act case ever because Hegseth himself has stated that this is about forcing Anthropic to obey not about national security, right? There's nothing insecure about the technology unlike Huawei and Caspersky, which were deemed to be vectors for exfiltrating technology or insecure because they would allow spying or whatever. And on top of that, Hegseth is saying, this tech is so essential, despite being so dangerous that we're invoking the DPA. And in fact, Liz, this is the best administrative procedure act case ever. Yeah. That is count one of this of this lawsuit. So here's the argument. The law allowing the Secretary of Defense to designate a company as a supply chain risk is 10 USC Section 3252. It says that the Secretary has to do three things. First, he has to determine that a contractor or subcontractor constitutes or exposes the US to a supply chain risk. And supply chain risk is defined very specifically. It's the risk that an adversary may sabotage maliciously introduce unwanted function or otherwise to subvert an information system used for national security. And once the Secretary makes that determination, the second thing he has to do is consult with the procurement officers about the extent of the risk. And third, he has to put in writing an official determination that excluding the contractors both necessary to protect national security and that less intrusive measures are not reasonably available to reduce the supply chain risk. So Hegseth, did you do any of those things? No, he was just too busy tweeting. Right. It was a week after, right? Those tweets came on February 27th. He then wrote a letter on March 4th. He backdated it to March 3rd. Oh, I will notice. You're right. But is a week later when he sent the letter to Anthropic and Liz, I don't fall out of your chair in surprise or anything. But like, is a two page letter? And it all, it's a fact. Why don't I read the entire fact finding section? It says, the Department of War has determined that one, the use of the covered entities products or services in Department of War covered systems presents a supply chain risk and that the use of section 3252 authority to carry out covered procurement actions is necessary to protect national security by reducing supply chain risk. And two, less intrusive measures are not reasonably available to reduce such supply chain risk. That does it. So that's not a rationale. That's just repeating the language of the statute. It did not even the language of the statute, right? Because as you read, like section 3252 requires that there be a risk to the supply chain by an adversary. Now, the Trump administration is actually free to define who our adversaries are and they have defined it the executive order as China, Russia, Iran, North Korea, Cuban, Venezuela. Now, you might quibble with that list. But whatever, right, the Trump administration gets to say what the list is, but then the law requires them to say what inthropics connection is to a risk from China, Russia, Iran, North Korea, Cuba and or Venezuela. And they just, they just don't. Right. And there's no explanation of why they've made this unspecified determination that in the topic is a risk. It's really just totally circular. And we've seen time and time again that the Trump administration's favorite argument is because Trump said so and you can't question it, particularly in a national security context. The Justice Department went to court with a straight face and said the judges couldn't second guess the president's determination that MS-13 had invaded the United States. We were at war with MS-13 or that Portland was a war zone or whatever, like all of these bullshit things. And those arguments have had mixed success in court, but that's because these court challenges were not made in the context of an administrative procedure act claim, which is different. Right. The APA sets five USC Section 706 requires courts to hold unlawful and set aside an agency action that is arbitrary, capricious and abusive direction or otherwise not in accordance of law. And that means that courts must ask how the decision to do this final agency action got made to figure out if it was arbitrary or capricious. Right. Specifically, the Supreme Court has said that the test for determining whether an agency acts arbitrarily and capriciously is when it, and these are the elements, entirely fails to consider an important aspect of the problem. If it offers an explanation for its decision that runs counter to the evidence before the agency, if it fails to articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choice made. So yeah, the courts are going to have to take a look at what Higgseth decided, what he considered, what explanation he gave, and whether that is rationally connected to the actual facts. I dreamt just saying it is not going to cut it in the APA context, which is why you call this the best APA case ever. Right. It is. Well, that's because they announced in advance that they were going to like do this is to get back at anthropic for being woke and that it had nothing to do with the, you know, risk to the supply chain or any other thing. So the case has been assigned to judge Rita Lynn, who is a Biden appointee, and she is moving lightning fast. She approved every, like there were, I think like 12 applications for admission prohawk V.J. Because that's a big lawyer. It's a big law firm. They have a million lawyers and they are all going to pour into the case and those were approved within like an hour. And then this remarkable thing happened that I think ties back to the point that you were making was, which is, okay, anthropic filed a motion for a temporary restraining order. That is not a surprise. What was a surprise was the amicus brief filed by open AI in support of anthropics TRO. And it really makes two arguments. Right. The first argument is, yeah, anthropic is right. This supply chain risk designation is ridiculous. And it is pretty explicit, right? It says that this is not the appropriate use of the supply chain risk statute. We think that they should get the TRO. And second, and then I want to really want to read this part and get your reaction list. They say, the technical concerns, animating and anthropics red lines, right? They're two conditions, are legitimate and widely recognized within our scientific community as requiring some kind of response. The best currently available AI systems cannot safely or reliably handle fully autonomous lethal targeting and should not be available for domestic mass surveillance of the American people. While there are various ways to establish these guardrails, we agree that these guardrails must be in place. I mean, they agree for the purposes of this amicus, which is amazing that they filed, right? It is amazing. I do not want to downplay it. But look, open AI, obviously they didn't feel that way about the guardrails because they signed the contract, which pretty clearly said no guardrails for us. That's fine. But I think it's clear that open AI is not real happy being Walmart to anthropics target. And more to the point does not want to live or do business in a world where they're going to find themselves in wilderness if Democrats are in power because they've exceeded to a kind of lawless targeting of civilians that is incompatible with good corporate citizenship in the eyes of the next administration. Yeah. And I would add to that that they clearly took a look at the political and commercial implications of either being perceived as caving to Trump or being perceived as being oppositional to Trump and they chose the latter. And that I think buttresses your point that maybe 2026 could be a little different than 2025. I mean, I think if we do, in fact, do very well Democrats in the midterms, I think it's I think 2027 is going to be a whole lot different. But I agree with you. I think I think the winds are changing. Okay. That is going to do it for us unless you're a subscriber at patreon.com slash along KS pod or law and KS pod dot com. In which case stick around, we have a really interesting segment on the justice department caving mid trial and deciding that live nation is basically good slap on the wrist. It's fine. Not a monopoly. You're probably just imagining all of those ticket fees and the crazy costs to attend every concert. Okay. So we've got that for our subscribers for everybody else. We will be back on Thursday with new written content and on Friday with another podcast episode. And if you can't be a subscriber, you could help us out by giving us five stars on your podcast platform of choice. We really appreciate it. Thank you so much for helping us keep doing this show that we love doing. Law and KS podcast is production of razor to media LLC is intended solely as entertainment does not constantly device and does not form an attorney client relationship. This shows research written by Liz Dye and produced by Bryce Blinken and all right to reserve.