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Kelly File

School speaks out on transgender case; Christie, Cruz talk GOP debate moderation

This is a rush transcript from "The Kelly File," November 3, 2015. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight in a landmark, first-of-its-kind decision, the Obama administration has placed school districts across this country on notice tonight that transgender students must be treated equally in every way, including full access to locker rooms of the gender with which they identify. Concluding any other result would be discriminatory.

Welcome to "The Kelly File" everyone, I'm Megyn Kelly. It is an unprecedented decision that changes the culture of battleground in public schools. Just one day ago, the Department of Education's office for civil rights found an Illinois School District violated anti-discrimination laws when it did not allow a transgendered student unfettered access to the girl's locker room. This case has been going on for two years. But it is now making national headlines in papers like The New York Times this week. The district argues it's made every effort to accommodate this high school student who is a young child began to identify as female but was born male, allowing her to play on female sports teams, use the girl's restroom.

But it drew the line at allowing her to undress in the same locker room with other girls. Instead, providing an adjacent changing room connected to that locker room. But that was not acceptable to the girl or to the ACLU. And, now, in a case with precedent-setting implications, the administration says the school district must ditch any restrictions or it could face court and a loss of federal funding.

In moments, we will speak to the district's superintendent, Dr. Daniel Kates who was fighting this ruling and nationally syndicated radio host Richard Fowler who is also here. We begin tonight with Trace Gallagher reporting from our West Coast Newsroom. Trace?

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Megyn, the student who has not been named has gone through hormone therapy, but not gender reassignment therapy. And in middle school, she transition fully to letting the life of a woman. As she went to high school, her request to be treated like a girl was honored by using her female name, giving her full access to girl's restrooms and girl's athletics, but the school would not allow her to dress and shower inside the girl's locker room. At first, she was given a private changing area outside the locker room, but the student said she felt singled out and stigmatized. She contacted the ACLU who sued on her behalf. Listen.

(BEGIN VIDEO CLIP)

JOHN KNIGHT, ACLU OF ILLINOIS: They are setting aside a separate bathroom and telling only her that she has to use that restroom to dress. That is discriminatory. There's no other way to look at it.

(END VIDEO CLIP)

GALLAGHER: The Department of Education sided with the transgender student writing, quote, "Township High School District 211 is not following the law because the district continues to deny a female student the right to use the girl's locker room." But the transgender student had said that protect her own privacy, she would use privacy curtains inside the locker room if they are available. Now they are available, but the Department of Education said, it's not good enough. And if she is not allowed to shower with the rest of the girls within 30 days, the district could lose millions in federal funding.

The unnamed student applauds the ruling saying the district's policy made her feel like she was a normal person -- or not a normal person. But the district is still fighting it saying quoting here, the students in our schools are teenagers, not adults. And one's gender is not the same as one's anatomy. Boys and girls are in separate locker rooms where there are open changing areas and open shower facilities for a reason." Several students have now signed a school petition asking that she be allowed to use the girl's locker rooms. But many students say she should not and many of their parents agree -- Megyn.

KELLY: Trace, thank you.

On the heels of the Fed's decision, the school's superintendent released a statement suggesting this is a serious overreach with president setting implications. In a "Kelly File" exclusive now, we are joined by Dr. Daniel Cates who's superintendent of Township High School District 211. Dr., thank you for being with us tonight. So, let's just start with this. What is it specifically that you are concerned about if this young woman, young girl, has unfettered access to the girl's locker room.

DR. DANIEL CATES, SUPERINTENDENT, TOWNSHIP HIGH SCHOOL DISTRICT 211: As school leaders, we are charged with the responsibility of balancing the rights of all students. And while we respect and honor transgender students and transgender identity, it is our responsibility to create an environment that is protective and built on principles of respecting the privacy of all of our students.

KELLY: OK. I get all of that. But I'm trying to cut through sort of the academic speak and get to what specifically is it? What are you worried will happen?

CATES: We believe that our accommodations provide a great deal of support to our transgender students. And, in our plan, what we believe that we're able to work through is what transgender students would request and benefit from, honestly. They would request privacy themselves and our accommodations would provide that.

KELLY: No, no. I get that. I get that. And we've made clear, the district tried. It tried many things. It gave her a private bathroom and then made that bathroom closer to the locker room and then made adjoining to the locker room, and offered her to let her friends use it with her so she didn't feel isolated. And you allowed her to play on the girls' sports teams and all the other things. But I'm trying to get at what is the concern that you have if you have to go this extra level that the Obama administration has said, you have to which is to let her use the actually girl's locker room as she wishes.

CATES: Yes. So our position is that she would be using the girl's locker room. And our position is that transgender students could access those facilities. Where we differ in our position is that we are requesting an agreement, and a commitment on behalf of transgender students, that they would observe a measure of privacy. Privacy in our locker rooms is a fundamental, critical right that we believe is protected for all of our students. And when the administration requests and requires that we remove that expectation or agreement, we believe that that compromises the rights of all of our students in the locker room.

KELLY: How?

CATES: By having students born of opposite sex in the locker room. We disagree with the office of civil rights and their position that this is legally objectionable. We believe that the law stands --

KELLY: But these are just generalities, with respect, Doctor, just explain it for us. What is it? What is it? Have you had students object? Had parents say, I don't want to be exposed to, you know, anatomy that is different? What is it? Just tell us specifically.

CATES: Yes, we've had resounding comments from our parents. And although their comments come from both sides, there is resounding support from our parents to stand firm in our position to protect the privacy rights of the students in the locker rooms. It is both from being in the presence of students who have different anatomy and the young women that we have heard from believe firmly that that is a right that they would like to protect and safeguard and as school officials, it is our responsibility to do so.

KELLY: Are you going to -- because right now, we hear you fighting the ruling. How? I mean, are you going to continue this? Or are you going to have to comply?

CATES: We continue to work openly and diligently with the office of civil rights. We are hopeful and every day, school administrators work diligently with families about their most important gift in the world, and that is their children.

KELLY: I know. Respectfully, you know, this is prime time capable. This isn't like a superintendent board meeting. So, we have to get to the heart of the matter which is, what are you going to do to fight the ruling?

CATES: Yes. We stand firm on our principles that protecting student's privacy is important. And while we hope to reach a settlement with the office of civil rights, we would be willing to have that due process hearing, a full hearing on this matter to be sorted out. We believe that, again, our position is one that stands on principles for privacy.

KELLY: OK. Thank you for being here, sir. All the best to you.

CATES: Thank you.

KELLY: Well, my next guest sees things very differently.

Richard Fowler is a national syndicated radio host. Richard, thank you for being here.

RICHARD FOWLER, NATIONALLY SYNDICATED RADIO HOST: Thanks for having me, Megyn.

KELLY: So, he's an academic Rich, so he speaks in academic speech. But you could hear the point that he's trying to make. That he's trying to be respectful of the other students who have objected, whose parents in some instances have objected feeling they've bent over backwards to accommodate this young girl. But at this point, there's a limit in 2015 America beyond which they feel uncomfortable.

FOWLER: Listen. I hear what the superintendent is saying. I disagrees with him. And here's why. I think when you say this one, only this student has to go behind a veil as she's changing, you clearly have separated her out from the pack of all the rest of --

KELLY: You have.

FOWLER: -- in itself. That's an exclusionary.

(CROSSTALK)

And that's part of the problem.

KELLY: I mean, that is absolutely true. You can't even dispute that it is. It's separate. But what he and his supporters have said is, what about the other students who are not biased and they don't have hate in their hearts but they feel uncomfortable that young girls -- I mean, I can speak from experience. I always looked for the private changing area when I was 15. You know, I mean, and I didn't have anything like this to deal with. So they feel uncomfortable. Should their feelings count at all?

FOWLER: No. I think their feelings should count. And I think this is what you call a teachable moment. Right? Here's the thing. You'll never going to get rid of transgender folks or never going to get rid of gay folks or never going to get rid of Muslims, never going to get rid of Christians. So why not all works together to really try to create safe and welcoming environment where we all can thrive. What are our differences? What are our similarities?

KELLY: What about -- what they would say --

FOWLER: They need to understand about the different cultures.

KELLY: This is not my argument. This is their argument. What they would say is, you can't -- why make everyone feel uncomfortable? All of these folks who are objecting just to make the one girl feel perfectly comfortable. In other words, they've done a lot to make her feel comfortable. But why is the other students -- why is their comfort irrelevant?

FOWLER: Well, this is about inclusion, not exclusion. Right? It's about making sure we open up our schools and open up our churches and open up our -- interests in more people and not less people. And the only way we can do that is by really having conversations about how we make it work. What are differences in anatomy? How do people understand that?

KELLY: A lot of people know that when they're 15 or 16. They have figured out the differences in anatomy.

FOWLER: No, I get that but --

KELLY: At least it was when I went to school. You'd know by 15.

FOWLER: I think there's a big misconception and miseducation about transgender folks. And I think the only way we're going to solve some of these problems is by really educating ourselves about the transgender community because we're not going to get rid of them.

KELLY: Yes, Richard, great to see you.

FOWLER: They're part of America.

KELLY: It's great to see you.

FOWLER: Thanks, Megyn.

KELLY: Thank you for being here.

This is now -- so this is precedent-setting. That's why it's a big case. Because this is a ruling that can affect and likely will, school districts across this country. The administration settled with two school districts. This is the first one that really fought it and has lost.

Checking your thoughts right now on Twitter @megynkelly.

Also tonight, we have breaking news on the firestorm created when Quentin Tarantino referred to cops as murderers. The director is tonight addressing the backlash for the very first time and wait until you hear what he is saying, not sure it's going to put out this fire. Next.

Plus, we also have new developments tonight on the fallout from an ugly Republican debate and a push for new rules. Governor Chris Christie is here along with Senator Ted Cruz.

And then, a new twist in the case of the woman who declared, quote, "open season on crackers." We will show you who came forward after our interview last night.

(BEGIN VIDEO CLIP)

LATAUSHA NEDD, ACCUSED OF MAKING TERRORISTIC THREAT: I don't hate white people, if that's what you're asking me, Megyn. I don't hate white people. I hate injustice. And I hate corruption. And I feel that the systematic killing of black people has to be addressed.

(END VIDEO CLIP)

(COMMERCIAL BRAK)

(BEGIN VIDEO CLIP)

QUENTIN TARANTINO, ACTOR/PRODUCER: I am a human being with a conscience. And when I see murder, I cannot stand by, and I have to call the murdered the murdered, and I have to call the murderers the murderers.

(END VIDEO CLIP)

KELLY: Breaking tonight in the more than ten days since Quentin Tarantino made those comments at a police protest in New York, the backlash has spread to law enforcement groups representing more than a quarter million officers across the country and has become one of the biggest stories in the nation. Today, for the first time, Tarantino responded. Playing the victim and refusing to apologize for remarks so incendiary that not even his Hollywood bosses are backing him up.

Joining me now, New York Police Sergeant Ed Mullins. And Townhall.com editor Katie Pavlich. But before we get to them, we go to Trace Gallagher in our West Coast Newsroom with more on what Tarantino is saying tonight. Trace?

GALLAGHER: And Megyn, you've got to keep in mind that now the five biggest police departments in the country along with the biggest police union in the country are now vowing to boycott Quentin Tarantino, the Weinstein company and or TWC which is actually distributing his new movie called "Hateful Aide" has now spoken out about the controversial comments saying, quote, "We don't speak for Quentin. He can and should be allowed to speak for himself."

TWC board members are reportedly concerned the growing boycott could lead to an economic hit for the upcoming film and are warning company founder, Harvey Weinstein to help clean up the mess. Quentin Tarantino also addressed his controversial comments for the first time today telling the LA Times that he's not taking back what he said and what he said was the truth. Then going on to say quoting here, "All cops are not murderers. I never said that. I never implied that." Which is kind of a tough argument to make when what you said is on tape. Watch again.

(BEGIN VIDEO CLIP)

TARANTINO: I am a human being with a conscience. And when I see murder, I cannot stand by, and I have to call the murdered the murdered, and I have to call the murderers the murderers.

(END VIDEO CLIP)

GALLAGHER: Tarantino believes police are now trying to single him out, shut him down and intimidate him. But the nation's largest police union isn't buying it saying quoting here, "All of the sudden, he's really not a cop hater, but at the same time, we're trying to intimidate him. So now he's a victim of the cops he doesn't hate?" Police were also agitated by the fact that that rally you saw was just a few days after an NYPD officer was gunned down in the line of duty -- Megyn.

KELLY: Trace, thank you.

Joining me now Sergeant Ed Mullins who is president of the NYPD Sergeants Benevolent Association. Also with us, Katie Pavlich, news editor of Townhall.com and FOX News contributor. Great to see you both. Sergeant, let me start with you. So he is technically correct. He did not say that all cops are murderers. And, therefore, he believes he's been misrepresented in an effort to demonize him. It feels lousy and it is slanderous. Your thoughts?

SERGEANT ED MULLINS, PRESIDENT, NYPD SERGEANTS BENEVOLENT ASSOCIATION: I think that the perception of what occurred was pretty accurate. It is anti-police. He's talking about murder. And whether it's reference to all cops, it is on the heels of an event in which a police officer in New York City was killed. I think right now is a big plan in words. If you look at all of his movies, in almost every movie he has, you know, written and directed, police officers are being shot in those movies. This boycott is growing across the country. In California, it's picking up. Eleven major unions in California and a public sector alliance. It is a coordinator for law enforcement groups and labor unions across the country are now exploring investments of most of these financial institutions to support Tarantino --

KELLY: Yes.

MULLINS: -- they look at the pension funds. So, you know, what's occurring here is wrong. And the truth of the matter is both Harvey Weinstein, the people in Hollywood and Quentin Tarantino, you read the part of the solution or part of the problem. And my challenge to them is, if they want to be part of the problem, they can contact you Megyn, or they can contact my office and they can join in on some of the things we're doing to build bridges in the community and start to work out the difficulties that exists between people of color --

KELLY: If they want to be part of the solutions.

MULLINS: No doubt. Because no one else is doing it right now.

KELLY: Yes. But well, Harvey Weinstein is not backing him up exactly. They say he's a longtime friend and we have a relationship with him, but he can speak for himself.

MULLINS: But he also -- him.

KELLY: Yes. Katie, the thing is, you know, he's out there and he is, you know, saying this is so vicious. I have been attacked.

KATIE PAVLICH, NEWS EDITOR, TOWNHALL.COM: Oh, poor me.

KELLY: And, you know, this is a guy who said -- implied, certainly, that certainly he thinks many cops are murderers. And the implication was it's a wide swath. Because that's what the protesters were saying.

PAVLICH: Right.

KELLY: That he was appearing at. And now he wants to come out and say --

PAVLICH: I mean, this guy is worth how much money? Hundred million dollars?

KELLY: A hundred million dollars.

PAVLICH: Yes. It's unbelievable the hypocrisy here. He's worth a $100 million who's made that money glorifying violence and being antipolice. We heard him loud and clear when he showed up at that rally. And further, it proved he was out of touch when he talked about only his words being the issue here. The fact that he showed up four days after New York City Police Department officer was murdered on the street doing his job when Quentin Tarantino lives in a really nice neighborhood, which, by the way, is nice because the police officers in Los Angeles or where ever he decides to live keep criminals out of his neighborhood.

He's never spent a day in the shoes of the police officers who walk the streets. He's with $100 million who has done it by glorifying violence. The average cop in this country makes $56,000. Who do you think is protecting the fancy red carpet that Quentin Tarantino and his friends walk when they have their words ceremonies? And by the way, notice how these Hollywood hypocrites haven't said anything until the bottom-line and the money department started to become a problem. And then they started backing away from the comments. It wasn't like they condemned it at the beginning. They weighed it until it became an economic impact on their bottom-line and then they decided that they were going to care.

KELLY: I mean, what is the harm in just coming out and saying, I apologize to the police officers who I -- it certainly sounded like I wrongfully included them in my blanket statement. I was speaking of the ones who actually have broken the law. And, of course, they can be condemned by anybody. But, certainly the way he presented it left a lot of questions and a lot of anger.

Thank you both for being here.

MULLINS: Thank you, Megyn.

PAVLICH: Thanks, Megyn.

KELLY: We also have new clues tonight in a passenger plane crash killing hundreds of men, women and children. We'll show you what the Pentagon is saying now about a possible ISIS terror attack. The United States is weighing in on this.

Plus, new reaction from Senator Marco Rubio's campaign as Donald Trump launches an attack that may have hit Rubio where it hurts.

Marc Thiessen is here next on whether this is trouble for the Senator's campaign.

(BEGIN VIDEO CLIP)

DONALD TRUMP, R-PRESIDENTIAL CANDIDATE: His credit card debt and his problems with credit card and what he did when he was running the party apparatus with credit cards, I've heard about it for years.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KELLY: Breaking tonight. New reaction just coming in from Senator Marco Rubio's campaign for president as new questions are being raised over the Senator's past finances. Just hours ago, a top Rubio strategist reportedly said, the campaign will now release previously unseen credit card records from the Senator's time back in the Florida State legislature. After businessman Donald Trump today accused the senator of being bad with the doe.

(BEGIN VIDEO CLIP)

TRUMP: Oh, no, his personal finance, all you have to do is look at his credit card. I mean, he is a disaster with his credit cards. Well, he has a very bad record of finances, if you look at what happened with his houses, with his, you know, he certainly lives above his means. There's no question about that.

(END VIDEO CLIP)

KELLY: If that were not enough, check out what Mr. Trump had to say about Senator Rubio and sweating.

(BEGIN VIDEO CLIP)

TRUMP: Did you ever see a guy sweat like Rubio? I've never seen anything like this.

He sweats more than any young person I've ever seen in my life.

He's sweating like a pig. I never saw a guy sweat like this. The sweat is pouring down. He's drinking water, water, water. I never saw anything like this. He drinks more water. He's like a machine. Drinks water, water, water. Sweat, pours, gives a speech.

(END VIDEO CLIP)

KELLY: Marc Thiessen is a Fox News contributor and former chief speechwriter to President George W. Bush. So, Marc, you know, in his defense, Rubio does sweat and he does drink water.

MARC THIESSEN, FOX NEWS CONTRIBUTOR: That is true. And those are disqualifying for the presidency, apparently. I mean, look, it's very interesting that Donald Trump is suddenly unloading on Marco Rubio and so is Jeb Bush and the reason is very simple. They see him as a threat. And they're right to see him as a threat. I don't think this is going to work as well for Trump attacking Rubio as he did when he attacked Jeb Bush. And the reason is, when he attacked Jeb Bush as a low energy guy, it was devastating for two reasons. One because it rang true and two, because it touched a nerve. Republicans are desperately afraid of having a low-energy nominee who is going to be like Mitt Romney and not respond to democratic attacks. Well, if Marco Rubio is sweating, by definition, he's not low energy.

KELLY: He's great defense.

THIESSEN: Exactly. He's out there. He's out there with lots of energy. You don't sweat by being low energy.

KELLY: Well, listen. On that point, we'll get to the finances in a second. I've heard people talked about this in casual conversation about how, you know, he sweats in the interviews and he needs water and what their take away is, he's nervous and he's not ready for prime time. That's what Trump is trying to tap into there.

THIESSEN: Yes. But look at that debate. Marco Rubio looked nervous. Did he seem like he was sweating out of nerves? I don't know what his personal perspiration --

KELLY: All right. But what about the money? What about the money? Because this is what the CNBC debate moderators are trying to get to. And, you know, Rubio said, these attacks have been discredited. And they really haven't been -- there are a lot of questions that remain about some of these issues to the point where his campaign is going to release two years of missing finances back when he was a state senator in Florida.

THIESSEN: They haven't been discredited but they've been adjudicated. I mean, all of this -- this is all old news. This all came up and later in the 2010 elections. These are the attacks that Charlie Crist as a Republican and then later the Democrats used against Marco Rubio. And the fact is, he acknowledged that he spent some money on a state Republican Party credit card that he shouldn't have.

KELLY: Some un-personal matters but --

THIESSEN: On un-personal matters and something he claims they were mistakes. He paid back $16,000 back to the state Republican Party. It was actually, there was an independent audit and he was cleared by state ethics commission. So unless there's some sort of great big reveal in this --

(CROSSTALK)

You know what, I think that's a little bit tough to be taking from Donald Trump. And I think Trump has to be very careful taking this line of attack because there are a lot of American out there who have difficult finances today. There are a lot of Americans who are struggling the Obama economy, have credit cards debt, can't afford their mortgages. And so, Marco Rubio, he's not one of these millionaires in the Senate. He's a guy, you know, he's a guy who had a father who was a bartender and a mother who was a maid and who made something of himself. And, you know, he had $100 thousand in student loans up to four years ago, not a lot of U.S. senators are still paying off their student loans. And so, he can very easily say to Donald Trump, you know what, I didn't get, when I started out my career, I didn't get a small million-dollar loan from my dad. I had to make it on my own. I had to struggle just like ordinary Americans can. And so I can relate to them in a way you can't.

KELLY: That's an interesting thing. If whether Trump will raise that. When he's actually next to Rubio at the FOX Business debate because, you know, he's got potential comebacks. That would be, if Rubio came out and -- I'm a victim of the Obama economy.

(LAUGHTER)

Marc, great to see you.

THIESSEN: Thanks, Megyn.

KELLY: Well, when Latausha Nedd appeared on a video calling for the killing of crackers and declaring open season on cops, it got her national attention and landed her behind bars. Tonight, a dramatic new twist.

Plus, those Republican candidates who are trying to, quote, "Take back the debates" are facing a new setback. Governor Chris Christie and Senator Ted Cruz are next.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: If you can't handle those guys --

(LAUGHTER)

-- then I don't think the Chinese and the Russians are going to be too worried about you.

(LAUGHTER)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

KELLY: Breaking tonight, the attempt by republican candidate took a greater control over future debates is facing a new setback. As a growing list of contenders now refuse to sign a letter to TV network, outlining their demands. Among some of the proposals, a minimum 30 seconds set aside for opening and closing statements for each candidate because you always love that part, don't you? A ban on so-called lightning rounds of questioning and a pledge to keep it temperature below 67 degrees, guess who that one came from? Texas Senator Ted Cruz is here, but first we begin with New Jersey governor Chris Christie who is refusing to sign the letter. Why?

GOV. CHRIS CHRISTIE, R-N.J., PRESIDENTIAL CANDIDATE: Because it's stupid.

KELLY: What do you mean?

CHRISTIE: Well because.

(LAUGHTER)

CHRISTIE: I think because, you know, put a podium up on the stage, stand me behind it, let the people ask me questions and I will answer them.

KELLY: What about the unfair debate moderators?

CHRISTIE: Well, listen. If you can't handle that, then you shouldn't be running for president of the United States. It's not that I like it. Nobody likes being treated unfairly. If you feel that's the way you are being treated. But quite frankly, the bigger problem I had with the moderator is that they didn't control the debate at all.

KELLY: They need a buzzer. But Ted Cruz is coming up behind you and he is going to say, look, their goal, the goal of what he perceives as liberal democratic debate moderators is just a ding up the republican candidates and we can't have that.

CHRISTIE: Well of course that's their goal. And by the way, that's going to be the goal next fall when we're debating Hillary Clinton. And when you want somebody who is up who doesn't care. I don't care about that. I care about prosecuting the case against Hillary Clinton, that's what I was doing on the stage the other night, in the CNBC debate. I didn't allow myself to get distracted by that. And you call people out when you think they're wrong, with, you know, when Harwood was interrupting me. I say even in New Jersey would say that's rude.

(CROSSTALK)

CHRISTIE: Right. He had called people out.

KELLY: That's saying something.

CHRISTIE: Right it is, right?

KELLY: No, I don't know.

CHRISTIE: And so.

KELLY: I'm not desperate to look there.

CHRISTIE: See you've got -- oh, that's nice.

(LAUGHTER)

CHRISTIE: See you got a call people out on it and answer the question, and talk to the people at home.

KELLY: What about that his argument is they're trying to put -- he keeps saying they're trying to pick the most conservative person. This is what the republican primary voters are looking for. Who is the most conservative person? So you need conservative debate moderators like Hugh Hewitt or he wants a debate by Rush, Lavin and Hannity, which he thinks will help the process more.

CHRISTIE: I -- listen. I don't care who the moderators are Megyn, it doesn't matter to me. Whoever is up there is up there. My job is to listen to the questions, answer the questions, if I don't like them to call them out on it and to communicate to the people at home. We have $19 trillion in debt, ISIS plotting against us, the Russians in the Middle East and a 1.5 percent growth in our economy, we really going to spend any time arguing about the moderators?

KELLY: We are, apparently. I don't know why we are doing it.

CHRISTIE: Well, ridiculous. I'm not going to doing it.

KELLY: We're doing it.

CHRISTIE: I'm not doing it.

KELLY: What do you make on what appears to be the increase of an inter-party fighting. You know that like Trump's attacking this guy and Carson and Rubio. And now Jeb and Rubio are fighting and so on.

CHRISTIE: Well, I'm just not participating in it. I mean the fact is nobody cares. Nobody cares about whether Jeb speaks English or Spanish. Nobody cares about, you know, Trump and how much money he made every time he lost money, or Carly's business record or any. No one cares about that. What people care about is the folks at home, they're trying to say, how we get this economy going to get? It's like getting a job. How are we going the pay off our student loans? How are we going to keep out country save? And why isn't the president of the United States standing up for police officers across this country? Why are we allowing there to be increased violence with liberal law enforcement policies? And why isn't the president (inaudible) the strength of that? He's own FBI director says, there's a chill wind blown through officers.

KELLY: But yeah, but the White House took a shot at you now for suggesting that -- well, on the police front.

CHRISTIE: Well, when he comes to New Jersey, when the president comes to New Jersey and he tries to take credit for criminal justice reform, that he doesn't got done the federal of, but I've got done in New Jersey? You know, he doesn't have the right to do that, (inaudible). By the way, you notice who's playing politics (inaudible), he didn't even mention my name. You know, he's there with Senator Booker and Mayor Baraka. Neither one of which anything to do with criminal justice reform in New Jersey, it was done at the state level led by the governor. And but, that's OK. I'm not looking to be complimented by Barack Obama.

(LAUGHTER)

KELLY: That, we don't how to work out.

CHRISTIE: Whoa.

KELLY: No. I'm just kidding, sorry.

CHRISTIE: Oh, look at you.

(LAUGHTER)

KELLY: You are.

CHRISTIE: Here I am. I come all the way across the Hudson River to be face-to-face.

KELLY: We have talked about (inaudible). This is not -- this is not the favorite thing among conservatives.

CHRISTIE: Yeah, but there was no hug.

KELLY: Well, it was like.

CHRISTIE: And Greta -- you noticed that Greta apologize of hug.

KELLY: Who apologize?

CHRISTIE: Greta.

KELLY: Greta?

CHRISTIE: Greta apologized to me on air.

KELLY: What are you talking about?

CHRISTIE: For saying that it was a hug.

KELLY: It was a figurative hug.

CHRISTIE: Oh please, stop.

KELLY: You had the doughish look in your eyes.

(LAUGHTER)

CHRISTIE: Oh, here we go. I don't want -- you know. We start talking about look in the eyes. We going to have a problem tonight (inaudible), so.

(LAUGHTER)

CHRISTIE: Why don't we just, you know, why don't we just think take a step back?

KELLY: All right. We're going to leave that, I'm out.

CHRISTIE: All right.

KELLY: Great to see you, Governor.

CHRISTIE: If you say so. Thank you -- I think.

(LAUGHTER)

CHRISTIE: Always great to be here.

KELLY: Get out of here.

CHRISTIE: All right.

(LAUGHTER)

KELLY: Joining us.

CHRISTIE: Is the show over?

KELLY: It's over for you.

CHRISTIE: Oh.

(LAUGHTER)

KELLY: Joining us now with more republican president candidate and senator from Texas, Ted Cruz.

Great to see you Senator, so what of that message, in particular, by Governor Christie which is essentially, man up, stop complaining, get out there and just debate.

SEN. TED CRUZ, R-TEXAS, PRESIDENTIAL CANDIDATE: Listen, Megyn. I think that's exactly right. You know the three debates that we've done so bar -- far, I think it have been terrific. And from my -- my attitude is that I'm happy to debate any of the candidates anytime and anywhere. And I think that is a good thing for the republican primary field.

KELLY: Are you.

CRUZ: We display the breath and depths of the field and the terrific talent we have.

KELLY: Are you signing onto this letter?

CRUZ: No. No, I'm not. I'm not interested in signing on, do a letter of demands. You know the one point that I have made and I've made it several times is why it is that we have republican primary debates that are moderated by liberal democrats. Liberal democrats moderate the democratic debates, and they moderate the republican debate. I don't think that makes any sense and the one role change that I think the RNC ought to think about is saying that if you had never in your life a voter in the Republican Party primary, that you shouldn't be moderating a republican primary.

KELLY: OK. Let me challenge you on that. Do you have any idea whether.

CRUZ: Yeah.

KELLY: Bret Baier or Chris Wallace has ever voted in the republican primary?

CRUZ: I have no idea and I'm guessing you may tell me whether Megyn Kelly has.

KELLY: So neither do I. I have no idea, but I can tell you, as a fact, that those are two of the most fair, talented journalists in the business. So under your rule, they could potentially be excluded from anchoring a presidential debate?

CRUZ: Look, look, look. They could potentially my guess is that they have voted in a republican primary. I can certainly tell you that Chris Wallace and Bret Baier and Megyn Kelly are not liberals. And the reality is that most journalists of mainstream media stations are liberal democrats.

KELLY: But how it will work?

CRUZ: It doesn't make any sense.

KELLY: Like, we have to submit our voting records to you or some committee? I mean we have to prove what primaries we voted in or didn't -- like how would that -- really, be impact the candidates and.

CRUZ: Megyn, it is not complicated in the primary, don't have liberals moderating list. And I've suggested, how about, have a debate moderator.

KELLY: What about Tim Russert? He was a liberal. Obviously, you know when Russert was alive, he was one of the most respected journalists -- you wouldn't sit for debate moderator by Tim Russert?

CRUZ: Megyn, why not have -- and listen, I'm happy to debate in front of anybody.

KELLY: Right. This is your forte.

CRUZ: I go on MSNBC. I let -- I go on liberal shows all day long.

KELLY: Yeah.

CRUZ: But in a republican primary debate, the object is to help primary voters decide who's the strongest conservative.

KELLY: Let me shift to policy now for you because you unveil your tax plan recently, and you are calling for a tax -- flat tax, which is basically.

CRUZ: Yes.

KELLY: A 10 percent income tax, 16 percent business tax and the critics of this plan say it won't work because if you need a flat tax, you got to have at least to 20 percent tax across the board. Otherwise, you're not going to take enough money to support the United States.

CRUZ: Well, listen. Any critic is saying that is not looking at the numbers because I put out the numbers. If you go to our website, tedcruz.org, tedcruz.org, you can see the exact numbers on the tax plan. My tax plan says that for a family of four, the first $36,000, you pay zero. No income tax, no payroll tax. Above that, everyone pays a flat tax of 10 percent. That means that billion hedge fund managers no longer pay a lower rate than their secretaries. And in a simple business flat tax of 16 percent, applies across the board, so giant corporations no longer pay less taxes then small businesses. And those two simple flat taxes allow us to eliminate the payroll tax, to eliminate the corporate income tax, to eliminate the death tax, to eliminate the Obamacare taxes and to enable every American to fill out his or her taxes on a postcard and to abolish the IRS. And the numbers are there.

KELLY: Senator Ted Cruz, it's always fun talking to you. Thank you for being here.

CRUZ: Thank you, Megyn. God bless.

KELLY: And by the way, we're posting on entire Ted Cruz interview, which is longer than that, on facebook.com/thekellyfile if you like to check it out. It goes on a bit about his tax plan.

And mark your calendars. The next republican debate is just a week away, Tuesday, November 10th on the Fox Business Network. Trish Regan, Sandra Smith, they'll start the debate coverage at 6:00 p.m., Maria Bartiromo and Neil Cavuto will take over for the second debate at 9:00 p.m. primetime and then, we'll all be on over here on Fox News Channel with the aftermath.

(LAUGHTER)

KELLY: Coming up. Latausha Nedd became a national story after appearing in a video with a machete and a gun and the call to kill white people. Then last night, she came on this show and said she was taken out of context. We reviewed the evidence and we will have the results next with Marthur (ph).

(BEGIN VIDEO CLIP)

LATAUSHA NEDD, ACTIVIST ACCUSED OF TERRORISTIC THREATS: Again, Megyn, once we go further with this investigation, the ending part for the last 30 seconds of that video, will be very clear and explained.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KELLY: In your discussion, you sound like you really can't -- like you hate the cops and you want it to be open season on them, too.

GERALD GRIGGS, ATTORNEY FOR LATAUSHA NEDD: Here's what you have to understand, Megyn. You have to take the video in context. You have to understand the threats that were made before the video when she was having a Google hangout chat and individuals infiltrated and hacked in and called her everything but a child of God.

(END VIDEO CLIP)

KELLY: Well, that was a clip of our interview with Latausha Nedd last night. The woman accused of making terroristic threats after video surface showing her declaring quote, "Open season on crackers and police." Last night, her attorney defended her client's free-speech rights by arguing in parts that the videos were improperly obtained by somehow who hacked into a private chat Latausha was having online. Today, however, we learned that the chat room's call-in number was being publicly posted to Twitter and Instagram on the day in question, where in fact the invitation remains to this day. Mark Eiglarsh is the criminal defense attorney and former prosecutor. Arthur Aidala is a Fox News legal analyst and a New York trial attorney. Good to see you both. All right, let me start with you on this, Arthur. Do you believe that she has the free speech right to say with the gun and the machete open season on crackers and police and all the stuff she said?

ARTHUR AIDALA, FOX NEWS LEGAL ANALYST: So if that you took that in and of itself, the answer to that question I would is no. Because even under the First Amendment, you don't have a right to use fighting words. However, with my favorite lawyer, my father, taught me, when I was a young prosecutor, you have to focus on the doctrine of completeness. You have to look at the whole thing. So when you look at assault, you don't just look at the second part of the assault where the guy's beating a guy in the face, you have to look at the beginning part where the guy who is getting beaten in the face had a knife and attacked someone. And here, she viciously, verbally attacked, and she reacted inappropriately, but not criminal.

KELLY: That's what she says. We have yet, there's apparently a six hour tape of this whole exchange. And she said to be see the whole thing, and we're trying to get it, it's not yet public. That this person who entered the -- chat room called her the N-word and attacked her, a charge he denies. Go ahead Mark.

MARK EIGLARSH, CRIMINAL DEFENSE ATTORNEY: Megyn, I used to think that Arthur drank from the vat of gullible. I think now he's addicted to it.

KELLY: I thought you were just going to say Arthur drank. And I was going to say that is true.

EIGLARSH: Yeah.

AIDALA: Red wine

KELLY: But not too much.

AIDALA: Red wine, red wine.

EIGLARSH: Megyn.

(LAUGHTER)

EIGLARSH: He is buying that her responses were because of a hacker? Let me explain why she says, "We want blood for blood." The reason why she says things like we want blood for blood is because, as she explained on your show, she believes that police officers took the blood of young, black males and she wants blood as a result of that blood. Taken in context, none of this is about hackers. It's about how she feels and its fighting words.

KELLY: That's -- go ahead Arthur.

AIDALA: But Megyn, the judge doesn't agree with Mark Eiglarsh. The judge, who heard the whole tape, or majority of it, granted her bail and allowed her.

KELLY: They were never going to lock her up without bond.

AIDALA: Well, she was, though. The first judge did lock her up without bonds. The first judge did and the second judge heard the tape and found out that this individual did use the harsh language and did identify where she lives and did trigger her. Obviously, what she said Mark, we agree. It's horrible what she said, but you need to look at the full picture.

KELLY: Go ahead, Mark.

AIDALA: What brought her to that.

EIGLARSH: Unbelievable that an experienced defense attorney like Arthur would suggest that a bond being given to her somehow means that the judge is buying into her argument. That's not the case. In fact, her argument makes as much sense to me as putting a homeless person on house arrest.

(CROSSTALK)

AIDALA: He must think of these things all day long, Megyn.

EIGLARSH: Arthur, I prepare.

AIDALA: All day long.

EIGLARSH: I prepare for this.

(CROSSTALK)

AIDALA: But the bottom line is, Megyn, when you first cover the story, I watched it last night. I didn't know what preceded it, but in today's.

KELLY: And now we do.

AIDALA: There is.

KELLY: I got to leave it that.

AIDALA: The real nasty stuff that preceded that and that has to be taken into consideration.

KELLY: Marthur (ph), it's a pleasure.

EIGLARSH: Pleasure, Megyn.

KELLY: Don't go away. We'll be right back.

(COMMERCIAL BREAK)

KELLY: Developing tonight, the Pentagon now weighing in on that Russian passenger plane crash, killing hundreds of men and women and children. U.S. Defense officials ruling out ISIS claims that it brought down that jet with a missile, but they have not ruled out terrorism. Conor Powell has more from our Middle East bureau.

(BEGIN VIDEO CLIP)

CONOR POWELL, JERUSALEM: The remains of some of the 224 victims of Saturday's deadly plane crash were returned to Russia today. As family and friends gathered in St. Petersburg, to pay tribute to those lost.

(BEGIN VIDEO CLIP)

VLADIMIR PUCHKOV, RUSSIAN EMERGENCY SITUATION MINISTER (THROUGH TRANSLATOR): We won't be able to replace those who died, unfortunately, but we can help every family, every relative, this is our direct responsibility.

(END VIDEO CLIP)

POWELL: Four days after the Russian Metrojet plane crashed in the Egypt's Sinai desert, there are more questions than answers. Airline officials publicly ruled out human error or a mechanical failure. Instead, blaming an external impact and (inaudible) that terrorism was the likely cause of the crash. But Pentagon officials tell Fox News, while there was a sudden and unexpected heat flash at the time of the crash, there is no evidence of a service air missile, the fired towards the plane. And during an interview with the BBC, Egyptian President el-Sisi also downplayed terrorism as a cause saying, quote, "When there is propaganda that it crashed because of ISIS, this is one way to damage the stability and security of Egypt and the image of Egypt. Believe me, the situation in Sinai especially this limited area is under our full control." As investigators sift through the debris and examined the flight's black boxes, no one is ruling out terrorism as a cause. And on-board bomb is still a possibility, but so, too, is a mechanical malfunction. Russia's airline industry has long had a spotty safety record.

(END VIDEO CLIP)

POWELL: Russian and Egyptian officials said today the investigation could take months, meaning a clear answer to the cause of the crash is unlikely anytime soon. In Jerusalem, Connor Powell, Fox News.

KELLY: We'll be right back, but first, coming up on Hannity at the top of the hour.

(BEGIN VIDEO CLIP)

DONALD TRUMP, R-PRESIDENTIAL CANDIDATE: He's been a terrible president. Everything he does is wrong. The Iran deal is wrong. Obamacare is wrong. The military is wrong. We can't do anything right. We're like the gang that couldn't shoot straight.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KELLY: Oh, we're getting a lot of feedback from you tonight on our first segment with the superintendent on Ted Cruz and on Chris Christie. Go to facebook.com/thekellyfile if you want to weigh in. Also follow me on Twitter @megynkelly. Let me know what you think. Thanks for watching, everyone. I'm Megyn Kelly and this right here is "The Kelly File."

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