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Boehner Speaks Out on Spending Cuts; Lance Armstrong Faces Lawsuits, Legal Problems; Gun Debate and Civil Suits.

Aired February 6, 2013 - 11:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: He also started an organization called Band against M.S., where people with M.S. can find information, hope, that they can live a full life, even with this chronic disease.

CLAY WALKER, COUNTRY MUSIC STAR: I was told that I was going to die. Once you conquer the fear of the disease, it's kind of liberating.

GUPTA: Dr. Sanjay Gupta, CNN reporting.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ASHLEIGH BANFIELD, CNN ANCHOR: House Speaker John Boehner is rejecting President Obama's call to delay automatic budget cuts known as the sequester. He is calling for different spending cuts and he's insisting they must not include tax increases. We have a look here at what he had to say this morning at his news briefing.

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JOHN BOEHNER, (R-OH), SPEAKER OF THE HOUSE: What they want is have spending under control so the economy can grow. And they have opportunities again. Democrats say we should replace the president's sequester with revenue increases or delay it. Republicans say we should replace with responsible reforms that will help put us on a path to balance the budget in 10 years. Republicans may not be the majority party here in Washington, but the American people would agree with us on this. And we are going to continue to stand with the American people.

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BANFIELD: And with the sequester comes $85 billion in cuts all set to take effect on March 1st.

We are following a fall out and big legal fall out from Lance Armstrong's admission his glory years were fueled by illicit drugs and transfusions. At the top of the hour, a Texas lawyer spoke with us about a long awaited lawsuit, that he has said officially it's going ahead. He wants to recoup more than $12 million in the ill gotten Tour de France bonus money. (BEGIN VIDEO CLIP)

JEFF TILLOTSON, ATTORNEY FOR SCA PROMOTIONS: He was the official winner of those races and our contract required that we pay him, if he was the official winner. But both he and his lawyers almost taunted us and said if we are ever stripped of those titles, we will give you the money back. I think at that time, Mr. Armstrong thought he would never be caught. Of course, he has been caught, exposed, confessed, admitted essentially to perjury. We ask him to finally live up to his word and give that money back.

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BANFIELD: This is not Lance Armstrong's only legal problem. Nor is it the biggest legal problem.

Joining me to talk about that one is an impressive batch of experts. From our bench today, CNN senior legal analyst Jeffrey Toobin; also a defense attorney and college professor, Joey Jackson; and Judge Hatchett herself, TV host, Fulton County judge, and best-selling author.

Great to see all three of you.

Judge Glenda Hatchett, let me start with you.

You heard what the Texas attorney, Jeff Tillotson, said, he is planning on filing the case today or tomorrow. They want their money back. They said it's ill gotten. I don't care he says we made a settlement. The settlement was based on fraud. Does he have a shot?

JUDGE GLENDA HATCHETT, TV SHOW JUDGE & AUTHOR: Absolutely. Based on the fact they entered into the settlement based on a certain set of facts that he has now recanted, I would take the case. I think he has a strong shot at recovering this money. And if I were Lance's attorneys, I would try to settle the matter quietly and move on.

BANFIELD: Joey Jackson, if you are involved in this, and you see a settlement with language saying this thing is signed, sealed and delivered, you both agreed to agree. I never want to see you again in this courtroom. Can you go back on that? I mean, this sounds like there are really two ways this could go.

JOEY JACKSON, ATTORNEY & CNN LEGAL CONTRIBUTOR: You know what happens, Ashleigh, generally in any settlement, what you sign is a waiver and release, that speaks to the issue you talked about, we are settling, it's over, I don't want to see you. However, as the judge just indicated, when something is predicated upon fraud, then it becomes problematic. Now you have a claim saying when you entered into this, it was not done so in good faith. Therefore, you nullify the waiver and release. I think they have a good case to get their money back, Ashleigh.

BANFIELD: Jeffrey Toobin, I want you to come in on this. Civil suits are expense and I have painful, it you lose them. But criminal charges are even worse. JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: They are painful even if you win. It's unpleasant to be in court.

(LAUGHTER)

(CROSSTALK)

BANFIELD: It's like going through the laundry.

Criminal charges are a whole other kettle of fish. The U.S. Attorney in Los Angeles investigated Lance Armstrong for almost two years and suddenly weirdly dropped everything without explaining anything a year ago, and reporters yesterday had a shot at asking whether the whole Oprah interview and the admission I'm a druggy changed anything, when it comes to how the feds look at their set of facts.

Here's what he said. Take a look.

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ANDRE BIROTTE, U.S. ATTORNEY, CENTRAL DISTRICT OF CALIFORNIA: We made a decision on that case I believe it's a little over a year ago. Obviously we have been well aware of the statements that have been made by Mr. Armstrong and other media reports. That's not changed my view at this time. We will continue to look at the situation. But it hasn't changed our view as I stand here today.

(END VIDEO CLIP)

BANFIELD: It hasn't changed our view as I stand here today.

Jeffrey Toobin, that's one U.S. attorney based in southern California, do all of the U.S. attorney's all over the country work in concert? Or might one U.S. attorney say on another coast be working on a whole different investigation that he might not know about?

TOOBIN: There is a long history of U.S. attorney's working in somewhat of conflict with one another. There are a lot of turf battles, there are sometimes lawyers working at cross purposes. But ultimately, the Department of Justice is one department, and they will decide whether to pursue this case or not. It's worth remembering a couple of things about this. These steroids cases have been pretty unsuccessful by the federal government. These cases have not -- Roger Clemens was acquitted. Barry Bonds was mostly acquitted.

BANFIELD: They didn't have full-throated admissions on camera to Oprah Winfrey.

TOOBIN: That's right. But statute of limitations issues are significant. These go back a long way. The underlying drug use, his clearly false sworn statement in the Texas deposition, that clearly is barred by a statute of limitations in Texas. So even though it's clear that he lied and lied under oath. It's not clear that there is going to be a criminal investigation.

BANFIELD: Hold that thought. I will throw a few words out to this panel. And after the break I'll get your take on what they mean, whether they could stick like glue to Lance Armstrong or whether they are fun to talk about -- drug distribution, fraud, conspiracy, obstruction, witness tampering, intimidation. Ouch. Those are painful things. After the break, do any of them apply to Lance Armstrong?

Back in a moment.

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BANFIELD: So CNN breaking the news just earlier this hour that the attorney in Texas that represents the sports insurance agency that paid Lance Armstrong a whole bunch of bonuses for winning a bunch of Tour de France races has decided to go ahead and sue him to get the money back that they settled and paid out to the tune of upwards to $12 to $15 million. So expect that on the legal front.

And Judge Glenda Hatchett, Jeffrey Toobin and Joey Jackson are back with me to discuss those uglier words than money. Those words I threw out before the break.

He was under investigation by the feds for drug distribution, fraud and conspiracy. And people are throwing all sorts of other words out there, like obstruction, witness tampering and intimidation, based on the facts as we know them, from say the Oprah interview where he 'fessed up to a bunch, Judge Glenda Hatchett, does he potentially expose himself to those other serious criminal charges?

HATCHETT: I think so. I absolutely agree with Jeffrey, there has not been a great line of success on these doping issues. But when you talk about obstruction of justice, tampering with witnesses, perhaps being involved in distribution of drugs, I think he's facing very serious concerns here. And I think that just because the U.S. attorney in California decides he's not going to go forward with that, I don't think this is over. I think we will see other things come out of this.

BANFIELD: Joey Jackson, I want to name a couple things that people have said they suffered at the hands of Lance Armstrong, his behavior and his lies. Frankie and Betsy Andreu say they were libeled by this guy. I assume they could have a civil case against them. Going further, Emma O'Riley his masseuse and a gofer for him, she told the USA ADA, he made her pick up and dropped off what she assumed were doping products, now we are talking drugs, and she was present when he and team officials came up with a plan to backdate prescriptions, so he could hide showing up positive in one of the tests.

That stuff sounds pretty --

JACKSON: Oh, boy.

BANFIELD: That sounds "oh, boy" to me, too. Explain it.

JACKSON: Ashleigh, yes, it does. I would be concerned if I'm in Armstrong's camp on two fronts, civil and criminal. As far as civil goes, we know he's going to be exposed to defamation liability. He already is exposed to the lawsuit we are talking about. He's made misrepresentations, so he has to pony up money. As relates to the criminal investigation, remember two things that are very important. The first is simply because the U.S. attorney said initially they were not proceeding does not mean they cannot proceed now. Furthermore I'm dealing with a case where one U.S. attorney's office said no, another said oh yes, we will. So by all means they could still proceed with that investigation, the old investigation and investigate the charges of witness tampering.

Boy, I think there is trouble to come, Ashleigh, without a doubt.

(CROSSTALK)

HATCHETT: I wonder, too, with the U.S. attorney, with al: of this renewed attention, whether there might be some reconsideration, he said this decision was made a year ago. You are thinking the timing on this. I mean, I think you will see -- I agree, Joe, I think he's in for problems both on the criminal side but also on the civil side. This is the first of a series of cases on the civil side we are going to see, maybe from the publishers, from other endorsers, from commercials, I mean it goes on and on.

BANFIELD: How about this.

(CROSSTALK)

BANFIELD: There is all of these claims he made, that easily could fit the libel descriptions, there is also stuff he said to former pals in cycling, like Tyler Hamilton said to "60 Minutes," that's not under oath but it is to "60 Minutes," Lance said to him, "I'm going to make your life a living f'ing hell," and he said to Travis Tygart -- Travis Tygart suggests he received anonymous threats in the form of emails and the worst threat was somebody was going to put a bullet in his head.

That's where I start to wonder -- and Jeff, maybe you can weigh in on this -- now that this is surfacing, the criminal aspect of those types of things and intimidation.

TOOBIN: I think he has a world of problems in every area. I think his civil exposure is much worse than his criminal. Criminal cases are very hard to make. And there is a record of failure in these cases.

BANFIELD: Emails are not hard to trace.

TOOBIN: But an anonymous -- Travis Tygart said someone was going to put a bullet in his head, there is no evidence it was Lance Armstrong. And some woman assumed there were drugs in something she delivered, that's not a criminal case. I mean, you have to have things nailed down with exquisite precision if you bring a criminal case. And based on what Lance Armstrong said to Oprah, there were very few specifics there. And it's not clear he's going to talk some more. So I just think you need to be very careful before assuming that he committed crimes. He lied about taking drugs to win races but crimes are a different matter. BANFIELD: I like that you said exquisite precision, there is so much of that. Yet, with his precision on how much he admitted to Oprah Winfrey.

Joey Jackson. I want you to weigh in on the federal whistle-blower case. Some people get confused about the federal whistle blower case and the federal investigation. Just give me a one two on how they are different and how they are very dangerous for him.

JACKSON: Sure. Absolutely. With whistle blower, as far as that is concerned, if you believe somebody is committing fraud with federal funds, you can bring forward a whistle blower case. What you do, you say hey, wait a minute government you need to investigate. This person is taking money. As a result the government investigates, if they recover money, Ashleigh, you get a piece of it. How nice of an incentive to move forward.

TOOBIN: And triple damages.

(CROSSTALK)

BANFIELD: Absolutely, Jeffrey.

TOOBIN: So that's where -- the financial exposure is through the roof. The reason it's a federal whistle blower case, he was sponsored by the United States postal service, no more deliveries on Saturday as you may have heard. But that money is federal money, and that is money he could get back.

BANFIELD: You just got that news in there? I just want to provide the news.

(CROSSTALK)

BANFIELD: So guys, by the way, 30 million was the estimated defrauding if you multiply by three, that's 90 million. Ouch.

We're triple threat today. We are keeping our triple panel in place.

Stay with us. The next topic is the gun debate. If you shoot a gun, what about your exposure to all sorts of legal problems? What if you make the gun? What if you sell the gun? Big, big story developing in the west. That's coming up next.

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BANFIELD: Pull the trigger on a gun, and there are dozens of things you need to think about in a split second, like who might die? Who could be charged? Could you face a civil lawsuit that could end your life as you know it? But push the button on a gun sale the picture is vastly different. There is nowhere near that kind of worry. Sellers even manufacturers are protected from legal exposure like that. Federal government says so. But the Colorado government begs to differ and is proposing a package of gun laws that could open the door to civil lawsuits for makers and sellers of guns. Really? Judge Glenda Hatchett, Emmy-nominated TV judge, I might add; and our senior legal analyst, Jeffrey Toobin, at CNN and a former federal prosecutor; and Joey Jackson, defense attorney and college law professor. What a smart bunch today.

Joe, I want to start with you.

First, people might be surprised to even know there has been these protections for manufacturers of guns and sellers of guns. They have enjoyed these protections on a federal level for quite some time.

JACKSON: You know what happened was in 1994, Ashleigh, briefly there was an assault ban weapons that went into effect under Clinton. It expired in 2004 and was not reinstated. Furthermore not only was it not reinstated the federal government in 2005 under president Bush said guess what, you cannot sue these manufacturers under theory of strict liability, defective product unreasonably dangerous thereby making them immune. There are some exceptions. My concern finally, Ashleigh, is this Colorado ban that is proposed may violate federal law, and therefore may be problematic to implement.

BANFIELD: I will get to that in a minute. But I want to be real clear, can you see a lot of guns in these pictures, some are pistols, some are assault-style weapons. By the way, we do not have a perfect definition of what an assault weapon is yet. We won't until we get our federal legislation in place.

But in the meantime, this set of proposals in Colorado does not actually involve shotguns, bolt-action rifles or handguns, just the assault style weapons.

Jeffrey Toobin, weigh in on this. Joey Jackson mentioned federal law. This is state law. What happens?

TOOBIN: The courts have to sort it out. There's a doctrine of law called preemption, does the federal law preempt? This came about because of the tobacco litigation in the '90s. A lot of lawyers said tobacco is so dangerous, we can just sue the manufacturers, it ultimately led to a gigantic settlement. They said look, why don't we do the same thing with guns? We'll start suing gun manufacturers. And the NRA mobilized and said Congress, stop this. And Congress did. In 2005 in that law and said there can be no lawsuits against gun manufacturers. Now in certain states that are under Democratic control like Colorado, the legislators are saying no, we want to revisit the issue. We want to allow gone manufacturers to be sued. They are the ones profiting from having guns on the street. It's a very tough call. I don't know how a court would sort out the federal versus state, if Colorado actually passes this law.

BANFIELD: So often you tell me that federal law trumps state law, when push comes to shove. Why not in this case?

TOOBIN: When there's direct conflict, that's true. There are certain areas that are preserved only for the federal government, like regulation of the military. I mean, that's something only federal. But certain areas, there is joint, there can be joint jurisdiction, and the question is can gun liability be one of those areas.

BANFIELD: Judge Hatchett, weigh in here with me, and explain why a gun therefore would be any different than say a knife? So the person who manufactured my lovely kitchen knife, that could be used in a murder would also be liable. Or the car that I drive, that I drank and killed someone, the manufacturer of that deadly weapon, doesn't this set a precedent?

HATCHETT: It's a very complicated situation. I want to go back just a second to the federal statute that was implemented in 2005 after heavy, heavy, heavy lobbying from the NRA. I mean, it was a huge victory for them.

But there are exceptions, as Joey mentioned, that talk about defective manufacturing and negligence. So if a distributor knows that they are circumventing the background check, they can do that. But I do think this is a complicated situation. It is what happens, and how far back, and how can you connect the dots for causation, even if you have the statute, it does not necessarily mean that you will prevail in these civil cases. Because you have to establish some connection between the gun manufacturer and the incident that happened, where somebody was injured or died.

I think Jeffrey is right. It's going to be a complicated situation that's going to be sorted out. I don't think it will be sorted out any time soon.

One footnote --

(CROSSTALK)

BANFIELD: Real quick.

HATCHETT: If the federal law would change, which is not likely, that would resolve this. I don't see that happening.

BANFIELD: Judge Glenda, Jeffrey Toobin, Joey Jackson, thank you to all three of you for reading up on all of those cases for this program. Thanks, everybody. See you again soon.

(CROSSTALK)

BANFIELD: I'm glad you were here.

Hey, everyone, thanks for watching. NEWSROOM INTERNATIONAL with Suzanne Malveaux starts after this quick break.

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SUZANNE MALVEAUX, CNN ANCHOR: Welcome to NEWSROOM INTERNATIONAL. I'm Suzanne Malveaux. We're taking you around the world in 60 minutes. Here's what's going on rights now.

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BANFIELD: Kind of weird. This is an online video showing New York City in flames, North Korean rockets launching.