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"stt_transcript": "Mr. Dubonnet may proceed. Good morning, Your Honors. My name is Alex Dubonnet and I represent Appellant Alex Villanueva. I would like to reserve three minutes for rebuttal and of course I'll keep track of my own time. With all due respect to the District Court, which Appellant certainly has, we believe the District Court did err in entering summary judgment for a number of reasons and we would respectfully ask this court to reverse. As you're aware, the first basis for summary judgment was lack of standing. We don't think that was correct as a matter of law. The plaintiff did submit a declaration that said that he was prevented from applying for county employment solely because of the do not rehire designation in his personnel file. Construing the evidence most favorably to him, which the District Court failed to do. That notation has nothing to do with elective office. Did he put forward any evidence that he had concrete plans or any kind of plans to acquire non-elective office to which that might be applicable? There was, Your Honor, with his declaration in opposition to the motion to strike, he mentioned two specific positions he wanted. One with the city's attorney's office as a consultant and to go back to the sheriff's office if the new sheriff would have him to consult there. And those were his positions. It is true that in summary judgment, the court did not hear oral argument and the court was likely aware or forgot that particular declaration was in the record. But what was before the judge was his stated desire that if it wasn't for this do not rehire notation, I would apply for employment. And as your honors are reviewing this full record, and the respondent does not deny that the declaration with specific positions are there, he would be able to testify at trial as to specific position. So the district court was hung up on the fact that he didn't actually take affirmative steps to apply and seems to construed his declaration against him saying it wasn't enough to say he wanted to return. We think that the declaration is very clear he wanted to return and he did have a position. Counsel, let's suppose that I thought that he wasn't really interested in applying with the county. Is there an alternative route for him to establish standing? Something maybe based on stigma plus reasoning? That is, that this has consequences outside of the county employment? I appreciate the question. It was exactly my next point that we do believe the reputational harm, which is also in the record in his declaration that he was an officer for 36 years and that this do not rehire being the end of his career as an employee of the Sheriff's Department was a deep insult to him. And that as an experience he knows that if you're accused of discrimination and harassment, even if you say it's false, it's a huge stigma and a huge blight on him, especially because he was very proud of being in the first Hispanic Latino Sheriff of Los Angeles. And even, Your Honor, we somehow to one believe the district court got it right on holding the declaration against him and found that somehow the reputation wasn't enough for standing. We believe, Your Honor, it was very much in a complaint. It's at ER 477. We actually asked for injunctive relief and in the alternative nominal damages. And that was also briefed in opposition to summary judgment on this very point. And we think the Supreme Court had made it clear. I always have a trouble pronouncing it out loud, but I believe it's a Zugenbaum case that said in a First Amendment case it's redressable. You can ask for nominal damages. That satisfies the redressability element. And so with all due respect to the district court, Plaintiff Alex V in a way of a said, I was injured by a do not rehire notation in my personnel file. It at the very least made it difficult for me to get employment or otherwise there is a complete bar. It hurt my reputation. I would like injunctive relief to have that removed. And at a bare minimum, I would like nominal damage, which would vindicate my reputational interest. Assume, arguendo, that you prevail on the standing issue. Can you turn to address the merits of the First Amendment retaliation claim? Yes, Your Honor. The respondent below did not argue that Villanueva did not engage in protected activity. And I believe Villanueva showed a triable issue of fact related to both pretext and causation because it's very well established in a First Amendment case in the circuit. You are permitted to establish pretext causation through pretext and you're permitted to prove it through circumstantial. What's the best evidence you have on pretext? Best evidence, Your Honor, is if you look at Esther Lim's complaint, she said she had four examples of harassment. And the exact evidence she gave was don't, it was, Alex Villanueva said, her work doesn't pass legal muster, the deputies are right out of college, flunkies, undefined, and she thought it was about her, it wasn't. Are listening this and will report to the Board of Supervisors, and then the fourth example is completely blank. That, I submit, Your Honor, is not a good faith fact. What about with respect to Huntsman and calling him a Holocaust denier? I mean, isn't that, I mean, I take it your argument is a pretext can be inferred from what you consider to be the weakness of the charges, but falsely calling someone a Holocaust denier, that's a serious blight to their reputation, and why isn't that something that warranted this sort of discipline that they then put in the case? I would say, Your Honor, that with Max Huntsman, he had two things. He did mention the Holocaust denier. He also said falsely he did not use the Max Gustav Huntsman name, and even at the time of his deposition, which was taken, the Max Gustav Huntsman name did not bother him enough that he did not even take that plaque off his desk that had that name. What Villanueva said in his declaration is that he learned that Max Huntsman denied the Holocaust, and he believed it to be true, and I'll also point out where we get to pretext, Your Honor, is Max Huntsman himself, in his interview, he said that Villanueva is right-wing and has a lot of neo-Nazi supporters, and he's trying to rile them up, so I would submit, Your Honor, this was a political back-and-forth. Max Huntsman accusing Alex Villanueva of having some right-wing or fascistic tendencies. Alex Villanueva going back. It had nothing to do... Counsel, were both the Lynn and the Huntsman charges investigated by outside counsel? They were investigated by outside counsel. That's true, Your Honor. And the conclusion of outside counsel was? I would point out, Your Honor, I don't believe it was a truly independent investigation, because I believe that what outside counsel did is simply parrot what Huntsman said and reported to it, and for that, Your Honor, I'll simply say that one of the things that outside counsel found is that Sheriff Alex Villanueva somehow retaliated against Esther Lim ending a letter, but they never looked at the letter. It wasn't attached in the report, and in deposition, Esther Lim admitted, well, actually, you know, my boss, she's the one who disciplined me for those tweets, so it was a legally impossible, both factually and substantively, theory of retaliation that they simply bought, and the other piece of damning evidence, Your Honor, is that there was an inflammatory accusation by other Justice Deputies that Alex Villanueva had said that there were dumb women and women unqualified, and that's in quotes, and he said that on his Facebook Live. Alex Villanueva denied that. Nowhere in the record, which they had, they gathered up together all his Facebook Lives, his KFA radio appearances. He did not say dumb women or women unqualified. What they tried to say is he said the Board of Unsupervisors, he disagreed with them, and somehow, because they're all women, they inferred some type of sex disintent, which is wholly unwarranted, and I will also say, Your Honor, that the District Court did make a finding that this evidence is actually quite thin, but it went on to say there is some evidence and listed it, but I would submit that's exactly the classic error on summary judgment, is that if the record is red and the light, most favorable. I'm not saying that a posting counsel doesn't have an alternative argument or explanation for what I've brought up, but because these are reasonable concerns and they could reasonably thought to be pretextual, appellant Villanueva does have the right to present that to the jury. What do you think is the relevance of the aspect of the factual scenario here where Sheriff Villanueva complains about Ms. Lynn's tweets and then Ms. Lynn perhaps is told by her supervisor not to make those kinds of tweets? How does that fit into the allegations here? I think it fits into the allegations because it shows its pretextual, because Lynn cannot be disciplined by her supervisor, then turn around and say, Alex, in a way of a retaliate against her for tweets. It's that there seemed to be a problem with, and I'd also want to point out, Your Honor, that the Justice Deputies, they are not supervised by anyone in the Sheriff's Office, and the record is very clear. Both the Justice Deputies and Max Huntsman do not interact with the Sheriff on a daily basis. Max Huntsman testified he hadn't spoken to the Sheriff since 2019. The Justice Deputies, in terms of how they interact with the Sheriff's Department, they interact with the undersheriff, a man named Tim Murakami, and he was deposed in this matter and was specifically asked, it's at record it's 13 ER 302 to 308, he was asked, did you do anything to make life of the Justice Deputies, including Esther Lim, more difficult? And he categorically denied it and said no. He treats them with respect. He tried to maintain in a good working relationship and that any problem was he thought those tweets might be a problem, but he certainly didn't take any adverse action. And the relevance to this, Your Honor, is that there's no credible argument that any type of supposed harassment or discrimination impeded any part of the Justice Deputies' jobs or in any way created any type of adverse environment. They weren't even dealing with the Sheriff. They were dealing with Sheriff Murakami, who denied that. And it's also, Your Honor, to be clear, it's not simply that we're saying they got it wrong. It's that all when you stack up all of these inconsistencies and also of these failures to acknowledge, when you read the report, it's not even acknowledged there's no supervision, there's no evidence it was difficult to do a job. When you don't even even acknowledge that, the reasonable inference is that this is a convenient excuse, let's just lay out the evidence completely in a way that's damning to him and then just rubber stamp the complaints of people who admittedly have a political bias. Is it your position that we should look to see whether Lim was politically motivated or Huntsman was politically motivated? And if so, why do you think that's the different point here? I think that you should look to that and also the evidence that the county itself had a clear bias towards Vienna Wave. And for that, Your Honor, I'd point out Mark Ridley Thomas, before he was federally indicted, he did a motion that the Board of Supervisors passed that inspector general, who is Max Huntsman, to explore all options to impeach this sheriff. That's at 12 ER 2574-275. Max Huntsman said that he got that and he did look into that. And so what Vienna Wave's theory was is that when Max Huntsman made this complaint, he was operating on instructions of the Board of Supervisors to look all options to impeach. And the key word in the motion was this sheriff. And when he didn't have any legal options to do it, the complaint that was coordinated with Esther Lim was part of what we would argue a retaliatory and extra extra legal. So we do think the county writ law urge had a bias and that Lim and Huntsman certainly should. Okay, so what do we do with the outside counsel's report? Is that also pretextual? And are the lawyers there acting pretextually on behalf of the county and we can ascribe it to the county? I think you can, Your Honor, for the failure. If you read the report, all it simply did was parrot what Huntsman and Lim said. There wasn't any acknowledgment. What generally how, excuse me, I do employment law myself. What generally we're seeing outside counsel reports, there's some type of acknowledgment of some contrary evidence like, for example, sheriff Vienna Wave didn't actually say that this inflammatory thing. We found no evidence of it. Actually, we looked at this. Lim was disciplined by her supervisor, not Vienna Wave. Well, we have to acknowledge there's a motivation. You didn't say a lot of things that I don't think you dispute, he said. What do you specifically dispute him saying? We just specifically dispute him saying dumb women and women and unqualified, which we think are the most egregious. And we specifically deny, and I think this is agreed to, that he ever made any reference to Lim's gender and her national origin or race. Go ahead, of course, Your Honor. There's some other comments like no male justice deputy staff, the board should explain why they exclude men from their ranks, 20-something woke individuals, flunkies, 25-year-olds who are right out of college. I mean, those you don't dispute? Those we don't dispute, Your Honor, but I did ask the CEO, Opie, about those, and they admitted those comments do not relate to race, gender, or national origin. Sheriff Vienna Wave, in his declaration, stated woke is purely meant as what he saw it as a political ideology that lacks common sense. And the comment you referenced about no males was in the larger discussion of diversity, and I believe if it's in the record, if it's not what the issue was, is that he was not expressing any just being distraught that there were women. The idea was for so long there were only men, now it's only women. We might have swung too far the other way, which is a fairly pedestrian thing to say in the context of political debates. Want to save time for rebuttal? Yes, Your Honor. Okay, all right, then we will hear next from Ms. Ruth. Thank you, Your Honors, and may it please the Court, L.A. Ruth, on behalf of defendants. I just want to back up and sort of briefly set the stage before I begin. The grab-a-minute plaintiff's complaint is that the county Board of Supervisors punished him for opposing it on public issues surrounding COVID policies and ballot measures by placing a file notation in his personnel file. The county presented an unbroken, undisputed mountain of affirmative evidence demonstrating that that was not true. The investigation, as the Court has already touched on, and ultimate panel proceedings were handled by a series of independent decision-makers, some starting with individuals who received the complaint in the beginning, were within his own department while he was sheriff. So is it really a violation of the county policy on equity to refer to staffers as flunkies? That can get you disciplined and a do-not-rehire? That seems, I mean, I would think that people who work for elected officials have to have a little bit thicker skin than merely being called a flunky. That's one of the charges. Some of the others are more serious, but a flunky is misconduct? Well, I would remind Your Honor that the investigator and, more importantly, sort of the investigative report, the outside investigator just gathered facts, didn't make any recommendation or conclusion regarding whether the conduct did or did not violate the policy. When it came back in to the internal panel. Okay, so it's just an objective fact-gathering and not evaluative? Well, it's evaluating exactly all the facts to present it to the panel, which is an independent internal panel, whose exclusive job is to evaluate whether there's been a violation. But I want to answer Your Honor's question. It is the totality of the report, right? It is not just one individual statement, and that statement may not have risen or been actionable on its own. This is not a Title VII or a FEHA, you know, under California law, lawsuit or claim. The county's policy of equity, and the part that the department has its own, sets a higher standard, and part of that is just prudent risk management to identify and eliminate or address problematic conduct that creates a bad work environment, but that also exposes the county to liability. So, to Your Honor's point, you know, and to my colleague's point, we're not talking about needing to prove a claim, you know, about how it impacted the workplace necessarily. It has a higher standard, and there were a number of charges here, and there was evidence to support a number of them. The panel did say, as to one of the charges, there's nothing sex-based here, so we're not going to confirm that, you know, conclude that that was founded, as to that charge. That's on the sexual harassment claim. Yes, sir. Yes. Sorry. What about the issue of standing? Do you think that the plaintiff has standing to assert a defamation claim? I don't believe he has standing to assert a defamation claim, Your Honor. I mean, first of all, I just would like to note that my colleague was referencing the declaration and the record. He was referring to a prior proceeding on motion to dismiss. The motion for summary judgment declaration doesn't say anything like those things. He does not, and that's exactly what the court, the district court identified. That item was in the record, but had not been identified under Rule 56 as one of the items in the record to be considered by the district court in connection with the motion. Is that your position on that? That's right. It wasn't part of the summary judgment record, and he didn't call the court's attention to that declaration in opposing the summary judgment. Just as a common sense matter, do you think it's the case that having a kind of negative notation in somebody's employment file, particularly somebody who's prominent and it gets publicized, would at least be an injury? Well, the injury to your reputation? It is an abstract injury, Your Honor, I would say. And what's important in this case to remember is it isn't public because of something the board did in your prototypical, you know, elected official First Amendment case. Sure, but it's public. The L.A. Times asked for it, right? They were entitled to it under public disclosure rules. But it isn't to anyone at the county? Certainly not the board? They haven't publicized it, but it's now out there, and the county knew once they put it in his records that it could be revealed, right? That it could be discovered. Okay, so it's now out there. It says, do not hire this man. And somebody else at a private firm might well take this into account in deciding whether to rehire the sheriff, or whether to hire the sheriff. Well, I do think it's important that it would have never gone anywhere besides a confidential file were it not for him telling the Los Angeles Times about it in his interview, and continuing to repeat that Max Huntsman is a Holocaust denier, knows about ethnic cleansing, etc. That all goes, I think they may all go to the merits, but we're just trying to figure out whether he can even complain about any of this. Sure. Well, I do believe that, you know, as the court well knows, you need concrete, specific facts. It sounds like if we would adopt your theory of standing, you know, if we were dealing with just, you know, a low-level staffer, who wasn't a prominent elected official, made public statements, etc. Right. And you had a lower-level official who works for, employee who works for the county, and there's some kind of proceeding, and then they end up leaving the job, but then the proceeding continues, and they put do not rehire in that person's file. As to your view, that person cannot challenge that? Well, I still think for standing purposes, for sure, you still need some concrete proof that you apply. Even if it is based on conclusions that they believe are false, and it gets then released, they can't assert a claim for defamation even? Well, I- And set aside First Amendment retaliation, just a plain old, you know, defamation claim. I think I have a couple of points. Number one, there is no evidence that any of this was false. He's taking small pieces- But standing doesn't look at that. Sure, sure. Standing just looks at whether or not it would be, you know, an injury. It seems hard to think that putting negative comments, particularly do not rehire someone in a person's personnel file is not an injury to their reputation for purposes of the minimal standards of Article III. It may not be much injury when you get to the actual defamation. Maybe it's not injury substantively to him for the merits of damage, the damage element of the defamation claim. Right. But if it's an article of Article III injury, you can't even go to court. We can put these freely in people's files, and they can't do anything about it. No, sir. That's not a policy that I am proposing. But that would be the- Well, he hasn't produced any evidence, even his own statements, concerning how and in what way this has injured him. And so that's the lack of concrete, specific facts that he has spoken to. He has continued to run for public office after the complaint, after the file notation. And to this day, he's continued to speak about the file notation publicly and in the media. He's continued to speak about repeat his statements about Mr. Huntsman, et cetera. So if it's in the public eye at all or if it remains there, it isn't because of anything that defendants have done. So I know we're a little bit off a field of understanding question. But my point is only no one on the defendant's side publicized this information. And so it would not have imposed any reputational harm on him were it not his own decision to make it a public issue, as he does with many things. And he freely avails himself, of course, of his First Amendment rights, both as elected sheriff, private citizen, or aspiring to a new elected office to air his views, to criticize individuals in county government that he doesn't agree with. But it equally protects individuals who want to call out his conduct in office. Can I ask you just going back to the merits? So obviously there's a fair amount of disagreement between Mr. Villanueva and others in the county government just about some of his views and their views. And the question I guess I would have is, is there a theory here of circumstantial evidence that says, you know, given all the bad blood between us, anything that is done to me, there's an inference that it's done because of the views I have. Well, the problem there is there's a disconnect, right, because he has publicly clashed with the board and the board has has fired back. Right. And he has even publicly clashed to some extent with Mr. Huntsman in the slam. But he alleges that the board is the one that directed this file to notation to get into his personnel file. And there is absolutely no evidence of that. In fact, the undisputed and substantial numerous individuals testified that was not the case. The board had nothing to do with it. And likewise, the individuals who were in charge with investigating, receiving review, creating the report and making recommendations. A series of independent decision makers all said we didn't know anything about the issues, the covid policies and the ballot measures that is his protected speech in this lawsuit. So what happened before is not particularly relevant to the four corners of what he's alleged alleged, you know, caused him was retaliatory and caused him harm in this. What would need to be. Are we looking then for some kind of smoking gun, you know, email or text that would connect the board to Miss Lim and Miss Huntsman, Mr. Huntsman in connection with the complaints they raised that then led to all of this. Well, you don't need a smoking gun, of course. Circumstantial evidence is sufficient, but he hasn't produced any. I mean, the district court really laid out sort of the three prototypical ways you can use circumstantial evidence to demonstrate that there is some pretext, some timing quirk here that really raises an inference. And there just is not anything like that here. There is absolutely no suggestion. You know, Mr. Villanueva deposed every one of these witnesses from every stage of this proceeding. I understand Mr. Villanueva sat in on the depositions himself. He he heard what every witness said. He knew that everyone said a do not rehire does not mean that you can't reapply. Do not rehire is one tool among many. And he heard every person say, no, the board didn't have anything to do with it. I didn't know anything about these prior conflicts between the board and Villanueva. This is an independent panel with a very specific. I mean, the employees we're talking about are not sort of low level people, right there. They're fairly senior people. One is an inspector general. Right. And so I guess I'm asking from from just a question, whether it's a genuine dispute of fact, is there not a genuine dispute of fact that given the warring environment between everyone here? Right. There's reason there is a circumstantial case to be made that, in fact, all this was motivated politically and that the two people who are making these complaints are aligned with the board. Well, the problem with that is that. The people who were that would require a series of like 13 people to have colluded altogether without a shred of evidence. We turned over every communication. There were 14000 pages of documents. Not a single thing raises that inference. Like, you know, essentially, like the board was completely left out of this, even if Miss Lynn and as the court knows, in the First Amendment context, harboring animus is not enough. It must be the reason. But for this, this final result would not have occurred. Well, what if it what if hypothetically Miss Lemon and Mr. Huntsman were motivated politically? Would that matter? It wouldn't matter because they weren't the decision makers. Right. They reported they made their complaint. They were interviewed multiple times at the outset. At the outset, the complaint comes into his own department, his own department interviews the complainant and says and I believe like relevant witnesses and says this requires an investigation. We're going to send it to an outside law firm, as we typically would do in a circumstance like this. And right now, just based on what we've heard in this interview, we are going to admonish our own sheriff. So his own department receives this and says, this looks like a policy violation. Let's just make sure we try to avoid this. That's all before it even goes to outside law firm, independent oversight council, et cetera. So that would require quite a attenuated and speculative chain of individuals harboring private animus that is not documented anywhere. Lemon Huntsman didn't have anything to do with how this ultimately came out. It was left to the hands of other people. And as the court has focused on some of the prior exchanges between these individuals. But I think that only underscores that the board wasn't in the business of covertly designing a secret conspiracy behind the scenes that basically results in a confidential file notation. If the board had a problem, it said so publicly and directly. Does the record say anything about whether or not there had been other instances in which this kind of a proceeding went forward to a conclusion with respect to a former employee? I would think. I'm sorry. Yes. I don't know that the record reflects that, I believe. Because a lot of times people, you know, use in in other contexts outside elected officials or a lot of people sometimes will resign in the middle in order to avoid the continuation of it. But here it continued after he was voted out of office. It continued. And it's actually quite late after he leaves at the final determinant. It's actually put into the file is is that. Well, this was unusual. It is not uncommon. I believe Lekra veins declaration, who was the person who ultimately imposed the notation testified to this. This is sort of it. But they do, in fact, do these proceedings. Yes. Back to people who've left. Well, yes, because the reason the file notation that is at issue in this case. Was because the individual couldn't be disciplined. Typically, what happens is the panel makes a recommendation and the soup, the individual supervisor decides whether or not that's appropriate and what penalty to impose, what discipline to impose. In a circumstance where the subject of the investigation is no longer employed, they can't be disciplined. So it's a file notation so that should that person apply for a future employment? The person, you know, Los Angeles County has 100000 employees. They can't there's not a centralized place to keep all the details. So it's just a note for purposes. Look at this prior history with this individual. You said in the declaration of the decision maker here, there's a reference to doing similar post departure proceedings for others. Or is that somewhere else? That where the person is no longer employed or cannot be disciplined, which is the case here. He wasn't with the county any longer in any capacity. He had retired before he was elected, and then he lost his election. The the the file notation is basically what they do, because otherwise it would typically be some sort of discipline or admonition or something like that handled by a supervisor. In his case, it was just completing the process. It was just putting that filing, completing the investigation and putting a kind of conclusion there. He had not Mr. Villanueva himself acknowledged that he couldn't have been disciplined even while he was sitting sheriff. So there really wasn't much that could have impacted him. You know, as the court knows, the sort of First Amendment retaliation cases say public censure, public statements saying you violated ethical policies or you are violated. The law when you are in office is insufficient because, as your honor pointed out, when you work, when you are when you work for an elected official, perhaps you do need to have a thick skin. You have to have an even thicker skin when you are that elected official, when you are regularly in the public eye, regularly opposing people legitimately on public issues. So I forgot where I began with that. I think there is some suggestion. I don't know if the court's interested in this at all, but that we somehow are now changing our tune, that we don't believe he was speaking. His speech was protected or that he wasn't speaking in his capacity as a public official. I mean, his lawsuit, the First Amendment complaint, his declaration in support of summary judgment leaves absolutely no room for doubt on the question of what capacity he was speaking. He's in his office for most of these. He's on video. He's it's a press conference or he's wearing his uniform. And he repeatedly has stated throughout his complaint and declaration, I am doing this as a steward of public trust, as the role of the most powerful law enforcement person and as my role to sort of keep the board, making sure the board is doing the things that are right for Los Angeles County. With respect to the adverse action, I want to just point out that the file notation, the district court didn't reach this, but there really is no genuine dispute regarding what the file notation is. Every county person who has experience with this says it's one tool among many. This is what we do. We take a look and we put it in there. And somebody in the future, if somebody future applies, you know, it's a speculative future moment when somebody applies in his motion for summary judgment declaration plaintiff says, you know, yes, I know all about this. And everyone knows that the blacklist, et cetera. But in his deposition testimony and in a book he published while this this case has been pending, he said it never existed before. They invented it to villainize me. They invented it to destroy me. So he he is the one who sort of can't even decide what he thinks the significance of the do not rehire. Isn't this at least genuinely disputed this piece? I don't know that that can be genuine if it's squarely contradictory with his own testimony in this same lawsuit. Well, it does say do not rehire. What's that? It says do not. It's an inapps name and I take your honor's word for it. But it the testimony on this specific question is uniformly in the county's favor. Regarding, you know, my friend has focused a lot on sort of process issues and criticisms of some details of the report or the individuals who brought the report. This isn't a due process claim. He had a due process claim and he abandoned it. What I think is important is there, as the district court properly said, if you look to his citations, none of these none of this evidence exists. There truly is not a single piece of even circumstantial evidence that suggests any impropriety, any falsity. And again, the standard is not. Is it objectively false? The standard is, did these 13 people along the way reasonably believe that what they were saying was true and that it was in violation of the county's policy? That is the standard. So unless the court has questions, I see my time is dwindling. Thank you, counsel. Thank you. Thank you. With your permission, I'd just like to address the argument that somehow plaintiff has to prove some massive conspiracy. I know it's always difficult to make quotations, but the quote from Shakespeare, won't someone rid me of this troublesome priest is generally how you we in the plaintiff's bar view retaliation cases, all of the board, which. The other side concedes did instruct Max Huntsman find all ways to impeach, quote, this sheriff, not a sheriff, not let's look into can we impeach. Let's remove this. Let's remove this sheriff. All it were all it were the reasonable inference requires it is, is that as county employees who are very high up black ravines, they had the chief. It's internal affairs. It's somewhat confusing, but the sheriff's department has a sheriff and chief. She's the very head of internal affairs, as your honor pointed out, not a low level employee. She knew about that. She knew who Villanueva was a political opponent of her current boss, Robert Luna, and the COP members know how much the Board of Supervisors users didn't like it. All they had to be aware of is that they knew the current Board of Supervisors users would really like the chance to bloody his nose with this improper retaliation. That's not that. That's not that's not a conspiracy. It's it's it's straightforward. It's a straightforward application of retaliatory motive, which is pointed out is usually based on circumstantial evidence. And I just also point out both Max Huntsman and Esther Lim reported it to the Board of Supervisors. So I think what she said was literally true. No direct involvement. There doesn't have to be direct involvement when they instruct their agents. It's very rare for the Board of Supervisors. They mostly vote on things. They have staff. They directed it to their staff to do it. So I do think there is an element that we can infer that are there in front there. They're animus that they were effectually waiting this through, excuse me, through their agents. And briefly, with its permission, be in the way of his activity was open and notorious. So we think there is a triable issue was to knowledge in this case. Usually when there's a lack of knowledge, it's very private. There's no reason to know. He was so open and notorious about it. And for the other thing about the protected speech, it's in the brief. But the Kennedy case, there's this clear civilian analog. This circuit has been very hesitant to say a speech is not not protected. The type of things we're talking about, especially the running for office piece. And very briefly, because I know I'm running out of time. We did over your time. I'm sorry. Briefly, your honor. We did file a 28 jail letter. But Ron Regis versus Kaus last month, which I know this panel is familiar with, which we really think speaks to the advert. Adverse action is adverse action. Action is issue. I'll stand. I know more of my time, so I won't discuss Monell or the appropriate standard. But unless the court has any questions, I appreciate. All right. Thank you, counsel. The case just argued is submitted and the court for this session today stands adjourned. Thank you. All rise. Hear you. Hear you. Persons having had business with the Honorable. The United States Court of Appeals for the Ninth Circuit will now depart for this court for this session stands adjourned."
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"stt_transcript": "list. And we will hear first from Mr. Tusek. Yes, sir. Did I pronounce that correctly? Yes, sir. All right. You may proceed when you're ready. Good morning, Your Honors. My name is Aaron Tusek, representing Appellant Barry Williams. I'd like to reserve four minutes of my time for rebuttal. May it please the court. The district court made two key errors below. First, it held that a Barry Williams claims challenging his overturned capital conviction for the murder of Jerome Dunn accrued before the termination of the criminal proceedings against him. This was error under Smith v. McDonough. This was error under what? Smith v. McDonough. I'm By holding that and honestly prematurely speculating that any claims related to the Billingsley murder would necessarily impugn the extant convictions for the attempted murder convictions of two other individuals, Carol Freeman and Anthony DeVos. With respect to Dunn, why isn't the vacature sufficient to remove any sort of heck issue so that at that point, the claim would begin to accrue? Yes, Your Honor. McDonough is very clear on this point. McDonough says that when there has been a vacature or an acquittal and there are still criminal proceedings ongoing, then there are very serious concerns about parallel litigation where you have a- But the violations that occurred were Nipue like false testimony and Brady and things like that, that cannot recur at the retrial. Well, Your Honor- So you've now, so the basis for the civil claim, which was the basis for the vacature, is not going to collide with the ongoing proceedings, which will have all the Brady stuff is cured and there's not going to be any Nipue violation. That false testimony that's been identified is not going to be used again. So it seems to have disentangled it at the moment of vacature and it's not clear why you have to wait for the dismissal. Well, respectfully, Your Honor, there hasn't been evidentiary rulings that certain pieces of evidence will be excluded or won't be excluded. We know what the habeas order says and we know that the habeas order does say that evidence, the Cox testimony related to the Messiah violation is certainly going to be excluded. But other evidentiary rulings about evidence that other witnesses may or may not- What were the items of evidence you think there was a remaining ambiguity that could have created a collision between the civil suit and the ongoing criminal proceedings undone? Yes, Your Honor. Well, looking at, we know that Cox's testimony was excluded, but there was also concerns about the testimony of Patricia Lewis. And these concerns were very significant because Ms. Lewis, initially at trial, failed to testify accurately and truthfully about the other witness in the car. And there was a Brady violation related to this. The complaint alleges that she failed to make that testimony because she was concerned about protecting this other witness. And on retrial, we just don't know what Patricia Lewis would have testified. So I have two questions for you. The first one you may not be able to answer. So first of all, why didn't you bring it? If it was barred by, if we determined that it was barred by Eck versus Humphrey, then you'd be in the clear to wait until the charges were dismissed. So there certainly was a protective suit that you could have filed. Secondly, what evidence is there that the district attorney was still considering? What conversations were going on between the defense and the DA that would lead you to believe that the DA was still actively considering bringing a prosecution? Yes, Your Honor. On the first point, we think that this case is very clearly controlled by McDonough. And in McDonough, it says that these sorts of claims accrue at the conclusion of a criminal proceeding. And so there, and McDonough lays out very clear concerns that a litigant in Mr. Williams' shoes may have about bringing a case while... Was, so Dunn was still in prison after the habeas was issued in 2016. Yes. But he wasn't under any sentence for the Dunn matter. Is that correct? That's correct. He was moved off of death row, but he was being held in the county jail awaiting potential retrial on the same charge for the Dunn conviction. And he just languished there. It is not in the record before this court why the prosecution was taking so long to decide whether or not it would retry Mr. Williams. But the fact is he was in county jail. He had this murder charge for Dunn hanging over his head like the sword of Damocles. He did not know what was going to happen. And in those circumstances, McDonough is very clear that a litigant in those circumstances should not have... Did you or a prior counsel have any conversation with the DA's office about, what are you going to do in this case? Just help me out. I've got family vacation coming up. Are there any of those conversations where the DA would say, yeah, it's still under consideration? Your Honor, I will admit I was not... And that goes on for five years with no communication whatsoever as the DA contacted you or your client about the possibility of a retrial? Your Honor, respectfully, I'm... That's a long time to sit on those rights. Understood, Your Honor. But respectfully, we are far outside of the pleadings, far outside of anything that's in the record at this point, particularly when the Supreme Court has had a very clear... If there were any such evidence of communications between the DA's office and your office or prior counsel or between Dunn, pro se, this would have been a good time to have brought that evidence out. So to say that it's not in the record suggests that there probably isn't such evidence. Very, very likely, Your Honor. However, I will take this moment to emphasize for the court that we are at the pleading stage here. There has not been any elucidation of evidence in this case. But there was no allegation in the complaint? No allegation in the complaint. However, plaintiff... Mr. Williams would submit that Rule 8 would not require him to include such an allegation in the complaint. And Judge Carter was the district judge who issued the habeas? I believe that's correct, yes. Yeah, so he's very, very familiar with the circumstances. So on that point, I would just emphasize that because McDonough so clearly controls this issue, says that a plaintiff in these circumstances should not have to choose whether or not to bring a civil rights claim against the very people who may be prosecuting him for a crime, in this case, a capital conviction, McDonough clearly controls. So just for the rule you're asking for, is it that until there's clear closure in favor of your client while there's a potential for prosecution, you think that this period doesn't run against him? Your Honor, I would push back slightly that this isn't a case where there's a potential for prosecution. There is active charges against him. The indictment is still in place. The question is what the state is going to do with those charges. So the criminal proceedings are actual, they are in place. And our rule that we would say is this is a simple application of McDonough. You look to dismissal, which happened in 2021, and then statutory tolling under California law because Mr. Williams. The rule you want is the fact of the charges being in place, regardless of what else may be happening with those charges, regardless of other communications or lack thereof. It's just the fact of the charges pending. I'm not trying to put words in your mouth. I'm more trying to understand what position you're taking on that. Yes, Your Honor. As I read McDonough, I think that is very clearly the rule that the Supreme Court has told us we have to follow in these circumstances. And as I understand the Ninth Circuit's, the way it has viewed McDonough, it follows very clearly in the same way. And in fact, What Ninth Circuit cases are you referring to there? Well, Your Honor, in preparing for this argument, I looked at, there are some, the Ninth Circuit hasn't addressed McDonough a whole lot, but in a couple unpublished cases, it has adopted very similar positions to what we're arguing for. Those would be Manan Singh v. United States, case number 21-16192, and Hawkins v. Wagner, number 21-17099. I'm happy to file something with the court with those citations. Are these in the briefs? They're not, Your Honor. Are there other Ninth Circuit cases you're referring to other than these two? Yes, there's also predating McDonough is Bradford v. Scherchlicht, 803 F. 3rd 382. That is in the briefs in which the Ninth Circuit adopted a rule saying that we're going to look to the date of acquittal in a somewhat analogous circumstances rather than the date that a previous conviction was vacated. Counsel, oftentimes when we get a grant of habeas by a district court, particularly if it's the only charge on which they're incarcerated, the district court will say you've got to retry them within a certain period of time, let's say 60 days. Was there any such condition in Judge Carter's order? Not that I'm aware of, Your Honor. So, Your Honors, based on this, we think, yes? I'm looking at Bradford and one of the comments, it says after the discussion that you referenced in this case, it says, we recognize, however, that the result may be different under other factual circumstances. For example, a similar claim could accrue upon vacature of a conviction if the conviction was set aside in a manner precluding the government from maintaining charges on evidence presented at the initial trial. Why doesn't that exception cover this case? Because it seems that it was all evidentiary related, as I said, and therefore the vacature, Bradford suggests that vacature may be the trigger in such a case and you tell me why it isn't such a case. Yes, Your Honor. Two reasons. First, Bradford predated McDonough and we think that McDonough- That dicta in Bradford about that case is inconsistent with McDonough. Yes, Your Honor. And what in McDonough specifically rejects that? Well, McDonough very clearly adopts a rule that we wait until the termination of criminal proceedings. It's a bright line rule. So we're not looking into what is happening in the criminal proceedings. If there are criminal proceedings pending, a 1983 plaintiff has to wait until the close of those proceedings to bring his case. And also, Your Honor, we would argue that it is not clear from this record that all of the evidentiary basis identified in the habeas order could not have been brought up again at the retrial. And further, Your Honors, we would argue that discovery in these sorts of cases where we're alleging fabrication of evidence, civil discovery very often produces additional evidence of misconduct that may not have been able to have been discovered at the criminal stage. And therefore, that's an additional reason on top of the others already articulated why this court should follow McDonough, should not put too much weight on the dicta in Bradford, and should hold that Mr. Williams' claims accrued in 2021 with the dismissal of his case and that further the application of two-year statutory tollings made his Dunn-related claims timely. With that, I'd like to reserve the remainder of my time. I'll give you more time for rebuttal, but we haven't talked about the other case yet. That's correct, Your Honor. Can you address that? Yes, yes. On Billingsley, in Billingsley, it's very important to make clear that there was the murder conviction of Billingsley himself and then separate attempted murder convictions of two other people, Freeman and DuBose. But as I understand it, this isn't like in Dunn where it's gone, the slate was wiped clean. The murder is replaced by a manslaughter. Do I have that correct? That's correct. So how is it not the case that the 1983 claim is inconsistent with the manslaughter conviction? Yes, Your Honor. In the Ninth Circuit, there is very clear precedent saying that when you have a circumstance where a previous conviction is vacated, even by a settlement agreement, that's Roberts, that that is sufficient to bring a challenge to that vacated conviction. It's replaced by a lesser conviction arising out of the same conduct. And it would seem that there's a tension between the claims in the 1983 case and the conviction that is still in place. Understood, Your Honor. It's a different type of heck bar, but why isn't that a heck bar? Well, in Taylor v. County of Pima and Jackson v. Barnes, in fact, the court held that a 1983 plaintiff who had a earlier conviction vacated and then was reconvicted on the same charges had a claim for that earlier conviction. And the reason is because that the later conviction is separate and clean compared to the first one. And so when you're challenging that first conviction... And which case is that that you're just describing? Taylor v. County of Pima, 913 F3rd 930, and Jackson v. Barnes, 749 F3rd 755. And further, Your Honor, we'd emphasize that what you're raising is a damages issue. Mr. Williams is not challenging any of the time that he was incarcerated pursuant to that manslaughter conviction, pursuant to the attempted murder convictions of separate people. What he is challenging is the decades that he spent incarcerated that is totally unsupported by any extant conviction. Do you have case law that suggests that the heck inquiry would turn on the damages that are being sought? This is what the court did in Taylor, what it did in Barnes, what the Second Circuit did in Poventand, where when you have this circumstance where you have an earlier conviction that is vacated and a later conviction that is separate and clean from that earlier conviction, you're allowed to bring a challenge to that earlier conviction. Now, you might have limited damages, but you're allowed to bring that challenge because that earlier conviction is no longer extant. And furthermore, to the extent there are questions about the factual overlap of these claims, that is not well developed in this record. And it would be appropriate to have, to remand and have discovery in this case, to get a full picture of the jury instructions, of the kind of evidence that was actually presented at trial. So is your claim that he served longer for the murder than he would have for a voluntary manslaughter plus the other two convictions? Yes, Your Honor. And so it's just, this is really sort of a proportionality question, a question which we would say, gee, you got a life sentence for the murder. And now that it's been downgraded to manslaughter, you should have only gotten 15 years and you served 20. So you can get compensation for five years. Is that the argument? Your Honor, I don't think it's quite a proportionality argument. No, I mean, but that looks like that's what comes out of Taylor. Well, but in Taylor, you're looking at time served in the first instance and time served in the second instance. And in Taylor, there was perfect overlap. This is a case where there is not perfect overlap. Well, in citing Jackson v. Barnes, it looks like you had a murder and a rape and the murder gets vacated, but not the rape. And the court is concerned about how long you've served. But he's still serving, this would be a manslaughter if we've been sentencing this correctly from the beginning, it would have been manslaughter plus the two attempted murder charges. That's correct. And then we're supposed to divine how long the court would have likely given in 1981 and decide that if it was a year or two under what he served until 2025, that he's entitled to compensation for that? Respectfully, no, Your Honor. All you have to look at is the sentences that were actually in the record here. We know that he received about nine years for the manslaughter and attempted murder convictions. And we know that he was serving, in fact, a much, much longer life sentence on the murder conviction. That murder conviction no longer exists. And that time beyond the 10 years is just unsupported time that he was in prison without any factual basis in a conviction. All right. Thank you, counsel. We've taken you quite a bit over, but I'm going to give you, because we did, I'm going to give you the four minutes you requested for rebuttal. Thank you, Your Honor. All right. And so we will hear first from Mr. Brown. Yes, Your Honor. May it please the court, Anthony Brown for the County of Los Angeles, Nick Trutanich and James Jacobs. And I am going to argue for 10 minutes, and Mr. Lee's going to argue on behalf of the city for five. And I'm happy to begin, Your Honors, wherever you want me to begin. But because the county defendants have a separate claim that the city doesn't, the prosecutorial immunity claim, I'd like to at least have some time to address that. So I can address that now if you want me to, or I can respond. It's your argument. Okay. Thank you, Your Honors. Let me do address the prosecutorial immunity issue then. The law is clear that when a prosecutor is involved in actions that are intimately associated with the prosecutorial functions, the prosecutor is absolutely immune, even if the prosecutor undertook those actions in bad faith or with malice. And the allegations in Mr. Williams' complaint all point to conduct that was undertaken that was associated with the prosecutorial functions. We made this argument below. It's preserved. Judge Carter did not reach it, but we're on de novo review so the court can reach it here. In responding, Mr. Williams essentially pointed to four different places in his complaint where he had alleged what he claims are conduct that does not fall under the prosecutorial absolute immunity. And if I can, I'd like to walk through all four of those because it's pretty clear from the allegations in the complaint that each one of the things that Mr. Williams points to, which he calls and characterizes as fabrication of evidence, is in fact the presentation of evidence at trial. So the four sites begin with site to page 376 and 377 of the record. And that's about paragraph 90 of the complaint. And the allegation there is that Mr. Jacobs encouraged Cox to obtain inculpatory statements from the plaintiff. And this was after the second preliminary hearing. And then Jacobs made a deal with Cox to testify against the plaintiff. What that states is a Nippoui violation and a Messiah violation. When Mr. Cox allegedly was working as an agent of the prosecution to obtain statements from Mr. Williams in violation of the Sixth Amendment rights, that was for the purpose of presenting those statements at trial, which is what perfects the Messiah violation. It also, I think, encompasses a Nippoui violation, which is the presentation of allegedly false evidence at the trial. Those are clearly within prosecutorial functions. The Ninth Circuit's decision in Broome v. Bogan points to the fact that that kind of conduct is absolutely immune, and the prosecutors cannot be held liable for that. The second citation that he provides is to pages 380 and 381. Mr. Williams claims that these allegations show that Mr. Trutanich obtained false evidence from John Gardner. The allegations are actually paragraphs 111 through 117. And what the allegations say is that Mr. Gardner testified that Mr. Williams told him he shot Dunn, Mr. Trutanich offered him a plea deal in exchange for the testimony, and that Mr. Gardner later recanted. Those state, if they state anything at all, a Nippoui violation and potentially a Brady violation. We've cited to a case called Demery v. Kupperman in our brief that says that Brady is encompassed, or Brady inducing a witness to testify falsely, which is theoretically what this allegation says, is encompassed by Brady, and therefore falls within the absolute immunity that prosecutors have for their functions. Mr. Williams also cites to page 383. He characterizes that claim as stating that Mr. Trutanich obtained false evidence from Steve Wallace. That refers to paragraphs 124 and 125 of the complaint. In fact, what he alleges is that the DA knew Mr. Wallace lied when he testified that he didn't receive a benefit, and that they didn't do anything to correct the record. That's clearly a Nippoui violation. That clearly falls within the absolute immunity that prosecutors are entitled to, because that happened at trial. The final thing that Mr. Williams points to is page 406. I believe what he's referring to are paragraphs 212 and 214 of the record. The language that Mr. Williams used makes it very clear that these are Nippoui and Brady violations that he's alleging. He says fabrication of evidence occurred through the improper and unlawful use of testimony of various witnesses at the trial, and that there was a fabrication of evidence by destroying and suppressing exculpatory evidence related to Arlene McKay, who was the driver of the car. So all of those allegations that Mr. Williams has pointed to in his complaint all point to Nippoui, Brady, or Messiah violations. Those are all covered by absolute immunity for the prosecutors in this case. He didn't point to any other allegations in the complaint, and so we think that any argument based on additional allegations are waived. That's the prosecutorial argument, and that gets Mr. Trucanich and Mr. Jacobs out of the case because those are the prosecutors. And to the extent that Mr. Williams is also alleging a Brady, or I'm sorry, a Monell violation based upon whatever policies might've been in place that governed the conduct of the prosecutors, because they have absolute immunity, then the county should be dismissed from the case for that. If I can, I'd like to address, then turn to the McDonough argument, and just point out a couple things about the McDonough case. I think that McDonough is completely consistent with Heck, and that in this case, it's easy to get confused about whether the damages are significant or how to treat the fact that Mr. Williams pleaded guilty later in the case, in the Billingsley case, to the manslaughter conviction. And I would just say the lodestar that I think the court needs to follow is what Heck says. Heck says, if the plaintiff moved forward and he was successful on his civil complaint, and that that would necessarily imply the invalidity of an extant conviction, that complaint needs to be dismissed. And that's exactly what happens in this case. McDonough is not inconsistent with that in terms of the accrual issue. What McDonough says is that, if you suspect that there's fabricated evidence in your case, you can't file a civil lawsuit until there's a termination of the case. McDonough is perfectly consistent with Wallace v. Cato, where the court found that while there was a potential for a charge to be brought, a person could still bring his action. And so McDonough does not sort of draw the hard and fast rule that Mr. Williams is suggesting is here. In fact, I think that decisions from this circuit describe the conditions that would apply for accrual. So do you have any cases in which the possibility, the theoretical possibility of charges being brought was still available and the Heck was deemed timely? Well, we have three cases that sort of describe those circumstances. And the way the county argued the cases is they're Bradford, Jacobs, and then Roberts. And in those cases, this court seems to be describing the following scenario. If a conviction is vacated in a way that allows the prosecution to go forward on all the evidence that existed in the prior conviction, then the person is barred from bringing an action, a Section 1983 action. But if a conviction has been overturned in a way that prevents the prosecution from using the evidence that tainted the prior conviction, then what you really have are two different proceedings. You have an earlier proceeding that has been terminated under Heck, and you can bring a civil suit on that case. You have a separate proceeding that is now clean, that is now, we don't really know what's going to happen in that case. We don't know what evidence is going to be used in that case. What we do know is that based on the way that the case, the earlier case was vacated- So are you suggesting that a prosecution could go forward with the untainted evidence and a Heck civil suit could be proceeding at the same time for the use of the tainted evidence in the first proceeding? No, I think I'm suggesting the opposite, if I understand you. What I'm suggesting is that, so in the case, in the Bradford case- I'm trying to follow your answer there, but- Yeah, so I think if we get into the facts, it'll be a little bit easier. In the Bradford case, what happened was, he was convicted of burglary and rape. This is a Peeping Tom case. And after he served his sentence- Just maybe to put it more concretely in terms of what happened in this case. So once Judge Carter granted habeas relief and vacated the conviction and granted the habeas relief, at that point, Mr. Williams had a possibility of being tried again. He didn't know what would happen. But your position would be that once that habeas relief was granted because of the nature of the ruling, which held that there was tainted evidence, Mr. Williams could have at that point brought the civil case about that prior vacated conviction, even though he might still be subject to another trial. That's exactly right. Okay, so that was Judge Bybee's question, I think, which was, these could happen simultaneously. The answer would be the opposite of the one you gave. Then I'm terribly sorry that I misunderstood your question. That's exactly what I'm saying. At the point when Judge Carter had overturned the Dunn conviction with his habeas ruling, which was about 50 pages long and very detailed about what evidence was and what evidence was in violation of the Constitution, Mr. Williams knew exactly what evidence could be used in the second prosecution. And he knew that that wasn't going to be available. What's your response to opposing counsel's argument that this argument, which seems to be based on that Bradford dicta, is overruled by McDonough's adoption of a Brightline rule? What's your response? I don't think that's the case. That, you know, under Miller v. Gammey, that would, they would have had to argue that the cases are entirely inconsistent with each other and they're not. Both of them follow Heck. And both of them, I think, are consistent with Heck. And so for that reason, there's no reason, there's no reason to suggest that McDonough in some sense, via Miller v. Gammey, had overturned those convictions, or those two decisions. I see I'm out of time and I want to make sure that my co-counsel here. Thank you, Your Honors. All right, we will hear now from Mr. Lee. Good morning, Your Honors. Stephen Lee on behalf of Appellee's City of Los Angeles and Los Angeles Police Department. May it please the court. First, I'd like to address Judge Collins's question that was most recently posed to co-counsel where it's whether McDonough is in conflict with Bradford and it is not. McDonough establishes that acquittal can constitute a favorable termination such that a Heck bar does not exist. And it goes on to say that in this case, in McDonough, that the presentation of the tainted evidence did not begin the accrual of the statute of limitations. And that's entirely consistent with Bradford, which specified that McDonough, there was a mistrial and then a retrial, but there was never a judicial determination in the interim that, oh, this evidence is tainted and is out. Right. And so Bradford specifies that favorable termination can also include the vacator of a conviction if the prosecution is precluded from bringing the same charge upon the same evidence. Your answer would be the same to the question that Judge Bybee posed that it's your position that while he was being re-prosecuted or potentially it re-prosecuted in the Dunn case that he was the clock was running and he needed to bring the civil suit for the Napoleon Brady violations in the prior trial. Yes, I believe so, because that's what Bradford says. And that suit would not be precluded if the DA decided to refile the charges using untainted evidence. Correct, because the violation of using tainted evidence or the violation of constitutional rights from that previous tainted proceeding would I still think be entirely consistent with Heck where you could have that violation in that prior proceeding yet still have a valid charge based upon new consistent evidence. So the prosecution could have done something wrong with that first tainted proceeding for which there is redress, but Williams could still thereafter be charged for murder based upon different new evidence. So you get money, but you could still go to jail. In theory, yes. I'm trying to imagine what your clients would say if he'd actually done this and you were trying to re-prosecute him at the same time. And I imagine you would come in and say this is a huge distraction to have a civil lawsuit going on about the same incident when we're at the same time trying to charge him criminally. Your Honor, I can only follow what the Ninth Circuit has said. And what the Ninth Circuit has said in Bradford is that the vacator of a criminal conviction upon these circumstances constitutes favorable termination. And I'd also like to specify that Williams was concerned about the habeas order's elimination of the Cox testimony that was tainted, but he also highlights the Lewis testimony was problematic as well. And in fact, the habeas order excluded that too. So the vacator here was entirely sufficient because it could not be tried on the same charge using either the Cox or Lewis testimony. Judge Brest, you noted that Williams is actually asking for a change of the rules. And the rule change he wants here is that if a charge could be brought in the future, then it's heck barred. And I think that rewrites Bradford. It overturns Bradford because that's not what Bradford says. If you're able to, in this instance, vacate that charge where you can't bring that same charge upon the same evidence that's Bradford says, then that still constitutes favorable termination to remove it from the heck bar. I'd also like to briefly discuss the Billingsley claim and the essential conflict between Williams's position. On the one hand, he wants to say heck bars his Dunn claims because the Dunn claim was so inextricably intertwined with the Billingsley claim that he could not have proceeded on the Billingsley claim without the dismissal of the Dunn claim. And then the next breath, he says, well, the attempted murder convictions related to Billingsley aren't a heck bar to his claims on Billingsley, despite the fact that they arise out of the same transaction and occurrence use largely the same evidence, largely the same witnesses occurred at the same time and in the same place. To me, the position Williams adopts is deeply incompatible in considering the impact effect. On the one hand, narrowing it for his Billingsley-related claims such that even attempted murders in the same criminal incident aren't related. And on the other hand, expanding it such that an unrelated murder in Dunn is somehow inextricably intertwined with the Billingsley events. All right. Thank you, counsel. Thank you, your honors. All right, we'll hear rebuttal. Thank you, your honors, and good morning again. I want to focus back again on this issue in McDonough. McDonough develops a categorical rule that says that claims accrue when there's a pending criminal proceeding at the termination of that proceeding. The Supreme Court was very clear on that in McDonough. It is a development of Heck because Heck only looked at what happens when there's... So in 2021 in Dunn, the case is dismissed without retrial. There's no statute of limitations on this, right? Because it's a murder trial. Is that correct? Yes. Which means that it still could be pending. Right. So if the DA had never taken the step of dismissing the charges, you wouldn't be able to bring Heck forever. Is that your position? I think it's important to note that the charges were dismissed. Counsel, I'm asking you a hypothetical. Yes. It is a hypothetical, but that's why I'm asking it. Fair enough. If the DA had not dismissed those charges, then you wouldn't be here today and you wouldn't have filed Heck forever. Your honor, I think there's a separate constitutional problem if someone is sitting in jail, awaiting retrial on charges that are still pending indefinitely. That's a Billingsley problem. This is a Dunn problem. But the rule that you're advocating for would encourage DAs not to say anything further in order to prevent a Heck rule. That doesn't seem like a very good rule, does it? Your honor, I think the Supreme Court has been very clear that a cruel happens with termination of criminal proceedings. So I don't think that there's wiggle room on that. But what, I guess, what criminal proceedings, right? I mean, there was a prior conviction that was vacated. Yes. So I think the argument would be those proceedings have concluded and there may be some future proceedings that happen, but that's a future matter. Your honor, he remained incarcerated, awaiting retrial on the same charge in the same charging document subject to potentially much of the same evidence. This is very clearly it was not an extant conviction, right? Heck is talking about an extant conviction. I think even Wallace V. Cato, if I recall, has language in it about, you know, Heck is not about impugning the invalidity of a future possible conviction. That's correct. Heck is not. What McDonough is, is that squarely that question because McDonough is concerned about exactly this circumstance as you were questioning my friends on the opposing side. What happens when you have a litigant in this position where there are charges pending, they don't know what the prosecution is going to do and they have a clock ticking on potential Heck claims and the Supreme Court was crystal clear in McDonough. You wait until the criminal proceedings are terminated and it's a bright line rule. It's categorical and I think the court has very little wiggle room with that bright line rule. And moreover, I would emphasize. Are you taking the position that some of the statements in Bradford are clearly reconcilable with McDonough? I think the dicta in Bradford that we discussed earlier is not fully compatible with McDonough. And the reason for that is the court in Bradford says we don't have guidance from the Supreme Court. We have to conduct standard accrual analysis in the first instance. And this is how we think that looks following our standard accrual analysis. This might be a circumstance where there's accrual. Then in McDonough, the Supreme Court comes in and says we are going to solve this question. We are going to look at this issue that's been a problem for lower courts with how to apply similar concerns about Heck, about parallel litigation and trying to fight in federal court and also state court at the same time and all these difficult circumstances that a plaintiff finds themselves in. And the Supreme Court says it's at the termination of proceedings, which we think controls in this case. Thank you, counsel. Thank you. Your case just argued will be submitted."
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"stt_transcript": "Good morning. May it please the court, counsel. My name is Evangeline Dewan Maloney. I represent Petitioner Anna Garcia-Mejia. This case presents a pure legal question that this court need not reach the merits to decide. Did the agency apply the correct legal standard? The Board of Immigration that requires evidence of a generalized hostility towards women as a class. A requirement this court has never imposed and Rivera prohibits. The agency asked whether Avelio targeted other women. Rivera required the agency to ask why he targeted this woman. Those are different questions. The first was asked. The second was not. That is legal error and remand is the remedy. Under Rivera, the agency was required to examine the underlying premise of why Avelio targeted the petitioner. Not merely whether each individual act of violence was triggered by her gender. That inquiry was never conducted. The agency instead asked whether Avelio harbored a generalized animus towards Salvadoran women as a class. Those are categorically different inquiries. We accept the government's argument that a mixed motive analysis does require a threshold showing that a protected ground was motive at all. The government is correct about the legal framework. Our that the record did not show that Avelio harbored a generalized animus towards members of respondents' proposed particular social groups. Does the BIA have precedent that applies this generalized animus standard? Your Honor, I don't believe it does. There were no cases, I think, that we cited where they do apply a generalized animus standard. Is this the first time that you've seen it? I'm trying to figure out kind of where it came from. Certainly, Your Honor. I don't believe that there are any BIA cases that have expressly held that an applicant for asylum must show a generalized animus towards all members of proposed particular social groups. So your argument is about generalized animus, not animus alone? That is correct, Your Honor. We would certainly concede that animus, some showing of animus, may satisfy the nexus requirement. Some showing that the persecutor targeted the applicant because of the protected characteristic. But the bigger issue in this case is the imposition of a generalized animus requirement, which is much broader than what the statute says. So it's a moment of analysis under the statute and under the precedence of this Court. So it goes beyond animus to a showing that the persecutor targeted or the persecutor has the persecutor targeted other members of this proposed particular social group. And that is a standard that has never been required by this Court, and is at odds with the plain language of the statute. So the government argues that without the animus standard, we run a risk of imposing a general rule that all women who are subject to sexual violence are entitled to asylum. What's your response to that argument? Your Honor, I understand your question, and I want to be very precise about why we're not asking for a per se rule. A per se rule would mean that any time an applicant for asylum experiences sexual violence, that they would automatically satisfy the nexus requirement. And we're asking for something much narrower. We're asking that on this specific record, where five years of conduct is really consistent with only one explanation, and the government has failed to identify any alternative explanation on this record, and that the government really asked the wrong threshold question to begin with, or the agency, excuse me, that this specific case requires remand. So we're not asking for a general rule that all cases involving domestic violence or sexual violence would automatically meet the nexus showing, or the nexus threshold. And I believe that, you know, Cumbara-Cumbara's framework is still going to be left intact, where there is evidence of other motives, such as, you know, financial or territorial or, you know, even sex trafficking, where there is some element of a alternative explanation, those cases are going to rest on that. Let me ask you this. It seems to me that this comes before us in a pretty unusual circumstance, where the only thing I think before us is this nexus question. If we were to grant the relief you ask, would the BIA be able to look at whether she actually has a cognizable social group, and whether the government is able and willing to protect her, and all those other issues that go into it? Certainly, Your Honor, and that would be fact-finding that the agency would need to make upon remand, because those issues are not before this Court. Okay, I am right. The one, we have one narrow nexus. It's a very narrow issue, Your Honor, and that's why we're asking for remand as the relief. It seems to me, and the briefs, I don't think, talk about this, that the particularized gender inquiry, unlike a particularized religion inquiry, is apt to be publicized back home, so to speak, and lead to persecution, violence, or worse. What do we do with that risk? What does the agency do with that risk? Seal it all? So, Your Honor, if I understand your question correctly, I believe you're asking if the petitioner would face harm if she were returned, if she has a wealth of interest in the future. Or others in the community, given her claim of PSGs. Well, Your Honor, I think that question goes back to the issue that we have with the agency's decision, is that it's requiring that the applicant or the petitioner show that this particular abuser has targeted other women. So, I think that's the wrong question to ask, and that's the question the agency asked. But what's the question you would have them ask? You want a particularized inquiry. So, you want evidence about this abuser versus, and to qualify the PSG, he has to reflect standards in the community. So, you're requiring, as I understand your argument, you're requiring evidence that's in every community that is at issue. And I think that, frankly, I think that's dangerous. Yes, Your Honor. If I understand your question correctly, you're asking whether or not we would require, or we would ask the government to inquire as to, or the agency to inquire as to whether he would be a danger to other women in the community. Is that Your Honor's question? Well, they have to. By your stats, that's your test, particularized. So, Your Honor, I don't think our test is, I think that goes beyond what we're asking. It's not femicide in the society. It's femicide in this community. And then she loses, and she's removed, and goes back to that community with those strings attached, so to speak. I think this requires much more care than you're suggesting. Certainly, Your Honor, I understand. And your agency, you would demand the agency do that to our satisfaction. Your Honor, I would ask that the agency apply the correct legal standard that this court has already laid out in Rivera and is consistent with the plan. Rivera. No, Rivera, that's my point. Rivera was religion, right? Certainly, Judge. Not all forms of persecution are on account of persecution. Causes are the same. Certainly, Your Honor. Certainly. But you're demanding that the agency treat them all as the same. No, Your Honor, I don't think that's what we're asking. Now, that's the way the argument reads. That's the way the opinion would read if we wrote it your way. Okay. Your Honor, I think... So, what is the agency supposed to do with that? Certainly, Your Honor. So, we're asking the agency to examine the underlying premise of why Avilio targeted Garcia Mejia, not whether each individual act of violence was triggered by her gender. So, that inquiry was never conducted by the agency. And the agency instead asks, does this abuser, has he harbored, you know, has he targeted other women in the community, and does he harbor a generalized hatred of all women as a class? And that goes beyond what this court requires and the plain language of the statute. Maybe. The agency's threshold inquiry was conducted under the wrong legal standard. The correct inquiry on this record would have produced a different result and triggered a mixed motive analysis. Avilio, a 40-year-old man, selected a 17-year-old girl, established five years of sexual servitude and control, directed exclusively at her body, and reproductive health. And the government has identified no gang objective, no economic purpose, no territorial goal that's served by any of that conduct. I believe my time is over, and I will have a seat. Thank you. Ms. Perlmutter? Good morning. May it please the court. Alexa Perlmutter on behalf of the Attorney General. The court should deny this petition for review because the petitioner concedes on page 6 of her reply brief that she believes she must only show, quote, a causal connection between her harm and the protected ground, but that is not the law. Rather, to prevail on this petition, she must point to evidence compelling the conclusion that what actually motivated Avilio to harm her was her membership in a gender-based particular social group. The fact that the type of harm she experienced has what she calls an underlying gendered premise cannot satisfy that burden. The Supreme Court rejected that precise argument in Elias Zacharias when it found that general political beliefs underlying Gorilla's forced recruitment did not establish that the Gorillas were motivated by the petitioner's political opinion or any other protected ground. The same is true here. It is irrelevant to this petition whether the agency or the government provided an alternative motive. What is relevant is if petitioner met her burden. It is petitioner's burden to establish her eligibility for relief and protection for the agency, and it is now her burden to identify evidence compelling this conclusion. I'd like to speak to Rivera, because Rivera, as a threshold matter, accepted Animus as a proper framing of the Nexus inquiry in this circuit, and it cautioned the agency against ignoring evidence of Animus. In Rivera, the agency ignored evidence that the gang members told the alien to stop preaching, that they threatened harm to the church generally, that they made disparaging comments about religion, and also ignored evidence in the record of an ideological disagreement between the church and gang members. But no such evidence exists in this record. The parties agree that the evidence in this record is limited to the type of harm that petitioner experienced, and the agency concluded, and the government agrees, that that harm is harrowing and rises to the level of persecution. But that does not necessarily mean that it meets the motive inquiry that's required by the statute and by the Supreme Court. You're arguing the factual connection, but it seems, as I understand the argument from your opposing counsel, is that this generalized Animus was the improper standard. Can you speak to that? Sure, Your Honor. That's certainly her argument. I've turned the court to pages 74 through 76 of the administrative record. This is where the immigration judge made its nexus determination. The immigration judge thoroughly consulted the record and thought through the motives in this case, and the reason why the immigration judge looked to whether there was evidence that Avelio harmed other women was because there was no evidence as to why Avelio harmed this petitioner. Petitioner simply did not put that evidence in the record, and that's why the agency looked. Okay, what can we look to if that evidence is not here as to this individual's circumstances? How else are we going to decide why he targeted her? I'm sorry. Go ahead and complete your thought. I just reasonably, in accordance with this court's precedent that harm to others is instructive, Martinez-DeLarza, Fuentes, Gomez-Rivera looked to whether he harmed others in the particular social group when petitioner did not put any evidence as to her specific circumstances of motive into the record. Well, there was at least some evidence, wasn't there? I mean, he held a knife to her stomach and told her to get an abortion, and that can only happen, I think, to a woman, right? But again, the question is not whether there's simply a but-for cause. The question is not whether or because. Isn't the question whether it's one central reason? Yes, and the board has reasonably articulated the animus requirement, which requires an intent to overcome the protected characteristic. If Delio simply may not have wanted to have a child, we don't have evidence in the record as to why he took those actions. Without that evidence, petitioner has not met her burden. And so it's really an evidentiary question here. Again, we don't contest that the type of harm petitioner experienced likely would not have happened to a man, but that is not the nexus inquiry. The inquiry is whether there is an intent to overcome the protected characteristic. What type of evidence would you expect to see or that you thought you would have seen in this kind of case to prove her case or to establish the nexus? For example, there's cases in other courts where individuals, you know, use gender-based slurs, gendered language, talk about the role of women in society, are generally violent towards other women, have, you know, evidence of generally sexist attitudes. We don't have – when an alien puts evidence of this type in this record, which is simply the type of harm she experienced, that is not evidence that gives the agency insight into the motive for that harm. What about the additional evidence here? It's a little bit different than some of the cases that we've seen where perhaps a consensual relationship between a man and a woman turns bad after a few years, and there's violence that perhaps rises to the level of persecution. Here we don't have that. It started out as what's been described as a kidnapping and a violent rape, and then keeping her basically for himself for these years. Why hasn't that set of facts set this apart in terms of the evidentiary level of – the level of evidence that she's presented to show that this really is possibly a target to a woman? Well, I do agree that it's a different category of cases that you describe of that type of relationship. But again, I mean, I think Petitioner – what the evidence reasonably reflects and what the agency found is that Petitioner was vulnerable, and whether her gender contributed to the reason why she was vulnerable, you know, does not compel the conclusion that Avelio was motivated. What drove him to harm her was her membership in a gender-based particular social group. Asylum protects against – you know, protects these protected characteristics that are group-based, that are identity-based. And the fact that she was targeted for a type of harm that, again, would likely not apply to a man does not compel the conclusion. When the agency reckoned with the country conditions evidence showing, one, that gangs target, you know, all members of society, and the fact that different segments of a population are perhaps more vulnerable to specific types of harm just shows that the entire community in different ways is subjected to this gang violence. And there's evidence in the record Petitioner agrees that this individual was a gang member. And so when the agency on page 75 and 76 reckoned with the country conditions evidence showing that gangs target a myriad of populations in different ways, and also gangs target women for different reasons. For revenge, for, you know, to do jobs for them, because these individuals just want to control people. But there's no evidence that it was her membership in a gender-based PSG that he was intending to overcome. And I'd like to just distinguish the Hassan case, where this court, you know, found that female genital mutilation found it did find a nexus. I think that case is distinguishable on the record. There, this court held that there was an intent to overcome the sexual characteristics of a young woman by mutilating them. And the record contained evidence of intent in the form of a widespread and accepted tribal practice, where there was no question what the intent of this tribal practice was. Everyone did it, and that's what Petitioner feared. Here, Petitioner testified that she feared Avelio would be mad at her for leaving. She testified that she feared Avelio would be mad at her for having the child. So those are, you know, a classic interpersonal dispute. Those were the testimony of her fears. And so the agency did not apply a generalized animus standard. It reasonably looked to what evidence in the record do we have here that Petitioner could meet her burden. Can I ask about the standard, about your view of the standard? Because I understand your argument here, but both the immigration judge and the board said specifically generalized animus. And so it's kind of hard to read that without understanding them to say that she needed to show a generalized animus, and particularly with the board's opinion, which is so short, and yet they adopt that phraseology. Do you disagree that they did actually apply that requirement to her case? Yes, I disagree. I mean, perhaps if animus was not part of the board's accepted nexus standard, that would be kind of a new requirement. But the board, you know, since LEA has used the word animus, and ORG defined what animus means in MRMS and matter of ORG. And so the board applied the, you know, binding case law before the board that requires animus. And I think here the board used the word generalized because the immigration judge, the board found no clear error in the immigration judge's findings. And a fair reading of the immigration judge's decision is that it was just, the immigration judge was just looking to what was in the record. And in the absence of any individualized evidence of motive, the immigration judge really had to think about, you know, how are we going to show this type of harm, and reasonably focused and thought about whether there was a generalized animus. So I think, you know, a fair reading of the board's decision is that it applied its binding precedent requiring animus. And the word generalized doesn't, there's no, you know, other than that word, there's no indication that the board ignored evidence of motive that the board did in Rivera. There's just no evidence of animus here, you know, even if that word was not the most precise. I see that I'm out of my time. I'm happy to answer any additional questions. In conclusion, we ask this court to deny this petition for review because the agency provided the correct standard. Thank you. Thank you. And you came across loud and clear, and that was good. I'll give you 30 seconds for rebuttal. I'll make this brief. The government emphasized that there is no evidence that gender played a role in Avelio's motive to harm this petitioner. The agency ignored over 500 pages of country conditions evidence, including the fact that gangs do specifically target women. I think that's thoroughly briefed. Yes, Judge. Simply put, the government cannot get around the fact that the agency applied a heightened legal standard in this case that required petitioner to show that Avelio targeted other women or held a generalized animus or hatred or prejudice or whatever you want to apply the label to towards women as a class. And that is simply not consistent with the plain language of the statute enacted by Congress. I didn't read the IJ's opinion that way. I think it was much more nuanced than what you attack in your briefs. I understand your question, Your Honor. I would note that both the IJ and the BIA explicitly talked about generalized animus and how petitioner had not shown that Avelio targeted other women in this way or held out prejudice towards women as a class. And I think that is categorically the wrong legal question that the agency applied, and that should be reviewed by this court de novo. Thank you. Thank you. The case has been thoroughly briefed and well argued, and we'll take it under advisement."
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"stt_transcript": "The fifth argument is Case 25-1302, Eastern Arkansas, BSI Group LLC et al. v. Solid Financial Technologies. All right, Mr. Kaluta, we'll hear from you first. Good morning, Your Honors, and may it please the Court. Nico Kaluta on behalf of Appellant Solid Technologies. The District Court here ordered full merits discovery, full merits dispositive motions, all before holding the trial that this Court ordered on whether or not the parties agreed to arbitrate. That course of action violates this Court's mandate and also the FAA's requirement that courts proceed summarily to trial. This Court has jurisdiction to correct that error, and Solid has not waived its right to challenge that error. This Court should respectfully reverse. Section 4 of the FAA states that when the making of an arbitration agreement is at issue, the Court shall proceed summarily to trial. And summarily, as many courts have said, means quickly, without delay. Consistent with that, this Court, for example, said in Duncan that arbitrability is a gateway issue, that the parties have the right to have the correct venue, court, or arbitration determined at the outset of the case. Consistent with that, this Court, the first time around, the first time it was before this Court, found in material fact dispute, remanded for trial on whether or not the arbitration agreement was effectively communicated. Well, on remand, the District Court did not proceed to that trial summarily, quickly, or expeditiously. Instead, it entered a scheduling order that required full merits discovery, full merits dispositive motion, expert disclosures, jury instructions, the whole nine yards that you would do in a normal civil litigation, before holding the trial on arbitrability the day before the merits trial. Then, when Solid moved to stay merits discovery in light of that order, the District Court denied that too. That is the opposite of proceeding summarily to trial. Again, the whole point of the FAA is to resolve arbitrability at the outset of a case. And the reason for that, Your Honors, is because when parties agree to arbitrate, they're not just agreeing to arbitrate the trial itself in arbitration, they're agreeing to have the whole pretrial proceedings in arbitration as well. They're opting out of the burdensome Federal rules of civil procedure for the more streamlined rules of arbitration, limited discovery, no depositions by right, no right for dispositive motions. But if, as the District Court did here, it holds the motion to compel essentially pending until the day before the merits trial, all those benefits of arbitration are lost. And that is why Section 4 requires courts to summarily hold the trial and resolve arbitrability at the outset. That is really the only way you can give full effect to an arbitration agreement is to resolve it at the outset. The contrary approach taken by the District Court here, holding it and resolving the arbitrability dispute down the line right before trial, not only violates Section 4, but it really strikes at the heart of the FAA itself, Section 2, that states that, you know, arbitration agreements are valid and enforceable. Again, the only way to give full enforceability to them is to resolve it at the outset. Otherwise, even if the court finds that the parties agree to arbitrate down the line, they've already lost the benefit of the bargain for, you know, 90% of the proceedings already. And, you know, for that reason, Your Honors, many courts have held that courts cannot proceed to the merits of a dispute before arbitrability is resolved. You know, Jim from the D.C. Circuit, Howard from the 10th Circuit, Sefal from the 3rd Circuit. The District Court here didn't do that, and that was error under Section 4. It was not a proceeding summarily at the trial. Well, the court didn't proceed to the merits. I'm sorry, Your Honor? The court here didn't proceed to the merits before determining arbitrability. The court, I thought your objection was the court allowed for discovery. Correct, Your Honor. Well, the discovery order proceeds, it allows for merits discovery as well, and also merits dispositive motion, which contemplates that the court could rule on the merits before reaching the merits trial, you know, by ruling on summary judgment motions on the merits. Well, the court hasn't said it would do that. Well, you're right, Your Honor, I didn't say that. It did ask for merits dispositive motions, though, before holding the trials, right? It could hold those in advance. But regardless, briefing the merits, engaging in merits discovery is all part of what the parties, if they agree to arbitrate, opted out of. They opted to have all that done in the arbitration panel or with the arbitration panel itself. So your concern is more about the cost and the, what else, the disclosure of information that wouldn't have to be disclosed? Well, the concern, yeah, the concern ultimately, Your Honor, is giving effect to the arbitration agreement that we argue that the parties entered. And part and parcel, as the court said in Coinbase, a big benefit of that is getting pretrial in arbitration with the limited procedures, with the more streamlined discovery. So, I mean, it is somewhat about cost, but it's also just, you know, respecting the bargain that the parties made when they agreed to arbitrate. Would we be effectively creating an arbitration-specific procedural rule if we were to hold that a district court could not order unified discovery prior to determining arbitrability? No, Your Honor, you would not be. You would be simply applying Section 4 as it is written, which says when the making of an arbitration agreement is at issue, courts proceed summarily to trial. That is not a new rule. That's the rule, excuse me, that is what Section 4 says. That is not an arbitration-specific rule. That's not invented. That is simply applying Section 4 as it is. And, again, it also really, again, as I said, goes to Section 2, right? The only way to give full effect to an arbitration agreement is to decide it at the outset. If you hold it to the end of, you know, right before the trial, the benefit of the bargain is already lost, you know, and that is contrary to what the FAA was designed to do, what Section 2 says and what Section 4 directs with the summary trial. You know, the plaintiff's two main objections to this is, one, that these are just, you know, docket control orders, case management orders reviewed for abuse of discretion. They are not. They are orders denying a stay under Section 3, orders denying a solid motion to compel under Section 4. They are reviewed de novo, and the motions panel of this court effectively decided that. When it denied a plaintiff's motion to dismiss for lack of jurisdiction, that ruling was consistent with precedent, and there's no reason for this merits panel to reconsider that ruling now, though, of course, it has the right to. I'll start with some case law. Let's talk a little bit about the summary trial. You know, as you were, let's assume you're right, that the court's supposed to proceed to a summary trial, and that would entail at least some limited discovery, right? I mean, it's not a no discovery trial because we aren't trying people by ambush, right? Sure. So you're going to go out and you're going to take some depositions, and what the judge is really trying to do is saying that, you know, once you've got those people under oath and you're going to depose them, let's just get one deposition, get it done. And that's part of, I think, what the underlying, you know, it's hard to tell because, you know, you're in there, you know, you're having correspondence with the judge's law clerks rather than, you know, in a hearing where the judge is explaining what the decisions are. But, I mean, that's part of this thing. And it seems to me that really the harm isn't in allowing some discovery, including saying once you start to depose them, please depose them on all issues, right? The harm is in, allegedly would be in, when he says, oh, yes, and then we'll have the ordinary rules for dispositive disposition on the merits piece, and then if you lose on the arbitrability piece, we're going to proceed directly to the merits trial, right? Because that transforms that order into doing discovery whole hog on the merits issue, right? And my question really is what would be the problem with just saying the discovery that you undertake, that once you're doing it, that you should complete it so you're not duplicating costs? Yeah, sure, Your Honor. Happy to answer. I see I'm into my rebuttal time. Am I free to answer the question? Well, your rebuttal time will be whatever remains. Excellent. So, number one, Your Honor, I think, no, there's nothing wrong with the court conducting limited discovery into arbitrability. I do think there needs to be an effort to limit it to arbitrability, not enter sort of a blanket scheduling order here that opens the door to everything. And to the point about, you know, maybe the deposition, there's some overlapping issues. It's unclear to me what the overlap here would really be. I mean, the issue is whether or not the agreement on EasyBank's website is communicated to plaintiffs. The claims against Solid are negligence for failing to control accounts, failure to investigate, failure to institute safety controls, constructive fraud. Those are not really overlapping issues on the facts of this case. And so, no, like the harm is engaging a full merits discovery, full merits dispositive motion. And for that reason, the district court's orders here should be reversed. And I'll reserve the remainder of my time for rebuttal. Thank you, Your Honor. Thank you for your argument. Mr. Mayfield, we'll hear from you. May it please the court. Mark Mayfield for the Appellee's BSI Group LLC and International Business Solutions Group LLC. I can't help, when I get into an oral argument, without answering, continuing with the last question that was asked. This case is different than some others in terms of how it was presented. Part of the argument has to do with what we refer to as the tripartite relationship. You have EasyBank, you have Solid in the middle, and then you have Evolve Bank and Trust as the bank in this instance. There is an argument that is being made, because there is no signed document, because there are issues with the electronic handling that are detailed in the previous decision, that made by Solid, that in fact the course of the transactions somehow establishes assent to arbitrability. Because that is an issue, the point that somehow discovery can be narrowed in some way is difficult at best. We're dealing here with an interlocutory appeal from a judge's scheduling order. The judge in this instance did in fact, Judge Miller did in fact, set a phased trial. Talks about arbitrability being described first, being decided first. You don't have jurisdiction then if this is an appeal from an interlocutory scheduling order? I mean if it's an interlocutory appeal from a denial of a... Your Honor, Section 16 of the Federal Arbitration Act I think is the plaintiff's basis for that. I'm not trying to make their argument, but I point that out as the first point and point that we did make an argument and move to dismiss on the basis of whether there was jurisdiction to hear this appeal. And so we stand by those arguments. But on the other hand, it does seem that most of the benefits of arbitration have been lost here by the scheduling order. Wouldn't you agree? Your Honor, I agree that there is a part with respect to discovery, but the door is already open so to speak with respect to discovery on this issue as Judge Erickson referenced a moment ago. What do you mean by this issue? On the issues that are involved in the case because... Well, couldn't you have discovery on the issues about arbitrability without going further? Your Honor, in a theoretical sense that might be possible, but in... I mean in a concrete sense in this case. In a concrete sense, I don't see how it gets to be the situation because Solid is arguing that the course of the transactions is showing that there was assent in this instance. But why would that then open up all the issues on which the plaintiff... Because you're still going to have to get into the issues with the course of the transactions from the banking side, from the fintech side that are involved in this tripartite relationship. But even if you're looking at those transactions, you're not contemplating the preparation of dispositive motions and the order requires dispositive motions to be made prior to trial. And the trial is set like one day later. I mean, the harm in this thing would have been much less even if Judge Miller would have said, we're going to try this a month later. Try it with the same jury a month apart. Because you're now required to kind of have the cart in front of the horse on dispositive motions, right? The dispositive motions issue, I understand. And of course, a trial court may reassess that when it gets down to it. We don't know that because this appeal was filed beforehand. What do you think Section 4 means when it says the court shall proceed summarily to the trial? It doesn't say a summary trial. It says proceed summarily. Does that suggest that it should be a truncated process? Your Honor, it certainly means that it should be done first. I think there's an idea that there should be some expedition, but it doesn't limit then the district court's ability to try to keep the case moving, so to speak, if arbitrability is determined against, in this case, the defendant's arguments. I've made the long way around to get to the point of Judge Graza's question that with this situation, they don't lose the right in any stretch of the imagination with respect to arbitration. If there is a finding that this matter should go to arbitration, it immediately goes to arbitration. They have all of those benefits that still go to them. Well, their point is some of the benefits would have been lost by having to go through discovery. Do you want to respond to that? Arbitration has narrower discovery opportunities, as you know. Right, right. And Judge, with respect to that, the arbitration point in determining whether there is – I'm sorry, let me collect my thoughts. Well, I was just asking you to respond to the argument that it's not really true that they would have all the benefits of arbitration if arbitration is ordered, because one of the benefits of arbitration is to avoid merits discovery in the U.S. District Court. And that is where we differ on that point, because we believe that the discovery benefit that they're claiming is already part of the way out the door and seemingly is wholly out the door in this instance. So this goes back to your point that on the facts of this case that there really isn't a way to separate the discovery? Yes, Your Honor. Yes, Your Honor. And if that's the case, if you can't separate it, it just can't be separated. But they're really saying is that it can be separated and that if it's separated, that there's a bunch of things that happen in the district courts that do not happen in arbitration. I mean, the obligations to meet and confer, the discussions about exchanging of documents, the number of depositions that may be allowed. You know, the hand governing discovery in arbitration is just a little bit different than the hand governing the federal courts. You know, we try every case like it's worth a billion dollars, right? I mean, in arbitration that just doesn't happen. Well, this case is worth nine million, so it's significant, yes. And, Judge, what I would say to that is I look back, one of the cases cited is the Duncan v. International Markets case. That case refers to a Fourth Circuit case of the Berkeley County School District case in which the court, I think, said appropriately that those matters were going to be left to able counsel and to the learned trial judge. And so that's what we're asking in this instance. The other concern I have is I don't know that the district court really ever said that the court concluded that the discovery was all merged, like you're saying. It'd be one thing if the district court examined the case and said, you know, I've assessed it and in my discretion I think that the discovery needs to be unified for this, that, and the other reason, but we just have a scheduling order. Is that right or am I missing anything? No, that is correct, Your Honor. The process that the court went through, as Judge Erickson referred to earlier, is that there was some communication from the law clerk about the, because there was a request for additional time. This matter was actually set seven months down, or was set, I guess, ten months down the road. And so, no, there was not a detailed discussion of that point beforehand. Well, is there even an indication that the judge concluded that the merits part of the case would not require any more discovery than the arbitration part, whether it's detailed or not? We don't even have that. Right, Judge, I don't believe that we have that. We would ask that you affirm the district court's determination to take this case to arbitration, to decide the arbitration issue is something that is within the law, and we would ask that the entire decision be affirmed. Thank you. My time has concluded, unless you all have questions. Very well. Thank you for your argument. We'll hear brief rebuttal. Mr. Coluto. Thank you, Your Honors. The question that was remanded is this. Whether the pop-up windows on EasyBunk's website or other aspect of EasyBunk's website effectively communicated the Evolve Agreement. That's what the trial is on. That's a narrow issue. It would not have been difficult to frame discovery around that. And sure, would there be disputes about whether or not some things go to that or go to the merits? Absolutely. But the court can hear that on remand and make those decisions. Here, as Chief Judge Colliton said, the district court didn't engage with that. It simply entered a blanket discovery order, having all merits discovery, all merits dispositive motion happen before the court reaches the issue of arbitrability. And I didn't hear anything from my friend on the other side that refutes the idea that the only way to get the benefits, the full benefits of arbitration, is to have arbitrability decided at the outset, because arbitration includes the right to streamline discovery. For those reasons, Your Honor, we act. Well, let me ask you one thing. You said the district court could decide something about the scope of discovery. Forgive me if I was speaking too fast. How would that work as a practical matter? Your Honor, I think it would work as any normal discovery dispute would go. On remand, the court would say you can take this. This wouldn't be normal. Well, we are authorized to take discovery on the arbitrability question. Suppose the questions in the deposition go beyond what you think is related to arbitration. Then what happens? I think there would be an objection like this is beyond the scope of the deposition. To the extent there are interrogatory requests, there could be a motion for protection, motion to quash on those grounds that these are outside the realm of permissible discovery at this point. Is that helpful, Your Honor? Do you think you would contemplate taking these deposition objections to the judge? We envision that the limited discovery would proceed as the district court would normally handle discovery. But, again, the scope of it is limited to arbitrability, to the narrow question that this court remanded the district court to consider. All right. Thank you, Your Honor. Thank you to both counsel. The case is submitted. The court will file a decision in due course. That concludes the argument session for this morning. The court will be in recess until 830 tomorrow."
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"stt_transcript": "R. Rammick on behalf of Cannon Falls Area Schools. This case is really about a single issue which is the interpretation of the insurance policy at issue here. Cannon Falls was insured by Hanover. They suffered, the schools suffered a hailstorm loss which caused dents to their metal roofs. The policy covers that as direct physical loss and both parties agree that that's covered under the normal part of the policy. But then Hanover contends that there is an exclusion for cosmetic damage that applies and we disagree that that exclusion applies. There's two real points to figure out if this exclusion applies in this and that's the direct interpretation of the policy on a technical level. Let me ask you something that's bothered me in other cases. Of course, interpretation of a policy like interpretation of a contract is ultimately at least a question of law for the court. So what case best describes the standard of review, the application of that standard review to a fact-intensive exclusion? Certainly, Your Honor. I think the Quade case out of Minnesota Supreme Court as well as the Bluff case out of Minnesota Supreme Court both go through some of the standards in terms of going. I know what the words, I know the words that are used, but I mean the application. Yeah. So this application in terms of this cosmetic The expert dispute is clearly fact-based. The expert dispute part is, and that's the issue that we're getting at here, Your Honor, is how do we review the resolution of the expert debate, assuming we don't buy the argument that it should have been excluded? And the issue that we're arguing is the interpretation of the policy such that then They're amplifying the policy, right? I get you, Your Honor, but To a fact-intensive situation and reach different opinions and slash conclusions that we're supposed to review as a matter of law, how do we do that? The matter of law part is that the district court applied the exclusion as a dichotomy to say either it still prevents water from entering, yes or no, and our interpretation is that because it says it prevents it to the same extent, our argument is that it's reduced how much snow and wind load it can hold. So the district court applied the wrong standard in interpreting this policy by saying that the only question I think an underwriter would just scratch his head and say, what a bunch of gibberish. You're peddling. Me? Yeah. Well Because you, like almost every lawyer in these kinds of cases, refuses to get at this question. Well, the heart of it, Your Honor, is really what it should apply to or what it shouldn't apply to. In this question Yes, and that's fact. That involves a question of fact. The court never got to the question of fact. We have different experts that are competing to say it did reduce how much wind and snow load. Their expert says that it doesn't. That's why I started you with a question that it's not in the briefs, not in the district court's opinion. And in my experience in contested exclusion cases, no lawyer ever wants to talk about this. Oh, it's a question of law. The interpretation of the exclusion part It's not a clear error or abuse of discretion analysis of either expert. Correct. We're just talking about If we don't knock them out under Dobbert Yeah, and we're not even getting to the experts yet. I'm not going to write along as a matter of law on facts. Well, we didn't get to the expert analysis at all in this case because the court said it doesn't matter if its wind and snow load has been reduced. That's what our expert opines and their expert disagrees. A remand, right? Yes, a remand back with a different interpretation of the policy exclusion. Because they applied it and so this is A different interpretation with the same lingering question unanswered. We would still have an unanswered question in terms of the experts and their battle. We would have that issue yet for the district court to decide. But if the policy application is wrong, then we've just We've gone with the wrong legal standard to apply to their expert opinions. The court didn't get to the expert opinions. And in fact, there's in the Canon Falls reply brief on page 10 through 12, There's some good photos that show the difference between a metal piece That if it's dented, its only function is to prevent the intrusion of water. Such as caps that go on a vent ridge. And so if the question is simply does it continue to exclude water From getting into the vent, then that can be a dichotomy question. It does or it doesn't. The problem in this case is that these roofs are the actual structural support. They're huge dome metal roofs that go over. And so the argument here is that these metal roofs, when they're dented, Canon Falls expert took samples of it and said this roof, as dented, Is less strong than the roof that's not dented. And because What do you do about the elements? It's sort of a present tense barrier to the entrance of the elements. Exactly. And that is, it is a current damage. The point is, so for example, if the roof used to be able to hold 6 feet of snow, And now it can only hold 6 inches of snow, It's still technically preventing intrusion of water, wind, But it's going to fail at a much lower rate. So it's not preventing it to the same extent as it did before. It would have normally prevented 6 feet of snow pack on these roofs. But it's weakened such that it will prevent less. That failing event just hasn't happened yet. Which is fortunate. But if it were, say it were reduced by 95% And now all of a sudden it's only 2 inches of snow, It's not going to snow all summer. So you'd wipe out the exclusion. I wouldn't wipe out the exclusion, no. Yes, you are. No, in fact, on page 10 and 12, Your Honor, there are You insist not. Correct. But this will go back to the insurance people on the East Coast. Just like the environmental exclusion. Sure. Rewritten 2, 3, 4 times. Yes. But the way that it's written right now, And, in fact, there's actually an example of that. There's a different case that the district court cited That has a different form of the exclusion That doesn't use the words to the same extent. And it focuses specifically on the intrusion of water. This one focuses on the elements overall and to the same extent. Because this is a structural support issue, Our argument is when that amount of structural support has been reduced, That is an effect as to how much it can prevent intrusion of the elements. Again, the elements aren't entering right now, But it's preventing less. It's like saying your car runs or it doesn't run. That's a dichotomy, yes or no. But if it ran at 60 miles an hour, And somebody steals the catalytic converter, It only runs at 30 miles an hour, You wouldn't say that it functions to the same extent. Does it run? Yes. It ran before, it ran after. But does it run to the same extent? No. And that's what we have here. These roofs do not function to the same extent as they did before. Because they've been weakened. They will fail at a lower snow load and a lower wind load than they did before. I'd like to reserve some time if you have a question, I'd answer it now. Thank you. May it please the Court, Scott Johnson appearing on behalf of Appalachia Hanover. The Court should affirm the judgment because the District Court correctly determined that the cosmetic damage exclusion precludes coverage for the school district's claim. This is, in our view, a case of contract interpretation, question of law. The exclusion expressly applies to cosmetic damage that does not prevent the roof from continuing to function as a barrier to the entrance of the elements to the same extent as it did before. Does is a present tense verb. So it doesn't contain the future tense connotation that the school district claims. Why couldn't you read that as saying, in this current moment, it does not protect it, function as a barrier as much as it did before? At this moment, it just can't sustain the same amount of snow weight. Before this hail damage, it functioned as a barrier to the elements. It kept out all elements. After this hail event, the same situation occurs. But you're ignoring to the same extent. Correct. And their expert says that it won't stand up, it won't take the same amount of rain or snow as it did before. So it's not to the same extent. Why doesn't that create a triable case? Well, it's not a triable case because, first of all, they didn't raise the question of, there's an issue of fact that precludes summary judgment. Both parties below agreed there was a question of law. They didn't raise that there was an issue of fact and the court should hear the expert testimony. The court considered the expert testimony. I think it's a sort of a combination. I think Judge Kelly's question was going to the legal interpretation, which they clearly did raise. And then when you combine that with the expert, it creates a fact question. Well, I disagree. Because I think the court correctly looked at the expert testimony and really decided it doesn't matter. Because it's a present... It's in comparison to the legal question of how you're interpreting this. It does. And because it's the present tense verb does, means it's a present impairment of the Bruce ability... What's wrong with Judge Kelly's question, or maybe address Judge Kelly's question? At the moment, it doesn't, according to their expert, to be believed, it doesn't, to the same extent, hold it capable of sustaining as much rain or snow as it did before this event. So then we'll call that their maybe someday theory. Their what? Someday maybe theory. Someday maybe this roof will fail. That's what their expert is essentially saying. Can we go back to, like, today? If there's test, if there's evidence, expert evidence that at that moment, it can't sustain as much weight. Not that it's broken through, but it just doesn't function as the barrier to the same extent as it did before. So we're still in the present, not in the future yet. Isn't that one way to read it? I don't think that's the way to read it. And the reason I say that is because there are exclusions that address that very issue. And we cited one in our, it's in the brief, it's also in the addendum, page four, and also the separate appendix at page 266. It's a Hartford exclusion that is essentially the same as ours, including to the same extent language. And it has at the, after all, the same extent language, and for the anticipated useful life of the roof. In other words, the future. Without that language, we're only talking about the present. It still functions as a barrier to the elements. It did not leak. It did not have any elements penetrate the roof after these shallow hail indentations. It continued to function as a barrier to the elements. And it's done so for four years. And their theory is, again, maybe someday, this roof will fail. But that's pure speculation and conjecture. And that doesn't defeat summary judgment. And the handover policy does not include that language that the Hartford policy has. It includes only the present language, does. The present tense verb, does. It doesn't have a future tense connotation that the school district contends it does. You concede that the exclusion will still apply and the duty to defend will apply if something maybe happens? Well, this is the property policy, so there's no duty to defend. Are you talking about someday in the future? Yeah, the day in the future happens. And there's clearly at the moment, at present, damage that is from a covered risk. The policy's still in effect, let's assume. Well, the policy expired some time ago, of course. I mean, if damage occurred during the policy period, it would be covered, assuming the other conditions of the policy are satisfied. So Cannon Falls needed a second windstorm that year? Well, they continue to carry insurance on their property. If the roof were to fail, they can make a claim under their then existing insurance policy. You know, the example they give in their reply brief is, they say, well, if this roof had basically caved in but still didn't leak, Hanover's position would be that that exclusion still applies. No, that's not our position. The exclusion only applies in the event of cosmetic damage. And cosmetic damage is marring, pitting, or other superficial damage. Caving in of a roof is not superficial damage. And that's all we're talking about here. Shallow hail indentations to the roof. And they do not presently impact the ability of those roofs to act as a barrier to the elements. They continue to resist the elements, just as they did before that hail event. And their argument essentially is, okay, every instance of hail will dent the roof and damage it to at least some extent. Even 1%. And in their view, in that instance, exclusion doesn't apply. So when does the exclusion apply when you have superficial damage? If every hail dent results in some impairment in the future, or some reduction in the useful life of the policy, or of the roofs. And there's no evidence, by the way, of any reduction of useful life. That's why hail coverage is so expensive and difficult to find. That's correct. And that's the decision that they made in this case, to purchase a policy at a lower premium that has a cosmetic damage exclusion. They could have purchased a policy without the exclusion, and then they'd have a new roof. But they bought a policy with the exclusion. They bought a policy that's drafted in the present tense, not the future tense. They have a roof that has shallow hail indentations that continues to function as a barrier to elements. And their testimony from the 30B6 witness is, we're not going to replace that roof if we don't get any money from Hanover. There's no concerns by the school district that this roof is going to fail. At any time, they have no concerns. They're not concerned about the structural integrity of that roof. Well, the expert expressed some concerns that conditions in that area were such that it may well fail given the amount of snow that comes in that area, right? He did express that. But, you know, keep in mind, he never tested the high school roof. Yeah, but that goes to cross-examining him, which I suspect you could do pretty effectively. But we're not, you know, at this point, we have to take it for what it is. Yeah. And again, in their brief, they talk about imminent risk of failure. Seriously, you saw the pictures of the roof. These are shallow hail indentations. There's no imminent risk of failure. There's been no damage. Yeah, now over four years ago. Yeah, now over four years ago. Again, the school district testified. They don't have any concerns about the structural integrity. They didn't replace the roof. If there was an imminent risk of failure, I guarantee you the school district would have replaced those roofs. They're not going to take the liability issue and discard that with children in the school. So, I see my time is about up. I just want to conclude by saying, again, we think the court should affirm district court because the court properly applied the cosmetic damage exclusion to the school district's claim. Just a quick question. Yep. Your position is that the cosmetic damage applies unless there's a leak? Well, no, unless there's... Well, a leak is only one way. You know, it's a barrier to the elements. The elements can be rain, primarily, but any kind of moisture, even sunlight. But these roofs don't allow any elements into the schools. They still function as a barrier to the elements. To follow, I understand you're taking the position that if it collapsed, we wouldn't do that. But I think one could, if one bought into your position, read it that way, that if it collapsed and it didn't leak, it's cosmetic. No, because there's two parts to that definition of cosmetic damage. And the first part is it's got to be pitting, marring, or other superficial damage. A caving in of a roof is not superficial damage. So, that would not be an instance where the exclusion would come into play. Well, I don't know if there's case law, but I think it's pretty plain, you know, a plain interpretation of the policy language that a caving in of the roof would not be considered superficial damage. Any other questions? Thank you. Thank you, Your Honors. Rebuttal? Thank you, Your Honor. I want to address right away is that once you have an insurance claim, you have to resolve the damage at that time. Under statute for hail, you have one year for a suit limitation deadline. Some policies have up to two years. But you can't take a wait-and-see approach to wait to see if it lasts three to five years. The roof is supposed to last another 30 years. And if it fails in 10 because of this hailstorm, we can't pin that on the next insurance company. If it damaged because it was insured at the time of Hanover It depends on the policy you buy. Your Honor, if it's Usually, yes, they do have that kind of a time if it's claimed. And of course, it depends whether it's claimed or not. I mean, the application of this is going to apply to I mean, it's going to apply to all cases. And so for creating a standard like this, it's going to say even if its strength is reduced by 90%, so that for the example of a six-inch snowstorm, well, if that doesn't happen for a year and a half, a dry winter, for example, in Minnesota, and then it fails a year later, well, that insurance company is going to say, Hold on. Six inches of snow should not cause this metal roof to collapse. That damage actually occurred under your previous policy. So they're going to deny it, saying it's not actually a snow weight collapse. It's a hail damage issue from two and a half years ago and Hanover is off the hook because they denied it for long enough. We need to assess the damage now, which is what our expert did by taking panels and testing it now to prove that the strength has changed from what it was before to what it is now. And that's an actual damage now. That's a claims made versus claims submitted issue. Yeah. For all policy, they're occurrence. They're not claims made. Like legal malpractice is a claims made policy, and so that's whenever the claim is made, that's the insurer that's on the hook for it. All property policies are an occurrence policy, so it's whenever that damage that's subject to the issue occurred, that's the insurer that's on the hook for it. But that time span is only one year under a hail statute, two years sometimes under the policy. So if it's beyond that, you can't go back to them to say, hey, this was an occurrence from three years ago, and therefore you owe it. That's why we do the assessment at the time. So the district court never got to the analysis of experts because they applied this legal standard that just said it doesn't matter if or how much it's been weakened. It's only if it leaks now. If it didn't leak after, then it's only cosmetic. And that was the standard that they applied, and that's the standard that we're challenging here because that would be very dangerous to apply to all cases, including this one. And I'm out of time, but I'm happy to answer any questions if you had any. Thank you. Thank you, Your Honors. The case is clearly briefed, and the argument's been very helpful, and we'll take it out of your drive box."
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"stt_transcript": "May it please the Court, my name is Scott Peitzer and I am arguing on behalf of the appellants today. The key thing to understand about this case is that, first I'd like to turn to my regressibility argument as that goes to subject matter jurisdiction. The key thing to understand about this case is that this is about avoidability under Section 544B, not recovery under Section 550 of the Bankruptcy Code. So this goes directly to whether or not what remedies were available for the district court to grant. Can we first start with whether we have a viable entity before us? As I understand the response you filed, you essentially say that Mr. Stepanovich has died in this, but there's been no, there are no corporate officers who can step forward, nobody else can step forward. She might inherit it, she might not inherit it. Where are we? Do we have a viable corporate entity and what are we to do with that? Your Honor, I think we do have viable corporate entities because the entities would pass to her. Would? Would maybe, maybe not. Did, I think. Did. Under the, I think under operation of the will that they do pass to her. Has she been appointed an officer, a director? I mean, who's going to sign your check, for instance, to pay you for your appearance here today? Somebody has to be able to direct this. That's the problem. Yes. I think that one, the, I think that the question of whether this needs, whether the corporation can continue to appear, regardless of who's directing it, is not really the issue here because the corporations still exist. They have not been dissolved and they, the entities still have rights regardless of who is directing the litigation or not and there's nothing left, there's no litigation decisions left to make for purposes of this Mr. Stavanovich died while I had, after I had already started the reply brief here. And so there was really nothing left for Mr. Stavanovich to do in terms of directing this appeal before he passed away. I think that the last very clear instructions that I received from him would be no different than if a individual had told, if he, even if he was still alive, I don't think I would be required to consult with him regarding oral argument strategy or the contents of the brief. Would you like to provide us a case or something that said that? I don't have a specific case that says that, Your Honor. I'm arguing at this point from general principles of, that the entity still continues to exist and that the law requires consultation on issues that, in terms of the client's objectives, but how the client's objectives are achieved, the particular, you know, what is raised on cross-examination, what's raised in oral argument, that is, that doesn't require any corporate direction, regardless of whether there is a, whether there's a individual person who is capable of speaking on that corporation's behalf. But the, going back to redressability, however, this is not about recovery. This is about avoidability. This is about the availability of a remedy that the district court could grant. And here, there, once 10 million, once the predicate creditor's claim has been satisfied or not satisfied, has been, once enough transactions have been avoided so that the creditor's claim, that are necessary to satisfy the creditor's claim, avoidability for the rest of the transactions is off the table. It's not something that the district court could avoid. They say that wasn't raised in the, in the bankruptcy proceeding. Are they right? That was not raised. And, in fact, I think they say it was affirmatively waived. It was, what was waived in this case was, well, one, it happened after the law of the case decision. But what was really waived here was that Yellowstone Funds is a predicate creditor, and we don't contest that. They are a predicate creditor. The question is what that predicate creditor could, is entitled to, what remedies the predicate creditor is entitled to obtain from the district court under State law. They are entitled to avoid transactions necessary to satisfy their $10 million claim. They are not entitled to avoid any transactions beyond that claim. Because here, we're talking about 346 discreet transactions. But if this were raised at the district court, isn't this the kind of thing that could have been battled out there? It's a tough one to review on appeal, is it not? I think that it's very easy to review on appeal because this is a pure question of law, and it just goes to whether under substantive State law, here, MUFTA, that remedy was available. Maybe when I say it, yes, a question of law certainly is the kind of thing we do. But the proceedings went on as if. So I'm wondering if the agreement on the one predicate creditor really did concede that that was all the government needed to show in order to proceed further to determine the transactions you're talking about, 346. I think that the framing here is better looked at in terms of mootness rather than what they could have raised at the beginning. I think that once the, once $10 million worth of transactions had been avoided, the rest of them became moot. There was no relief that could have been awarded for those other transactions because MUFTA requires, as this Court held in Boussalas and the Minnesota Supreme Court held in Finn, MUFTA goes to the individual transaction. It does not allow for a global approach, which is what this Court rejected in Boussalas. This is 346 discrete transactions. This could have been done with avoiding as little as two transactions. The rest of them, once that threshold was hit, Minnesota law does not allow recovery. The big difference here is that under Section 550, once the transactions have been avoided, then the trustee can recover the full amount. They're not limited to what a state court creditor could do. But we're not at that state. We're at the avoidance state, which United States v. Miller makes clear that there must be a creditor, a predicate creditor, who could actually recover this transaction, could actually avoid the transactions under state law. That's an important limitation on the trustee's power of avoidance that Congress specifically intended with Section 544B. So the easiest way that I think to understand this is to look at what the trustee could have recovered, what Elstone could have recovered in state court. There were numerous transactions that were $5 or $6 million in the list of transactions that are attached to the expert report in the appendix. If the trustee had sought to avoid two of those for a total of $11 million, under state law, under Minnesota statute 513.48B, that recovery would, once those two transactions are avoided, recovery would then be reduced on the judgment side under 48B. 550 would allow them to recover all of it. So the difference is that $1 million excess above the amount necessary to satisfy Elstone's claim under state law would be reduced. Under 550, it's not. But that doesn't go to the underlying avoidability of the transaction. And once the trend — once those transactions have — once enough transactions have been avoided under MUFTA, that no further transactions would be avoidable under MUFTA, then those claims become moot. And that goes to the subject matter jurisdiction in this case, because there's no longer a case or controversy with respect to the remaining transactions, which are based — in essence, they're based on the really — they're basically 346 discrete claims under 544B, because under MUFTA, which is the state substantive law that has to control, it requires treating them as individual claims and analyzing them individually and relief granted individually. And that relief is not available for as many as 344 of those transactions, depending on which transactions are invalidated. And it doesn't matter which transaction — which order the transactions are invalidated in. The key is that they have to be done one at a time in a sequence. They could avoid any number of them, but they have to be analyzed one at a time. And that is precisely what did not happen in this case. And that goes to the — that goes to the relief that the trustee would — that the district court would be able to grant. I'd like to reserve the rest of my time for questions. Good morning, Your Honors. Igor Margolin of Coburn & Kim on behalf of Doug Kelly, DAPLI. So I do — You have to slow down and speak up for me. Understood. Will do, Your Honor. So I do want to start with the corporate authority issue that was raised initially, because we do share the Court's concern regarding the corporate defendant's or corporate appellant's ability to continue to be in this position. And I think it's important to note that there's a living constituent who is authorized to direct counsel on their behalf. The declaration that counsel filed certainly raises more questions than it answers. The position they appear to be taking is that Mr. Stavanovich's widow is now the authorized representative of these companies because she inherited the ownership of interest of Mr. Stavanovich by virtue of this will. And then — but that, of course, rests on the assumption that Mr. Stavanovich's authority to — You are still talking way too fast. Understood. I will slow down, Your Honor. But that assumption rests on their position that Mr. Stavanovich's authority to instruct counsel on behalf of those companies was based on his ownership interests. But we don't have any evidence of that. Counsel just attested in his declaration his understanding that that's how it works. We certainly don't know — there's no corroborating documentation that was filed that at the time Mr. Stavanovich passed, he was an owner of these companies. And that, I think, is the threshold issue that is very much open and certainly hasn't been established in any manner. And do we know whether she's actually inherited any — well, whether he owned it or any of his interests, do we know if she's inherited it? We do not, Your Honor. That's right. That's the additional issue here. Do you know if there are any other officers, directors, employees, anything? No. As far as we understand from everything that we have seen, and the other side certainly hasn't contended otherwise, at all relevant times here, Mr. Stavanovich was the sole living person with authority to instruct counsel and essentially provide any direction on behalf of the corporate defendants or corporate appellants, rather. So we do think it's a very important issue here that isn't resolved. So where does that leave us? Does that, in your opinion, does that mean we need to dismiss? Do we need to hold it in abeyance and see what happens? What's your recommended outcome? So our recommended outcome would, in the first instance, would be a dismissal because, again, we believe the law supports the notion that if a company has not a single individual that can direct counsel on its behalf. All right. So what if she is entitled? What if he does have the ownership interest and it passes to her? She could appoint herself to be the president or director or whatever. Should we wait for that? So that is an option that the court certainly has as well. Which would require stay and collection of the judgment. I'm not sure that that's necessarily the case, Your Honor. Of course you're not, but that would be my reaction. Well, defendants did move for a stay of execution before the district court and it was denied. That wasn't on this issue. I'm not bringing up a ruling of a completely unrelated question as controlling on this novel question. So, Your Honor, I'm certainly not aware of any authority that in this circumstance would I don't need authority. It's a matter of an appellate court's discretion. Understood, Your Honor. So in that regard why should we allow you to collect the whole 318 million while we wait around to see if she should have she would have been entitled to it if you didn't grab it? So, Your Honor, well, first of all, I think just to be clear, even if there was a basis to stay collection of the judgment while this issue gets resolved, it certainly wouldn't apply to the ability to collect with respect to the judgment that was rendered against Mr. Stavanovich individually, right? Because right now we're only talking about the ability of the corporate defendants to remain in this appeal. Right. So I think It seems to me for that we have to have them represented and hear an argument. Separate issues pertaining to his appeal that are limited to his appeal. That troubles me greatly. We just brush those aside. They're gone because he died. Despite the fact they were unique to him. Your Honor, and also to be clear, where we are procedurally in this case right now is that Mr. Stavanovich's appeal has been dismissed. Because he died and nobody properly moved to substitute in time. And I understand there's a separate motion on that issue. I believe that could be vacated. Okay. Understood. And it wouldn't be with the proper showing of sort of here and now representation and right to defend. Understood. But you'd wipe that out. You'd take the money and make sure it was out of state before we got there. Well, again, our position on this would be that certainly the issues that are being raised here today do not impact the trustee's ability to collect, to continue enforcement against Mr. Stavanovich. Because we haven't reached, you know, he isn't here to argue it. Well, that's because his appeal has been dismissed. By a panel of our court. Correct. Which a hearing panel can review and reconsider. I agree with all of that, Your Honor. I'm just not sure that leads to the conclusion that there needs to be a stay of judgment enforcement. Because, again, my understanding is that in order for that to have taken place, the other side would have had to make an affirmative motion to stay execution. Now, they did that before the district court was denied. Perhaps they could have done the same thing before the appellate court. They haven't done that. Perhaps. It's done all the time. Come on. Yeah. But I think that is where we stand on this issue. Unless there's any other questions from the panel on this one, I'm happy to proceed to the issues that were being raised on appeal here by the other side. And so with respect to the product and creditor argument, our position that that argument has no merit and should be rejected for two reasons. The first one is that defendants weighed this argument because they never raised it before the district court. What about the — it seemed to me, if I understand correctly, there was a stipulation as to the predicate creditor, correct? That's right, Your Honor. So that there was one of them. What is the scope? At the district court, what was the understanding of the scope of that stipulation? So the stipulation related to whether the predicate creditor element was satisfied so as to give the trustee standing to pursue the Section 544B claims. Was there any — was this issue addressed at all, the issue of the capping of the amount that the district court could order? It was not, Your Honor. And I think that's the critical point here, is that at no point did they argue to the district court below that the amount that the district court could avoid and recover in resolving the trustee's Section 544B claim is somehow capped by this language from Minnesota's fraudulent transfer law regarding how, you know, avoidance can be granted only to the extent that it's necessary to satisfy a predicate creditor's claim. That argument certainly was available to them before the district court, but they never raised it. And so for that reason, our position is that they waived it. Now, they tried to get around waiver by saying, by painting this as an Article III standing issue, but it's not. And you don't have to take my word for it, because when you look at the first page of their opening brief, on the very first page in the summary of the argument, they actually say that what they're raising here is an issue of interaction between Minnesota fraudulent transfer law and bankruptcy standing. Those are their words, not ours, bankruptcy standing. And we think the law is pretty clear. Bankruptcy standing, it's not Article III standing. Bankruptcy standing is about statutory standing. And I think courts pretty clearly have held, and we cited those in our papers, that statutory standing is waivable. If your argument is tied to a statute, and that's what the Supreme Court had said in the Bank of America v. City of Miami decision we cited, if your argument is tied to a statute, it's a statutory standing argument, or sometimes they refer to it as prudential standing. And those arguments are waivable. So we don't think this is an Article III standing issue at all. Then they, I know, pivot to mootness, but I think as this Court has recognized and many others, mootness and standing, in Article III standing, they're essentially two sides of the same coin, right? The only difference is timing. Standing, Article III standing in a conventional sense, is something that gets addressed at the beginning. You want to know in the beginning that you satisfy the trifecta of injury, causation, and redressability. And then you also want to make sure that those three elements continue to persist so that there remains a lot of controversy throughout the litigation, and that's mootness. And certainly in this case, it wasn't like we had a situation where by the time the Court resolved our Section 544 claims, the injury has disappeared. Because the injury here, again, because we're under 544, the injury that's relevant here is the injury to the bankruptcy estate, not to the predicate creditor. And the injury certainly persisted for the entirety of this litigation, and in fact to this day, even with these judgments, if we ever can collect them, it wouldn't make the estate whole because the amount of unsatisfied claims is huge. It's well over a billion dollars. Because as the panel, I believe, is familiar with, the underlying Ponzi scheme was a multibillion-dollar Ponzi scheme. So that's why we don't think there's any merit here to their argument that this is an Article III standing issue or a mootness issue that they're raising, and therefore, that they can avoid and bypass the fact that they indisputably waived it. And as to the merits, we think the argument fails in the merits as well. Because if you look at the language of Section 544B, it authorizes the trustee to bring an action to avoid any transfer that is voidable under applicable law. And so their argument is that, well, to determine if it's voidable, let's look at the remedy section of Minnesota Fraud and Transfer Law right at Section 513.47a that they point to. But that doesn't talk about — that section doesn't inform what you need to demonstrate under Minnesota law to determine voidability. Voidability is addressed in Sections 513.44 and Sections 513.45. Those are the sections that dictate what you need to establish if you're alleging actual fraud or constructive fraud. And those are the statutory sections that use the word voidable. So if we are even going to match, try to match what Section 544 says with the applicable State law, which in this case is the Minnesota Fraud and Transfer Law, those are the sections that you look at and not the remedy section to which they point to. Because the remedy section to which they point to is ultimately about recovery. And I believe, as the other side has already conceded, recovery is different. When you're in the realm of recovery, I think the law is pretty clear. You're no longer governed by any limitations that State law imposes on your ability to recover. In fact, we believe — we cited this in our papers, the in-rate DLC decision that a bankruptcy appellate panel of this circuit, which this Court subsequently affirmed in the Stolner case, they actually addressed pretty much the same question that they raise in here. The question that they addressed was when a trustee alleges a 544b claim, is the amount that he's able to recover governed by the amount of the predicate creditor's claim, or is it the amount that — or is the relevant inquiry what the amount of the estate recovery is? That one didn't involve other transactions. So wasn't that about attorney's fees or some other? Right. Yes. No, that's true. I mean, to the extent there was, you know, anything about that case to which they point as a difference, it did talk about something specific in that case, I believe, to the attorney's fees. But the distinction that they're drawing about how, well, we're in a different realm because we have multiple transfers, we don't think that — we think it's a thin distinction. It doesn't make any difference. Because ultimately, the relevant inquiry here is whether when you're examining the predicate creditor requirement under 544, all you're asking for is, is there a right? As of the petition date, to avoid each of the transfers. In this case, Ellis Stone creditor, the Ellis Stone fund, who was the predicate creditor, they indisputably had that right. And we don't think there's anything in the statute, in the language of the statute or the case law, interpreting it that says that when you're assessing whether a predicate creditor is satisfied as to each of the transactions where you have multiple transfers, we don't see anything that requires them to say, okay, well, but what about if we had — if that predicate creditor had already avoided prior transfers, right? Like, where does that leave them? And I think the decision that the record supports the point that even when you have multiple transfers, it's still — you still need to start looking at them collectively in that manner, is the Ninth Circuit's decision in the — in Rea e Saquiat that we cited. Because it's the decision by the Ninth Circuit in Rea e Saquiat. It said 34 F. 3rd. 800. There, the court posited a hypothetical and said, look, if you have a creditor with $10 in unsecured claims — or, I'm sorry, $5 in unsecured claims, you can use that $5 unsecured claim of the predicate creditor to avoid $40 worth of separate transfers of $10 each. That's — that's what the court determined in Rea e Saquiat. Moreover, the court also said that if you adapt the rule that the defendants are advancing, it would actually lead to arbitrary results. And the reason for that is — and the court kind of went through this different hypothetical and said, the reason it leads to arbitrary results is because then the manner in which — or rather, the scope of what a trustee could avoid or recover becomes governed by the order in which transfers are avoided. And they said that's — that's a very arbitrary way to read the bankruptcy code, and particularly this provision. And the court said we're not going to do that, and we think the same applies here. And so for this reason, I see my time is up, Your Honor, so unless there's any questions for the reasons that I just mentioned and those that are detailed in our briefs, we ask that all the decisions and orders of this record that are being appealed here be affirmed in their entirety. Thank you. Thank you, Your Honor. Let me address a few points. The — first of all, the waiver with respect to standing does not waive mootness. Mootness — if there was a waiver, if the waiver — It's not waived as to what? It's not waived as to mootness. Even if they had standing at the beginning, that must persist. And mootness occurs based on after — facts that happen afterwards. And what happened afterwards — Oh, that's certainly true. Yes. And once the — once there was no longer a — once there was no longer a transfer that was voidable, the remainder become moot. Because this injury did disappear with respect to the estate. The injuries of — we're not talking about the main company here of PCI, the main Petters entity. We're talking about the specific purpose — special purpose entity with which my clients transacted, which was PL Incorporated. And we can't look at the full injury to the estate in terms of the overall Petters scheme here. What we need to look at is this specific transaction — these specific transactions with respect to the entity that was the transferor, which the parties had agreed is PL Incorporated, and that Ellistone is the only predicate creditor for PL and PLI. Once the — once the injury to Ellistone, from whom the trustee is deriving its authority to bring these claims, once that disappears after $10 million worth of transactions have been avoided, the injury disappears. There's no more injury to the creditor to whom — from whom the standing is — from whom the trustee's authority is derived. The other thing that I'd like to point out is that — it's not that under 544B, whether a transaction is voidable is a function only of State law. If you look at the United States Supreme Court's decision in U.S. v. Miller, that was a case in which the Petitioner attempted to avoid a — avoid some transfers to — for personal tax liability to the IRS. Those could not be avoided in State court because of sovereign immunity. The Court held that the waiver of sovereign immunity for bankruptcy goes to the 544B claim, but not to the underlying State claim. Those claims did not have jurisdiction in State court because they — the sovereign immunity prevented that. They could not bring that case. Here, 544B may go to what the — is basically just a shell for what the substantive State law says here. And the trustee is ignoring 548 — I'm sorry, 513.48, which is the recovery statute, 544 — or 513.47 is not a — it's not simply a remedy statute. It goes to the availability of avoidance because the — the person's bringing the — that — a MOFTA claim can only obtain avoidance. Whether it actually is able to receive that remedy is a function of whether it is necessary to satisfy a creditor's claim. And here it was not. I see that my time is up, Your Honors. I will be happy to answer any further questions. Thank you. The case is certainly thoroughly briefed. It raises a lot of issues that are not — not typical and not easy, and we will take them all under advisement. Thank you, counsel. The argument's been helpful."
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"stt_transcript": "The first case for argument is 25-1146 Western, Arkansas, Fayetteville Public Library et al. v. Todd Murray et al. All right, Ms. Patterson, we'll hear from you first. Good morning, Chief Judge Colleton, and may it please the Court. The District Court concluded that two provisions in Act 372, the policy provision and the obscenity provision, violate the First Amendment and the Due Process Clause. This conclusion was wrong, and its judgment should be reversed. For starters, the District Court never should have even reached the merits of the policy provision, because no party has standing to challenge that provision. Library plaintiffs allege harm based on their fears that the policy provision will increase their administrative burdens. But because library plaintiffs are political subdivisions of the state, they lack First Amendment or Due Process rights that they can invoke to challenge a state law. And this is clear in the Supreme Court's cases Williams v. Mayor of Baltimore, Uzura v. Pocatello Education Association, as well as several circuit opinions such as City of Hugo v. Nichols. Regardless, even ignoring this political subdivision problem, their alleged harms are too speculative to constitute an Article III injury. They cannot show that the policy provision will lead to an increase in challenges. And the same is true of other plaintiffs. Their alleged harm is too speculative. They've offered no evidence that a person would challenge the material under the policy provision, much less material that they wish to read, and that the library would relocate or remove that material in response to that challenge. As this Court's opinion in L.H. v. Independent School District demonstrates, this sort of speculative future injury premised on a hypothetical future challenge is insufficient for Article III standing. And even if they could show a non-speculative concrete injury that is sufficient for Article III standing purposes, they still cannot show traceability or redressability. That is because prosecutor defendants do not implement the policy provision public library officials and local governing bodies do. So their alleged harm is not traceable to the prosecutor defendants, nor redressable by a judgment against them. And the alleged harm is also not traceable to the Crawford County defendants' enforcement of the policy provision. Their alleged harm relates to an earlier county policy that existed and predated the policy provision, not the policy provision. And in another case, there is an injunction in place that prevents Crawford County defendants from reinstating the social section. For these reasons, they don't have standing to challenge the policy provision. Did the district court seem to think that it was a virtual certainty that the county would proceed in light of the history? Is that the theory of standing? Yes, Your Honor. He seemed to assume that there would be a challenge. However, at Act 257, one of the partains testified that she was unaware of someone who would challenge the provision in Crawford. So it was still speculation based on that past practice. And it ignores the fact that there is an injunction in place that would preclude the Crawford County defendants from creating that same sort of social section, Your Honor. Whose testimony were you saying? That was Madeline Partain's testimony. Who's Madeline Partain? She is one of the individuals who resides in Crawford County, Your Honor. And she admitted that she was just assuming someone would challenge the provision, and that's at Act 257. But regardless, even if there is standing, their challenge fails on the merits as well. Are you talking about Section 1 there? Section 5, Your Honor, the policy provision. I would like to ask about Section 1. I'm having trouble understanding why the librarians and bookstores don't have standing to challenge Section 1. Yes, Your Honor. Your brief seems to almost concede that point. We take the position that no plaintiffs have standing because they, and this is clear under the court's opinion in Christian Action League of Minnesota v. Freeman, when the obscenity provision is properly interpreted, it doesn't affect the books in their collection. They have not identified books that would fall within that provision to give them standing. But admittedly, it is a close question as to those plaintiffs, which is why we don't spend too much time discussing those plaintiffs in the brief and focus more on the other plaintiffs' lack of standing as to the obscenity provision, because it's admittedly a close call given standing is relaxed in the First Amendment context. So we try to just point the court to those portions of the record, showing that those plaintiffs' allegations we still think are too speculative because they don't provide the detail about the books. No evidence regarding the books is in the record. They don't introduce the books into the record or provide descriptions of the books or anything of that nature. And their testimony even states that they don't believe the books in their collection would fall within the obscenity provision's definition. Turning back to the policy provision. On that policy provision, you say there's an injunction in place to prevent the county from segregating books. I understand the injunction you're referring to is the one entered by Judge Holmes. Is that right? Yes, Your Honor. But does that injunction forbid the county from acting pursuant to Section 5? So pursuant to Section 5, the county is not allowed to discriminate based solely on viewpoint. So they would not be able to make those decisions for the same reasons. They would still be able to, in response to a challenge, if they review that material, review it in accordance with their selection criteria and assess whether they think it meets the selection criteria or not, and take action in response to that. But they would not be able to create a viewpoint discriminatory social section as they were alleged to have done in that case, Your Honor. But regardless, even if they do have standing, that provision fails on the merits. The policy provision simply imposes minimum requirements on public libraries, including that they have a written curation policy that they make public. Many of these libraries already had curation policies, it just requires that it be written and made public. And that they have a challenge process that complies with certain minimum procedural requirements. Again, many of these libraries already had challenge provisions, it just is requiring that they comply with certain procedural requirements. Because the policy provision regulates public libraries' curation decisions, it regulates government speech, which means it does not violate the Free Exercise Clause. The curation decisions satisfy every indicia of government speech, as a plurality of the Fifth Circuit recognized in Little v. Lono County. But even if public library curation decisions are not government speech, the policy provision still does not violate the First Amendment. For several reasons. First of all, the public libraries were already making content-based discriminations. That's in the nature of what they do. Deciding what books would be edifying or beneficial for the communities and serve their interests and which would not. All the policy provision does is impose minimal procedural requirements on how it is making those decisions to increase transparency and accountability. Second, even assuming plaintiffs had introduced evidence that a book would be challenged, a book that they wanted to read, and that that challenge would result in the library removing or relocating the book, they still have not proven a First Amendment violation. And that is because there is no First Amendment right to compel the government to provide plaintiffs' preferred books at taxpayer expense or to shelve them in a particular way. And that is made clear in this Court's cases in Penguin Random House v. Robbins, that the First Amendment does not guarantee the right to access books of one's own choosing at taxpayer expense, as well as this Court's opinion in Walls v. Sanders, that the right to receive information cannot be used to require the government to provide a message with which it is no longer willing to say. As well as Supreme Court cases, including Reagan v. Taxation with Representation. It therefore does not violate the First Amendment. The policy provision also does not violate the Due Process Clause. It does provide guidance to the library and local governing bodies to assess whether material is appropriate and in accordance with the selection criteria. And perfect clarity and precise guidance has never been... Do you mean that appropriateness is the equivalent of consistency with the selection criteria? Or are they two different factors? In assessing appropriateness under Section 13-2-106C7A, the library officials are supposed to assess whether it complies with the selection criteria. And the selection criteria talks about materials being age appropriate and things of that nature. So we think appropriate is to be interpreted in light of whether it complies with the library selection criteria. Does that mean it's the equivalent of inquiring whether the material complies with the selection criteria? Or does it go beyond that? We think it is tethered and tied to the selection criteria, Your Honor. So does that mean the two are equivalent? Yes, Your Honor. And regardless, even if appropriateness had a broader definition, it still does provide some guidance. Perfect clarity and precise guidance have never been required, even in the First Amendment context and even when criminal or civil penalties are involved. And that's not the case here for the policy provision. There are no criminal or civil penalties. As the Supreme Court recognized in National Endowment of the Arts v. Finley, that in this sort of context, even quote, undeniably opaque end quote terms aren't forbidden. Here, the consequences of imprecision are not constitutionally severe in this sort of context when the government is acting more in the role of patron. And you see that at page 589. On this question of appropriateness, does the record show any selection criteria that are in place? So the district court enjoined enforcement of the policy provision before it went into effect. However, as I mentioned earlier, libraries frequently already had selection criteria in place and some of the library's previous policies are in the record at RDoC 93-2 and RDoC 93-3. Are all of those policy provisions consistent with the statutory scheme as enacted? Or will they all have to be redrafted? Because when I was reading it, it looked to me like there was a direction that they revise and review and adopt the policy consistent. So when it comes to the selection criteria, I don't recall seeing anything that would need to be changed in light of the policy provision. However, I believe possibly some aspects of it related to the challenge procedure would need to change, Your Honor. Okay, thank you. Turning to the obscenity provision, plaintiff's challenge to that provision fails too. Even assuming they have standing, it's not overbroad or unconstitutionally vague. The obscenity provision prohibits a person knowing the character of the item involved to knowingly furnish to a minor an item that is harmful to minors. Counsel, do we have to apply the definition from Shipley when we're looking at what's harmful to minors? It needs to be interpreted consistently with the Shipley opinion. Because under Arkansas case law, the Arkansas Supreme Court does interpret provisions consistently with other provisions. But the plaintiffs misinterpret the Shipley decision, Your Honor. They focus on the court's discussion of the dissimilar provision, which was later held to be unconstitutional, rather than the discussion of a similar provision that was later held to be constitutional. So the dissimilar provision prohibited the display of material which is harmful to minors in such a way that minors, as a part of the invited general public, will be exposed to view such material. And it had a safe harbor provision that if a person had two-thirds of the material covered, not exposed to view, or had physically segregated that material, that they would not be held liable. And the Arkansas Supreme Court reasoned that in light of this safe harbor provision, requiring physical segregation, and in light of this invited general public language, that there that provision would be violated simply by shelving a book, and that whether material was harmful to minors had to be determined based on a younger minor. However, when it interpreted a provision that's more similar to what we have here, that made it unlawful to knowingly sell, furnish, distribute, allow to view, or otherwise disseminate to a minor any material which is harmful to minors, it reached an opposite conclusion. Despite the prohibition on allowing a minor to view harmful material, in light of the other verbs in that list, and the scienter requirement, the court reasoned that to violate that provision, a person needed to take an affirmative action to actively permit a minor to view the harmful materials, and that simply shelving it would not be enough. At the very least, it would have to be deliberately turning a blind eye to that activity, and it was targeted to a specific minor, meaning assessed whether it was obscene as to that particular minor, not minors as a class. The concurrence also helps explain this point, talking about when selling a book to a 10-year-old, for example, the question is whether it be harmful as to that 10-year-old, not to minors as a whole. Regardless, even if minors had to be considered as a class, as the U.S. Supreme Court recently explained, in Free Speech Coalition v. Paxton, it likely would need to be viewed from the perspective of an adolescent minor, because it's not really, and they say this in footnote 7, it's not clear it's coherent to talk about what would have a predominant tendency to appeal to a prurient interest in sex to minors when you're talking about a younger child. And that's one thing that plaintiffs overlook here, is the obscenity provision only prohibits material that is obscene to minors, so it has a lawful, and it has that three-pronged definition, and that has been upheld by the Supreme Court and several circuit courts as well. So it has a wholly lawful scope and is narrowly tailored, because minors have no First Amendment right to access material that is obscene to them. But as Free Speech Coalition v. Paxton makes clear, it's only subject to intermediate scrutiny, and it easily satisfies that because it is so targeted. And it's far narrower than the law at issue in cases on which plaintiffs rely, because they're citing to a lot of cases that ban speech to adults as well, or ban protected speech to minors, such as definitions that were broader than this narrow obscenity provision, or things like protected speech, such as violent video games. Unless the Court has further questions, I'd like to save the remainder of my time for rebuttal. Very well. Thank you. Excuse me. Mr. Adams, we'll hear from you. Good morning, Your Honors, and may it please the Court. This case is about whether the state of Arkansas can threaten librarians and booksellers and even parents with jail for merely making available a book that is harmful to minors. It's also about whether Crawford County can implement the state's policy of listening only to those that deem a book inappropriate and not those who would like a book to remain on the shelves of their local public library. I want to respond to a lot of what the state got into and field your questions. Starting, I think, quickly with... You might adjust the microphone so we can see. Thank you, Your Honor. The podium can be adjusted as well. There's a button on the right side if you want to raise it. Thank you, sir. Thank you. The state's arguments about the scope of Section 1 don't give full credence to what Judge Isley did 20 years before Act 372 in the Shipley case. It is good that the state points out that there were two sections at issue back then. There was a display provision and a sale provision, and it included sale and lending. It essentially covers both our librarian and bookseller clients. That case, in fact, relied on a very common sense distinction between putting a book on a shelf and not excluding minors from the facility. And a one-on-one, what the state describes as targeting with obscenity transaction, when a librarian or a bookseller puts a book in the hand of a minor that is unsuitable for that minor. These are very different things. And the display provision in the original statute covered up a broad range of action and for that reason was held unconstitutional. The kind of age discrimination in the positive sense that a librarian could do from the Shipley dissent at the Arkansas Supreme Court that the state is relying on from back in 2004 is only possible with the second kind of prohibition on sale or lending. When you are talking about displaying a material, or in the case of the new act, merely making it available by putting it on a shelf, there is no way, besides excluding all minors, to know whether it is an 11-year-old minor, in the case of the youngest library patron that is allowed to be there unsupervised, or a 17-year-old patron that is pulling that book down off the shelf. So the entire concept of making a truly variable determination about whether an item is suitable for a minor only makes sense in the context of that second kind of prohibition on sale. Are you saying that the state has no ability to protect 6-year-olds from obscene materials because something might be suitable for a 17-year-old? No, I think the state has clearly a compelling interest in protecting a 6-year-old and lots of constitutionally permissible statutes that might go about doing that. In fact, all of the examples of the plainly legitimate sweep that the state wants to cite as justifying this new statute were already banned under the prior statute, as she said, the sale provision that was upheld. Any time a person wants to put a book in the hands of a 6-year-old that is sexually explicit for that 6-year-old, that has been illegal in Arkansas for over 20 years and Act 372 didn't add or remove from that. Did the district court even conduct a proper over-breath analysis? I don't see anything in the order where they identified all the applications of the law in order to determine whether the unconstitutional applications were way more than the constitutional applications. I don't even see that analysis in the order. I take your question, but I don't think this order has a net choice problem for the following reason. The district court found that all of what Act 372 added to what was already illegal in Arkansas was an over-broad statement. So to the extent that what Act 372 was trying to do was go back and re-litigate Shipley by essentially saying Arkansas is not banning just giving a minor something that's unsuitable for that minor in a one-to-one transaction, but making merely shelving it, displaying it, making it available, I think is even broader than displaying because it doesn't have any kind of restriction on what's within the book. It doesn't have any restriction on applying it to only what's on the outside of the book or what's visible. It includes the interior contents of the book. So it's quite a bit broader. So I think the judge was well within his rights under the net choice framework to find that everything added by Act 372, Section 1, was an unconstitutional addition to the prior Arkansas harmful to minors statute. The other thing I think the state... What about the over-breadth analysis? How would you describe the over-breadth problem here? For Section 1 or Section 5? Section 1. Well, I think it was easy for the district court in that sense because all of the plain and legitimate sweep, the denominator, so to speak, falls away because it was already illegal. The state wants to essentially gain that proportionality. You're saying there's no part of 372 that added anything permissible in your view? That's how the district court talked about it, and that's what I think happened. And I think if you study the verbs, as the state points out, and compare the verbs in the 2003 statute to the verbs in the 2023 statute, essentially what happened was the more passive verbs like display and make available and the more active verbs like send, show, lend, sell were run together. And the state wants the benefit of the deference given to the targeting one-on-one transactions for what get analyzed in all the prior cases in a very different way because of the burden on plainly constitutional distribution of material, both to older minors and adults. When a bookstore has to worry about an 11-year-old finding Lady Chatterley's Lover on the shelf, that's a book that many of us are going to find unsuitable for minors. That brings up another problem. The state likes to say this is not a problem because any book with scientific literary value is going to have that value for minors. But that totally understands how the third prong of Miller-Ginzburg came about. It came about because judges were looking at books like Lady Chatterley's Lover and saying, well, this has descriptions of sex, which don't make some of us blush, but it also talks about class and gender relations in a way that has import, legitimate literary import to lots of grown-ups. Just because that book has value to a grown-up doesn't mean it's going to have value to an 11-year-old that might be capable of reading the words. So the scope of these harmful-to-minors statutes has always been understood by judges to be necessarily variable in a way that precludes sloppy application with passive verbs. And also to just cover a lot more material than what's Miller test obscene. The state calls this the obscenity provision, and obviously it is variable obscenity. But nobody that looks at this doesn't think that there's a lot of material that my 9- or 12-year-old daughter is not quite ready to read yet. So with the court's permission, I'd like to turn to Section 5, because I think there may be lots of questions about that as well. I want to make sure I can answer them to the best of my ability. I'd like to have you explain how that section harmed your clients. It seems rather speculative to me. We didn't have the benefit of the LH decision when we started this case and the library plaintiffs came to us. But we did have the benefit of a general understanding of how federal judges think about Article III and prudential standing. So we challenged the plaintiffs to say, these judges might want to know who it is you think is going to challenge the books, what books they're going to challenge, what process they're going to go through at the library. They answered all my questions quite explicitly. If you look at the record, it's simply not true that they don't know who's going to challenge. The fact that the mature minor couldn't identify the likely challengers doesn't mean that much. The grown-ups knew. There was an identified group of people that, if you read the Verden decision, are quite plainly identified. And everybody in Crawford County knew who they were. The two adult Crawford counties knew who they were. They had a list of books, 20 books, that they wanted taken out, including Uncle Bobby's Wedding, which I can come back to in a minute because it's in the federal reports. So you guys can go look at it yourselves if you'd like to, Your Honors. They had a process those challengers went through which was strikingly similar to what Section V would set up. First, they went to the librarian and said, please take these books out. We think they're inappropriate, using those words. They went to the library board. At that point, that was the governing authority. The library board said, no, we think those books are appropriate or consistent with our criteria of selection. Then they went to the county quorum court. The county quorum court threatened to defund the library and the library backed down. Now, we heard at deposition all of that detail from not just our plaintiffs but from the county judge who admitted that he hadn't reviewed the books. He just understood they were obscene. We put the copy of Uncle Bobby's Wedding in front of him and he said, well, I guess it's not obscene, but I hadn't looked at it. It's important to realize that Section V, again, graphs on to an existing set of practices. It's not just some libraries that have criteria of selection. All of the libraries that we're familiar with, that you can see extensive records of if you read our summary judgment briefs, they all have criteria of selection now. They also all have challenge provisions. The way that works in every library in Arkansas that I'm familiar with is you can file a form. You can describe why you think a book is inconsistent with what the library's stated criteria are. That gets heard by librarians. Then it goes to the library board. Counselor, you're describing a process. How is this injury informed? Because the viewpoint discrimination that the Verden case describes was ongoing at the time Act 372 was passed, was ongoing at the time Act 372 was going to go into effect, was documented by that district court, and it was very specifically going to be ratcheted up in a letter put in the record by the Crawford County's own attorney who said, we're going to keep doing what we were doing, which we perceive to be important to protect minors, and the court found it to be a pretext for viewpoint discrimination. It's going to be ratcheted up even more. We're not just going to take the books out of the adult section. We're going to make them inaccessible to minors and connected the ongoing activity to viewpoint discriminate in Crawford County to the impending and imminent implementation of Act 372. Again, the story that these plaintiffs told me when they came really addressed all the sort of concerns that the court's talking about. In the L.H. case, I think we can concede to the state that in most book challenge cases, this is not going to happen. This was an unusual set of events that made this an imminent event in Crawford County. But Crawford County's judge, its court and its lawyer tied these two things together in a very real way. The other thing I want to talk about is Penguin Random House. Who do you say would be injured by what you say is an impending action by Crawford County? Just as the district court found, the three Crawford County library plaintiffs would be injured if Section 5 went into effect. Libraries as entities? No, the three Crawford County plaintiffs are library patrons. You called them library plaintiffs. Oh, sorry, library plaintiff patrons. I understood, patrons. Those are three people, if you look in the records. Yeah, I understand. Mielle Partain, her daughter Madeline, and then Lita Kaplinger. Now, the other part of this that I think really is relevant to the state's discussion of Penguin Random House. All of the procedural protections that Section 5 add exist inside the libraries. There is a hearing if somebody complains about a book's existence inside a library. Again, that maps very neatly on to what is happening in Arkansas every time someone challenges a book prior to Act 372 and now with it being enjoined. The primary thing Act 372 adds is essentially a one-way ratchet. You can't complain about a book being taken out. You can only complain about a book being added. You go up the stage from the library staff to a committee of librarians to the quorum court. When you do that final step to the city board or the quorum court, all of what they're talking about falls away. That board had no part in the creation of the library policy, which under Arkansas Constitution is a duty given to the library boards. Local communities set up property tax and that money is dedicated to public libraries, a specific purpose, and to library boards, which again report to the city or county but are not identical to the city or county. So that's what's been going on before. What this does is adds graphs on a new process where the county quorum court or the city board has to receive a complaint about a book. It can't receive a complaint about a book being taken out based on its viewpoint discrimination. It can only receive a complaint that a book needs to be taken out. And it doesn't have to look at the criteria of selection. Again, they weren't involved in the creation of the criteria of selection. We're within 30 days. They don't have to look at the material at all. They don't have to create any kind of record. So the point is Act 372, Section 5 takes what was otherwise a fairly comprehensible due process that people go through to help figure out which books should be in their local public libraries and turns it into a kind of one-way ratchet that gives censorious parts of the local population power that my clients don't have as someone that wanted some of these books in there. All three of them testified that they had and would continue to take part in advocating for the presence of books that they wanted in the library, like Uncle Bobby's Wedding, but would be denied the opportunity to do that because of the way Act 372 is structured. So even if the court disagrees with our primary argument that there is an access to information issue here and follows the Llano County case, at least the three judges in the middle that didn't adopt the government speech argument but also found there was no right to access information there, Section 5 is a really bad test case for that because it's not really geared to generate fair results. It's geared to just give the loudest members of a local population a kind of heckler's veto. Are you saying there's some kind of constitutional right under the First Amendment or Fourteenth Amendment to control the review process of public libraries? I think there are due process constraints. Anytime the government sets up a subsidy for private speech this way, that you can read in cases like Rosenberger v. Rector or Velazquez v. Legal Services Corporation, that means that even though we're admittedly precluded from making public forum arguments about the nature of a book collection, that there is an important First Amendment and due process element to how these challenges go. The state shouldn't essentially codify a heckler's veto to the loudest elements of a local population that forces public officials like Judge Keith in this case to have to respond to claims that a material is obscene when he's not really in a position to make a judgment about whether the material is obscene until we get him into deposition and he finally looks at the book. So you're saying it's not a First Amendment problem, it's a due process problem? Well, it's a process aspect of the First and Fourteenth Amendment rights that people have in certain contexts when the government subsidizes private speech. So you want the First Amendment or the due process clause? Well, it's both, Your Honor, in the sense that I think the First Amendment has process limitations that it places in certain kind of situations, like I mentioned the Rosenberger v. Rector case. So in that case, the University of Virginia didn't have to create that program to subsidize private journals, right? There's nothing in the First Amendment that says they've got to pay the printing costs for student magazines. But once they do that, there are process limitations on the rules they can set up for how students apply. And setting up a vague standard about, well, your journal can't be about ultimate religious things, simply... What if there were no statute and the library just had a process where they decided what books they thought were appropriate for the library and which ones weren't, and that's how they made their collection? Would somebody have a right to challenge the way the library's creating their collection? Not in the absence of some evidence of viewpoint discrimination. So again, I think I would go back to the Wide Awake case and say students at the University of Virginia don't have a freestanding right to complain about the way that the university was handing out printing subsidies. But once the university creates that right, starts subsidizing private speech, there are limits to what lines the government can use to decide what speech to subsidize and which speech not to. And Section 5 is a fairly blatant attempt, as the judge found and I think we saw in Crawford County, to set up an unconstitutional one-way ratchet to have books taken out, and it really flies in the face of any sense that they were trying to curate. Now would that...flies in the face of... Well, let's... Why wouldn't it be curation? Let me just say one quick thing about the government speech argument. Llano County's lawyer in the Fifth Circuit had a really clear answer when he was asked, who is the government speaker? It was the Llano County chief librarian. The state can't answer that question here. Because Section 5 sets up a weird process where they're saying, the library staff sets up some criteria of selection, which they've already done in every case in Arkansas. Again, they're just describing the standard state of affairs libraries go through. Then something totally different happens. What used to go to the library board, which has the authority under the Arkansas Constitution to spend book money, now goes to a separate body of the government, which doesn't have to consider that criteria of selection. So who's the government speaker? Is it the staff, the library board that used to have the ultimate authority, or the county judge in the quorum court that just got injected into this process in a way that the judge found, I think, reasonably based on what was going on in Crawford County, is a thinly veiled attempt to pull controversial material out of Arkansas public libraries. What's that had to do with the government speech point? It means that... Are you saying there's no speaker? Yes, I'm saying they can't identify the actual speaker. Even if this court were inclined to follow those 7 of 17 judges in the Fifth Circuit and find these to be government speech decisions, Section 5 of Act 372 is a spectacularly bad vehicle to vindicate that principle. Because it's exactly the sort of garbled mess that people worried about when you talked about putting books in a public library, because who's ultimately responsible for the Section 5 process? We sued Judge Keith because he adds the plainly unconstitutional elements to what was going on in Arkansas before Act 372. All right. Thank you for your argument. We'll hear Rebella. I'd like to respond to a few of the things that he said. First of all, towards the end, he talked about the policy provision in public libraries as though there are programs to subsidize private speech, referring to cases involving universities. But that's not the case. Public libraries, if anything, are subsidizing the reading, not the speech. As the Supreme Court said in United States v. American Library Association, a public library does not acquire Internet terminals to create a public forum for web publishers to express themselves any more than it collects books in order to provide a public forum for the authors of books to speak. So that's not what it is doing here. And as explained, plaintiffs don't have a right to compel the government to provide books that they wish to read at taxpayer expense, as this Court's opinion in Penguin Random House v. Robbins makes clear. Now, if it is done in some sort of way with different facts, there might be some sort of equal protection claim or something else there, but there's not a First Amendment problem and there's not a due process problem, which is also clear from the Supreme Court's case in National Endowment for the Arts v. Finley that I discussed earlier. To move back to the beginning of his argument, he began by referencing a parental rights claim. They did not bring a parental rights claim here, nor did they bring an as-applied challenge. They only brought a facial challenge, and they can't point to a single, realistic, not fanciful, unlawful application, much less the lopsided ratio that would be required to prevail. Turning to Shipley, he tries to portray the similar provision as a sale provision, but that's not accurate. It also included the term allowed to view, and yet the court read that term narrowly in light of the other verbs, and the court should do the same here, based not only on Shipley, but also on the Supreme Court's opinion in United States v. Williams, where it looked at a string of operative words and took those to narrow the two words that were challenged and to interpret them more narrowly. Of course, there's also the constitutional avoidance candidate play, as well as Arkansas statutory construction principles that require criminal statutes to be interpreted narrowly. Plaintiffs also continue to ignore the scienter requirement that requires a person can only be prosecuted if they knew the character of the item involved and knowingly furnished it to a minor. And that item also has to be viewed as a whole, meeting that three-prong definition, something they continue to gloss over. At one point, plaintiffs also suggested that the lawful scope is exactly the same as a provision that was already at issue, but that is not accurate. The items covered in this obscenity provision is broader than the materials covered in the other provision. The items are defined in Arkansas Code Section 5-27-212-4A, and it includes things like performances and things of that nature that were not covered by the other provision that they referenced. And there's also different criminal penalties involved, so it is not the same. And again, they still haven't pointed to one unlawful application, much less the lopsided ratio. And that gets back to, it is a rare case where a party can prove a facial challenge and that it is not a case that it should be challenged as applied. And they have failed to carry that burden here. In Holder v. Humanitarian Law Project, the Supreme Court explained that there, the plaintiffs had failed to show that activities described at such a level of generality will constitute prohibited services under the statute and that it would require sheer speculation, which meant that plaintiffs cannot prevail in their pre-enforcement facial challenge. The same is true here. They don't provide descriptions of the books, they don't provide the books themselves, anything of that nature, and they still have not proven a single unlawful application, much less the lopsided ratio that would be required to prevail here. Therefore, all of these reasons and the reasons explained in the brief, we ask the court to reverse, and that judgment should be entered for defendants. If the court has no further questions. Very well. Thank you for your argument. Thank you to both counsel. The case is submitted, and the court will file a decision in due course."
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"stt_transcript": "The second argument is Case 25-2211 Western Arkansas Fayetteville Public Library et al. v. Todd Murray et al. 25-2427 Western Arkansas Fayetteville Public Library et al. v. Crawford County, Arkansas et al. 25-2427 Western Arkansas Fayetteville Public Library et al. You may proceed. Chief Judge Colleton, it may please the Court, I am sharing my time with Crawford County and will leave three minutes for their argument. Fee shifting is not a blank check. Here, the District Court awarded plaintiffs nearly half a million dollars in attorney's fees, only after overlooking Rule 54's mandatory deadline, never discussing this Court's controlling decision in Spirit Lake, approving above-market rates, and accepting hours that were not reasonably expended. Those errors exceeded the bounds of discretion, and this Court should reverse or substantially reduce the award. I will begin with Spirit Lake, as Rule 54's application eliminates more than $200,000 of fees incurred through the preliminary injunction stage. Lackey, which was published in the middle of attorney's fees briefing, concerns prevailing party status under Section 1988, not Rule 54's timing requirements, definition of judgment, or notice-giving function. Spirit Lake was clear that regardless of whether the preliminary injunction order ever became one that entitled plaintiffs to fees, they still had to move within 14 days after entry of the preliminary injunction order, based on the plain text of Rule 54, which, as this Court recognized in Spirit Lake, serves the important notice-giving function recognized in Spirit Lake. Nothing in Lackey attacks that logic, a point plaintiffs conceded below at Docket 154-2. Plaintiff's argument here recycles the theory pressed by Spirit Lake plaintiffs, who argued that they were not a prevailing party and thus had no obligation to move for fees. But here the preliminary injunction ripened into one that conferred prevailing party status when the Court entered a preliminary injunction. Lackey arose in a dispositively different procedural posture, and plaintiffs don't face any of the mootness issues that deprived them from obtaining relief on the merits. And even if a fee motion were premature on the merits, prematurity does not suspend Rule 54's plain text obligation, which a district court recently recognized, observing that Spirit Lake was fundamentally grounded in the text of Rule 54, rather than the existence of prevailing party status. And just like the district court did not think about or even mention Spirit Lake in making its argument, the district court's lodestar analysis did not even review things like redacted time entries. It approved time for attorneys failing to file documents. And it did not provide an explanation for why it departed from its reasoning as to rates and reasonable fees as it had done in prior cases. We're merely asking, at minimum, that the court show its work as it has in other cases. At the very least, the fee award must be reduced as it exceeds prevailing market rates and includes unnecessarily expended hours. I would like to point the court to the district court's own analysis. We need not look further. The court previously refused to grant rates in similar cases for attorneys with more than 40 years of experience and awarded rates here to five attorneys without similar finding of such experience. As to several of these attorneys, there's no evidence of them having litigated a First Amendment case. But attorneys' lack of relevant experience in similar litigation is a fact the district court itself found relevant in other cases, like human rights defense in 2023. Curiously, the district court here failed to show why this case justified departing from its previous approach in First Amendment cases. And that's also true as to hours. A reasonable fee is one that is adequate to attract competent counsel. Yet the overstaffing here mirrors a case where the district court slashed more than 500 hours from another nine attorney and four paralegal requests. Mindful of the county's time, I reserve my remaining time for rebuttal. Mindful of the county's time. What did you say about the mindfulness of the county's time? Your Honor, I'm splitting my time with the county. The county has three minutes for argument. Is this their three minutes? No. Is this the county's three minutes, or is that three more minutes for her? That is the county's three minutes. She has three minutes and 16 seconds of total argument time, or rebuttal time left. In addition to the county's three minutes? Yes. Correct. All right. Understood. Thank you. We'll hear from the county for three minutes. You may proceed, Mr. Stobaugh. Thank you, Your Honor. You may adjust that podium if you wish. I think that's all the travel it has, unfortunately. May it please the court, I'm Forrest Stobaugh representing the Crawford County Appellants. The LUD STAR is being addressed by Ms. Krause, so I'm not going to jump into it unless the court has questions for me about it. I'm going to dive right into why Crawford County should not be jointly and severally liable for the attorney's fees awarded in this case. Specifically, the district court's fee award should be reversed for two primary reasons that sort of have some overlap. First, the district court awarded fees that did not prevail over Crawford County because they either lacked standing or asserted no claims against the county. And second, the district court abused its discretion when it refused to apportion fees between the county and the other defendants in the case. The legal issues associated with the fee award should be reviewed de novo, while the actual dollars and cents should be reviewed for abuse of discretion. Moving into my first point, Your Honor, is the most egregious example I can point to are the fees awarded to what is termed in the briefing as the bookseller plaintiffs. This group of plaintiffs did not bring any claims against Crawford County, nor do I think they could have the way they were positioned. Yet the district court awarded them nearly $120,000 in fees out of a total award of almost half a million dollars. You know, the overarching dogma of awarding fees is that the fee award must be reasonable. And I would submit it's per se unreasonable to hold a defendant jointly and severally liable for fees from a plaintiff that never actually sued it. And it would just seem to be axiomatic that a party can't prevail over a defendant when it doesn't bring a claim. And, Your Honor, this is just one example of the prevailing party and standing issues in the case. We've heard already that only three of the actual plaintiffs reside in Crawford County, interact with the county library. What about the Carhartt opinion from our court? You're familiar with that? I am familiar with that case, Your Honor. And I do think that from a macro level, this is different because we have plaintiffs here who cannot obtain an enforceable judgment against the county. They cannot prevail. There are other libraries that are similarly situated. The U.S. Supreme Court has told us you cannot enjoin the world. My judgment is no good to them. It does not alter their relationship with my county. So they cannot prevail. And how is that different from the Carhartt case? Your Honor, I believe it's different. I think that in the Carhartt case that those plaintiffs had a closer relationship with the plaintiffs, or the defendants in that matter. And their injuries were more concrete as opposed to here where someone out there in the ether is just suing my county because they want to enjoin the law itself, which the Supreme Court has told us is not allowable. And, Your Honor, I see I've run out of time. I'll briefly conclude unless there are no further questions. Crawford County did not draft Act 372, did not vote on it, did not endorse it, write it into law, did not defend the merits of it below. As you can see, we didn't defend the merits of it here today. Another litigant did. The district court should have apportioned fees accordingly with an eye on standing, prevailing party status, and degree of culpability. The fee award should be reversed. Thank you. All right. Thank you for your argument. Ms. Parker, we'll hear from you. Thank you, Your Honor. Rebecca Hughes-Parker for the appellees. May it please the Court. You just heard appellants ask this Court to cut a carefully considered fee decision by almost 90%. That harsh result would thwart the purpose of Section 1988, a remedial statute. Plaintiffs here, as you know, challenged two unconstitutional provisions of state law, prevailed completely at every stage, and exercised billing judgment, reducing their request by hundreds of hours before submitting it to the district court. Does that assume, counsel, that you get beyond Spirit Lake Tribe? Yes, Your Honor. I can move to that. Our fee motion was timely here under the current landscape, as Judge Brooks found. The appellant's argument here is a gotcha argument to try to force, again, a harsh result based on a procedural technicality that, after Lackey, serves no purpose anymore. Because Lackey held that a preliminary injunction can never confer prevailing party status anymore as of February 2025, when this case was still active. So, yes, Your Honor, we contend that. How would we justify disregarding Spirit Lake? As I recall the opinion, it didn't say that fees were awarded because there was a prevailing party. I mean that the motion was required, the deadline was imposed because there was a prevailing party. It was based on the rule. Yes, Your Honor. It was based on Rule 54's requirement of a fee motion 14 days after a judgment. But the judgment... Which is defined, as I recall, in the rule, right? Yes. However, the legal landscape that Spirit Lake relied on at that time is not the same anymore. Rule 54 requires that the motion specify the judgment and the statute rule or other grounds entitling the movement to an award in 54D2B2. After Lackey, there is no prevailing party status as per Section 1988 to rely on. There is no entitlement to an award after a preliminary injunction anymore. So that part of the legal landscape that existed at the time of Spirit Lake just does not exist anymore. Spirit Lake said that in some cases, a preliminary injunction can ripen into making a party a prevailing party for purposes of 1988. However, that is not the case anymore. The Supreme Court of the United States was very clear in Lackey that simply winning a preliminary injunction motion does not confer prevailing party status. It does not conclusively change the legal relationship of the parties. There's no judicially sanctioned change. It's very clear, as Judge Brooks found, Your Honor. So further, I'd like to make the point to address some of what Appellant said. That here, the District Court was well within its discretion to award the fees. It is the job of the District Court to look at and scrutinize the factual record and make factual findings, which is what the District Court did here. There was clearly no abuse of discretion in awarding the hours and fees for a case that plaintiffs efficiently litigated. As one case could have been more than one case, but conserving judicial resources, the plaintiffs coordinated, as the District Court found in litigating this case, litigating it heavily against especially Crawford County, which was not a passive defendant, as was the case in Carhartt, which Your Honors referenced earlier. Again, we self-edited the hours before they were submitted, which the District Court recognized. And finally, the joint and several liability ruling that the District Court made here was also well within its discretion. That is the general rule for a case like this with more than one defendant. No matter, even if you don't prevail on every contention, which we did here, the general rule is joint and several liability for the defendants to apportion it among themselves. Perhaps they have a claim against each other, but the District Court followed that rule, as it has in many other cases where there is more than one defendant, even in cases where there was not total victory, as here there clearly was after the permanent injunction. And finally, I'd like to say that this case fulfills the purpose of Section 1988, which exists because Congress decided that when state actors violate constitutional rights, the financial burden should not rest on the violators, but instead on the citizens who were forced to vindicate their freedoms. And here, these laws affected many plaintiffs. There were 19 plaintiffs in this case. And the losing party here, the appellants, should be paying the fees that the District Court correctly assessed within its discretion, where it has broad discretion, which many cases have held. This is the job of the District Court to look at the factual findings and make a reasoned decision, which here the District Court clearly did, looking at our reduced hours and making further targeted reductions. So unless your honors have further questions, I would urge you to affirm the District Court's decision, both on timeliness and on the hours. Very well. Thank you for your hearing. Thank you. We'll hear Rebella. Two quick points. Their self-edited argument boils down to, it could have been worse. We could have billed more. But that's not their, and that also goes to the fact that they excluded improper time that was a baseline billing requirement under this Court's decision in Gruttmeier 31 F. 4th, where this Court has said purely clerical tasks should not be billed. That goes to duplicative time as well. Under their theory, plaintiffs would be incentivized to splinter themselves, one attorney representing one plaintiff, to each seek a full unreduced bill, which would force public officials into settlements based on artificially inflated fees. And lodestar principles exist specifically to prevent windfalls, and the District Court's award here departed from those guideposts at the expense of the taxpayer. Indeed, Fox v. Vice, the Supreme Court said, Section 1988 was never intended to produce windfalls for parties. Accordingly, the Court should reverse the award or vacate and remand. Thank you. Very well. Thank you. Thank you to all counsel. The case is submitted, and the Court will file a decision in due course."
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"stt_transcript": "The third argument is Case 25-2632, Eastern Arkansas, Joseph Falasco v. USAA Casualty Insurance Company. All right, Mr. Quattlebaum, we'll hear from you first. Thank you. May it please the Court. My name is Steve Quattlebaum and I represent Appellant Joseph Falasco. We appeal from the order of the trial court granting summary judgment on the claim of bad faith and seek remand for further proceedings and trial. The standard of review for an order granting summary judgment is de novo. First, let us consider the applicable law which can be stated succinctly. If a company engages in dishonest, oppressive, or malicious conduct in order to avoid a just obligation to the insured, it is bad faith. Each type of conduct can support a claim of bad faith. Further, bad faith may be inferred from the conduct and the surrounding circumstances. The Court must view all facts and make all reasonable inferences in favor of the non-moving party in evaluating whether genuine issues of material facts support the claim of bad faith that exists in the record. Finally, deciding between bad judgment and bad faith is a material fact question for the jury. The error of the trial court below is evident in five steps. There were affirmative acts of bad faith by USAA. Unquestionably, there were many misrepresentations of material facts. Judge Miller noted that in his opinion. He said that the record was riddled with misrepresentations. As such, there are necessarily genuine issues of material fact. Were the misrepresentations intentional and thus dishonest? Or were they innocent mistakes as USAA claims? Were they off-the-cuff remarks or strategic leveraging of the insured? These questions are genuine issues of material fact. The questions of intent and motive must be left to the jury and cannot be made by the Court on summary judgment. The inferences must be viewed in favor of the non-moving party. The fifth step, no authority under the law of Arkansas holds that reliance by an insurance company on a third-party valuation immunizes the company from the claim of bad faith arising from affirmative misconduct. Not Tillman, not Sims, not any case in Arkansas stands for that proposition. The law should not and does not provide a blanket per se defense and therein lies the error. Under Tillman and Sims, there was no affirmative misconduct. Here, the Court found affirmative misconduct. It found misrepresentations, but it excuses the affirmative misconduct on the notion that somehow relying on a third party for evaluation gives immunity to the insurance company for its own bad faith conduct. Do you think that's what the Court really did? Or do you think the Court was just saying that whatever misrepresentation occurred here was not in fact dishonest or malicious or oppressive and that it didn't meet the scienter requirement under Arkansas law? I mean, because I think that's how I read it, is that there were negligent misrepresentations and negligent misrepresentations are just that, negligent or even grossly negligent, but they're not dishonest. And so that's the point that I thought I saw there, but maybe I was reading too much into it. Well, I appreciate the question, Judge Erickson, because that requires a weighing of those misrepresentations. It requires the Court to look into the mind of Ms. Adams, for example, and determine when she said that there was an appraisal provision in the policy and it required the insured at the insured's expense to go get an appraisal to challenge their valuation, was that a negligent statement? Was it an intentional misrepresentation in order to have a strategic advantage? That is a question of fact. I follow that, but the problem is the scienter requires, under Arkansas laws, I understand it, some intent to do harm or some truly oppressive or outrageous intent. No, I disagree. Yes, I think you are wrong. If you look at the model jury instruction, it provides a clear explanation. Right. I understand that, but our problem is as I look at it, our precedence, we look mostly at case law as opposed to the model jury instruction. We may look at our case law and the Arkansas Supreme Court case law and have a different view of that, which is not what I was looking at. I understand that the jury instruction says what it says, but is that the governing law as opposed to what the Arkansas Supreme Court said? Okay, set aside the jury instruction. Look at EDGIN, E-D-G-I-N, cited in our case is the Arkansas Appellate Court, where the court made it perfectly clear that it is dishonest, oppressive, or malicious, and then what the jury instruction helps us with is they take out the word malicious and they insert hatred, ill will, spirit of revenge, because that's the definition of malicious, which applies to if there was malice, but dishonesty doesn't require that, and that's the confusion that arises. There's a lot of cases under Arkansas law where that statement of there must be a spirit of ill will, there must be a hatred or revenge spirit is included in the language, but it does not modify dishonesty. If the insurance company is affirmatively dishonest in its dealings with the insured, it is committing bad faith. Well, counsel, couldn't the jury infer malice from dishonesty as well? Oh, of course, it could be inferred if it needed to be, but if the jury finds that the statement was dishonest, that is that it was not just wrong, but wrong for a reason, it was either the intent of the insurance company to fool the insured or the intent of the insurance company to leverage to get a better deal on its settlement. If that is the case, that is bad faith, but those are questions to be left to the jury. The judge either apparently said the dishonesty that I find riddled through this record is not dishonest, it's a mistake, and then the court has invaded the province of the jury, or the court said, yes, but under Tillman and Sims, if you rely upon a third-party evaluator, you're excused from your mistakes. You're excused from your dishonesty. You're excused from your affirmative misconduct. That's not the law. There is no case that says that, and it can't be, and shouldn't be. We shouldn't give an insurance company a license to go hire a third-party evaluation and then say, I can lie, I can make dishonest statements, I can engage in bad faith conduct, I can attempt to impress because now I have a blanket defense, and there's nothing in Arkansas law that says if there's a reliance on a third-party, you are then forgiven, you have a license to engage in bad conduct. And that's what we're left with in this case, if you take the point that there was dishonesty. So let me run through a list, and taking everything in the light most favorable to Mr. Felasco, which has to be done, let's look at the affirmative dishonesty. They said the policy required an appraisal. Not true. In fact, contrary to Arkansas law, said the appraisal had to be at the insurance expense. Not true. Not according to Arkansas law. Ms. Adams said that she wasn't even looking at the policy, but then if you look at her notes, she was actually reviewing the policy. Mr. Felasco asked for a copy of the policy. She said she couldn't provide it because she didn't have it. But if you look at her notes, she's reviewing it. That's dishonest. Why was she doing that? Because if she revealed it, she would reveal that there was no such provision in the policy. She denied the ability to provide it. Stated, you're under investigation for arson and fraud, which they now claim in their brief, oh, that was just a fire investigation. But the record at JA 543, Mr. Felasco said they told him he was under investigation for arson and fraud. Why? There was no good faith basis for arson and fraud. Was it to leverage, or was it not to leverage? The question of will you provide the undisputed amount, the answer was under arbitration law, you have to engage in a settlement to get the undisputed amount. That was just wholly made up, manufactured. There is no arbitration law that's applicable to this, and they can't cite anything. In their brief, they refer to that as an off-the-cuff statement. It's a dishonest statement. It's wrong, and was it wrong intentionally because they were trying to leverage Mr. Felasco into accepting an undisputed amount as a full and final settlement, or was it wrong just because the person made a mistake? That's a question for the jury. Here, the court resolved all those questions against Mr. Felasco, or provided a license to engage in dishonesty because they relied on a third-party evaluation. Same thing on the question about comparables. Mr. Felasco provided comparables that he thought were more appropriate. They said those are unavailable, can't be viewed because you got them off of a website called Bring a Trailer. But there is no evidence that the third-party evaluator said that, and then after the lawsuit was filed, it was their expert, their arbitrator, I mean their appraiser, who went to Bring a Trailer. So clearly, that was again either a mistake or it was a lie, and that's a question to be left for the jury. This case is different, and I see that I'm getting into my rebuttal time, but this case is different from Tillman and Sims. It's different from the other cases that are cited. It's different from Unum, entirely different from Unum, but because of the affirmative misconduct. An affirmance of this case will give insurance companies a blanket defense that if they're relying on a third-party, regardless of whether it's accurate or not, they have a defense to then go forward and engage in dishonesty. And I think that's the problem with this case. That's why we're here today. Thank you, Your Honor. Very well. Thank you for your argument. Mr. Eccleberry, we'll hear from you. Good morning, Your Honors. Thank you. May it please the Court, Roger Eccleberry for Appellant USA Casualty Insurance Company. Your Honor, I'll first address the standard, as Judge Erickson stated. Arkansas jury instructions in a Western District of Arkansas decision and a single Arkansas appellate decision do not override this circuit's precedent or the Arkansas Supreme Court's precedent. The standard is rigorous, and the dishonest, malicious, or oppressive conduct must be carried out with a state of mind characterized by hatred, ill will, or a spirit of revenge. That is not present in this case. The USAA appellant has never made the argument, and the District Court did not hold, that reliance upon a third party absolves all conduct. It's conflating issues. Reliance on third party for the value, even if that value is wrong, is not bad faith. My understanding is that the duty of good faith is non-delicable. Isn't that what is happening here? No, Your Honor. There's no evidence that CCC, which is the vendor we're talking about, or USAA believe that there was anything wrong with the comparable vehicles used to determine the value. One of them was not even running. There's no evidence that that was known to CCC or USAA at the time the initial valuation was made. Well, it wasn't known to them because they delegated that duty to a third party. No, I'm sorry. I'm following, Your Honor. I'm saying that there's no evidence that the third party was aware at the time of the valuation because, as Appellant pointed out, the CCC report, the valuation report, did not include the advertisement. They list the vehicles. They don't have copies of the advertisements. And I'll point out, Your Honor, that the document that plaintiff relies on, excuse me, Appellant relies on for that valuation that says it's not running is Joint Appendix 090. There's a date on that document, Your Honor, and that date is October 3rd, 2023. That's four days after the case was filed. That also corresponds with JA 0088-89, which is an October 3 email from Appellant to USAA stating that that vehicle is not running. There's no record evidence that the advertisement, which is JA 0940, was ever provided to USAA prior to discovery. So during the claims administration, it was never provided. Now, in response to summary judgment, Appellant attached an affidavit stating that he informed the adjuster at some point over the telephone that one of the comps wasn't running, even assuming that's true. Again, there's no record evidence of anything before October 3rd, four days after the suit was filed. But even assuming that they were told over the phone, there's no evidence that USAA just blindly accepted CCC's valuation. Appellant submitted his own comparables, and those were sent to the dispute team for evaluation. CCC will not accept, and this is documented in the adjuster's notes, the dispute team said CCC will not accept comparable vehicles from the auction site, bring a trailer. Now, counsel just stated that there's no evidence that that was ever discussed with CCC. Two points. First, USAA's corporate representative testified that USAA uses CCC exclusively to value cars. So they've seen CCC reviews and disputes before. It's not unreasonable that they would have known from past experience that CCC doesn't inspect them. CCC-1, this was unrefuted, is the leading car valuation vendor in the country. Sixty percent of the industry uses this. It's in use in all 50 states. It's been approved by numerous regulators and state statutes. But I'll refer the court to JA-0092. This is the adjuster's claim note. OBC-CCC-1. OBC stands for outbound call. OBC-CCC-1. She's talking to CCC. Based on age, limited market, up and down. This was a 49-year-old car. This wasn't a 2022 F-150 where there's hundreds of thousands of them. This is a 1974 Porsche 911. Reviewed comps with CCC-1, or excuse me, CCC. NI comps, two from bring a trailer, is not eligible, and one was showroom quality and was needing more comps. It was discussed with CCC, even if they didn't already know that CCC won't accept comps from bring a trailer. Later it says, just blindly relied on it. Tried to do another search for same year 911 with CCC-1 since model Targa. Remember, Appellant's two complaints was one, complained that the engine wasn't running. Well, his initial complaint was it was the wrong vehicle, but he later realized that he was looking at the wrong vehicle. And two, he claimed the Targa is not sufficiently comparable to a 911 Carrera to use as a comp. Offered no support of that, either to USAID during the claims adjustment, or even in the litigation. That's his opinion. He's entitled to it. But that doesn't mean that CCC is wrong that it is. But still, tried to do another search for same 1911 with CCC-1 since model Targa. No hits. But reached out to evaluator, sent name, insured email, follow-up pending rerun comps. So here's what's funny. They complained about the first comps. Said we blindly relied on CCC, and we just kept relying on those first comps. Then he complained that they tried to find new ones. Refer the court to JA-0092. NI email, that's named insured email, resend back to CCC-1 to rerun comps, stating was told all we can do, and now feels misled that we are attempting another eval to see if new vehicles in the area. So he's complaining that they're looking for different ones after he complained about the first ones. The use of CCC-1 does not give a blanket. It's not going to bring down the insurance industry and do whatever they want. The valuation, the point of reference to the CCC, was the valuation was reasonable. Neither CCC nor USAA had any reason to doubt the value. He was invited to provide comps that CCC-1 would accept. He refused. He started at $100,000 before valuation was ever done. He told the field adjuster, thought the car was worth $100,000, threw out, never wavered. Even though his comps were showroom quality, and he couldn't provide an explanation for the difference between his comps and his vehicle. How do you get to that value? Holistically, you look at the whole car. He said he understood that appraisers like to do that, but he doesn't think it can be done. Then he complained that CCC-1 wouldn't use his showroom ready comps and applied a dollar adjustment to get to his value. Counsel, I'd like to focus on the standard under Arkansas law for bad feet. Yes, Your Honor. Viewed in the light most favorable to the plaintiff, there are at least six instances of potential lies that were told to him in the record. Why couldn't the jury infer malice? Because the court makes a threshold determination, Your Honor. As this court said in Howard, all reasonable inferences must be drawn in the non-moving party's side. But the court need not accept unreasonable inferences or mere speculation. And that's all appellant has. One, and we can take the… He was told that arbitration law did something that it absolutely doesn't do. I understand, Your Honor. And that is… What was the basis for that representation? If you look, one, again, under Arkansas law, if it's mistaken, even if it's wrong, that's not bad faith. It was a very specific representation. Yes, Your Honor. Context matters. This is in the same call, and I'll refer the court to JA0093, the claim note that reflects her making that statement. In the same call, the appellant advised her that he'd filed suit, refused to provide information about the lawsuit or his lawyer, and previously in the claims adjustment process, he had reminded her, I'm a lawyer. And on a different call, I'm a lawyer and I have my counsel on the phone with me. So who's trying to intimidate whom? What about the representation that he was under investigation for arson and fraud? That seems rather intimidating. First, Your Honor, there's no record evidence of that other than Mr. Appellant's testimony, but telling someone they're under investigation is not the same as accusing. And I'll take that, if I may just briefly, Your Honor, on arbitration law. There's contemporaneous claim notes where she states, advised this is the claim process and not withholding anything. And then there's a separate. She attempted to correct her statement the same day, this is JA0089, where she sent a letter stating all you need or what you need is the title procurement process. And then she testified in her declaration when she's no longer an employee of USAA that she was unfamiliar with the process for resolving claims after a lawsuit was filed. He filed suit, but she didn't know until she was on the call with him. That was four days after he'd filed suit. She had no idea. So she's on the phone with a lawyer, just found out it's in litigation, and she's unfamiliar with the process after litigation is filed. Now, it's not a reasonable inference to think that she's trying to fool a lawyer about nonsensical, as they describe it, rightly so, arbitration law. She was unfamiliar with the process, and it was corrected that same day. But with respect to the, I'm sorry? You know, one of the issues just generally on the question of dishonesty that's been argued, I think, is on one hand you have the judge who's essentially said that there certainly were mistakes made, misrepresentations made, that there were a lot of them made, and that there's evidence of negligence and perhaps even aggravated negligence of some sort. But as a matter of law, the judge said it doesn't rise to the level of dishonesty, right? Yes, Your Honor. That's where the judge is at. The argument is, well, in order for the judge to say it doesn't rise to the level of dishonesty, the judge has to weigh the evidence and has to make credibility determinations and has to make determinations as to, you know, the questions that are just ordinary left to the jury. Why are they wrong on that point? Because, Your Honor, again, the court has to make threshold determinations as to whether an inference is reasonable or not. And regardless of the district court, it's de novo review, so this court can affirm on any basis it's supported by the record. But going back to the arson investigation, if I may, Your Honor, Pelham was not accused of fraud. He testified he was told he was being investigated for arson. Even if that's true, investigation is not accusation. And the statutes that they cite, the first says, a person engaged in the business of insurance having knowledge or a reasonable belief that a farce on the insurance act is being, will be, or has been committed shall provide to the insurance commissioner notice. The other states, any insurer having reason to believe that a fire loss in which it has an interest may be of other than accidental cause shall notify in writing an authorized agency of the finding. Webster's defines to believe as to consider to be true or honest. Webster's defines finding as the results of an investigation, usually in plural. Now, Pelham admitted in his deposition that it's unusual for a car to spontaneously combust. The combustion is supposed to stay inside the cylinders, not throughout the passenger compartment in the engine. You have an unknown cause of fire. Anytime there's an unknown cause, arson is a possibility. They investigated it. They determined it was accidental. They made an offer within 32 days. That's well under the standard required by law in Arkansas is 45 days. This is not Keaton, where the adjuster accused or threatened criminal prosecution, admitted to lying about having viewed video evidence, and then admitted that he was aware of the reporting statute and never did it. Nor is this like Thompson, where the insurer, and also in Keaton, they denied coverage. Here, they granted coverage and made an offer. In Keaton, after they approved coverage and they make an offer, and the insurer wants more money, then they make allegations of fraud. And then they don't report it to the Arkansas Insurance Department until after the insurance department reached out three separate times asking if they had made a report under the statute. That didn't happen here. They conducted an investigation because you have an unknown cause of fire. They determined it was accidental. They approved coverage, and they made an offer. The same goes, Your Honor, with the, you have to look at the context when you look at the appraisal provision. There are contemporaneous claim notes that appellants themselves cite that show that she believed the policy had an arbitration clause. She believed there were only two, Arkansas and Louisiana, that did not, is what she found out. She believed they all did. JA-01, sorry, JA-1070, claim note from the adjuster. Verbiage not in policy that I can find. There would be no reason for her to look if she knew when she made the statement that it's not in there. Also, the claim about her not having access to the policy. If you actually read the notes, that's not exactly what she said. JA-0086-A7, I don't have access and was going to send you where in the contract to look, but it is actually not in your contract. What she's referring to is, in the same note, I reached out to the dispute team, and this is to Mr. Flasco, and it looks like they were unaware that for Arkansas and Louisiana, auto contract do not carry appraisal clause. The policy team can provide you a copy of the auto contract. He asked for a copy of the original, complete policy. She didn't say she couldn't view the terms of his contract. She said she didn't have access to that, but she told him where he could get it. And, JA-0082, from appellant, I was able to call back and get somebody to send me the policy. He had it the same day. That does not support, Your Honor, a reasonable inference. This was a disputed claim, Your Honor. This was about claim valuation. If I may briefly, because I see my time is about to expire. As Tillman said, pardon me, Your Honor? Go ahead. There can be no bad faith when there is a legitimate dispute for trial. This was a dispute about valuation. Very well. Sotheby's valued it at $65,000. JA-0133. Appellant's expert witness at $50,000. JA-0191. And the district court expressly found USA's expert to be qualified and well-versed in classic cars. The plaintiff said it was $100,000. Your time has expired. Thank you, Your Honor. Thank you for your argument. We'll hear rebuttal from Mr. Qualadon. Thank you, Your Honor. This is not an appeal based on the difference in valuation. Much of what we just heard was about a difference in valuation. This is an appeal based on the granting of summary judgment in a situation where there were affirmative misstatements, where there were clear inaccuracies stated by the insurance company. What's the line between when you have to have a trial over an incompetent phone representative versus where you have bad faith? Well, if you take all the inferences in favor of the insured in this case, who was the non-movement in summary judgment, then you have to question were those just blunders by the insurance company? I mean, is that the implication of your position that when you have a blundering insurance phone representative, it always results in a trial on bad faith if they say something inaccurate? Not necessarily. I don't know, but if we did a study, that would be an uncommon phenomenon. You may be right, Your Honor. I don't know. And I'm not saying that. What's the limiting principle? I think the limiting principle is when you look at the totality of the circumstances, which Aetna Insurance, the first bad faith case in Arkansas Broadway Arms, says you have to do. And when you look at that here, they affirmatively turned a blind eye to known flaws in their evaluation. They affirmatively provided false reasons for refusing to consider comparables. They affirmatively misrepresented the obligations of the insured. They affirmatively misrepresented the ability to access and provide the policy. They affirmatively misrepresented that the insured had to provide an appraisal. They affirmatively misrepresented the arbitration law. Those are the totality of the facts and circumstances. So it's not a one-off blunder. It's not an off-the-cuff inaccurate statement. It's a series of statements. And when you put those into the situational context of when they were made, for example, the appraisal, Mr. Flasco is challenging their valuation. They tell him he has to go get an appraisal if he wants to challenge the evaluation. Otherwise, take the money. That leads to a question that a reasonable juror could say, they were trying to intimidate and squeeze a settlement. Same thing on arbitration law. He was saying, pay me my undisputed amount, which you are obligated to do under Arkansas law. The answer was, not without a settlement, look at arbitration law. That situational context gives rise to a reasonable inference that a juror could make that those were not just off-the-cuff blunders. Those were strategic statements with statements of fact. Have you deposed this Adams? No, we did not depose her. She was not at the company. We could have tracked her down somewhere. She's the star witness in your trial. She could have been. Which trial do you want, right? You want a trial where she's the star witness and you say she was putting all this pressure on your client to... I want a trial where Joe Velasco is the star witness. He was the one talking to her. But will we take her deposition? We might. Well, maybe the company will need to put her on, I guess. Yeah, and that's what we actually thought might happen. But that's beside the point. The acts that USAA engaged in constitute bad faith under the law. Ignoring evidence and turning a blind eye. Cincinnati v. Mickles. Bryant v. State Farm. Sims v. State Farm. Emmanuel Baptist v. Brotherhood Mutual. They all reference that fact. Ignoring relevant information. Omitting or ignoring from the analysis Emmanuel Baptist. Misrepresenting policy terms. The arbitration imposition and the arbitration law and the appraisal imposition. State Farm v. Allen. Columbia National v. Freeman. I see I'm out of time. You are. I apologize. Thank you for your argument. Thank you to both counsel. The case is submitted and the court will file a decision in due course."
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"stt_transcript": "Yes. May it please the Court, my name is Adrienne Anderson. On behalf of Appellants, Parker Stewart. I'm NDA. I'm also doing business as T-Launch. So, what has, I guess, developed during the... It looks like you might want to raise the lectern a little bit. Yeah, okay. Sorry about that. There's a button on the side that'll do it. I think we got it. Can you hear me? Wait, the whole platform will go up. Oh, I think I'm good. You're all right. I'm good? Speak into it. Okay, I'm sorry, Your Honor. So, our basic argument is Parker Stewart is the one that is injured. He is the one that holds the federal RICO standing as a starter. While he was a part of the firm, while he was a part of the company, that still continues to this day, which has been subsequently founded, that there is now another company that he would potentially have ownership in. So, whether we're talking derivative or direct here, there is standing for him to have RICO. And, you know, the one case that we have, you know, is the medical marijuana case versus Horn, that states, you know, that this is a closely held corporation with two people. Two people. Mr. Parker, or Mr. Stewart, sorry. Mr. Stewart started the company, got his second cousin involved, and he is the only one that is harmed in this. He clearly was lied to about the valuation of the company. He was provided, you know, false information. And it was not just known before the company was dissolved, and apparently it wasn't dissolved. It was purchased and or created a new company that he would still have interest in. Wasn't the injury, though, I understand you're saying it's directed at your client, but wasn't the injury the diminution of the value of the corporation, the company? No. I mean, and that still goes on. I mean, the fraud goes directly to him. The fraud goes directly to him. It started from the beginning, and it still continues to this day. But the damage was done to the corporations, the underlying entities. The only other, the perpetrator was your owner. The only, this is, we're not dealing with a company that has, you know, 7,000 shareholders here. Medical Marijuana specifically has an exception to this matter, that he is the only one harmed and is the one that is able to collect and specific facts have developed since. But isn't he only harmed by a diminution in the value of these entities that he no longer owns? Well, no. So there were entities that were created that were unknown to him, monies that were siphoned out, unknown to him, and, you know, especially Medical Marijuana, it gives him the exception to that he is harmed of millions and millions and millions of dollars. And there was no way that my client, who started this company, now I believe it was incorporated under his cousin who came in, would have ever sold it or have ever have entered into the trial agreement. That was not natural. We don't deny that. If these lies were discovered before then, and the lies continue to go on. So, you know, he is, has specific... Would the state law remedies remain available in state court? They would, but I think the RICO remedies, I would say still keep it in federal court. Well, you know what the federal courts think of RICO generally. I'm doing your honor. I mean, you're riding your... I don't know if it's the weakest or the most questionable horse. Why not go to state court? Well, we also have the bank here too. We've got so many parties involved. I think banks are subject to state law. I correct your honor, but I believe in the district that we are in, in South Dakota, that this is now the best cause of action and the proper court to be in. But if you lose on RICO standing, now the court declined to exercise supplemental jurisdiction over the state law claims. That's a discretionary matter. We're not going to reverse that. You just go to state court. Correct your honor. That is a possibility, but I believe... I think it's more than a possibility. It may be the only possibility. Well, I believe we still have, my client still has standing under 1964 to be in federal court here. I don't even know if that's... I do not disagree they have state law remedies available. Correct. In state court. Correct. That would be supplemental jurisdiction within the federal court. In state court it is, right? Correct, but can be supplemental jurisdiction within the federal court. You never reverse a district court for declining to exercise supplemental jurisdiction if it properly dismissed the federal claim. I can almost say that categorically. Correct. I understand what you're saying, your honor. But I believe that there is still a federal RICO claim here that continues to this day and has still continued on and on. Between with the bank from the beginning to the additional fraudulent corporations that were incorporated behind my client's back, behind the buyout of the corporation, that everything still continues to this day and that there is proper federal jurisdiction. And because there are so many other defendants, I can reserve the rest of my time for reply. Wait a minute, you're reserving time for what? To raise other issues? Well, no, not to raise other issues. You argue it all right now or you don't get the second chance? Correct, but for a reply because there are so many defendants. Okay, we'll see. Yes, because I believe we have three or four attorneys behind me that I will need to, you know, assume additional responses to. All right, thank you. Thank you. Mr. Bruning. May it please the Court, my name is Corey Bruning. I'm appearing on behalf of the defendants identified in the briefs as the HAMSI defendants. From our view, this issue can be disposed of several different ways. I'm only going to touch on a very brief one because my co-counsel needs time to talk as well. The standing in this one is an issue. It's undisputed that Parker sold his interests. You're talking RICO standing, Article III standing. What are you talking about? I suppose technically this would be prudential standing. That's statutory. Okay, so RICO is a statute. Broad is common law and often statutory. Come on. Well, Your Honor, I believe. Briefs just make a mess of this case, frankly. Yes, Your Honor. The part I'm talking about and what I'd like to draw the Court's attention to is the actual buyout agreement itself. In the buyout agreement, which is in 205 to 207 of the record, it specifically says that Parker sold all of his interests in Iam Indy back to Iam Indy. As a result, in order to unwind that contract, Parker would have to sue Iam Indy, not list him as a co-plaintiff. In that buyout agreement, there's a broad waiver. Oh, no, no. Wait a minute. Wait a minute. A shareholder can. . . All right. I think you're just wrong what you said there. Go ahead. Well, in the buyout agreement, there is a broad waiver and indemnification of many of the claims, and those that weren't were specifically included in the sale to which he was paid for. It's important to note that Parker did have access to the financial data months in advance of the sale. By June, before the end of September sale, he was advised by both sets of his prior counsel that he had the opportunity to seek a forensic audit, and Chris Hamsey specifically responded in writing that he had no objection to that. He chose not to. Well, release is completely different than standing, isn't it? Well, in the sense that Federal Rule FRCP 17 says we look to State law for the standing issue, all of his injuries are derivative. And under South Dakota Codified Law 47. . . That's a little different than saying he released these claims when he sold the company, isn't it? Well, it is, but the fact that he no longer owns the company. . . Okay, that's different. The fact that he no longer owns it means that he then can't meet the statutory requirements under South Dakota Codified Law to bring this suit. The Court's earlier question about whether the injuries were derivative, they are all derivative. Every single one of his alleged injuries are because he believes IM&D has less money or less value than it otherwise should have. Stewart voluntarily sold his interests with the advice of counsel after receiving financial records, after being told he could get forensic accounting, he chose not to, and with a broad release and indemnification clause. He now asked the Court to let him sue for alleged injuries that even if true, belonged to the company, not him. The District Court got this right. We'd respectfully ask this Court to affirm. If this Court has no further questions, I'll reserve the rest of my time for my co-counsel, or yield it to them, I should say. Good morning, Your Honors. Steve Landon on behalf of Defendants Appellees, Plains Commerce Bank, and Chris Marbus, an employee of Plains Commerce Bank. Your Honors, the District Court properly dismissed, granted the motions to dismiss, for basically three reasons. First, the Court properly found that Parker Stewart, as a plaintiff, did not have the capacity to sue because, as Mr. Bruner just mentioned, he had already sold his interest in the company. He was no longer a member of the LLC, IM&D, and as a result, the injuries were not to him. Under South Dakota law, which is where the Court properly looked under Rule 17, in order to maintain an action for a limited liability company in South Dakota, the person bringing the lawsuit must be a member at the time the action is commenced and must remain a member throughout the duration of the action. It's undisputed. In fact, it's pled specifically in Plains' complaint that Mr. Parker was no longer a member of IM&D, the LLC, and therefore could not maintain that action. Second reason is because the District Court properly found that Mr. Stewart had also failed to allege a direct injury to himself, that the injuries that were alleged he suffered, as the Court has already noted, a diminution of value of the company, diminution of income to the company, as all part of the scheme that he's alleged. Now, what's also important about that is there's a third reason why the case was properly dismissed, and this was briefed below, it was argued below, the Court didn't reach it, but you're all aware of the RICO cases that end up always naming a bank, an accounting firm, a law firm, another service vendor. This Court has held numerous times, a banker does not become a racketeer by acting like a banker. Well, in this case, wasn't there potentially a breach of fiduciary duty with the violation, the alleged violation by one of your clients of this agreement, of this third party agreement? Sure. Two things to that, Your Honor. First of all, remember the customer that Plains Commerce had was IM&D, the LLC. So to the extent there's a claim, we're right back to the first issue, which is IM&D hasn't brought that claim, and Mr. Stewart can't bring it on behalf of an LLC he's no longer a member of. Secondly, I don't know that this was briefed very much or even argued below. The case in South Dakota is that a bank does not necessarily owe a fiduciary duty outside of the terms of the contract that it signed with a business client because they haven't trusted the bank to basically run their business for them. So with respect to the fiduciary duty claim, which is a State law claim, that's not a predicate racketeering event. And that's, you know, Judge Lange in the district court hearing essentially asked Plains Counsel, Appellant's Counsel, what separately indictable action did Plains Commerce Bank take? Plains Counsel couldn't answer the question because there isn't one. Now, they've alleged that there was wire fraud and mail fraud with respect to the Hamze defendants, but not with respect to Plains Commerce Bank. Your Honor, at the end, I guess what I would refer you back to is Plaintiff's own complaint. In Plaintiff's complaint, they allege the scheme. And, of course, the Court has read the complaint and seen the detailed factual allegations about the scheme. We would direct the Court to see that the scheme is between Chris and Nick Hamze against I.M. Mindy and at times against Parker Stewart. But the allegations with respect to Plains Commerce Bank, back to a bank doesn't become a racketeer by acting like a bank, those allegations are, and I quote, paragraph 21, Mr. Marbus for Plains Commerce Bank routinely breached the third party agreement, breached the agreement. In addition, every payment during Parker's absence was unilaterally validated, excuse me, was unilaterally executed by Chris and blindly validated by Marbus. Those are allegations potentially of negligence and certainly a breach of contract, which in the proper forum would be disputed by Plains Commerce Bank. What they don't do, though, is allege an enterprise and a pattern of racketeering activity by the bank. And that's why the RICO case claims whether you reach them at standing or whether you get to them on the merits, based upon the pleadings, there's been no RICO claims properly alleged in this complaint. And the Court was also, well, I don't think this is properly reviewable, but to the extent the Court denied the right to amend the complaint, all the plaintiffs sought to do was add three general paragraphs that lump all the defendants together. Again, it's subtle law in the Eighth Circuit that in order to keep parties in a RICO cause of action, you have to specifically allege all of the required elements for each defendant. You don't get to do shotgun pleading and say all the defendants did this. This complaint specifically alleges that the Hamsey cousins had a scheme, that they acted on that scheme. All it alleges has to Plains Commerce Bank is that it was a bank and potentially that it breached a contract. That's not a racketeering predicate cause of action. As a result, Plains Commerce Bank asks the Court to affirm the district court's granting of the motions to dismiss. Thank you. Good morning, Your Honor. May it please the Court. Laura Lamontagne for Appellee District Photo. District Photo does not belong in this case. It is a District of Columbia corporation that was founded in 1949 by the Cohen family. It purchased assets from I. Mindy in 2024, the year after Parker Stewart voluntarily sold his interest. District Photo is, as Mr. Stewart's own complaint acknowledges, a competitor of an enterprise participant, a competitor and a supplier. And if you look at the appendix at page 182, there's a quote that discusses how we have lost, talking about I. Mindy, numerous customers to manufacturers like John Doe, District Photo, and WW and Catalyst, as they have developed superior technology. So my colleagues already went over the two issues with standing. He's not a member of this LLC. He needs to be a member if he's going to sue in its name. And two, the fact that all these injuries are derivative, and the injury flows through the corporation. It's not to him directly. But moving those issues aside, for District Photo, his whole allegation is that there is successor liability. And under the rule in Hamaker, a corporation which purchases assets does not succeed to the liability of the entity that is acquired. There are four narrow exceptions, but none of those are pled adequately. The complaint relies on conclusory assertions, and the complaint says about 40 times, the brief, about 40 times, the well-pled complaint, the well-pled complaint. But there's a complete absence of any factual allegations as to District Photo. The court didn't reach the issue of the failure to state a claim as to District Photo, but this court can also affirm on that basis. For Erico, he must plead every element and all of the parties involved. There's no mention of any employee from District Photo, not its CEO, not its No one from District Photo is ever mentioned. There are no predicate acts alleged to District Photo. The complaint says that the last predicate act was the buyout agreement between I. Mundy and Parker Stewart. That agreement took place the year before District Photo purchased the assets. There are zero allegations that District Photo participated in this enterprise. There's no who, what, when, where, or how, or any of the requirements that are necessary to establish fraud under Rule 9b. And again, nobody from District Photo is mentioned once in the complaint. So they're relying on shotgun pleading and trying to bring in this entity that has absolutely no relationship to the case, aside from the fact that it's a supplier in the same industry and that it purchased assets, and to lay responsibility where there absolutely is none. They need to plead more than just the conclusory allegations of, oh, they're the successor company, and therefore they're liable. That's not how the law works. And so beyond the fact that there is absolutely no standing, that the injury is derivative, there's a complete failure to state a claim. My position is that District Photo doesn't belong here, that it's been wrapped up in a dispute it has no relationship to, and that the district court was absolutely correct in dismissing this complaint. And as was noted earlier, the complaint was dismissed without prejudice. There are state law remedies available. If they want to try and succeed in action to rescind the buyout agreement, they have that right. But at least as to District Photo, there's no reason to include them. If there are no further questions, I would just respectfully ask that you affirm the district court's order. Thank you, sir. All right. To address counsel's points going forward, as to our ability to get an accounting, there was in the agreement it was supposed to be split. They refused to pay for it. They refused to pay for the audit. And additionally, there was no knowledge on my client's part of any of these fraudulent corporations that were siphoning money out of the company, which were split. You know, everything was split there. As to the bank not being involved in the fraud, they were a fiduciary, as alleged. They insisted on then signing the third-party agreement. Once my client finally realized that it was not being held, they were completely involved in the fraud. To say that they were not, you know. What made them a fiduciary? Though they had under the ability, I mean, they had under the agreement. They had to hold the funds. They were holding the funds. I mean, they agreed to that. You know, and as to, you know, District Photo not being involved or specifically pled, there were, I believe, over 23,000 transactions with District Photo before the buyout. We don't know. We have no discovery. This was dismissed at a 12B6 phase, okay? So that's just addressing the facts. I don't know, and no one knows, and this cannot be dismissed at 12B6 phase. You know, this is a RICO federal question, honestly. If it's not governed under South Dakota law, that the federal law is definitely going to, you know, override. You know, Parker, as, you know, a 50% owner under, you know, Federal Rule 17A, on behalf of the company at all times, relevant to the complaint, was the owner, who was the only one hurt by this RICO enterprise. We have no information on this. South Dakota law does not control, does not preempt federal RICO spending under 17B3. We've got Curtis v. Lumber as well cited. Again, medical marijuana. You know, all, you know, what we're asking is that this be remanded back down to district court. So for actual discovery, because this is, you know, this is what's needed. Okay? I don't know if you have any other further questions. That's just what we're asking. Okay? Very good. Thank you. Case has been thoroughly brief. Lots of issues that are not typical, so take them under advisement. Take all cases under advisement."
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"stt_transcript": "The fourth argument, case number 25-2758, Eastern Arkansas, Sherry Prunty et al. v. Corey Obregon et al. All right, Mr. Higgins, we'll hear from you first. Chief Judge Culleton, may it please the court, Charles Higgins and with my partner, Les Jones, we represent the appellant plaintiffs, Sherry and Greg Prunty, on behalf of their deceased son, Jaden Prunty. This case is obviously very different from the argument Your Honor's just heard. But similarly, in this case, our appeal fundamentally is about the District Court's application of Rule 56. We respectfully submit that the District Court improperly weighed evidence and credibility, disregarded the plaintiff's countervailing evidence, didn't grant the plaintiff's reasonable inferences, in order to grant the defendant's motion for summary judgment. As the Supreme Court affirmed in Toland v. Cotton, Rule 56 standards apply to 1983 and quality immunity issues, the same as it does in other civil cases. The court must view the evidence in the light most favorable to the plaintiff. All evidence of the plaintiff should be believed, and all justifiable inferences made in the plaintiff's favor. Correctly applying Rule 56 standards to both our unlawful seizure and excessive force claims, shows that there are genuine issues of material effect for the jury to decide at trial. Now in this case, of course, we have Officer Obergon's body camera video. And that's obviously a critical, crucial piece of evidence. But it does not answer all of the essential questions that relate to our 1983 claims. I'd like to go through the issues of material fact for both of our claims, beginning with our unlawful seizure and arrest claim, and then I'll address our excessive force claims. The seminal issue in our case is whether Officer Obergon in fact smelled marijuana on Jayden Prunty's person when he attempted to detain him. Obviously, that's what Officer Obergon has testified to. We believe, and based on facts and the record, we think a reasonable jury could believe that Officer Obergon is not being truthful about that. To put it bluntly, that he's lying. That he did not in fact smell marijuana on Jayden initially, and was only saying that to create a pretext so that he would have reasonable suspicion to detain Jayden. Everybody agrees the initial encounter was consensual. Jayden was within his constitutional rights to do what he did, which was walk away from Officer Obergon. And then Officer Obergon wanted to get what he came for, what he got out of the car for, which was compliance. And so at that point, from a considerable distance, Officer Obergon says, Hey come back here, I smell marijuana. And you see Jayden on the video dispute that. Saying, oh you're lying, you're lying, you can't smell marijuana. And if Officer Obergon is lying about not being able to smell marijuana on Jayden's person, he also then can't have, not only is it a constitutional violation, what happens next, the unlawful detention and arrest, there's the constitutional violation because he doesn't have reasonable suspicion or probable cause, he also can't have qualified immunity. Because qualified immunity, of course, does not protect an officer who knowingly violates the law. Counsel, we do have the officer's testimony and we have some cooperating witnesses as to the odor. Is there any evidence to contradict that, to create a genuine issue of material fact? Yes, your honor, this is what I would point to. First, there's no drugs or drug paraphernalia found on Jayden. If he had just recently smoked marijuana, well he certainly wasn't carrying marijuana on him, we know that. There's no evidence that he had recently smoked marijuana. So that's a key fact, there's no drugs or paraphernalia found on Jayden. You can look at... How does that go to the reasonable and articulous suspicion for the Terry stop, right? What you find later, right? You're looking at the thing from the point of view of an objective view of an officer who's similarly situated, which has not yet made the stop. And what you've got is, you've got the smell of marijuana. And whether they find paraphernalia or not, that doesn't change what this reasonable, objectively reasonable officer would understand. Yes, I understand the question. Remember, our position is that Officer Obergon is lying. Okay? It's not a question if he's mistaken. It's in that moment, he's trying to think of what he can say to force Jayden to stop. What he can say that will give him reasonable suspicion. The fact that there's no drugs or paraphernalia found on Jayden, what that would allow a jury to say is, well wait a second, did he really smell of marijuana? If he didn't have any drugs or paraphernalia on him? So that's one piece of evidence. And I think it's relevant because it contradicts, the inference can contradict what Officer Obergon testified to. You also have Officer Obergon's motivation for stopping Jayden in the first place. He said in his statements in the days following the incident, he's going up there looking to make an arrest. I mean, this is what they do. He goes up there trying to find people who are on parole or on probation and see if he can find violations. Then when he's asked about it in his deposition, he impeaches himself. He says, no, that's not why I'm going in there. Even though that's what he had said in his recorded statements to the Arkansas State Police. So those contradictions, that impeachment, it's another thing that a jury could look at. But do his subjective motivations matter for reasonable suspicion? Yes, Your Honor, I think they absolutely matter. I think it is illegal for a police officer to make up a pretext to try to detain somebody that they know is not truthful. That's a constitutional violation. And it's one that you don't get qualified immunity for because you knowingly violated the law. Yes, if there was no smell of marijuana. Correct, yes, if there's no smell of marijuana. You also have the fact that Officer Oberground is a considerable distance from Jayden. He's inconsistent about when he first smelled marijuana on Jayden's person. He can't remember if it was burnt marijuana or new green marijuana that he smelled. That was in his first statement. He said he couldn't remember which it was, which was just a couple days following the incident. So those types of inconsistencies could lead a jury to say that Jayden didn't smell like marijuana and that Officer Oberground is being untruthful. And also you have Jayden on the video who denies it. And I think the jury can watch that and assess the credibility of it. Which is the reason why the video is important but does not answer all the essential questions. So our position on the unlawful detention and arrest is that because a reasonable jury could find that Officer Oberground is lying about smelling marijuana on Jayden. If he did not in fact smell marijuana on Jayden, then Jayden was within his rights to keep walking and Officer Oberground had to let him keep walking. Instead, he goes after Jayden. Jayden then in fear starts to run. There's a takedown. That's an unlawful arrest because there's no probable cause or reasonable suspicion that a crime had taken place. What relevance is his flight? Doesn't that also create reasonable suspicion for a terrorist? I don't. And I know that there's cases out there that says that if somebody starts running, then that can create a reasonable suspicion. But here when the officer, if you accept our position, knows that there's no smell of marijuana, that he's creating a pretext, he can't cure that constitutional violation just because Jayden takes off. And it's not like Jayden sees Officer Oberground and immediately starts running. I mean, you see him on the video. He's standing there very calmly. What's this about? And then he begins to walk away calmly. It's only when Officer Oberground starts coming at him aggressively that he gets scared and turns to run. So I don't think it can cure the constitutional violation. Your Honors, I would like to turn in the time that I have left to talk about our excessive force claim, which in here I think the video is most inconclusive because you can't see how the first gunshot happened. Officer Oberground's testimony is he's got, and you see it on the video, he's got Jayden pinned to the ground. And remember, Officer Oberground is 6'4\", 210 pounds. Jayden Prunty is 5'7\", 109 pounds. He's got him pinned on the ground. He says that Jayden's right hand is in the waistband and he, Officer Oberground, is holding Jayden's right arm. Okay? Now you can't see what happens on the video. But Officer Oberground's testimony is somehow Jayden drew the weapon from his waistband while his arm was being held, re-stood around, and pulled the trigger and shot Officer Oberground in the leg. Because the video is not definitive on this, we believe a reasonable juror could hear that testimony and disbelieve it. There are other ways that gun could have gone off. It could have gotten discharged accidentally. It could have gotten discharged by Officer Oberground when he was taking the gun away. And if that's the case, okay, if Jayden wasn't pointing the gun at the officer or somebody else, he wasn't using the gun in a threatening or menacing fashion, then it's not reasonable force to shoot Jayden in the back of the head, which ultimately happened. I don't necessarily disagree with your recitation of events, but all Officer Oberground knows is that he's been shot by Mr. Prunty's gun. Why doesn't that place him in a situation where his life's in danger? I understand, Your Honor. I don't know if that's what Officer Oberground knows because I don't know if Jayden pulled the trigger on the gun, if Officer Oberground did. Remember, there was no fingerprint testing that was done. There was no analysis on gunpowder residue or anything like that. All we have to say that Jayden reached the gun around and shot Officer Oberground is Officer Oberground's testimony. And just given the physics of it, I think a jury could say that that's not credible. And if the gun goes off accidentally or through some fault of Officer Oberground, he knows that. He then can't take lethal force. And that's something that was clearly established at the time and he wouldn't have qualified immunity for. I'm into my rebuttal time, Your Honors, but I'm happy to answer any additional questions. Otherwise, I'll reserve my time. You may. Thank you, Your Honor. Thank you for your argument. Ms. Adams, we'll hear from you. Thank you, Your Honors. May it please the Court. My name is Jenna Adams and I represent the Appalese in this case, the City of Jonesboro, Chief of Police Rick Elliott, and Officer Corey Oberground. We're asking that this Court affirm the District Court's granting of summary judgment and qualified immunity because there is no genuine dispute of material facts and the undisputed record shows that Officer Oberground had reasonable suspicion to detain Mr. Prunty once he smelled the detectable odor of marijuana. Mr. Prunty's flight converted reasonable suspicion to probable cause. The takedown was objectively reasonable given that Officer Oberground had both reasonable suspicion and probable cause to arrest. And after being shot by Mr. Prunty, Officer Oberground's use of deadly force was objectively reasonable under the Fourth Amendment. Both parties agree that this encounter begins consensually. However, once Officer Oberground steps out of the vehicle, he smells the odor of marijuana coming from Mr. Prunty's direction. That fact is not genuinely disputed in the record. There are three independent pieces of cooperating evidence to support the fact that Officer Oberground smelled marijuana. We've got Chief of Police Rick Elliott, who said that when he arrived on the scene later that night, he smelled that Mr. Prunty reeked of marijuana. We've got the State Police Investigator, who noted in his file that the next morning, the body bag emitted a strong odor of marijuana coming from Mr. Prunty. And finally, we have the toxicology report, which confirms that there was marijuana present in Mr. Prunty's system. I believe the appellant argues, though, that the district court ended up weighing the circumstantial evidence that Mr. Prunty had, his verbal denial and the fact that there were no drugs on him against the testimonial evidence, and that it was engaging in weighing testimony and making credibility determinations. What's your response? At this stage, plaintiff has to put forth evidence to contradict the undisputed, corroborated evidence that we have put forth, and they've not done that. They've only put forth speculation, which is not enough to stave off summary judgment under Rule 56. Is that true, or have they also put forth distance at the time of the initial contact and Mr. Prunty started to walk away, right? And they're saying that the distance between the two was sufficient, that the sort of smelling of the odor of marijuana was factually problematic. So, Officer Obergon initially says that when he gets out of the car, that he smells it coming from that direction. And obviously, you can tell from the video, he is quite a distance away. However, he does close that gap between them as he walks towards him, and he confirms that, yes, it's not just the direction now, it is coming from Mr. Prunty. And you can see in the video, he is quite close to him, and he can confirm that it comes from Mr. Prunty. When does the seizure occur? How close are the two? Once Officer Obergon tells Mr. Prunty, I smell marijuana on you, come here, that is when he is going to make the lawful detention based on reasonable suspicion. I thought the Supreme Court said that if someone resisted the show of authority and kept on walking, the seizure didn't occur until the tackling in this case. I think at that point, he is being detained. It's a Terry stop under Terry v. Ohio. And if he does not acquiesce to that authority, then the seizure would be when he flees, and we've got probable cause then to detain him based on the unprovoked flight. But then, obviously, we've got a seizure when he performs the takedown as well. Well, if that's true, then the reasonable suspicion issue is moved. Because you're now saying there was probable cause to seize based on the flight, and there was no seizure before that. Correct. If this court, for whatever reason, were to find that there is no reasonable suspicion based on the odor, we still have unprovoked flight, which certainly provides reasonable suspicion under Illinois v. Wardlow, which is the Supreme Court case, and then the Eighth Circuit cases of U.S. v. Smith, U.S. v. Benson, and U.S. v. Horton. Just going back factually to my earlier question, how close were the two when Obregon ordered him to come here? If that turns out to be irrelevant. I don't know that we had exact measurements. You can tell from the video at the point in which he tells him to come here. He has closed the distance. He has moved away from his patrol car at that point. He is walking towards him. So the best we have is just eyeballing it from the video? Unfortunately, yes. Go ahead. Although appellants didn't raise this issue during their argument, they did in their briefs, they want this court to create a novel rule that the smell of marijuana in Arkansas can no longer give rise to reasonable suspicion simply because Arkansas has legalized medical marijuana. However, since the legalization of medical marijuana, Arkansas Supreme Court has repeatedly held that the odor of marijuana alone justifies further investigation. Does this case involve pedestrians or operators of vehicles? The most recent ones, the McElroy v. State, that one was a traffic stop and didn't involve a pedestrian. Do you think there is an important legal difference between a pedestrian and someone operating a motor vehicle in terms of the smell of marijuana giving rise to reasonable suspicion? In the traffic stop cases, the result of smelling marijuana then gives them probable cause to search the vehicle. Whereas if it's a pedestrian, it gives you probable cause or reasonable suspicion to detain them. Violation of what? To determine whether or not they possess marijuana or that they have committed a crime or might be committing a crime based on the odor. If they're possessing it legally, why would there be reasonable suspicion? Well, then at that point, you would dispel the reasonable suspicion because the person would be able to provide you with that medical marijuana card. But you have to have that... There's case law on that? On detaining somebody to... Reasonable suspicion for the mere odor of marijuana in a state with legalized marijuana? Yes, so McElroy v. State is the Arkansas Supreme Court case. And then we've got two... For pedestrian? Not for pedestrian, I apologize. That's my whole point. Then we've got the two federal district court cases that came out of Arkansas in the Eastern District, U.S. v. Spencer and U.S. v. Wright, that say even after marijuana was legalized in the state of Arkansas, the smell of marijuana still provides reasonable suspicion, whether that be a pedestrian or a traffic stop. There is a difference with a traffic stop because there's also the potential to be charged with operating a motor vehicle, while under the influence of a controlled substance. And even not... I mean, it doesn't matter whether it's... Just being under the influence, right? And that's a different thing entirely than what you'd see with a pedestrian, right? And the odor of alcohol, say, always allows a stop to proceed to the next thing, right? But the odor of alcohol on a person just walking down the street is nothing. Sure, the implications of the charges might be different ultimately in the end, but court cases don't distinguish the fact that ultimately the odor of marijuana provides reasonable suspicion, whether that be on a person or whether that be for a vehicle stop. I understand that the odor of marijuana on a vehicle stop would result in a search of the vehicle, whereas for the person you could either verify they have the medical marijuana card or... The legalization in Arkansas is only for medical use with a card, right? Correct. So anybody who possesses marijuana without that medical use is violating Arkansas law. It is a crime, yes. What about under federal law? Correct, yes. It is still a crime. So your position is there's at least reasonable suspicion that someone who reeks of marijuana is violating some law. Absolutely. And it could be dispelled if the person shows a medical use card. Correct. And that's the purpose... In which case there would have been reasonable suspicion that's dispelled, not... I think that's what you're saying. Yeah, I mean that's the whole point of a Terry stop so you can investigate further to make sure are they legally possessing this marijuana, assuming they have it. On the age, it's only legal for persons of a certain age in Arkansas. If Mr. Protty appeared to be below the legal age, that might be a different situation, or if he's in public, doesn't it? I don't know that possession in public is legal either. Yeah, there's, and don't quote me on this, there's various laws on the amounts and how it has to be packaged and all that kind of stuff, and that is a little bit out of my wheelhouse in the briefing. So after we have Mr. Protty fleece from Officer Obergon's presence, and so he performs a takedown as a result, because he flees from a lawful detention. The Eighth Circuit has repeatedly held that takedown maneuvers are objectively reasonable to do with fleeing or resisting misdemeanant. This is exactly the kind of limited force that the Eighth Circuit deemed reasonable in Ehlers, Fischer, and Cohors. So after the takedown, once they are on the ground, Mr. Protty is actively resisting and that he is keeping his right hand concealed beneath his body at his waistband. He's refused multiple commands to give his hands. Obergon can feel that Mr. Protty is reaching for something and he makes the comment, stop reaching whatever it is that you're reaching for. When warned, if that's a gun, this is not going to end well for you, Mr. Protty says, I know, I know it's not, yet he still does not give up the gun. Officer Obergon testified that he felt the beaver tail of that gun while it was under Mr. Protty's body and then Mr. Protty's gun is discharged, ultimately shooting Officer Obergon in the leg. Only after being shot does Officer Obergon then draw his own weapon and fires it at Mr. Protty. Under longstanding Eighth Circuit precedent, deadly force is justified when an officer has probable cause to believe that a suspect poses a threat of serious physical harm. Here we are far beyond a threat. The suspect actually shot Officer Obergon. This case doesn't require the court to consider a hypothetical danger or ambiguous hand movements or an inferred threat. The threat was real, the threat was immediate, and the threat was realized. Faced with an immediate and life-threatening situation, Officer Obergon acted in defense of his own life. Appellants speculate that perhaps this shot was accidental, maybe Mr. Protty accidentally shot. Well, that's the case that we have in Fitzgerald v. Patrick where they weren't sure whether it was accidental or not, but there was a discharge of a firearm by the suspect. There the Eighth Circuit says it was objectively reasonable to use deadly force because whether it was accidental or not, we don't know what the unknowing intentions are of the suspect. The fact of the matter is we have a gun that has now been discharged and shot an officer. Even if it were accidental, the objective facts that were confronted by the officer, that's the struggle of the gun, the refusal to release the hand, the acknowledgment of the gun, that gives Officer Obergon probable cause to believe that Mr. Protty poses a deadly threat. Even if this court were to believe that there was a constitutional violation, appellants have not identified a single case from either the Supreme Court or this court holding that an officer violates the Fourth Amendment by detaining someone after smelling marijuana, performing a takedown after a suspect flees from that lawful detention, or using deadly force after being shot. Instead, the overwhelming weight of precedent from this court supports Officer Obergon's actions in this case. There are no material facts in dispute. The governing precedent is clear, and Officer Obergon's actions from the initial detention to the use of deadly force were objectively reasonable under the Fourth Amendment. For these reasons, we ask that the court affirm the district court's judgment. Are there no further questions? Thank you. Very well. Thank you for your argument. We'll hear rebuttal, Mr. Higgins. Yes, Your Honor, thank you. And I want to start with a point that Your Honor made and see if I can address it. This idea of the unprovoked flight then creating probable cause to justify the arrest. Well, that was counsel's argument. Right, and I don't think it's fair to characterize Jayden beginning to run away from the officer as unprovoked. If you accept our theory of the case that Officer Obergon is making a false accusation against Jayden, Jayden's standing there trying to walk, well, he begins by standing there, then he tries to exercise his constitutional rights to walk away. And then he has an officer who he believes is lying on him who begins to start moving aggressively towards him. It's hard for me to say that that's unprovoked, that Jayden begins to run away in fear. You would be saying that the officer's unlawful actions in trying to detain Jayden somehow then get canceled out by Jayden trying to exercise his constitutional rights, albeit in a more fast manner than a walk. I don't believe that the flight, that Jayden running away from the officer when he thinks the officer is trying to make up a lie about him smelling marijuana is unprovoked and would then create an independent probable cause to justify the arrest. As I think the arguments today have indicated, what the district court engaged in was really weighing the evidence. Is there items from the record that a jury could use to support Officer Obergon's contention that he smelled marijuana? You know, his chief of police who arrived later? Sure. On the drug test, there's been no testimony in the record about, because he tested positive for cannabis, what that actually shows. If it means that he had indicated he had just smoked. Also remember, Officer Obergon doesn't remember what type of marijuana odor he smelled. It wasn't like he didn't remember two years later in a deposition. He didn't remember a couple days later whether it was the smell of someone having just smoked marijuana or it was the smell of somebody carrying a package of marijuana. That's another factor the jury could look at to determine whether they find his testimony credible. Your Honors, I know that this is a tragic case. I know that this is a sad case. But I would submit to you that it's more than that. It's a case of constitutional violations and it's a case that a jury should hear and decide. Thank you. Very well. Thank you for your argument. Thank you to both counsel. The case is submitted. The court will file a decision in due course. Counsel are excused. Thank you, Your Honor."
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"stt_transcript": "Thomson Reuters v. Ross They're still setting up over there. Might need some more chairs. Mr. Davies. Two minutes for rebuttal, Your Honor. Sure. Thank you. May it please the court. Under this court's ASTM versus UpCodes decision, unanimously issued on April 7, 2026, the court should summarily reverse this appeal based on fair use. Fair use ruling here brings into question the core technology of the AI revolution. In 2015, a startup called Ross Intelligence built a legal search platform. To train its model, Ross first adapted a headnote into a question. Talk to me about factor four and the impact on the market. So factor four, there's a straightforward answer. You have to look at the statute which says, the effect of the use upon the potential market or value of the copyrighted work. The copyrighted work here is the headnote. There is no market for a headnote. And there's no market for a headnote. Sorry, Your Honor. What do you make of the argument about the market for AI training? The market for AI training, Your Honor. The reason why there's no market for AI training is we are the only ones who used headnotes for AI. And we didn't just take a headnote as raw data. We built them into these memos, which have the two parts. We have the memo itself with the questions, adapted from the headnote. But the key to that memo are the six different answers. Some right, some OK, and some wrong. Because that's how you train AI today. You need that wrong answer. And then from that memo, we train. And the point I'm getting at, Your Honor, is it would be circular if we can come up with such an idea, implement it, and then be accused under factor four of dividing every fair use. Somebody could say, oh, I would have done that. But I guess maybe it's a question for your adversary. But there is some evidence in the record that they were trying to do things like this. The only evidence about AI on the Westlaw side, Your Honor, points to a 2011 algorithm that hadn't been updated since. And it's important for us to get across what AI means. There's AI generally that's been around for a long time, artificial intelligence, anything a human does, tic-tac-toe. What we did is the fundamental AI that is changing the world today. We use deep learning neural networks. So as we point out in our brief, our founder was from the same lab that generated he won a Nobel Prize. So it's not AI doesn't have like this. It's a very broad definition of the market, Your Honor. If you just say, well, it's AI, they were going to use it that way. You have to be much more precise about specific use. Wait a minute. Doesn't West have its own AI-powered general language search engine? You mean today, Your Honor? Yes. I mean, they have to create it, right? So yes, they have it today. Is that correct? I believe so, Your Honor, that today they just spent a lot of money to buy somebody else who is doing it to reach an agreement with a company that can do it. Yes, and that's one of our key points here. That's the same fundamental technology that we invented and that is part of why it's fair, because that's what it's about. It's not a market protection system, Your Honor. Didn't they use their headnotes to train the West Search Plus feature? Their headnotes were used in that context, Your Honor, to just reach other headnotes. They were not part of how that. I don't understand what you're saying. Just to reach other headnotes. It's not a method of finding opinions. But Your Honor, even if they did, even if they did, that's the copyright is not about protecting markets. We have to start with factor one, Your Honor, with respect. The factor one here is the specific use. What did we do with their copyrighted work? And because what we did was so transformational, that narrows the question in factor four. Can you flesh that? You're going to flesh that out. Why was it transformative as opposed to just a different type of legal search engine? To start, we wrote those memos, which is not what the headnote is. We had the memo. We used the headnotes as part of the memo. But the core of the memo was answering the questions. But yeah, let me unpack that, Your Honor. And my question, I guess, is more about the ultimate product. Well, the purpose, the factor one is about the purpose and character of the use. OK, so I'm asking about the ultimate product. The ultimate product has to be the copyrighted work. Factor four doesn't say ultimate product. So you just don't want to answer my question? No, I'm happy to answer your question, Your Honor. OK, so talk to me about the comparison between Westlaw and the ultimate product. The ultimate product is, in some sense, we would be competing with them. I think that's what you're getting at. Yes, we are competing with them. That's one thing that I'm getting at. But I'd like to understand what the differences were. The difference, we, our product, internally operates very differently than the Westlaw product. But it was a direct competitor, correct? I think that's what you're getting at. It's a direct competitor. And that's great. We won competition in this country. The Copyright Act is not an anti-competitive act. It's about looking at the specific use. Your Honor, is it? It aimed to serve as a commercial substitute for Westlaw. Is that not what its internal documents say? Well, external documents, sorry. Yeah, we were competing, yes. We wanted to bring to the country a better legal search technology that takes advantage of today's AI. I'm trying to give you an opportunity to explain on the record what was so different or transformative or earth-shattering about what Ross planned to do as compared to what happens when I log into Westlaw in the morning. At some high level, Your Honor, as in Andy Warhol, there were pictures that looked similar. You could see similarities in the picture. But what we have to do is look at the statute. And the statute has four. There's a lot of dancing going on right now. And I'm just asking some very fact-bound, specific questions about your client's product. Because I am sincerely trying to understand what the product is. And I'm under the impression that for whatever reason, strategic, client-based, I don't know, that you don't want to answer them. No, no, no. So I'll give you another chance. Could you please describe to me what Ross's proposed engine would have looked like and the differences and why it was so transformative from what happens when I log into Westlaw in the morning? From a user perspective, if you're asking to find, you want to find a case, at some level, they're the same. But that doesn't make it a violation of unfair use. So I'm not trying to resist you. I'm embracing your answer. I'm asking you a factual question. And truthfully, I'm not trying to go anyplace with it. I want to understand what your client was trying to do. Our product is you would ask a question in natural language. And then you would get six answers. You would get a stream of answers. But the first, they're all quotes. Here's another difference, Your Honor. Our answers are quotes from judicial opinions. So there's no risk of hallucinations. There's no making things up. The way our search engine works, using the numerical representation, that is important to understand. We teach the legal language connected to the judicial opinion. The question has legal language in it. And what we have taught this machine now is how to think like a lawyer. You get the question, and you go find it. So another key difference, the unusual part of this is we were only trained on 0.08% of all the headnotes. But we can answer any sort of legal question because it learned the semantic relationships in the legal context. Under the first, may I turn to the first factor, Your Honor? How is that transformational from the user's perspective? The question, as you put it, Your Honor, is what the user did with the original work. So let's start. Westlaw's headnotes, they're users' indexes to try to understand an opinion. That's the use. Our original work, we had the memos, which I've described. But we also have this algorithm that I was just briefly mentioning, where we use the latest technology to teach the model how to think like a lawyer. We teach it the language of the law. That has to be transformational. Other district courts have called it spectacularly transformational, have called it highly transformational. And certainly under UP codes, that is just such a dramatic difference. We took something. And another key point, Your Honor, is we don't reproduce the work. A lot of these cases, like the Warhol case, the work is reproduced. There's no headnotes in what we teach the public. That result does not have headnotes in it. It's just quotes from the judicial opinion. And so that is why it's spectacularly transformational. And Your Honor, I think it's also, we took so little. We just took 0.08% is all we copied of 28 million headnotes. And let's also come back to factor two, the nature of this work. As Your Honor's opinion made clear, this is legal context. It's not something that is creative. It's not poetry. It's not like the creative works that are going on in the other district court cases. Well, the bar for originality doesn't seem very high. If we focus not on the ones that directly quote, put aside for a moment, because that's not what the summary judgment was about. If we focus on the ones that are not direct quotes, that take a full paragraph of language and dwindle it to whatever it was, 250 words or whatever it was, or less, why is that not sufficiently original? So first, each opinion has multiple headnotes. I'm aware. OK. Well, if you look at page eight of our reply brief, we quoted both the opinion and what Westlaw did to it. And it's just so little changes. And under the bank's decision. In the one example in the opinion, we're talking about 2,000, I can't remember, it's 248, but it's something close to that, Westlaw notes. I looked at a lot of them. There are some where you have significant language that's changed. And let's be clear about where that number comes from. That number comes from your expert that says, nope, these changed. This is the change. And your argument, as I understand it, is that none of those, I'm not focused on the ones that are quote, none of those are sufficiently original. And I'm trying to understand why. So three responses, Your Honor. First, a judicial opinion is part of the public. What you all write belongs in the public. And the trivial differences that you're discussing, Your Honor, should not be enough to take that away from the public. How are they taking the opinion away from the public? Couldn't you have taken the exact same opinion and formulated your questions? We could have taken the exact and formulated. Yes, but the question is, under the originality, are they doing anything original? Did they write those headnotes? They did not write those headnotes. They copied, Your Honor, the work. So I'm trying to understand how. If you take an entire 10 pages that I write and summarize it in a page, you summarize it in a page, is that copying? No, Your Honor. We're not talking about summaries. We're talking about headnotes. I understand a headnote. So the Seymour headnote, this is one of 10 in a five-page opinion. And there's also the Feist decision that you're on. The Seymour headnote, the part that you're quoting from the brief, the table here, you excerpted in the right column. You use ellipses because you're actually lining up excerpts from that paragraph in Seymour with the headnote. And so when you go back and look at the opinion, there's citations in there. There's things that Wes's editor, to create the footnote, cleaned up, thought about what was salient, and included in the headnote. And this is one that I think you all are talking about as a straight copy. But even in that, there is discretion. So there may be discretion. The only word in Your Honor's question I would comment on is the word creative. This was the work, the instructions that Wes Law gives to its editors is to take out any creativity. Creativity, the reason are there are so many verbatim. It just seems to reflect a judgment about what they wanted in the headnote, and what they thought was salient to communicate in the headnote part of it. Yes, and same true in Feist. It's not like anybody is saying there was an effort and work done in Feist. But the idea here is to get the line. I'm not talking about sweat of the brow. I'm talking about a, I don't know, this is, I think everybody agrees, this is not some remarkable level of creativity. But there are things going on here that go beyond copying, just in the excerpting. But the goal is to track the language of the opinion. If there's some difficulty, you do the best you can. But the goal of the system, and that's what's so lacking creativity here, the goal is to copy the judicial opinion as close as possible. And of course, what we're talking about too. Not what this example shows. This example shows judgments made about what to call out for purposes of the headnote. It's not to copy as close as possible. There's two ellipses. And this is the example you gave to us. This isn't, I think, one of the ones that everybody agrees was discretionary and different. This is a copy. And even in this, there's two sets of ellipses. There's three sentences from the opinion that were called out from a paragraph and condensed into a headnote as part of their thinking and their judgment. And rather than going to Seymour and your client doing it themselves, you took the headnote. So this is their best one. We got this because this is the one they highlighted. But your honor, factor two under the fair use. Even if you think there's some tiny bit of creativity here, which I don't think there is given the goal of the system, it certainly is a factor two of fair use has to be. We have to win on factor two, as the district court agreed. We win on factor three, as the district court also agreed, because it's so trivial. So what we have here is a use where we're ahead on factor two. We're ahead on factor three. If they are ahead on factor one and four, what's the result? Well, Google turns. I believe Google starts with factor two. So it's certainly possible to win. But I don't agree that we should lose on factor two. I'm not asking to agree. I'm asking, if we think they're ahead on one and four, what's the result? We prevail on factor two and factor three. I think, who wins? Who wins? We win, your honor. If you take two and three, and they take one and four, you win? It's a multi-factor test. And another key part here is that copyright law. Is there any factor that's more important, so to speak, than the other factors? It's a equitable decision. You can find language in cases pointing one way and pointing the other way. But the key is, copyright statute came after the common law development here. These are case-by-case determinations. When you have something as spectacular as this AI system, when you have something with a market where nobody is buying headnotes, when you have something with trivial Just because you mentioned equity, in the opposition brief, there's a discussion of bad faith and evidence of bad faith by your client. It's not, I don't think, completely addressed in the reply. You guys have space constraints. And you have to think about what you want to present to us. But could you address it now, whether there are factual disputes about the bad faith evidence and how that fits into the fair use analysis? Your Honor, a couple of things. We did not, we paid for the original database. We paid for the memos. We haven't used any pirating issues. And so I think, first off, we resist the characterization. But let's say the characterization is fair. But what about the communications with Dentons? And I think there's another party about trying to get these in the first instance through them. What are we to make of that? The short answer is that that is way, that doesn't compare to what was done in Oracle versus Google, for example, where people high up at Google were saying we need to negotiate a license. And it doesn't play in. Judge LaValle says copyright is not a privilege reserved for the well-behaved. But regardless, these are issues that can be worked out in the pending litigation of the license violations. They're not part of the fair use inquiry. So I would say nothing, Your Honor. Well, explain to me why that's the case, what you're relying on to say that we shouldn't look at bad faith. So Campbell, being denied permission to use a work is not way against a finding of fair use. The Sega case, copyright is not a privilege reserved for the well-behaved. That's LaValle. I mean, that's just not the way the doctrine has developed. You think those cases stand for the proposition that bad faith is irrelevant, or that the bad faith in those cases didn't outweigh a fair use finding? So in the Supreme Court and Google Oracle, there is a paragraph. And they strongly suggest it doesn't matter. But they don't need to hold it. And I think that would make sense here. Because the goal of this is a copyright case. It's an interesting case. It raises lots of issues. But it's a copyright case. And the point of copyright is progress. And here we have a startup that 10 years ago was engaged in the very technology that is changing the world. Not in the AI, just generally. In the deep neural network technology that was driving change today. It's the same basic stuff. Yes, today there's much more money in it, and much more data centers are everywhere. But it's the same fundamental technology coming out of the same lab. And that's why it would be such a shit. That's why copyright is progress. This is what my client was doing. And it should be recognized. Thank you. Thank you. Good morning. Good morning. I'm J.L. Sindaly. I'm proud to represent Thomson Reuters and West Publishing here. I'm going to hit you with a question right out of the gate. And it's about, what are we talking about? As I understand it, the district court issued a summer judgment as relates to the 2000, you know the exact rest of the number, headnotes. But there is a discussion about the remaining headnotes that may be described as direct copies. Your brief addresses that additional discussion. Are we focused on that? Should we ignore that and just focus solely on what summer judgment was granted on? We don't think you need to address anything other than what we moved on. What we moved on on summary judgment was the 2,834 headnotes, which after, in a very thick document, Judge Bibas carefully looked through and said 2,430. But didn't he certify the question to us as to all headnotes? He did. Two things. Under Calhoun, this court doesn't have to abide by the certification. It can decide the appeal on any grounds that it thinks proper. Makes sense? Pardon me? Would it make sense? I think it would make sense here for you to, we think that what the district court said was right. But the court was talking about, when it talked about all headnotes, was talking about that we have a presumption of validity because we have co-copyright registrations for many years granted by the Copyright Office. And they had to challenge them. And the court in the beginning part of his opinion just said they didn't meet their burden of challenging the presumption of validity. And this makes sense because the Supreme Court held 100 years ago in Calhoun and more recently in Georgia that headnotes are copyrightable. So this court doesn't need to revisit whether headnotes are copyrightable. They are. The law draws a distinction between things that are the work of people writing about law and the law itself. What I thought, so our point is, as Your Honor had pointed out, the headnotes, their own experts showed that the headnotes do not match the judicial opinions that we moved on and do match the bulk memos. And as a result, the court found these were protectable and were infringed. And that, I think, is the proper scope of this appeal. If you wanted to go beyond that, you certainly could go beyond that. But from a categorical point of view, headnotes have already been decided as copyrightable. And the only things that we were all briefing below were these specific numbers. What I'd like to do is start where this court started on fair use and try to clear up some of the both factual and legal questions that came up on that. Because there's a core principle here. In Warhol, the Supreme Court said, substitution is copyright's bet noire. This is a classic case of substitution. And let's start with factor four, if that's OK. So factor four looked at market harm. Harper says it's the single most important factors. So some factors are more important than others. And usually, it's factors four. And some people talk about factor one. I've been doing this a long time. I don't know of a case where someone, in answer to your question, won on two and three and lost on one and four and was deemed to win fair use. I'm sure there's enough clerks in the room that would further answer that question. But I think that's not how the law works, given how the court has said that factors one and four are most important. On this factor, I think the parties are sort of worlds apart on what the relevant market is and what we should be looking at. Can you flesh out your side and the authorities for it? Sure. Well, first up, it's their burden. Let's remember that. This court made clear in upcodes that it's their burden to establish a lack of market harm. And the Redigi case is helpful because it says, when a secondary use competes in the rights holder's market as an effective substitute for the original, it impedes the purpose of copyrights in incentivizing new creative works by enabling their creators to profit from them. And the key point here is not only is their work a substitute, but they admitted it and marketed it as a substitute. The ad that we put in our brief, choose Ross or Westlaw, you can't get a more quintessential example of I'm putting out a product that's substituted. In addition- The competition piece seems a little disconnected from the use that we're talking about. I think that's your adversary's point. And that's why I've been asking about the market for AI training and where that fits into this. Well, there's two kinds of, well, there's three kinds of harm that we've talked. I'm not sure if I'm answering your question, Your Honor, but they're marketing the product as a substitute. And there's lots of documents, some of them I can't all talk about here, where they're trying to take market share and there was actual substitution and all sorts of things like that. That alone is enough for us to win. There's also harm to our market for exclusivity of our training. My friend on the other side seemed to give the impression that we didn't train on our own AI, but in our own content. But as we said, I think in page 12 of our brief, we actually trained on our head notes four years before they even were founded. And we do have an AI tool and we're allowed to use our own exclusivity to build our product. And then the third thing is there's also a potential market, which is also allowed to be recognized under the law for AI training. And we know this, one, because we've used it ourselves. There are other legal research AI companies that would find it useful. And Ross's own conduct here shows that there's such a market because they paid money when they couldn't get it to us, they paid money to someone else in order to get the material. So is it your position that we should be looking at all three of those markets in thinking about whether Ross has carried its burden with respect to each? I mean, it seems like there's a distinct legal question about what market factor four asks us to think about. And I'm not sure that I agree that there's a burden there as opposed to just who's right. And then I do agree that there's an evidentiary burden once we fix the parameters about who wins on the factor. Well, I think we can all agree that fair use isn't a primitive defense and they have the burden, again, up codes of establishing that. And our point is, even though the burden wasn't on us, we actually articulated three types of market harm and they haven't come forward with any evidence to dispute any of it. Almost they said was that, oh, the market really isn't Westlaw, it's for headnotes. But that makes no sense because what headnotes are part of Westlaw, that's how you get licensed to headnotes. That brings another case to mind for me, the video pipeline case, the one involving Disney. As I understand it, there was no market for Disney trailers standing alone either, but the website that stole the trailers was found to have caused diminished value to Disney's website because Disney used that to attract people to their website to do other things on their website. And I'm wondering if you could talk a little bit about that case and whether or not it applies here. It does apply here. It's one of the leading third circuit fair use cases. And again, the court said, similar to Warhol, doesn't even have to be perfect substitution, but I will get at the fact that they're selling the same product, does the same thing, and there's nothing transformative about it. But video pipeline, again, they came up with their own kinds of trailers. Disney had its and others had their own kinds of trailers. And they said that you're gonna hurt my market for what I'm doing with my trailers. And also the idea that once people engage with them, as you said, they will otherwise be interested in other things we're marketing or selling on our website and the like. And once you divorce, they take our content, our question and answers pairs. Remember, they had the cases, their own experts admitted that they could have done their own analysis themselves and come up with question and answer pairs to do the same thing. They didn't need to copy us. They just wanted to. In that situation, there's no justification, which is a lot of what Warhol says. I hope I answered your question, Your Honor. But so the point is on market harm is that it interferes with markets that we went out of our way to identify even though it's an affirmative defense. But let's go to factor one and your questions about transformativeness and what's transformative about it. Because a couple of things, they admitted in the undisputed joint statement of facts, docket 796 at 01, that Ross's legal research platform is commercial and for profit and that they're competitors. So the whole idea of commerciality, which is very important in looking at factor one, they've admitted that they are commercial. In addition, on terms of transformation, in Warhol, the Supreme Court said you need to consider the purpose of the use and where the purposes are the same or similar, the use is not transformative because the use of an original work to achieve a purpose that is the same as or highly similar to that of the original work is more likely to substitute for or supplant the work. And the district court held that Ross's use was not transformative because it doesn't have a further purpose or different character. As the court put it, it was using the head notes to create a legal research tool to compete with Westlaw. I feel like there's one version of this that my guess would be that you like where it's the head notes are sort of a cheat sheet that your client designed to opinions that everybody had access to and Ross could have just gone to the opinions, they took a shortcut and you guys have your rights. There's another version of this that you hear from your friend on the other side that they took the head notes to train up a transformative technology that is just materially different from what you guys do in terms of, just for simple me, there's a search bar and what I type into Westlaw versus what I would have typed in to Ross. What is in the record about sort of the precise nature of that training and the technology that we should be thinking about? Well, the training, it's just a means to an end. It's just a means to copying. What you look at is what the purpose is under Warhol and this here, the purposes were the same to come up with dueling legal research platforms. Now, you asked my friend on the other side, well, how different was what your product did compared to what Thomson Reuters plotted? With him, I was more focused on the end use and with you, I'm more focused on a comparison between what Westlaw is doing with the headnotes in its search functions and what's in the record about this and I'm not asking for any state secrets, but compared to what the Ross product would have done after the training. Well, what's in the record, I believe it pages 12 and 13 of our brief is that we trained on our own headnotes to create AI products that we offer to the public. You said that started four years before Ross was even created? Correct, correct. And so as much as they try to cast themselves as tremendous innovators, they really were late comers in terms of what Ross and it's not just us, if you look at the amicus brief of Lexis, they also had an AI product in 2010. So that's what the world was, but the question is, what did this product do? And as the district court said, what it did is it spat back cases, that's what you heard, it wasn't like generative AI, I'm gonna write a brief for you or anything like that. It was like spitting back list of cases and quotes, which is at least when I use Westlaw, that's part of what you get from Westlaw too. And I think it's very telling that in Bart's philanthropic, while the court there was very comfortable finding that what was transformative was the AI generative issue in front of it, but it agreed with the district court here that as it put it, using a proprietary system for finding court opinions in response to a given legal topic to train a competing AI tool for finding court opinions in a response to a given legal topic was not transformative. In other words, you can't just say AI and have that just be across all fact patterns. The whole point of fair uses the Supreme Court has recognized is it's fact specific. You look at the uses and you look at whether in fact there's substitution and justification. And here, there's a direct. What's your best evidence on the record of market harm to your client? Well, the best evidence on market harm is one that's their burden to show that there isn't, but our evidence is that they advertise this as a competing product, as a substitute for us, and that they admitted that they in fact did succeed in taking market share for us and causing people to switch. The other key thing that my friends on the other side don't even mention in their opening brief and our view gives short shift to in their reply brief is the concept of widespread use, because the Supreme Court is clear that you don't just look to what Ross did from a fair use point of view. It's not a damages analysis. It's an analysis of everybody and his brother who were allowed to do this. What would be the consequences? They don't mention that, and with good reason. They don't mention it because the net effect of it is that you end up with, they don't mention it because if everyone was able to do this as both our brief and the Lexis Amicus brief said, why would we continue to be hiring and training people to do this and analyze the law and be useful for people if you can free ride off of that? I see I have a red light. I just wanted to, if I could, just say two quick things on factors two and three. Factor two is that this was the creative nature of the headnotes. We all know that if we all analyzed a case and were told to headnote it, we would probably do it differently. That, given the nature of the use here, that this was for a legal research platform, these are creative uses, and they admitted that they wanted those pairs. With regard to factor three. On factor two, I think you talk, and I think you just referenced it, the investment of time and funding in the editors, and you cite, there's a Ninth Circuit case and a Second Circuit case, and you guys battle about whether those are opposite. We haven't looked to this consideration in this circuit. Is there anything else you're hanging your hat on for we should be looking at that? The one thing I can add on, thank you for asking the question, Your Honor, is that recently, it's a District of Delaware case, but in Deloitte Consulting versus Sagitek Solution, Judge Bryson of the Federal Circuit, sitting by designation in the District of Delaware this year, adopted Waldata's reasoning that while hard work doesn't go to anything about copyrightability, it is something to consider with regard to assessing the factor two. And then, if I can turn to factor three? Okay. And then in terms of factor three, the key thing here is they took the heart of our work. You heard a lot of comment of, oh, it was only .08% or something like that, but the heart of the work, what Westlaw is, what differentiates it from merely a collection of cases that you can get, which they did from other vendors, is the editorial content that you can use the West Key Numbers system, you can use the headnotes, you have different choices as to how you wanna research, but ultimately, it solves the problem which their own expert admitted was a really good thing of solving the problem of finding the needle in the haystack. That's one thing. The only other point, and they took a lot, it was in bulk memos, each one of them had a headnote, and that's not like one or two lines like in some of the Salinger cases. This was a lot of taking. But the other thing I wanted to just point out that the one thing that I don't think was quite right in the district court's opinion on factor three is the court said, oh yeah, it does look like they took the heart of the work, but gee, in the Google Books case, the court focused there on factor three on the fact that things weren't visible. And since the headnotes weren't visible, the court said, well, maybe that should go towards Ross. But the reason that doesn't apply here is the Google Books was all about the idea of whether Google Books, the book search tool, substituted for actual reading of books. So what the court said in its factor three discussion was no one's gonna read these little snippets as a substitute for reading whole books. Rather, Google Books is a search tool that lets you find books, and that's a good thing. That concept of visibility is not relevant here where the whole point is the district court found, and they don't dispute that the whole engine, excuse me, the whole Ross platform was built on Westlaw. And that's a difference. And that's my last point. I've got one more. I want you to talk a little bit about the cases involving intermediate uses, so Sony and Sega and the Ninth Circuit, and then the Supreme Court's Google decision in the relation to declaring code, like compare headnotes to declaring code. Okay, let me start with Sony and Sega, and I will try to remember. I know you want me to do Google next. I'll remind you, yeah. So if I forget, I have a feeling you'll remind me somehow. But all right, so Sony and Sega. Those cases actually go our way. Why? Because they cite those cases as if they stand for the proposition that intermediate copying is fine and that you can do it and that's not a problem. Actually, they say the opposite. As the Sega court said, the Copyright Act doesn't distinguish between unauthorized copies of a copyrighted work on the basis of what stage of the alleged infringer's work the unauthorized copies represent. And so the Copyright Act unambiguously encompasses and prescribes intermediate copying. And we know this in the Copyright Amicus Brief of Copyright Professors talks about this because Section 106 has separate rights for distribution and reproduction. They're basically saying unless there's a distribution, it doesn't matter. But that's not what the Copyright Act has written. And thus, the Sega court said intermediate copying of computer code may infringe exclusive rights regardless of whether the end product of the copying also infringes those rights. So that's what the court said. Then the court went on to say in those cases that because you're dealing with computer code, we're the only way you could understand the functional nature of that code to create a compatible product. In one case, it was cartridges that could play on the Sega station. In the other case, to be able to play the games on a PC. Because of that compatibility need, you needed to be able to do that intermediate copying to achieve that purpose. That is completely different from this case. There's no argument whatsoever of any compatibility need, which also relates to why this is an Oracle v. Google. And it also just highlights, again, that there's no need. The whole point of the Sony and Sega case is you had to reverse engineer in order to understand the functional aspects. As we've heard and my friend admits, they didn't need to copy to do what they did. So those cases do not help them. If anything, they help us. And with regard to Google v. Oracle, that case- And the declaring code. Oh, excuse me. So Google v. Oracle, in contrast to, go back to factor two a minute, in contrast to the situation here, which is a literary work written by humans where someone is analyzing the law and deciding what headnotes to write and what case passages to link them to and the like, the court in the second factor was very focused on APIs declaring code as being basically the most functional kind of code as it could get. So in that situation, it was the most extreme situation you can think of where factor two existed where there was essentially, just maybe a little bit over, the court found copyrightability there, of course, but not extensive work. That's not the situation here where there's no computer code, don't, no, I can tell you're asking me a question. There's no ones and zeros, but at least I think in the way end users of Westlaw consume opinions, there is a functionality part of this that there's sort of, the argument would be there's a row copying of a headnote that then in the same way that a declaring code sort of shoots the programmer to the right part of what they actually wanna get at and the more creative aspect of it, the headnote, you click on it, it shoots the user to the part of the opinion that is public and is everybody's. I disagree with you, your honor, because the whole point of, after the court said declaring code was this special kind of lowest level of computer code, it really based the thrust of its opinion was on this compatibility desire to let programmers who are already familiar with those APIs that were just barely protectable according to the court to be able to use them in an entirely new platform. A platform, by the way, where the court said under factor four, there wasn't market harm because Oracle had not entered or didn't seem likely to enter the market for using Java on mobile devices. Totally opposite, this situation. And I think your other question, did I answer your other question? You hit my three cases. I hit your three cases. I'm good, yeah, thank you. Three cases. My bottom line, your honors, is, and thank you for giving me a couple extra minutes, my bottom line, your honors, is I go back to the Constitution. The Constitution is designed to give people copyright protection so that they could innovate and come up with, invest and come up with works. And that's what my client has done for over 100 years. It was once a startup too. And we all know, some of us went to law school when there was paper that we used to shepherdize cases. And then Westlaw came around and suddenly that was different. And now we're using AI and we've been using natural language search for before them, as has Lexis. That is all possible because of copyright. And the idea that someone could come along and can't, oh, it's AI, is just wrong fundamentally under the law, under common sense. And yes, I'm happy to talk about bad faith if you wanted to talk about it too. But if ever there was a case where that mattered, it would be this case and it favors us. Thank you. Thank you, your honor. One place where I agree with my colleague is you cannot just say AI. We're gonna give some sites because if there's one thing I can leave the court with, it's to convey the complexity and sophistication of the technology here. So we lay it down in our brief at pages 10 to 14 at appendix 6992 to 7000. That's where the fundamental version of AI that we invented, that we use, that is now changing the world, the chat GPT is the anthropic, that's the technology we're talking about. We're not talking about the AI from 2011 that was never updated. Now yours is not generative AI, right? It's not generative AI, your honor, but that word, as one of your amicus briefs points out, has no technical meaning. We don't output, but we could have output. But you don't, you don't spit out, I can go on and ask chat GPT, write a brief about this. May hallucinate some stuff, but it'll write it. I can go on and say, can I legally do this? Might not be completely right, but it'll give me an answer. I can say, you know, I've been sued for X, Y, and Z, what can I say to convince my insurance company to cover me? And it'll give me an answer. That's not what your product did. No, no, and that I think reflects on the integrity and knowledge of the founders, because they didn't do that. They could have had it generate answers, but they went to the judicial opinions, because one of the visions of this company is to get people access to law, not to generate hallucinations. But you ask a question and it gives you quotes from a case. Yes, yes, Your Honor, and that the sophistication is it links your question to judicial language, even though we only use 0.08%. So what the training lets you do is answer a legal question that the model has never seen before. And that's why we didn't take the heart. We could have used any 0.08%. You know, any 0.08% we could have used. Your Honor asked about summary judgment motions, A58 is where the district court below denies our summary judgment motion on all the head notes. And Your Honor, you've asked a lot about the market. I would refer you to both the Oracle case and the Andy Walhart case, where it's not the market in general. It's a distinct market. In Oracle at 1207, Your Honor, Google's Android platform was part of a distinct and more advanced market than the Java software. And so we don't collapse the markets. The AI that my colleague was talking about that they had just went from head note to head note. It didn't go from head note to opinion. And that's at A8615. The record here of the market, Your Honor, completely lacking. Even if we had the burden, they do need to come forward with some evidence that the market has been harmed at a significant level. And they've shown- It's just precedentially established that it's your burden. Yes, sure, it's out, yes. When you, on rebuttal, say they have to come forward with some evidence, what is the basis for that? Because we have argued, we've made an argument. They need to refute the argument. It's the record. And UpCode itself doesn't turn on burden. It turns on the fact that the evidence there had no- I think the way to frame it would be, has your client established that there is no market harm? Right, but as a practical matter, it's Westlaw's subscriber numbers. It's Westlaw's customers. How on earth can we do that? I mean, we did our part, but they haven't shown any evidence. In fact, there's actually evidence the record's shown the other way, that people left Ross to go back to Westlaw. They have an obligation under UpCode to give concrete numbers, not sort of anecdotes and ads that don't even mention headnotes. They have to come back with real numbers. You know, I mentioned the video case. That was a reproduction case. Another point here is we don't reproduce the headnotes. It's not as if the customers in the market can get Westlaw headnotes through us. We just give them the opinions as we were talking about. And then on the Sega Sony cases, those actually state the public policy that I think is so fundamental here. Fair use is not an invention. If I'm an author, I may not love fair use, but it's what Congress decided. We have to allow people to do things that make sense. There's no strict necessity requirement, and it's fine if you're using it. What you have to have is a legitimate purpose, and we couldn't ask for a more legitimate purpose. I think Sega uses language, humans cannot read the object code. Humans cannot read the object, yes. And Ross employees could read the opinions. Ross, the opinions are not the work, though. Right, but my point is it was not necessary to scrape the headnotes to get to the legal opinion. Right, and there's no necessity requirement. Well, you're relying on these intermediate use cases, and those are situations where it was without the intermediate use that we're talking about, they couldn't access the information. So, Your Honor, the Oracle Google case, that there's 37 APIs that Oracle wrote, Google was copying them. Right, so that's a different line of authorities, but in the Ninth Circuit cases that we're talking about, we got ones and zeros that had to be reverse engineered in order to create the transformative uses that those courts talked about, which seems to be fundamentally different from what you're telling us the product is, is a lawyer puts in a question and gets an answer linked to case law that everybody agrees is available, is fair game. And you guys took an intermediate step, and when you cite the Ninth Circuit cases, Sega and Sony, I think the argument is we should be looking at those steps that they took to modify those platforms as similar to what you did, and I just don't think it is. I mean, those cases are about public policies, and they say that, and here's a quote from Sega, when the person seeking the understanding has a legitimate reason for doing so. We were under huge time pressure, these startups don't have a lot of time, they have to raise money, they have to move fast. That sounds very commercial, when you're talking about public policy. Your Honor, startups definitely have a commercial element, for sure, but in America, certainly in the AI context, we have what we have, because of the energy that's coming out of that community. Yeah, I think this case is about balancing what we have, and where are the right lines. It's all about balancing, as all copyright cases are, Your Honor. Yeah, if there are no further questions. Thank you. Thank you. Counsel, before we leave, I'm gonna ask you to check in with the clerk, because we'd like a copy of the transcript, and I'll ask you to split the costs, and the clerk can explain to you how you go about doing that."
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"stt_transcript": "25-2502. Ms. Brill, good morning. We're moved to adjourn. Thank you all for joining us and we're going to start in a few moments. That the timing of the federal comparator is no later than the timing of the state predicate offense. First on the categorical approach, this is a well-established rule and we ask that it be faithfully applied. The government has proffered various other approaches that... They're suggesting it's similar to, correct? Yes, their formulations for similar to are slightly broader than or looser or another approach that has no contours, which is that more severe than can just have its own independent meaning. I don't think that that's supported by the statute and certainly not by every other. There's the word comparables in the statute. That has to mean something as we define whatever approach we're going to take, doesn't it? Yes, comparable means same or defined more narrowly, as the Supreme Court said in Mathis. It doesn't have to be an exact match. That's not the categorical approach. It has to be the same or more narrow then. Just to be clear, when you say the strict categorical approach, are you suggesting that we don't apply the hybrid approach, which as I understand, allows us to consider conduct for the purposes of determining whether or not it was committed against a minor? If this court wants to reach the question of the hybrid approach, which would be the Tier 2 inquiry, I do think that the statute does call for a hybrid approach in this court. Okay, I just want to make sure I understood what you were saying. For the Tier 3 inquiry, which is if first degree rape by forcible compulsion in New York is comparable to or more severe than aggravated sexual abuse or non-aggravated sexual abuse, I believe a strict categorical approach is the appropriate inquiry. What are the critical differences that you see in the two statutes? The critical differences between the New York statute and the federal aggravated sexual abuse is the degree of injury, physical injury versus serious bodily injury is a clear way that courts distinguish severity of harm. You're talking about 2241, right? Correct. What about 2242-1? 2242-1 is an issue that the government has just raised two days ago. It was never raised or briefed below, and I believe that argument was made. I thought that was raised below, and I'm pretty sure the government responded to it below as well. I was just looking back, and I believe that they were always discussing 2242-3, that subsection. Well, 2242-3 didn't exist. Correct. But the government's argument below and here is that 2243 is the relevant comparator because the timing is at the time that Mr. Summers committed the SORNA offense, which would be in 2024. So for the government, it always included 2242-3. It did not include it in the briefing. I submitted a 28-J response last night. I have not had time to fully brief it. My one response on the government's late argument and waived argument is that if force in non-aggravated sexual abuse was so broad, then they wouldn't have created 2242-3, that new subsection, which is supposed to be the catch-all. So that's my quick response to that. And so for those reasons, I think that a strict categorical approach is the appropriate approach. It's consistent with the statute and in every other circuit. And it calls for the court to find that Tier 1 is the appropriate inquiry. What do you make of the government's argument about Tier 2? So I do agree that this court should find hybrid approaches is appropriate. It was not raised below. And the problem with it not being raised below is that the government didn't prove it. What the government is relying on for this very significant finding that will also have lifetime consequences for Mr. Summers is the arrest report as recited in the PSR. That is the only proof in the record. I've never seen Mr. Summers' plea colloquy from New York. His plea colloquy in federal court said nothing about the age of a victim. His judgment, which I have seen, I'm not sure that the district court saw it, says nothing about the age of the victim. The statute that he was convicted under says nothing about the age of the victim. So I don't think that it would be appropriate for this court to find that Tier 2 is applicable at this stage of the briefing or even applicable to him based on the proofs. Counsel, when you get a chance, do you have the sentencing transcript with you? Will you take a look at, and you can do it when you're sitting down, when you prepare for reply. I want you to take a look at, I think it's JA 70-72, I could be wrong about that. But I thought that 22-42-1 was discussed there in the sentencing transcript. You can do it when you sit down, I just want you to take a look. So we didn't specifically speak about the timing, but regardless of how this court decides this case for Mr. Summers, I think the timing is very important for this court to consider. When a defendant pleads guilty to a sex offense in any court, federal or state, they think about the collateral consequences, the registration consequences. Mr. Summers, in this case, was specifically asked if he had consulted with his attorney about collateral consequences. To rule that a change in the statute, a change in the cross-reference to a statute could affect his original state plea seems an even stronger argument than the court had in Brown, that the timing has to be at the time of the state offense. And I would ask the court to look at, to make that decision regardless of how the decision goes for Mr. Summers. When you say the timing of the state offense, both the state, the underlying state predicate and the SORNA statute? The underlying state predicate and the SORNA statute, not the SORNA statute, the cross-reference to 2242. All right, at the time of the state offense. Yes, and I say that the timing should be no later than the state offense, but actually the Supreme Court in Brown was talking about the reference canon. The reference canon actually goes back to the timing of when the statute was enacted in 2006. That is actually the appropriate time to cross-reference 2242. If you have a statute, the reference canon that the Supreme Court discussed in Brown is if you have a statute specifically citing another statute, it's locked in time without any subsequent amendments. So I would ask the court to find that no later than the state predicate is the appropriate timing. But at the plea, wasn't he allocated on the fact that the district court was going to make decisions about sentencing consequences later and that no promises could be made to him about what the district court would decide? Yes. Wouldn't that cover the tiering part of this as opposed to the guidelines and collateral consequences that those are decisions for the district court to make and not something that is sort of bound up in a plea agreement or a guideline stipulation? Whether the district court has ultimate discretion to make those legal determinations and factual determinations, there's still a burden of proof on the government. No, I appreciate that, but you're making an argument. It sounds like sort of a reliance interest that the defendant at the time of the plea had an understanding about the collateral consequences and the tiering and the guidelines implications. And what I'm asking you is, or I guess just stating, isn't it true that those things were left to the district court's discretion and that he was made well aware of that at the time of the plea? Yes, that is all true. I'm sorry if I was not clear with my argument. The timing of the state plea, when his defense attorney was advising him of the SORNA consequences, of the life registration consequences, that would be something that a defense attorney would be obligated to advise a defendant of. But how could the attorney be providing any advice guaranteeing how a district court would apply the tiering? The attorney would be advising at the law at the time. The attorney would be saying, I think, I did a little of this. This is my best guess about how a district court would do it. Yes, agreed. Best guess by competent legal counsel is what a defendant is entitled to. The reliance point, I think, is tough. There is strong language in the Supreme Court cases you cite about the timing part of it. I think what's a little sticky is that those cases speak to the state law conviction and are not necessarily covering the federal law on the books at the time. And that's the extension you're asking us to make. Can you flesh out a little bit why that's appropriate? So McNeil has always held, the Supreme Court case has always held, that the state offense is stopped. We look at the state offense at the time the state offense was committed. But Brown did deal with the federal cross-reference to the Controlled Substance Act or Controlled Substance Regulations. It did deal with the same issue of a cross-reference to something in the federal codes and how that affects the court's determination of the risk factors from that original conviction. And so I think that Brown is exactly on point and stronger in this case. Did that answer the stickiness? It's a different statute, but I take your point. Do you want to talk a little bit about mootness? I'm drawing some inferences about the emphasis in your argument about your position there, but can you flesh it out for us? Mootness is on categorical or on... You know, the government agrees that the issue of the cheering is not moot because it has lifelong consequences. The government said that it is just an issue of... What's your position on mootness with respect to the one point? My position on mootness with respect to the criminal history category issue? Great. How is that not moot? How is that not moot? On the specific facts of this case where Mr. Summers has a pending violation for this underlying conduct and then the two sentences are essentially intertwined because he's not able to proceed with his parole violation until he finishes the federal sentence. In that unique scenario, it's not speculative that his federal sentence and what he's serving will impact the parole board's decision and I am in frequent contact with the parole revocation defense unit in New York. Let's assume he's released in a few weeks, right? Okay, is it moot then? It's not moot then. It's the same issue because he's going into New York custody to face the parole violation and he will be able to make the argument if he did over serve his time that that time should go to his parole violation for the same instant offense conduct. So it's like money in the bank. It's not money in the bank because he can't bank the time for later supervisory release violations. That doesn't preclude a finding of mootness. But in this case, he has interrelated crimes. For example, in federal court, if a defendant had a violation of supervised release on a state charge, we would wait for the state charge to play out to see what the appropriate federal supervisory release violation sentence is. And it's the same interrelation here. It's just going in a different direction. It has direct consequences for him, not collateral consequences, but direct consequences for that next proceeding. If the court does determine that it is not moot, I think that the Josie issue is, the issue that the court in Josie left open is well placed here for this court to determine. What about 3661? What about 3661? Can't the court consider pretty much anything at sentencing? The court can consider, yes. But the court is required to find under Josie when the instant offense conduct commenced. Well, the court, let me ask you this. Do you dispute the accuracy or the validity of the June 3rd, 2024 W-4 that shows New Jersey employment? No. I agree that the judge found that he filed a W-4 on June 3rd, indicating that his employer should send his tax withholdings back to that address. And the court relied on that in setting the date? Yes. What is the issue with that? The issue with that is that is not an appropriate, that's an erroneous finding of residency. How is it erroneous at the sentencing standard? He's asking, send my money or send my refunds or whatever it is. This is where I'm living. How is that erroneous? And can I layer something on top of that? As you're considering how it's erroneous, not from the perspective of the trial court, but from the perspective of our court and what our standard of review is when reviewing the trial court's determination. I believe that it is a hybrid standard of review because while she made the finding, the factual finding, which is clear that he filed a W-4 for employment purposes giving an address, the question of residency has a significance. And so this court should decide what residence is. And it is not giving an address for employment purposes. SORNA is worried about the community and protecting people in the community. SORNA is worried about people living in the community. It is not giving an address for employment purposes. And I would ask this court to think about residency. Again, regardless if this court finds that the factual finding was sufficient, I think that clear standards are very necessary in the SORNA context. And this is an example on both issues of a case where the clear standards prejudice Mr. Summers, both on criminal history and tiering. Thank you very much. Good morning, Mr. Sanders. Good morning. May it please the court, I'm Stephen G. Sanders. I'm from the United States Attorney's Office in New Jersey on behalf of the appellee. I have a lot of ground to cover. We're going to ask you to affirm, but I think there needs to be a remand under Rule 36 to correct the judgment because as I noted in my letter on mootness, the very condition of supervised release that we now agree prevents this case from being moot on the tiering issue is not reflected in the judgment. So I think under Rule 36 that needs to be corrected since the sentencing transcript controls over the written judgment. But with that, I'm going to address very quickly the mootness point and then move to the SORNA issue. The criminal history category issue is moot under this court's precedence and under Spencer v. Kemner. The fact that Mr. Summers would like to take an argument and use it somewhere else without any showing that it's likely that that argument is going to be considered, let alone have merit, is not sufficient to prevent this case from becoming moot. When does it become moot? When he's released? When he's released. So unless this court issues a decision, obviously within 14 days, which I don't know if we'll be able to do that, but I mean this appeal could have been expedited. That would have been one way to avoid this situation. It wasn't, so we're here. But the critical assumption of the it's not moot argument is that he over-served his sentence, but without a remand to the district court, we'll never know what that court would have imposed had it had a different guideline range. So unless you have any questions for me on mootness or on the residency issue, I would like to spend the bulk of my time talking about the SORNA issue. Sure. Is that all right? I'm in the odd position of recognizing that there are, I think, eight circuits out there that apply the categorical approach with this carve-out for a hybrid approach on the age, but that immediately proceed to the assumption that there's a strict categorical approach without really analyzing, as Judge Bowe said, the comparable to language. I'd like to point out this statute was passed in 2006, and that's a long time after Congress enacted ACCA and Congress had a chance to watch the Supreme Court develop the categorical approach in Taylor and apply it in Shepard and a series of cases. And if Congress wanted the same analysis to apply, they would have used the same terminology, right, is. Has any published case adopted the slightly broader approach? None has had to apply it. The Eighth Circuit has rejected it. The First Circuit, in an earlier opinion, which I cited in Morales, recognized the possibility of a slightly broader approach but didn't have to apply it in that case. What does that mean? If we're writing an opinion adopting that, what do we say that is? Well, I'll go to a case I give my Ms. Brill credit for citing in her brief, Port Nova, which is a decision of this court, right, that construed the words relating to, right, a state crime related to child pornography. And this court said that that called for a broader or a looser categorical approach because Congress hadn't used the same words it did in ACCA or that the commission did in the career offender provision. It didn't say is. So there's been no administratability problems with that standard. Here, it's hard to articulate that standard, but I can tell you when I look at the New York rape statute and I look at 2241A, the only difference, and it's not the level of injury cause, right, because this is not about causing injury. This is about a threat to cause injury. The only difference between those two statutes is that New York just requires a threat of physical injury. Congress in 2241A required a threat of serious bodily injury. Now, didn't New York amend its statute to remove the word serious? I'm not sure if New York subsequently amended the statute. I know we're focusing on the version and the definition that was in it. I'll represent to you that it did, that the prior version had serious and that it removed serious in the next set of amendments. So in our version, serious is not there. In the version just before, serious was there. Take that representation. Does that matter? Well, it does. And I mean, if it was in the version that was in effect, and I'll go back and check for sure, when Mr. Summers committed his crime and was convicted, then there's no difference between these. No, my position, what I'm representing to you is it was an aversion that existed before he committed his offense. The statute was amended. Serious was removed. And when he committed his offense, serious was no longer there. And let me finish my question. So you're arguing to us that there's no difference between the two. And I'm wondering if the fact that New York took serious out means anything. I think it just is a recognition that a rape offense where the rape occurs because there's a threat of some sort of bodily injury to either the rape victim or to some third party is the same thing. And then we're going to have juries quibbling over whether the level of the threat, where there is no actual injury cause, the jury's not deciding whether someone was injured. They're not going to have the jury quibbling over that. What matters is that the threat is the same thing as the other thing that the statute requires, which is forcible compulsion, either a threat of physical force or a threat to cause injury. But if we were to apply the traditional, old school, strict categorical approach, where do we land on this case? If you apply the strict categorical approach, I agree that. And I don't have to quote all the opinions that complain about the category. But I agree that the statute's overbroad and that we have to move to my alternative argument. And so I'll do that. But I do want to, again, just stress that comparable to, I quoted it in my brief Black's Law Dictionary, doesn't say it has to be equivalent. And I can't think of a more perfect case to make this argument when you compare 2241A and you compare the New York's definition of forcible compulsion, the only difference is in the degree of the threat. That, to me, is the quintessential case of something that's comparable to. And with that, I'll move to my- To the degree of the threat or degree of the injury? Well, remember, there doesn't have to be injury. It's just about when you're threatened to cause injury in order to induce the sex assault. It's just, are you threatening to kill somebody versus just threatening to hurt somebody? Again, serious versus bodily. Right. And to me, that is right in the heartland of what Congress was getting at. Now, let's move to 2242.3, which is the argument I made in my brief and the argument about Brown. It can't be that when Congress enacted SORNA and made a cross-reference to 2241 and 2242, it was freezing in place those definitions at the time SORNA was enacted, right? And we know that because in Brown, the Supreme Court didn't look at ACCA as of 1986. They said, we need to do some statutory construction, some analysis, and they ultimately pinned the date for purposes of that case on the date of the prior state drug offense. But SORNA is not a criminal statute. It is a civil statute meant to protect the public from sex offenders generally and meant to protect children specifically because there's a focus throughout the act on crimes against children. But couldn't you roughly frame ACCA that way as creating enhanced penalties to incapacitate somebody who's been a recidivist and been a threat to the community to protect the public by incarcerating them? I mean, at a high level of generality, you can, but those penalties, right, the consequences of having three strikes under ACCA are far more severe, right? You go from a zero to 15 to a 15 to 11. But I don't know that your argument turns on the severity of the outcome. No. In fact, I have better arguments than that. And one of them is that under SORNA, right, you did not have to commit your qualifying sex offense after SORNA was enacted in order to be a covered person. If you were a state offender, you have to travel in interstate commerce after the date SORNA was enacted. But if you were a federal defendant who had a sex offense conviction, you were obligated to register, right? And there's no retroactivity or ex post facto problem. We know that from Smith v. Doe, the Supreme Court case, and there's circuit-level precedent on that. So what I'm getting at here is that Mr. Summers, even if he was a Tier 1 or Tier 2 offender when he committed his sex assault offense, when Congress amended 2242 and added Subprovision 3, all it did was say, you're going to have to register for a longer period of time. They didn't create an obligation that didn't exist on him previously. They just made the consequences of his prior conviction more severe from a civil reporting consequence. If he fails to report, obviously he faces federal conviction if he travels in interstate commerce. But SORNA, the 2250s offense that he was convicted of here, that language hasn't changed and the penalty hasn't changed. So I want to also talk about the reference canon. I mean, I stumbled... The reference canon is an aid. As Ms. Brill mentioned, it's an aid in statutory construction, but the key features of the statute, right? The use of the present tense is comparable to, as described in, right? And especially when we have a U.S. code where everybody can look up. I understand the reference canon was developed at a time when statutes were in books, right? You couldn't go online, right? And they were just in the at-large written statutes. You couldn't know by looking at the statute when there was a cross-reference whether that cross-reference statute had been amended. But isn't there a present tense language in ACCA that the Supreme Court didn't find persuasive in the other line of cases that we're talking about? There was some, yes. I mean, it's in the opinion. They talk about it. That argument didn't carry the day. It didn't. So I struggle with... Because there's some intuitive appeal to what you're saying textually. I agree. But I read those opinions, and I don't see the way around that language. Well, all I can say is that the Supreme Court in Brown wasn't prescribing a one-size-fits-all, right? It wasn't saying any time you have a categorical approach and a need for a comparison, you always look at the law in effect on the date that the underlying crime was committed. It depends on the statutory scheme, its purpose, its structure. And I think all of those are the reasons I've seen in our brief point toward allowing an amendment to 2242, like to add that subsection 3, to be counted and cross-referenced in the definition of the tiering definitions. I have only three minutes left, so I'd like to talk a little bit about the tier 2 argument and why we don't think that there's a waiver there. And it's even more important now, right? If this case is effectively moot but for the tiering question, this appeal is effectively like a declaratory judgment action. It's as if Mr. Summers is seeking a federal court declaration of what his obligations are, right? So the tier 2 argument is not going to matter to the length of his sentence, but as he's putting it, it will dictate how long he has to register and how often. And so why should the fact that a prosecutor at a sentencing who made the winning argument, right, the tier 3 argument, didn't make the backup argument, the lesser included, that he's a tier 2, why should that give Mr. Summers an immunity, right? He's not just seeking a reduced sentence. He's trying to say that he's going to take the decision from this court, saying he's not a tier 3 offender, and act like he's a tier 1 offender. And he's going to be in for a rude awakening because if 15 years goes by and he doesn't register, we're going to prosecute him, right? Because if he's a tier 2 offender as a matter of law, he has a duty to register for 25 years. So at the very least, we think we haven't waived that. It's a purely legal issue, and contrary to what my friend Miss Brill said, it's in the PSR in two different places that the victim was 13 years old, and Mr. Summers didn't dispute that. And I can represent to the court also that I checked the New York State Sex Offender Registry, and the age of the victim is listed under the entry for Mr. Summers. This court can take judicial notice of public records. So that information is out there. How do you respond to your friend on the other side's position that the argument set forth in the papers two days ago is double forfeited, it wasn't raised below or here? Well, first of all, my apologies to this court for discovering that as I was preparing for argument. So I didn't raise it in my brief, and that's my bad. I strive to do better. It was raised below, and in preparing for argument, I recognize that I've checked the record. I think at page A81, I think Your Honor referenced several pages earlier where the defense attorney was trying to negate the argument. But at appendix page 81, the prosecutor, although she didn't make this argument in her written sentencing brief, argued on her feet in response that 2240-2-1, right, that the rape offense was categorically more severe for the very reasons I said. Is that enough to have preserved it? It's certainly enough to have preserved it, right, for appeal. And certainly if I had read that section of the transcript more carefully, I certainly would have briefed that because that, to me, is the easiest path to finding that Mr. Summers is a tier 3 offender. So it was raised below. I didn't raise it in my brief, and if the unfairness to my adversary is that she didn't have a sufficient chance to respond to it, then I would submit supplemental briefing as one option for the court. I see my time is up. Thank you very much. I'd ask you to affirm but to remain with your instructions to correct the judgment. Thank you. I apologize. I did not write down the appendix pages that you had asked me to look at. But I will say that the government made the argument below that slightly broader than was the relevant consideration, and they weren't saying that under the categorical approach 2242.1 was met. They were always espousing the slightly broader than, and I don't think that they preserved that argument. On the tier 2 issue, the government failed to meet its burden. Taking judicial notice now of something that a sex offender- Is it in the PSR? It is in the PSR. It just feels like on this argument and on the commencement of the fence argument, you're not putting much weight on the fact that this PSR went through an undisputed process under the Federal Rules of Criminal Procedure, factual disputes were resolved. This is a fact-finding document. I don't think we need to take judicial notice of anything if the age is in the PSR. Why can't we rely on that? On this specific issue, there was a discussion, there was an objection made to the district court that the court shouldn't include in the PSR just an arrest report because it wasn't reliable. The district court responded that it's appropriate to know the background of how the offense began. It was never more in the PSR or in the discussion- But that's a factual finding by the district court. That the arrest report said what it said. Yeah. It was never more than that at the district court level. And the reason that defense counsel- Is that enough? On arrest report, I believe that it's not enough under this court's case law. For other reasons, this court can't find a bare arrest report has significance for deciding criminality. And for this reason, that a finding of a sex offense against a 13-year-old would have a very significant consequence. And I would ask this court to find that that tier two generally requires more proof. For example, in Nihuan, which this court decided and the Supreme Court affirmed, the issue of the factual, the hybrid approach which was raised at the district court level. It was a immigration case where the government had to prove more than $10,000 for the fraud-mated and aggravated offense. The government, the defendant stipulated that the offense involved more than $10,000 and the restitution order followed that stipulation. That is reliable facts. In this case, if Mr. Summers had known that the arrest report written in the PSR would have this kind of consequence for tiering purposes, he would have had a better objection to the district court for taking it out. It was only discussed in terms of how the Bureau of Prisons would look at the bare arrest report in determining different risk factors once he was in prison. It was never intended to be a factual finding. So it is true that the PSR is a document for those reasons. It's a document that contains the sentencing fact findings of the district court without regard to purpose. I'm not following that. If this court is to find that everything in the PSR that isn't stricken has these kind of long-standing consequences that could affect tiering, then defense attorneys would have to practice differently. Maybe they should. I don't understand why we would be looking at things printed in this document that survived an unchallenged process and disregarding them based on the consequences of the district court's fact findings. Because the defense attorney did not know that this piece of the arrest report would be used for fact finding for tiering purpose that would affect him for 25 years. That's a consequence that I don't know that probation officers are making that finding. They're frequently using arrest reports. But every factual determination in a pre-sentence report has real serious consequences. I would say that this consequence is the most serious because it has consequences for his safety in prison. It has consequences for his safety in the community. It might have consequences for how New Jersey is going to tier him under Megan's law. And notwithstanding all that, there was no objection? There was an objection. Challenging the age of the victim? No. Defense counsel did not challenge the age of the victim because it was never suggested that a hybrid approach would be the appropriate standard. If that was raised in the district court, it would have proceeded very differently. And I assume that the government would have put in different proof. I don't know. I haven't seen it. I haven't seen the New York parole sex offender registry website on that point. But I also haven't seen the plea colloquy. I believe that the tiering, the hybrid approach, requires more reliable proof than recitation of an arrest report. You agree with your friend on the other side that we need to remand this to correct the judgment? Yes. Thank you. So I would ask this court to find that neither issue is moot and to remand quickly if the court is going to decide in Mr. Summers' favor so that he could get the benefit of a reduced guideline sentence based on a reduced sentencing range. Thank you. Thank you. Thank you, counsel. We appreciate your arguments and your briefs. We'll circle back to you in the not-too-distant future."
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"stt_transcript": "525-0807, DeVore v. Camp. Mr. DeVore? Yes, ma'am. You're the appellant? Yeah, I'm one of several tax payers in Asia, yes ma'am. Understood. Are you ready to proceed? My report's ready, yes ma'am. We're ready. If it pleases the court, my esteemed colleague, this case comes in front of the court on the appeal of a taxpayer objection. I was just one of the many tax payers who brought this suit in Bond County, which deals with the publication of the statutory required notice. This case is actually a case of first and And when I get into the facts, I think the court will understand why, because it deals with, for the first time, an appellate court is dealing with a mandatory publication out of 12-10 that was actually filed in the subsequent tax year. That's never happened in front of the courts. Okay? So that is why some of the cases that we'll talk about that are cited by my colleagues don't apply here. Not only did they deal with a different statute, the statutes are fundamentally still the same. The governing principle, though, of the Andrews case is still the same, and what that says is that this particular publication that used to be under section 103 of the old statute, now under section 12-10, is mandatory. It must be followed, and if it is not followed, then that increase for that particular assessment year is invalid and it's void. So the question for this court is going to be, based on the writing of the statute, did they comply or did they not comply? I don't know that there's a big dispute in that particular legal standard. Now, the 2022 tax year we're dealing with here, the court can find that when it looks at the publications that were made. They're in the record, they made two publications for the 22 tax year, at C-248 and C-256, where it says that they're complying with 12-10 for the tax year of January, starting January 1st, 2022. So that tax year is important, and if you look at the statute, and we argued it at the trial court level, the actual definition in the statute for what does it mean, year, because we're talking about a tax year, the definitions say calendar year. So I think that's important, we're talking about the calendar year, the tax year, the assessment year of 2022, ended in December 31st. They publicized again in June, July, 2023. The statute, I think, when the court looks at it and breaks it apart, again, that I believe they concede will be mandatory, says as soon as the chief county assessment officer has completed the assessment, that's where it starts. Now, they do not ask you to stop there. There is a relevant standard for as soon as you've completed the assessment, because even though the facts aren't present here, if the court reviews the Corenson case, I can get the site. It is 106-3D-975. What you'll find is that as soon as it's completed, that was a case where there was no particular issue with it being a different tax year, is they waited a couple of months after the assessments were completed before they published, and that court said you took too long. Again, that's not what we have here, but I just point that out to you for the point that as soon as you're completed, let's have a relevant standard. But then if you go to what we're talking about here, it says they shall publish in each year of general assessment. That is the operative language here, in each year of general assessment, shall publish. In each year, what does year mean? It means that particular year that ends on December 31st, 2022. They don't talk about the language in each year. Their proposition is that, well, we're in a quadrennial year, which we were, and in a quadrennial year, the publication requirement doesn't apply. Their proposition to you would be, as in a quadrennial year under a reading of the statute, there is no deadline. They can just go as long. And you disagree with that? Absolutely. Quadrennial, dividing it up into what is a quadrennial year versus not. Yeah, in a quadrennial, if you go back to the old statute, Pam, I think this may make sense. In the old statute, it said in a quadrennial year, you still had the language you had to publish in the year of assessment. But in a non-quadrennial year, you had this July 10th deadline, which makes sense, because what they were saying in the old statute is that if it's a non-quadrennial year, your taxpayers are not under the impression that there's going to be a change in their assessment, because that usually happens in quadrennial years. So in a non-quadrennial year, you had this earlier date that you had to publish to give the people extra time to say, we're changing your assessment this year, even though you're not in a quadrennial. But then they changed that in the new statute, and now it just says December 31st. But what they didn't change in either statute is the language that you start to publish in each year of general assessment. It says it right there, I've got it bolded in 12-10. So the language, again, in each year of general assessment shall publish the complete list. You know, you have this question in the statute that I don't think you have to get to, where it says the publication shall be made on or before December 31st. Is the statute referring to only the non-quad year? Is it referring to the quad year and the non-quad year? I don't think the court has to get there, because you still have the operative language, shall publish in each year of general assessment. I just have a question. Yes, sir. Under your interpretation, what is the purpose of as soon as the chief county assessment officer has completed the assessment in the county or in the assessment district? What's the purpose of that? I think the purpose, if you look, it's a good question, sir. If you look at the Korzen case, I think that would answer it. So what that is saying is, let's say in a quadrennial year, the assessor finishes their assessment in June, and they waited until December to publish. There is a separate legal argument under the Korzen standard that would say even that is a violation of the statute, because you waited too long after you had completed. Okay, so if we had a fact pattern that they published it in December, but they finished in June, and that was the argument being made, it's still within the tax year, but it wasn't done as soon as they completed it, and the Korzen standard would then apply. That's why it's separate. It's two distinct requirements. As soon as you're done, and again, Korzen said two months was too long, sir, after you were done. But it still, nonetheless, has to be in the year of general assessment. I hope that answers your question, sir. Thank you. Yes, sir. Let me ask you to clarify. It's kind of a larger picture here for me. So if you would. Yes, sir. The assessments we're talking about were ultimately published before the taxes were due or paid, correct? Yes, sir. So are we talking about procedural noncompliance is the issue here? Well, there is some case law, sir, that they talk about, whether if you still got notice and you still got a chance before. And I think the Andrews case takes care of what you're talking about, because the Andrews case talks about, Your Honor, this is not a due process issue. It specifically took this on and said this is a statutory mandated publication. We're not talking about due process. And since you violated a mandatory requirement of publication, we don't get into due process. We don't get into whether there was an injury or not an injury. It doesn't matter. You violated the statutory deadline for filing. I think Andrews takes care of your concern there, sir. In this case, we don't really have a prejudice or injury. It's the noncompliance you're focusing on. Correct. And again, if you read Andrews again closely, the injury or the prejudice, I've actually got, if you look at the no injury part, they specifically take that on in Andrews. And there's a specific language in there that says the injury is not even, we don't even get to that. We don't get into prejudice or injury. This is a mandatory duty. You blew it. We don't even go down that path. But you're asking that the assessment be declared void? What the remedy in Andrews also says, Justice, is that if that assessment publication was not made, then you use the assessment from the prior period. So there's still a tax burden. It just doesn't have to, it doesn't receive that increase that they put in for that particular tax year. But that is an injury to the taxpayers because they may be paying more, and if we void it, it goes back to the prior year. Well, anyway, that would be the injury that this court is remedying, yes. But it's saying, but I think what the justice was asking, well, you still got a notice in 2023. You still had a chance to object through the normal objection process. What's the injury? And, again, the Andrews Court, Foxworth says, that's not even a question for this particular objection. This particular objection is a statutorily mandated. It's not, you don't have to maybe follow it. You have to follow it. No, but we have to find, if we agree with you, we have to fashion some sort of relief based on your argument, and what would that be? Correct. And, again, following the case, excuse me, Justice, it says that the relief is that, let me use this as a hypothetical. Your assessment in 2021 was a 10,000 assessed value. They put a 2,000 increase for 22. That increase is not allowed because you violated it. It goes back to the 21, 10,000 for that particular tax year. That's the remedy that I'm asking. That's the remedy that Andrews authorizes. Okay, so the remedy would be that we would roll back the assessment to the prior year. Correct, ma'am. And then however that impacts the taxpayers would have to be figured out. Yeah, those calculations are pretty simple. And for that tax year, and, again, the numbers for each taxpayer are in the record. The clerk would easily, or the assessor, can calculate those to say, okay, you were 10,000 in 21. You were 12,000 in 22. Assess value, ma'am. Right. It goes to 10,000. And, again, I think the Andrews court exactly took that on, and that's exactly what happened. Now, one of the things that they'll argue is, again, is this is a nonquadrennial. This authority for Andrews is nonquadrennial. They cite that as that doorstep. Those cases are particularly important because in each of those cases when we had the old statute of July 10th, the Andrews case blew the July 10th deadline. Okay, and the court said in both. Dorfler and Ball, those were the years that were quadrennial years. And they still published within that tax year. This is imperative. They still published in that tax year. It was just after July 10th. And the Ball and Dorfler case said it's not a violation of the statute because July 10th only applies to nonquadrennial years. That doesn't stand for the proposition that in Ball and Dorfler they could have published in the next tax year because each of them still published before December 31st within that year, which the statute says is the calendar year. That's why those cases, I don't see an issue with those holdings. They just don't apply to the facts you have here. And none of this authority stands for the proposition that they're going to rely upon that you can publish into the other year because what's the guardrail? That's what I said to the trial court. If they're saying as soon as we complete, they can complete the 2022 tax year and after the 2023 tax payments are due, I mean, that becomes irrational and absurd. And that's why if you go back to the language of the statute, it says he or she, after you're done, which again, based on your CERF, even if they were done in June, you can't wait until December under that standard. That's what as soon as you complete means. Separate requirements still says in each year of general assessment, which means that assessment publication has to be published before the end of that year, which again, based on the definition is the calendar year. That's what they blew. And that's why the publication was invalid. And Andrews applies. So do you believe that this deadline should apply every year? The deadline of December 31st applies every year. Every year without distinction on quadrennial years. Correct. Because it used to be July 10th, ma'am, on the old statute for non-quad years. Now they've changed the statute and the December 31st date is the same regardless of whether you're in a quad or not. Because again, ultimately it leads within each year of general assessment and then it talks about the publication of 1231. So yes, regardless, you have to make this mandatory publication before 1231. And is there legislative history that you can rely on to support your argument? No, ma'am. I think it's just a clear interpretation. I didn't have a legislative history. I believe the language of the statute, once you parse through it, I think it speaks for itself. It sounds like the old statute was pretty dissimilar to this new one. No, I think they're almost exactly the same except for the July 10th deadline that used to require our assessors to publish earlier on these non-quad years. They now are able to wait until December on the non-quad years too. I think that's the only change, ma'am. But they distinguished between quadrennial years and non-quadrennial years. They did. And I believe this one does too. Yes. That's why I'm interested in your argument that it should be every year. There must be a reason for the distinction. Why would the statute discuss two different… If it's 1231? Yes. I think it's a good question. But again, I think the last sentence, the publication shall be made on 1231 of that year. There's two publications depending on… There's one publication. It just depends on what year that you're in. So, again, it clears to me that if you're reading the statutes that it's now saying 1231 is the year for both. Because I think even if you go to the old statute, it was still clear it was 1231 for a quadrennial year, July 10th for a non-quadrennial year. And they changed that. So there is no purpose to putting a calendar date in the second paragraph. There's no purpose to saying December 31st rather than as soon as and in each year. Correct. I think they both roll together. I think the statute could be… You could look at this and say in each year of assessment, it says the same thing. I think that language was there when the July 10th was there. And now that July 10th is gone, they're both saying the same thing. So if I'm getting your argument, everything has to be done by the first of the year. But in the quadrennial years, it has to be done as soon as it's finished? Yeah, I think it has to be done as soon as it's finished. It's never been argued other than the closing case. I've never seen the appellate history. I think there's two separate components there. As soon as you're finished, some reasonable time after. But it has to be done in that calendar year based on the interpretation of the statute. Okay. Okay? Anything else? One question on what you're asking this court to do as to the remedy. You're not asking the court to find the assessments invalid. You're just saying that the obligation to pay those assessments is invalidated because of the publication date. Correct? I'm saying that the increase, sir. So the increase that that taxpayer received for that tax year would be invalid. Not that their tax bill is invalid. They still owe taxes. But their taxes are quantified based upon the assessment that they got valid assessment the prior tax year. It has to be calculated on that and not that incremental increase in this late publication. They don't pay a tax on that incremental part. Are we supposed to consider the folks whose assessments went down? I don't believe anybody in here's assessments went down, sir. That's quite an assumption. No. I don't believe that. No one in the county had their assessment go down. What's that? No one in the county had their assessment go down. Well, the people that complained here. Right. But what you're asking is for us to declare that statutory violation. I mean, doesn't that affect the other taxpayers? No, because they're not in front of you. They didn't bring that case to the court. Once you've paid and you didn't file a timely petition for a taxpayer's objection, you lose any right to complain, sir. So the other taxpayers have no argument in this court. And you get to bypass the Board of Review? You can bypass the Board of Review with a timely filed taxpayer's objection. You can't, yes. Why is that remedy not adequate for you? Now, we actually did go to the taxpayer, the review board. But on these types of violations, sir, if you're filing a taxpayer objection based on these types of mandatory statutory duties, you can, if you want to, go around the Board of Review. We went to the Board of Review. But, again, you could if you wanted to. Thank you. Before you leave, you raised an interesting question. So the only remedy that's available, if we would grant relief, is to the individuals who are before this court. It's not a global kind of remedy. Correct, yes, ma'am. Because when you want to file a taxpayer objection suit, you've only got, like, 75 days after you've made your second payment. And if you don't file a timely petition for taxpayer objection, you've waived any right to complain. So your only request of relief here is for the pardons in this case, because they're the only ones that file a timely objection. But if the court agrees with you, then for subsequent years, then the law is as we dictate it. Yeah, well, you heard the case the way we're asking. You have now created the law that says you have to publish these by the end of December. And I'm here for purely difficult court. That's already happening right now, anyway. Okay. So is this moving? No, because my taxpayers still have an injury. Okay. But it is an important question, Justice. Well, I think it is, because it affects not just this county or your taxpayers, but the state globally. Correct. And again, all we're asking is a ruling that says that publication, you have to publish it within that tax year, because that's what the language says. My clients get some relief for what it is. But as importantly, you have been laying out authority, to the extent you agree with my clients, that's clear. And if you were to disagree with my clients, that authority could be that an assessor in a year, that publication could be whenever they get to it. It might be two, three years down the road. It just becomes untenable, because there's no guardrail. Thank you. Okay. You will have a few moments after your part. Thank you, ma'am. All right. Thank you. Okay. Would you like to address the court, Mr. Cook? Yes, Your Honor. May I please support the counsel? My name is Matthew Cook, and I'm here on behalf of Giffen Winning. Just speak up. I apologize. My name is Matthew Cook, and I'm here this morning on behalf of the law firm of Giffen Winning. We contract with the state's attorney's office, and we help them and assist them in matters concerning property tax appeals, such as the one before the court today. So, as counsel has indicated, the issue on appeal here involves the interpretation of the timing requirement in the statute as it pertains to the publication of assessments. So, here we're dealing with, as counsel has indicated, the quadrennial year, not a non-quadrennial year. So, in fact— Let me stop you. I don't think he makes a distinction, if I understand his argument correctly. So, our position is there is a distinction as to the publication requirement between a quadrennial and a non-quadrennial year. So, he did—he distincted there were two types, but under the appellate's view, it is their position that the December 31 deadline applies to both situations, whereas the appellees do not agree with that. Okay, but you started out your argument by saying that this applies to a quadrennial year. The text here in question is a quadrennial year. Okay. All right. Go ahead. I'm sorry. Yes. So, it's your argument that the words, in each year of general assessment, identifies or distinguishes between general assessment and years other than general assessment. That is correct, Your Honor. So, it's not that you have to publish in that year, but as pertains to those years is your interpretation. That is correct. Okay. Thank you. Yes. And again, the tax year at issue here is the 2022 tax year. The assessments in that year were completed on June 16th of 2023, and publication was made on June 23rd of 2023. Now, Bond County did have to do another publication because there was an incorrect assessment. That publication was made on July 25th of 2023. Excuse me. And again, the error in the assessment affected no taxpayer in this case before the court. And so, what the appellee is asking the court is to affirm the trial court's decision to grant our motion for summary judgment and deny the appellate's cross-motion for summary judgment. And we ask this for three reasons. The first being that the plain language of the statute in question directs that publication in quadrennial years, assessment years, be made as soon as the assessment has been completed. Two, the appellee's interpretation of the publishment requirement in quadrennial years is consistent with established case law from the Illinois Supreme Court. And third, even if the appellant's argument or interpretation of the statute is accepted, the relief requested by the appellants in the lower court is not supported by the property tax code at issue. So, again- What do you mean, the relief requested? The relief requested. So, the relief requested in the lower court was that the 2022 tax assessment be invalidated because of the alleged late publication, and they want to revert to the 2021 year assessment. It is our position that that is not a valid relief to request in this situation. If the court agrees with the plaintiffs here, when you say that's not appropriate relief, I don't understand that part of your sentence. Why wouldn't it be appropriate if the court agrees with their position? So, in 1994, the legislature enacted section 26-5 of the property tax code. Therein, it states that an assessment completed beyond the time limits required by this code shall be legal and valid as it completed by the time required by law. They further enacted section 21-185, which reads that no error or informality in the proceedings of any of the officers connected with the assessment are collecting of taxes not affecting the substantial justice of the tax relief itself shall initiate or in any manner affect the tax or the assessment thereof. So, it is our position that even if the appellate's argument was accepted and that publication was, in fact, late, the law under the property tax code here in Illinois does not allow for the assessment to go back because it will be deemed as though it was done on time. And what's the section of that sentence? I apologize. What's the site of the section? That would be the property tax code, so 35, and that would be at 200 in section 26-5. And that section was enacted by the legislature in 1984. I'm just curious how the legislature can enact a statute that would somehow be in conflict if we declare a statute, the interpretation of the statute and the conduct void of the assessor. In other words, if we declare that they're entitled to the relief and they wanted to go back, the only way for us to do that is to say they violated the statute. And then we have another statute that says, well, that doesn't matter. That's what you're arguing, right? Essentially, yes, Your Honor. We did pull the section 26-5, so it is a unique circumstance, I do agree. But it is our position that the assessment, if it was completed beyond the time limit, it still is so. No big deal. What is the remedy that the General Assembly, taking this tax code as a whole, envisions for such a violation? No harm, no foul? Well, it would assume that there was a violation, and it's our position that there was not a violation. So we don't believe that there is any remedy that is necessary for this particular circumstance. Now, hypothetically, if this were to get to the place where that happens, then that would be something that the legislature would need to address at that point, because it is our position that right now, currently, as we interpret the statute and the publication requirements, there was no violation, and there is no relief that needs to be made. But that wasn't the question that was asked. Oh, I apologize. I must have misunderstood. Well, as I understand Justice Clark's question, he wants you to assume hypothetically that we grant the relief, and you're saying no harm, no foul. Isn't that the question? That was the question. You grant the relief. If we agree with the other side's interpretation of the statute, and if you argue that the relief they're requesting is improper, my question is what is the intent of the General Assembly taking these statutes that have been quoted to us in total, which I think is one way to interpret the statutory intent, take all the statutes on the subject in total, what is the intent of the General Assembly should be the relief? And is your answer nothing? My answer at this point in time would have to be that the intent is something that I did not look into for that particular scenario, because we are under the operation that there was. I'm not trying to ask an unfair question. I'm really not. No, I understand. I'm just, under your interpretation, what happens if they wait five years? Under our interpretation, if they wait five years, as ridiculous as that sounds, our interpretation of the statute allows that to happen. Okay. And, again, it's an absurd result, I do agree, but it is the result that we interpret nonetheless. And it is even in the Anders case that the appellates cite to, the Illinois Supreme Court even identifies that, in fact, in the court's analysis they actually bring that to light. And they say that although there is no prescribed date for the publication in a quadrennial year, it was the court's opinion in that case that the legislature intended the taxpayers could at least rely on the July 10th deadline when it was a non-quadrennial year. So their analysis even acknowledges that there's no prescribed date of publication under that statute, as it says that it should be done as soon as it is completed. Now, when it is completed, the statute does not give us a date, as the December 31st deadline applies only to the assessment in a non-quadrennial year. But the other side says it's a matter of first impression. Is there any case law, Supreme Appellate, to support your side? Yes. So we have cited in our brief, it is the 1961 case of People, Exwell, and Wall. I'm sorry. Poor question. After the amendment, any case law looking at the statutes after the amendment? After the amendment, we have not come across anything. I apologize for the poor question. No, you were fine. I do know that the Anders case, I believe, was the 1972 case, and then we have the 1961 case with Wall. But that is the case that the appellee finds controlling here in this situation. And in that case, it involved the 1958 quadrennial year assessment, where the publication of those assessments was made starting on July 31st. And, again, under the statute at that time, it was required that the assessment in a non-quadrennial year be made on July 10th. So in Wall, it was a quadrennial assessment. The publication was made starting July 1st of 1958, with the last publication being made on October 2nd of 1958. And, again, it is the same language that we see in the statute today as it references to quadrennial year assessments. So in that case, the court concluded that it was clear from reading the language of the statute, with reference to the requirement for publication in quadrennial years, that all that is required is that the chief county assessment officer is required to publish the quadrennial assessment as soon as he has completed the assessment. And as to the other non-quadrennial assessment years published, assessments were to be made on or before July 10th. So they do differentiate and identify and call out that the quadrennial assessment is due to be published as soon as the chief county assessment officer has completed that assessment. And that's the statute today. It is the same language in the statute as today's. Yes, Your Honor. As it pertains to the quadrennial assessment. Now, I know as the counselor has already called out and correctly called out, is that the minor changes that do occur in the statute between then and now have to do with the non-quadrennial years. And it was, there was the change from the July 10th to the December 31st. And then there was also, I believe, the changes as to the population. Because this, the statute as it stands now, says that in the counties with inhabitants of 3 million or less, those numbers were different than the prior versions. But it is interesting that the date got changed from July back to the calendar year. And would you maybe concede that there's an intent to provide some consistency there? I would not concede to that point because... I didn't think you would. The language that's in there is that if the inclusion of the words as soon as completed in reference to the quadrennial year assessment, that has remained and that has never been removed. And so that is found within the same sentence that requires that the assessment be made in a quadrennial year as soon as the chief county assessment officer has finished her assessments. But if you have an assessor who has insufficient funds, for example, to have somebody assess the property because of the inadequate funds from the county, so that it's delayed, how long can you delay it? So from what I understand, there are actually multiple ways that the assessments can take place. And in Illinois, I'm not an expert, but I do know that there are different, I guess you would say methods of assessment. So those methods do account for the fact that a single assessment officer in no way could be able to assess the value of every single property in a county. And so different counties have employed different methods and different calculations. My question is, how long can you wait? For the assessment? Are we talking in a quadrennial year? Yes. So it would need to begin within that year as the statute prescribes. But again, the publication of those assessments, that's kind of an open issue here with the language of the statute because it just simply requires as soon as, or publications require as soon as the assessment has been completed. So you could wait until after the tax is due and then find out later that your tax bill went up and now you have to pay more. Theoretically, our position would say agree to that. And yes, and it is a different, it's a unique conundrum, but it's one that has not occurred yet. Theoretically, you have a different requirement in a non-quad year, right? That is correct. For publication? Yes. Correct. Yes, Your Honor. You're arguing that's a different standard, so that may serve as a backup to assessments. That is correct. I am arguing that that requirement is the December 31st deadline that is discussed in that statute. Thank you. Of course. We cut you off from your argument, so if you would like to proceed on another issue or you have some time. All right. I do, I will address the argument that the Anders versus Foxworthy case that the appellants have presented, they say that that is the controlling case law. The appellees do disagree. Again, the Anders case does involve a 1972 year assessment, which was a non-quadrennial year, and yes, there was a failure to timely publish on the July 10th deadline. I see that my time has expired. Go ahead if you want to finish that up. Okay. Thank you. And the deadline of July 10th had been pushed, and publication did not happen until October 28th. However, due to that failure of the timely publication, the tax resulting from that increase in the assessment was deemed to be inbound, as counsel had stated. Now, again, Anders involves a publication where there is a non-quadrennial year that was an assessment, which is required to be completed around July 10th. However, it did not involve a quadrennial year where the publication is required to be as soon as the assessment had been completed as the statute was then and still remains now with that language. And in fact, in the Court's analysis, as I alluded to earlier, and Andrew, the analysis even brings this conundrum to light that although there is no prescribed date for the publication of the assessment in a quadrennial year, it is the Court's opinion in that case that the legislature intended at least that the taxpayers could rely on that July 10th deadline for assessments made in non-quadrennial years. So I believe that the Court has acknowledged the fact that there is this gray area, so to speak, that's open to interpretation. And in doing so, I think that that makes Andrew's case non-applicable here and not controlling. Thank you very much for answering my questions. Thank you. Okay. Thank you for your argument, Mr. Cook. We're going to hear from Mr. DeBoer. Follow-up. All right. Thank you so much. All right. Thank you, Justice Gates. I think I can clear a few of these things up. First is the issue of a remedy. In Andrew's case, the remedy was to render the increase void. That's exactly what they did. They reverted the assessment from 1972 that they found the increase invalid and went back to 1971. So they did take that remedy directly on. I was going to ask Mr. Cook this. If we fashion a remedy that is consistent with your argument, how would that look? I mean, would we limit our discussion to the plaintiffs in this case? Yes, ma'am. Or would we look at the statute generally and interpret the statute in such a way that it is more broadly applicable? Well, I think when you interpret the statute, you're going to draw a conclusion about what you think it says, and you're going to issue a ruling of law. It's only going to apply in this case to these particular plaintiffs, which would require the assessor to recalculate the assessments and the tax liabilities for the plaintiffs in this case, and there's going to be a small marginal refund to each of those. But your ruling of law would absolutely be taken across the state as being different because then they would know how to apply what we're talking about. At least as to those counties with a population that there's a limitation in there. Now, when my colleague says there's no date in Andrew's, I disagree. There's no physical December 31st, July 10th. But there is a date. It just wasn't addressed in Andrew's because it also says, in each year of general assessment shall publish. What does that mean? Year is a defined term in the statute, 5 ILCS 70-1.10, and it says a year by definition, unless otherwise prescribed, is calendar year. So there is a date in there. It just doesn't say December 31st. It says in each year. That is a definition, but the language is absolutely clear. Now, they cited these other statutes, and the court has them, but if you look at those statutory sites, none of them deal with the late publication of 12-10. They're not even on point. One of them talks about, well, if your assessment's late, or one of them talks about if you tried to get it in the newspaper, but the newspaper had a technical glitch, then you had to fix the glitch. That was not a problem. But none of these statutes that they're citing override the authority and the language of 12-10 and the interpretation of 12-10. So those statutes are really not even relevant. I'm like a dog with a bone here. I apologize. No, I am not. I'm looking at two paragraphs, and the General Assembly says, in each year of general assessment, boom. Shall publish. In years other than years of general assessment, boom. And they put a qualifier in the first one. It doesn't say, in each year of general assessment, shall publish in that year. It just says, identifying those years of general assessment versus years other than general assessment, and in the years other than general assessment, they felt the need to put December 31st, the big year. That's the purpose. I'd ask the court to even consider whether that last sentence, the publication shall be made by December 31st, is it even referring to only the non-public in the year. I don't know. It doesn't ask us to interpret a statute to make a clause meaningless? No, I don't think it makes it meaningless. I think this court can interpret that paragraph to say that that refers to all publications regardless of the year, because otherwise the absurd result, the court knows you can't interpret to get an absurd result. The absurd result is Justice Gates asked, could it be five years down the road that you could do this? And according to them, that would be an interpretation they would follow. So, again, how you leave in each year is clear, and it's never been litigated. The ball plays in the door for Gates when you look at those. During the nine-quad years, still dealt with publications that were made in that assessment year. They were made in, like, July 31st, October 10th, and it's still not before December in those facts years. So, again, this issue of first impression, I believe when you parse the words, in each year shall publish, I think you'll come, I'm hoping you'll come to the conclusion that that has to be the interpretation, because it's not. It's a complete wild west, and there is no guardrails. Unless there's any questions, that's all I have. Justice? No, thanks. I apologize. No, sir, please. I love the questions. One second. Well, then I have another. You do, sir. Maybe splitting hairs on a minor point. I'm still a little bit confused about what you're suggesting the proper remedy is here. I know you're saying that for these main plaintiffs, that the increase is a way to go back to the prior year assessment. If the court would rule as you ask, how does that affect assessments, obligations to pay in 2024 and thereafter? It doesn't. It only affects the tax year that we're complaining of, because, again, the procedures of tax objections are clear. You fix this. Let's say you fix it for this tax year. I'm talking about the assessment number itself. The assessment number given then becomes the obligation for the following year, unless another one is published, correct? Correct. So let's say I'm a taxpayer in this case, sir. I'm sorry. I don't need to know. Go ahead if you want. I'm a taxpayer, so the 2022 increase that I receive, I'm asking you to say that increase isn't valid. I should be taxed in the 22 tax year based on the 21 assessment. But in these subsequent years that we have since seen, 23, 24, those aren't impacted. Those assessments are new assessments that have their own separate rights and circumstances. They're not impacted at all. It's just that one narrow time year. But what this case will do, which I think is of paramount importance, justices, is it's going to lay the foundation of how our assessor and other assessors going forward interpret this. And, again, for what it's worth, there's not any publications happening in subsequent tax years right now, because I watch every year. Thank you. Anything else? No, thank you. Sir, ma'am, sir? Thank you. All right. Thank you, Mr. Tore. Thank you, Mr. Cook. Thank you both for your arguments here today. This is, as you say, a case of first impression. We will take the matter under advisement and issue an order in due course."
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"stt_transcript": "The next case on the court's docket is 525-0275, Peoples v. Antoine Bush. Lucia, for the defendant. Okay, you may come up and start when you're ready. May I please the court? My name is Yilou Yee, assistant appellate defender, on behalf of Mr. Antoine Bush. We ask this court to reverse Mr. Bush's conviction and remand for a new trial. This case arises from the shooting of Maryse Harris. The central issue at trial was whether Mr. Bush was the person who shot Harris and whether the state could connect him to the firearm used in this case. In that shooting, the trial court allowed the state to introduce Peoples exhibit 4, a 20-second video recorded four months before the charged offense. The video should not have been omitted. The standard of review should be de novo under Peoples v. Forrest because the challenged evidence is a recorded video, and this court is in the same position as the trial court to decide what the video does and does not show. But even if this court applies abuse of discretion review, reversal is still required. No reasonable view of this record supports omitting a vague, remote, unrelated video as proof of motive, intent, state of mind, or possession during the charged shooting. Peoples exhibit 4 is a video Mr. Bush sent privately to his fiancée, a person unconnected to this case, about four months before the shooting. In the video, Mr. Bush said he could not speak and had a lot on his mind. He was explaining why he didn't want to talk with his fiancée at that moment. He then briefly lifted his shirt and showed an object on his waistband. Under Rule 401 and 402, evidence must make a fact of consequence more or less probable. This video did not do that. The fact of consequence was not whether Mr. Bush had the ability to possess a gun at some point in his life. The question was whether he possessed or used a firearm during this charged shooting. The video did not answer that question because the video had no real connection to this case. It was not sent to Harris or anyone involved in this case. It did not mention Harris or the shooting at all. It did not refer to any disputes involving Harris. It did not show a plan, threat, preparation, or motive for this offense. In addition, the firearm used in this shooting was never recovered. And the state's own gun witness testified that he could not definitely say the object in the video was a real gun. Did anybody challenge the actual authenticity of the video? Was that an issue at all? No, no one challenged the authenticity of the video. So during the pre-trial hearing, the trial counsel did challenge that the video should not be omitted because it's not relevant to this case. So it was a relevancy? Yes. Argument? Yes. Okay. How would you respond to the argument that the video is relevant to show the defendant's state of mind and that he solves his problems by projecting a willingness to use deadly force? Yes, Your Honor. Your Honor, the evidence is irrelevant because the state gun witness testified that he cannot definitely say that the object is a real gun or not. And the trial court judge also said that it doesn't matter whether it's a real gun or not. If it doesn't matter whether it's a real gun or not, then he won't be able to connect this case to this shooting or the firearm used in this case. Thank you. Thank you. And the trial court stated that whether the object in the video was a handgun in question, even a handgun or not, doesn't matter. The trial court believed that the video showed Mr. Bush's state of mind months earlier and suggested how he would solve the problem. So it doesn't matter whether the object was the handgun in question or even the real handgun, then the video did not help prove possession or the use of firearm in this shooting. And even if this court finds them minimally relevant, the video still should have been excluded because it was omitted entirely based on propensity reasoning. The trial court stated that the video suggests that Mr. Bush resolved the problem with a gun. This reasoning depends on the inference that because Mr. Bush supposedly displayed a gun when frustrated before, he was more likely to use a gun here, which is propensity. In his response brief, the state tried to label that same inference as intent and motive. It is true that either-or may be omitted when it's generally relevant for a non-propensity purpose. Intent and motive can be proper purpose, but this particular video did not show Mr. Bush's intent during the shooting or his motive to shoot Harris. Looking past the label, the only way the video helped the state was by inviting the jury to conclude that Mr. Bush acted in conformity with a supposed gun-related character. That is exactly the propensity inference rule for B for best. Finally- Let me stop you there for a moment. Okay, sure. The propensity evidence that you just described, the defense attorney during opening statements- Yes. Okay, did not object when the state said, we're going to talk to you about the weapon. Did the state ever connect the weapon that was referenced in opening statements to this weapon that was put forth in the video as being the actual gun that did the shooting? Does that make sense? Yes, your honor. So that is actually the reason why we believe the evidence was not harmless, just because the state used it multiple times, the state placed it multiple times during the trial to ask the witness to testify on that video. And then also at the closing, where the defendant had no chance to rebuttal, the state again say that- Wait, what do you mean the defendant had no chance to rebuttal? Because- Because the state did it in their own closing. Okay, I understand. Yeah, at the closing, the video was played to the jury again, and then the state suggests that this could be the gun used to shoot Harris. It's exactly the gun shown in the video. Therefore- But there was no objection by defense counsel, was there? Yeah, that's true. There was no objection from the trial counsel about the witness testifying on this video. But this issue is still preserved because the trial counsel moved to exclude the video at the pre-trial hearing, and then the lower court held a hearing, and the issue was raised again in the post-trial motion. So the state still bear the burden of showing that the arrow was not harmless, and the state cannot meet that burden because this was not an overwhelming case. The shooting lasted only seconds. The civilian video did not show the shooter's face, race, or gender. The firearm was never recovered. There was no physical evidence tying Mr. Bush to a particular gun, and Harris' credibility was disputed. Both Harris and Mr. Bush had relationship with Ms. Nam, and Harris had a prior felony conviction involving Ms. Nam. Harris also gave inconsistent statement about his feeling toward Mr. Bush. He initially denied having animosity toward Mr. Bush, but later admitted that he has once prayed Mr. Bush belong outside of the apartment before the police required him to bring them back inside. And Detective Markov acknowledged that he did not investigate John David, who had threatened to kill anyone living at Ms. Nam's residence where the shooting happened, less than one month before the shooting happened. Another witness testified that he saw a musket person running near the scene. So in that context of video matter, he gave the jury a visual image of Mr. Bush associated with the gun-line object. It allowed the state to suggest a connection to the gun, and the state argued at trial that this might have been the gun used to shoot Harris. It invited jury to use unrelated conduct as proof of guilt. Because people exhibited force was irrelevant, because its only real force was propensity, and because the state cannot show that their error was harmless, Mr. Bush was especially asked this court to reverse his conviction and remand for a new trial. Thank you. But that was one issue, right? Yes, there's only one issue at this time. Well, did you raise ineffective assistance to counsel? Yes, I also raised ineffective assistance, because the counsel failed to object the admissible of the act during the trial. So, if there was error, as you allege under the ineffective assistance of counsel claim, wouldn't you also have to show prejudice under Strickland? I believe for this issue, the test is that the video is irrelevant, and then also it was omitted based on propensity. One second. Yes. The video was preserved. That error was preserved, you told me, right? Yes. What I'm asking about is the error by the trial counsel. I asked you a couple of questions where the defense counsel didn't object, right? Yes. So, if we agree with you that that would be error, how the trial counsel conducted itself, didn't make objections, what would be the prejudice to your client? Do you have to show that? By the case people be smart, we don't need to conduct that test, because we are arguing that the video is irrelevant, and the video, for an evidence to be omitted, it has to be relevant for a non-propensity reasoning. What if we decide that the video comes in, that that was not error? Would you still have an ineffective assistance of counsel claim, potentially, based on what you believe the defense counsel did poorly? In other words, if we decide the video claim, do you still have another claim that you would argue to us, which would be ineffective assistance of counsel? I believe so, Your Honor. Even we will still raise the ineffective assistance claim, because the witness, the expert witness, should not be able to testify on a video that is development on this case. Okay. All right. Questions? No, thank you. At this time, thank you. Okay, thank you. You'll have a few moments after your opponent speaks to us for the state. Is this Halbert? Mr. Halbert, yes. Halbert, Mr. Halbert. Please join us. Gladly. Good afternoon, Your Honors, counsel, and may it please the Court. My name is Jacob Halbert, and I'm here on behalf of the state. I'd like to take the defendant's argument in turn today, starting first with the standard of review this Court should apply, which is abuse of discretion. Then I'll shift to the admissibility of the other crimes evidence, and finally I'll address the harmlessness of the error, and if time permits, I'll address some of Justice Cape's concerns regarding ineffective assistance of counsel. With respect to the standard of review, the defendant suggests that this Court should review the admission of People's Exhibit 4 de novo. He maintains that under People v. Flores, this Court is in an equally good position to review the evidence because it is a video and no live testimony bore on the admissibility of the evidence. That position is wrong for two reasons, and this Court should apply abuse of discretion. First, even where no live testimony weighs on the admissibility of other crimes evidence, reviewing courts routinely apply abuse of discretion. And for example, this Court did it in Blaney and Baker, where photographs were admitted as other crimes evidence and no testimony weighed on their admissibility, and this Court should follow suit here. Second, any reliance on Flores is wholly misplaced. That case dealt with a motion to suppress, which is analytically distinct from evidentiary issues directed to the trial court's discretion. Our Supreme Court recognized that rulings on evidentiary issues cannot be made in isolation and require courts to exercise discretion in making considerations such as reliability, probative value, and the prejudicial impact that warrant deference. That deference is only abrogated where the court's discretion has been frustrated by an erroneous rule of law. Here there's no suggestion that the court applied an erroneous rule of law, and instead the record shows on pages 125 to 127 that the trial court made discretionary findings that warrant the application of abuse of discretion. The court observed that it couldn't determine when the video was exactly recorded, but that it was sent about four months prior to the shooting, and in doing so the court made findings on reliability and temporal relationship. The court also determined that the relevant issue was not whether the object was a real weapon or the murder weapon, or I'm sorry, the weapon used in the shooting, but instead the probative value from the video established the defendant's state of mind when agitated or frustrated. The court concluded that the probative value was. You know, really, when you talk about somebody being agitated, they pull up their shirt and they show you what, I mean, we don't even know what that was. Yes, Your Honor, we don't definitively know what that was, and the state acknowledged that in their evidence with Sergeant Eric Cote. And they put an expert on who would say what it was. Well, Sergeant Eric Cote was qualified as a firearms expert, but not an expert in determining whether a gun can be determined to be real or fake. So he was a firearms expert, but not specifically with fake guns. Well, you can be an expert in a lot of things, but that doesn't mean you get to testify to it. So my question is, though, the same as you want to show agitation, so a guy lifts his shirt and there's something there. Yes, Your Honor. How does that come in? The relevance isn't just based on the general agitation of the defendant alone. We have to consider the context in which it comes in. What other context? Well, in the video, the defendant is visibly upset about something. He says he has a lot on his mind. And in conjunction with that state of agitation, he lifts up his shirt and displays what appears to be a handgun and says, I have this. I'll spare the court the explicatives, but this thing on his hip. But he doesn't make it a gun. I'm sorry, what's that, Your Honor? He doesn't say it's a gun. That's correct, Your Honor. He doesn't say it's a gun. But whether or not it is a gun doesn't necessarily preclude the evidence itself. Well, I'm just wondering what it is that makes it relevant to a shooting case. Yes, Your Honor. And I would point, Your Honor, to the context leading up to the shooting in conjunction with the context in which the defendant made the video. As I mentioned, in the video, the defendant obviously displayed a state of agitation and lifted his shirt and showed what appeared to be a handgun. And then subsequently, the jury was presented with evidence leading up to the shooting that the defendant was agitated with the victim. At the end of October 2023. Is he saying in the video that he's agitated with that particular victim? He's not, Your Honor. But the state wasn't putting forth this evidence to prove modus operandi, which would require particular similarities. They were only putting it forth to prove intent and motive, which just requires generalized similarities. Motive doesn't go to the victim? Motive doesn't? Well, the victim wasn't mentioned in the video, Your Honor. But I don't think that that precludes the admissibility of the evidence. You're saying that it goes to motive. So is motive related to an individual in this case? His motive in shooting the victim is related to that individual, but based on his conduct in the video, we can infer his motive based on that agitated state. The video helped the jury understand the significance of the defendant's anger towards the victim, which I was mentioning, he believed at the end of October 2023, the victim was responsible for slashing his tires. He admitted to that in his own testimony. No, but in the video, is any of that in there? It's not, Your Honor, but we have the defendant's agitation in conjunction with what appears to be the display of a handgun. Four months or some odd time before, and my question to you is, how do you link those? Agitation. I'm having a hard time with that. I believe it's agitation in conjunction with the display of what appeared to be a handgun. And then leading up to the shooting itself, defendant's testimony was that he was angered with the victim, believed that the victim was responsible for slashing his tires, and four days prior to the shooting, sends a text message to an individual named Sparkle Jordan that he is going to pop the person responsible for slashing his tires. And at the time, I don't want to interrupt. I was just thinking, if the court had not allowed the video in, would the state have been able to prove its case? Certainly, Your Honor, and that goes to the harmlessness of the error, and the additional evidence in this case was overwhelming of defendant's guilt. And I'll point Your Honors to a couple of instances. Can I interrupt there? Yes, of course. To Justice Kate's point, I'm still a little bit curious about how you argue that this shows an exception of state of mind. Isn't state of mind generally something more in close proximity to or contemporaneous with the second incident? I mean, the criminal incident. You're talking about four months, and it sounds like the argument you're making is four months prior to the shooting, he was upset about something, we don't know what. So it's relevant because he probably was upset when he shot someone four months later. Well, Your Honor, I believe that the relevance comes from the agitation, as I was mentioning to Justice Gates, in conjunction with the display of the handgun. Excuse me. Yes. Could you please highlight for us the 403 analysis the trial court used? Obviously, it found some relevance, but was there the balancing that People v. Smart requires? Your Honor, I don't know that the trial court explicitly laid out that balancing. Is that important? It is important, Your Honor, but it doesn't mean that the court didn't do it, because when we look at the record, and I believe this comes in on page 127, the court concludes that the probative value of the video is not substantially outweighed by the prejudicial effect. And so when— Stating the conclusion is not stating the balance. That's correct, Your Honor. And even if this court were to determine that the trial court didn't conduct the proper analysis in balancing probative versus prejudicial effect, I still think this doesn't require reversal when we look at the harmlessness of this error. And so I'll point, Your Honor, to a couple facts that show the overwhelming evidence of the defendant's guilt with respect to the intent and possession of a handgun. First, we have the victim's positive identification of the defendant twice. Once while the victim is in his home after being shot by the defendant, and then a second time at the hospital while the victim is receiving treatment for his wounds. And the victim's trial testimony also established that he had the opportunity to observe the defendant during the shooting. The shooting occurred in a well-lit doorway. The defendant stood about two or three feet away from the victim, and nothing obscured the defendant's face when he shot the victim. And second, the evidence of defendant's anger with the victim prior to the shooting established his motive and intent in shooting the victim, and in turn his possession of a weapon. At the end of October 2023, as I mentioned, the defendant's tires were slashed, and he believed that the victim was responsible. The defendant testified that this angered him, and in response he sends a text to Sparkle Jordan saying he's going to pop the person responsible, again, who he believes is the victim. And then finally we have two statements indicating that the defendant shot the victim. The son of the victim's girlfriend testified that the defendant said he was going to shoot the victim because he needed a place to stay, and a court security officer testified that on January 13, 2025, the defendant said he shot him. So even if this court finds that the court didn't conduct the proper balancing test under Smart or that the evidence shouldn't have been admitted entirely, the error is still harmless. And to your point about ineffective assistance of counsel, Justice Cates, you do need to establish both deficiency and I see that my time is up. You do need to establish both deficient performance and prejudice. Now, if the court does determine that it was error to admit the video, obviously we have deficient performance, but that doesn't end the inquiry. You have to prove both elements. And with the harmlessness of the error, there's no way that they can prove that the defendant was prejudiced by this error. Thank you. One second. Yes, of course. Is, this is a little bit off of the point that you made. Is the appellate court committed to affirm the court's ruling, even if the court doesn't state a basis that would allow the ruling? Certainly, Your Honor. This court can affirm on any basis in the record. And secondly. No, I think you've answered it already. Thank you. Thank you, Your Honor. Thank you, Your Honor. Justice Clark. No other questions. Thank you very much. Thank you, Your Honor. All right. From the defense. Your Honor, I want to emphasize that the video was not tied to any material fact in this field. And any supposed development depends on the forbidden inference that Mr. Bush was the kind of person who you sent when angry. Because the video was sent privately to his fiancee four months before this event happened. And it did not talk about Harris or anyone involved in this case. And it did not talk about shooting at all. And it did not talk about he want to resolve issue with handgun. So, if the video is kicked out, Mr. Halpern, the State, says that there's harmless error. How would you say there's no harmless error? How would you rebut his argument? Yes, Your Honor. There are two reasons. One reason is that the State relied heavily on this video to prove its claim. It praised the video most of the time during the trial. And it's the only piece of evidence that could – it's the only visual image that Mr. Bush associated with a gun-like object. In addition, there's other evidence that's supporting alternative explanation. There's at least two suspects that the detective failed to investigate. One, his name is John David, who had threatened to kill anyone who lived at Mr. Nunn's residence when the shooting happened, which is less than one month ago before the shooting when he made that threat. And then also another witness testified that he saw a masked person running near the scene right after the shooting happened. So there's alternative explanation to this case other than Mr. Bush being the shooter. Okay, yeah, I think that concludes my answer. Do you know what the burden is on people to prove if there's harmless error? Yes, the State bears the burden of showing that the error was harmless because this issue was preserved. What does harmless mean? What is the definition of harmless? Yes, Your Honor, it means that even if the trial court is proved this video, the State would still be able to convince Mr. Bush. So in my notes, I have no reasonable probability that the jury would have acquitted the defendant. So they have to show that. No reasonable probability. And I know I'm putting you on the spot here, but you have to then come back and say that's not true somehow. So without the video, what else is there? So without the video, because the gun was never recovered, then the State witness won't be able to connect some firearms that Mr. Bush probably possessed like four months before that to the firearm used in this case. So what the State has to do is to identify the shooter. So we have an identification. Right? We have an identification of the victim. Yes, Your Honor, Harris, who is the victim, identified Mr. Bush, but his credibility was disposed because Mr. Harris, they both have a relationship with Ms. Nam. And Mr. Harris had a prior felony conviction involving Ms. Nam. And he also gave inconsistent testimony about his building to Mr. So he initially denied that he had any animosity toward Mr. Bush, but later admitted that he once praised Mr. Bush's belonging outside of the apartment, and then the police had to come in and ask him to bring them all back inside. So credibility is one of your arguments. Yes, Your Honor, in that regard. Okay. Do you have anything else you want to say to us? I think that's it for my argument. No other questions. Thank you. Thank you. I have one more difficult question for you. The court's ruling basically says, I'm not saying entirely, but basically says state of mind exception for admissibility of the video. What about the argument that the video was admissible on other bases, such as weak, though it might have been that it was alleged at trial that it showed possession of a weapon similar to what was described as being used in the shooting? Your Honor, I believe the relevancy and it has to connect to the fact of disputes in this case. It cannot be a general firearm. It has to be the firearm used in this case. There's simply no connection between the object in the video because the state gun witness testified that he won't be able to tell whether the object in the video is a real gun or not, then there's no way that it could connect to the specific firearm used in this case. Okay. Thank you. Thank you. No other questions. Nothing further. Okay. Thank you very much. Thank you both. Thank you both for your arguments here today. This matter will be taken under advisement. We'll issue an order in due course."
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"stt_transcript": "is People v. Sedgwick Lifter, 525-0560. And for the appellant, are you ready? All right, you may approach the lectern and begin. Welcome. I haven't met you before, but you may begin when you're ready. May it please the Court, my name is Yulou Yip, Assistant Appellant Defender on behalf of Mr. Sedgwick Lifter. We have to speak up a little bit. Okay. Okay. We ask this Court to vacate the denial of Mr. Lifter's post-plea ineffective assistant claim and remand for a new preliminary plaintiff's inquiry before a different judge. In his pro se, Mr. Lifter alleged that inadequate representation and that the State's attorney had also been his topic defender. That allegation triggered the need for some form of preliminary clinical inquiry. The purpose of that inquiry is to examine the factual basis of the claim in a neutral and non-adversarial manner so that the record can show in an objective and neutral way whether the trial court promptly decided that the defendant was not entitled to new counsel. That did not happen here. The State's response brief tried to defend the exchange by breaking it into separate pieces, but that firmly misses the point. The problem is not one isolated question. The problem is the accumulated effect of the exchange. The inquiry began when the Court asked Mr. Lifter whether he had any information or court order showing that Mr. Kohlemann was having his attorney. Mr. Lifter began to answer, but the Court interrupted him almost immediately. When Mr. Lifter tried again to explain, the Court interrupted him a second time after he had only said a few words. The Court then placed Mr. Lifter on the oath and repeatedly warned him about felony perjury. Mr. Lifter still tried to explain his claim, but the Court interrupted him a third time while he was trying to answer. The Court then warned him again that he was on the oath and subject to a felony perjury charge if he was lying. Mr. Lifter still attempted to provide information about the claim, but after he stated that he did not have the court order showing that Mr. Kohlemann was his attorney in this case, the Court told him, well, you just lied to me before I put you on the oath. The Court then attacked his credibility, stating that this showed Mr. Lifter did not have the greatest sense of truth. After that sequence of interruption, the oath, the repeated felony perjury warning, and the accusation that he had lied, Mr. Lifter stopped trying to explain his claim. He said, I'm not going to say anything because I see where this is going, and then stated, I remain silent. That mattered because the purpose of the preliminary clinical inquiry is to allow the Court to examine the factual basis of the claim in a neutral and non-adversarial manner. Here, the Court repeatedly cut off Mr. Lifter while he was trying to explain his claim, placed him on the oath, missed any change. Do you think that placing him on the oath was improper? No, I don't think so. I don't think, like, placing him on the oath alone was improper. But I do think that the Court, when the Court placed Mr. Lifter on the oath in the middle of the conversation, even after interrupting him twice, and then after that placed him on the oath, and even after that Mr. Lifter still tried to articulate his claim, the Court started to accuse him of lying when he said he didn't have the court order. But he did not say that he had a court order in the case. So there's no conflict of a statement that he made would make it reasonable for the Court to accuse him of lying. And only after that he feel that he worry about getting more criminal charge, and that he plead the fifth. Can't the judge rely upon his own knowledge of the case in conducting a hearing like this? A defendant says A, and the judge says, well, I happen to know it was B. There's nothing improper in that, is there? Yeah, I think, I think sometimes the Court can rely on its own knowledge and the record to determine whether there's a, whether the defendant entitled to a new counsel. But that is not the case here, because the Court, because, because the Court asked Mr. Lifter whether he have any information or court order showing that Mr. Corman had represent him. So that question itself show that the Court was trying to understand the factual basis of the claim. Like, beyond what appeared in the immediate record, in addition to that, the Court also said, because you raised a ineffective assistance claim, so now I need to figure out what is going on. So it means that the Court did not believe that the record, it can, it can answer that question based on the, its own knowledge and the record itself. In fact, the record that the Court had made up to that point indicated that the State's attorney was not, in fact, the defendant's lawyer in the case, right? He was right about that. Yeah, but it's, so I, I would say that, so our position is that, first, when the Court start to ask Mr. Lifter a question, it should allow him to, allow him to answer in a neutral and non-arbitrary manner. And then also, in this conflict of interest, conflict of interest case, he might, the defendant might have more information than the record about maybe private conversation between him and the attorney. So that raised his concern, so he want to raise about it. But Corman represented the defendant in another case, but not in this case, right? I mean, that's what the record that was before the judge at the time indicated. And it's okay for a judge to say, well, I, I know this to be true. If a defendant interrupts a judge, can't a judge say, hey, wait a minute, it's my turn to talk? Yes, that's true, but the record showed that there's no interaction of the conversation. Mr. Lifter only answered the question after the Court asked the question, but when he tried to answer, only saying like a few words, the Court cut him off before he can finish the answer. Well, by the time we got to page 12, the Court asked him if he had any additional basis to support his motion, and I feel like, well, I know for a fact, if I didn't take it, he would hit me with it, it would be off the table that day. But to me, I felt that was a low-key threat, so that's the only thing I have. He did get to explain, right? Yes, but that is happened after the Court interrupted his answer, and then after the Court put him on the oath, and then warned him about family perjury, and that attacked his credibility. So by the time his answer already been limited, so he already worried about having additional felony charge on top of the criminal charge he already have. So I would not see that as a complete answer that he could provide. I'm sorry, was there any real problem in the record to the admonition given at the time of the plea? I mean, it happens all the time. The State says this is what they offer. You don't take it away. You're facing more exposure. Either take it or leave it. That's pretty common, isn't it? Yeah, I think the question here is that when Mr. Lifter raised a ineffective assistance plan, and the Court need to conduct the inquiry in a objective and neutral way, and because the Court didn't conduct it that way, so we won't be able to know from the record whether he has border conserve, and that's why we are asking this Court to demand for a new preliminary inquiry so that the record can reflect Mr. Lifter's complete claim, and whether he is entitled to a new counsel. Thank you for answering my question. I just want to follow up on this. So the State's attorney was the defendant's attorney in the underlying theft case. Yes. Is that right? Yes. And then the case that was under consideration in this proceeding was the escape for not showing up on the theft charge. Am I correct on that or not? So Mr. Cuomo was Mr. Lifter's public defender on the theft case, and then he was the prosecutor in this case. But this case relates to the theft case. Yes. That was originally prosecuted. Yes, exactly. Okay. And the judge, when he got to that point, didn't really allow for that kind of explanation. As I read the record, he said, I understand that. We're going to move on. Or did he allow for that? Did he allow your client to discuss it? I think the trial court asked the question. So he first asked whether he had any information or the court order. And then Mr. Lifter said, so Mr. Lifter tried to answer like two times, but he never had a chance to finish his answer. And then after that, the trial court put him on the oath. And then he again tried to answer, but he wouldn't be able to finish the answer too. And then the trial court attacked his credibility after he said that. And then the trial court said that he did not have the court order. But we won't be able to know that whether he had other documents showing that, showing his concern, other documents that can prove his claim. And then also, he's a pro se defender representing himself in effective assistance. So he might not, he only tried to present to the court what was his concern and what information that he had. But he did not have the ability to do so. Okay, but did the court have before it, in this case, the information that Mr. Lifter had, the record of what, the file of what happened in the theft case? Yes. So that was considered by the court at the time, is what you're saying? Or I thought your whole premise here is it was not considered and we need to go back. You're not clear on that? I think... I mean, you're asking us to send it back for another Krankel hearing, right? Yes. So you think that your client didn't get an opportunity to explain and you are looking for a preliminary Krankel hearing with new counsel, right? Yes. Okay. Questions? Is there anything in this record that suggests anybody had an actual conflict of interest? I don't think so. I don't believe so. But Mr. Lifter might have other concerns that he didn't have a chance to raise. Yes. But your point is the record wasn't fully opened or explored, right? Yes. So the defendant walks into the courtroom and he sees as his prosecutor is his defense attorney in the underlying case and his defense attorney is a former prosecutor from the same state's attorney's office, correct? Yes. All right. Thank you. Thank you. All right. You'll have a few minutes in rebuttal after we hear from Ms. Ray from the state, okay? Yes. Thank you. May it please the Court, counsel, I am Becky Ray with the Appellate Prosecutor's Office representing the people. The only issue that the defendant has raised in this case is whether the trial court conducted an adequate preliminary Krankel inquiry into the defendant's ineffective assistance of counsel claims. The trial court's preliminary inquiry was not adversarial as the defendant claims and because no error occurred, no remand is necessary. By way of clarification, pursuant to this Court's October 9th, 2025 order indicating that the corrected record was filed on that date, the state's record citations are to the corrected reported proceedings which are file stamped October 9th, 2025. And I'd like to answer the Court's question about whether or not the trial court was aware that the court was aware of that. It's in the record at page 31. The defendant responded to the Court about Konemann having been his attorney on a different case, the retail theft case. So just by way of clarification. I agree with you that the record says that the Court was aware. Yes. My question was, though, he said we've already discussed that and he moved on, there's no development, as Justice Hackett would say, of what happened, what was his worry is my concern about. Your Honor, if you'll allow me to make my argument, I think that there is clarification about how that came about, about what happened and that the trial court was very aware of what had happened prior to ruling on the Krankel preliminary hearing. Do you think that was because, as Justice Clark says, that he knew what was in the record? I do, and the trial court indicated it had reviewed the record as well. We don't know because he didn't put it in the record, he didn't recite it. That's accurate? Yes. When a judge tells a defendant, I know you're lying, as opposed to being ignorant as to the law on conflict of interest or status of attorneys or mistaken about conflict of interest or status, when a judge says you're lying, isn't that just unduly coercive? I don't think it's unduly coercive in the facts of this case because the trial court did say, perhaps not very artfully, that the defendant was not being truthful, had lied to him, but the trial court also said, you won't be prosecuted for that because it happened before I put you under oath. So there was no fear that the defendant was going to get an additional charge because of what the court's perception was that he had lied to it. So you better believe he picked his words more carefully. I do believe the court could have picked its words more carefully, but that does not necessarily turn the proceeding into an adversarial one or one that requires freedom as a result of that. What do you believe the court was referring to when you said, when the court said, I don't know who the judge was, when the court said to the defendant that the defendant was lying? That the court had interpreted the defendant's statement that he had a court order in his cell that indicated that the public defender, Ms. Heaton, was the state's attorney. And I think the court was indicating that that was incorrect and it knew that that was incorrect based on the record before it. Well, if you read the transcript, is that open to another interpretation? Here's the difficulty I have with it. There's two places where the judge makes a statement or an assumption that essentially cuts the defendant off from an opportunity to explain. One of which is when he says. Okay, thank you. In the report of proceedings, page 20, line 12, 13, the court says, okay, you just lied to me before I put you under oath. So you won't get charged with the felony. But what I'm suggesting is, isn't it possible to interpret the prior minutes in this as that Mr. Lifter wasn't lying, that there was a misunderstanding? I think that is possible, but I don't think, based on the entirety of this record, that the court had opportunities to explain what his claim was, both by very pointed questions to the defendant and also open-ended questions to the defendant. Do we have a clear record from Ms. Crankle here as to what his contentions were? I believe we do, Your Honor, if I may. Sure. Thank you. So, as Justice Clark pointed out earlier, or asked about earlier, the trial court can rely on its own knowledge of the facts and circumstances of a defendant's claim to evaluate it. And I think in this case, the court had that knowledge and was able to do so. The trial court had given the defendant his first appearance and appointed him an attorney, a public defender. And later that very same day, the trial court took the defendant's guilty plea. Stating the obvious, the trial court is presumed to know and follow the law, so it would not have appointed the State's attorney to represent the defendant. Thus, the court knew at the outset that the defendant's allegation was not factually correct. It was insufficient on its face. That allegation was in writing in the defendant's pro se motion to withdraw his guilty plea. And it said that he did not receive effective assistance of counsel because the State's attorney was his attorney. And the court knew that that was not the case. And so, everything about the defendant's claim was on the face of this record or in this record. It wasn't beyond. And the record rebutted the defendant's claim. And not only that, the trial court asked the defendant about his claim. And contrary to what the defendant claims, the trial court did not interrupt the defendant initially. The defendant interrupted the trial court. The trial court was restating the procedural posture and the reason for the setting when the defendant tried to interrupt him. And the trial court merely stopped him and said that it was the court's turn to speak. And that cannot be an adversarial conversation like the defendant claims. The trial judge has the authority to maintain control of its courtroom. And not only that, but the court followed it up with, you'll get your chance to talk. I don't know how much because you're represented by an attorney, not implying that the trial court would keep the defendant from talking, but perhaps the defendant's attorney. So the court was permitted to inquire, which it did. And it's not required to let the defendant testify in the narrative. It may ask questions. And it was reasonable of the trial court to ask the defendant if he had any proof. And how the court conducts the hearing is up to the court as long as it develops the record. And I believe that it did in this case. And there's another page in the record where the court even says, I think we agree that Mr. Conan was your attorney on the retail theft. I can lay hands on that. Isn't that what the promotion to withdraw guilty plea says, is that the state attorney was also my public defender on the states? Correct. And that's why I'm saying it's clear that the state's attorney was not his public defender on the estate case. Well, but for somebody who might not be as artful in the issue of proceedings, that's why I say this case, the estate case, arose out of this theft case, right? I mean, there would not have been an escape but for the theft. I believe that that is accurate. But we are not talking about the retail theft case. We are talking about the escape case. And we're also not talking about the motion to withdraw the guilty plea. The only issue the defendant has raised in this case is whether or not the trial court was adversarial in its conduct of doing the preliminary Krenkel inquiry, and it was not. Okay, and I understand the legal that you just described, procedurally. Yes. But if we look at the practical, which is the defendant's moving to withdraw because he shows up and he sees that the state's attorney now in this case is somebody who defended him on the theft, is it reasonable to think that in his motion to withdraw he might say, the state's attorney was my public defender in this case? I mean, I could see a scenario where somebody like a defendant could say, in this case, and mean the retail theft case. Well, Your Honor, if you'd like to get into the merits of that guilty plea, I'll be happy to. I mean, I could see the defendant talked to his attorney. The court took a break after he was appointed an attorney. Clearly at that time, had she been the state's attorney previously and she was now his attorney, he would have known that at the time he took the guilty plea. And if I recall from the record of the guilty plea, he indicated that he was not coerced into taking that plea. And he hadn't been promised or threatened anything to take that plea. So I think at that point in time, he would have been aware, if you're saying, you know, if he walked in the courtroom and saw this, he would have been aware of that at the time of his entry of his plea as well. Is the only basis for conflict is that you appear for the defendant in that particular case? I'm sorry. Can you ask that question? Is the defendant limited to only raising the issue of conflict if he alleges that this attorney was involved in the prior case? Isn't there a basis for conflict to say the office represented me and now they're prosecuting me, or they prosecuted me and now they're defending me? I think that there is a basis for that. The defendant did not raise it in this case, and he was given ample opportunity to do so. The court asked him more than once. Even after the court started to rule from the bench, the court asked him again, do you have anything else? And the defendant said no. And even though he had told the court that he would remain silent after the admonitions about perjury, the defendant did not do so. He continued to answer the court's questions, and also he participated in his motion to withdraw a guilty plea hearing. This was after the record proceedings on page 21 says the defendant says, I'm just going to plead the fifth. I'm not going to say nothing else because I see where this is going. And the defendant says, I remain silent. And then he says, I didn't say she prosecuted me in this case. I said she's the assistant state's attorney. After that is what you're referring to, but it's after the point where the defendant appears to be saying he's afraid to say anything more and doesn't get to make a clear record. But he didn't remain silent, Your Honor. Even after he said that he would remain silent, he did not do so. And at least five times after that, he responded to the court. Court, if any information do you have that Ms. Heaton prosecuted you in this case, the court asked. The defendant responded. Do you have any evidence to the court today that she was directly involved in your prosecution? The defendant responded. Twice, as a matter of fact. Once in the middle of that sentence. And my question is, is that the only basis for someone to allege conflict? No, Your Honor. But on the facts of this case, the defendant didn't raise any other conflicts, even though he had the opportunity to do that, plenty of opportunity to do that. The court gave him that opportunity, and the defendant said he had nothing else other than the fact that she was his attorney. She was the prosecutor and then his attorney. Isn't it true that before the defendant said anything on the record, the court had said, Mr. Lifter, the court notes from the onset, number one, Mr. Conwin was no real attorney in this case, not for one second. The court did say that, and that was just the court's recitation of what it knew the facts to be from its own knowledge and the record of the case, which it is entitled to consider. And it could have stopped there, truthfully, and it still would have been a sufficient crinkle hearing. The court was entitled under Jackson to consider its own facts and knowledge of the case, but it went beyond that, and it inquired of the defendant and his attorney, and so it took additional steps beyond its own knowledge to ascertain what the defendant's claims were and gave him plenty of opportunities to present those, and he did not. Okay. Thank you. Justice Long? No other questions. Thank you for answering my questions. All right. That's all right. Thank you. Thank you. Thank you. Ms. Yeung? Some response? Yeah. Your Honor, we maintain that the trial court on handling does not treat this as a claim that was resolved by the record at all. So the court asked Mr. Lifter whether he had information or court order showing that Mr. Conwin had represented him. That question itself showed the court was trying to understand the factual basis of the claim beyond what happened in the immediate record. And that makes sense because an attorney-client relationship or conflict issue may involve facts that are not fully reflected in the record before the court. But Mr. Lifter had not been allowed to fully explain what he meant, what information he had, or why he believed there was a conflict. So he did give some limited answer after the court moved on to the question related to Ms. Heaton, but by that point, the court had already accused him of lying and questioned his truthfulness. So the later exchange does not cure the problem because the earlier handling shielded and narrowed his explanation before the factual basis of the claim could be fully developed. That's why we are asking this court to remand for a preliminary critical inquiry before a different judge. Thank you. I'm looking at the conclusion. Yes. I mean, we keep calling this a pre-crankle inquiry. Yes. But at the conclusion of the case, the court asked the defendant's attorney if she had any evidence to present. She said none. Allowed the defense attorney to make an argument on the defendant's behalf. Asked the defendant if he had any additional basis for the motion. Defendant said he was under pressure. I just feel like, well, I know for a fact that if I didn't take it, he said he would hit me with it, that it would be off the table that day. And to me, I felt that was a low-key threat. So that's the only other thing I have. That's how it concluded, right? Yes. I think that is related to his intent to withdraw his UTP. But the earlier question was about his ineffective assistance claim. And he wasn't able to fully articulate what information he had. And then after that, after the court attacked his credibility and then put him under oath, and then he pled the fifth, the court still asked him questions, and then he still had the chance to answer. But by that time, he only gave some limited answer. Because the earlier handling already narrowed his explanation, he tried many times to articulate his ineffective assistance claim but never had a chance to do so. So I think the later answer is more about his claim to withdraw the UTP itself, not the ineffective assistance claim. Thank you. Thank you. Thank you. Okay, thank you both for your arguments here today. This matter will be taken under advisement. We'll issue an order in due course."
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"stt_transcript": "525-0062 People v. Travis Turner May it please the Court, Counsel. My name is Nathan Swanson. I am here today on behalf of Appellant Travis Turner. Mr. Turner was convicted of three counts of criminal sexual assault on a jury trial. He's raised four points of error, or four allegations of error on behalf of the trial court. Kind of proceeding down them sequentially, the first two have to do with allegations of how the trial court dealt with, I'm sorry, with how the trial court dealt with allegations of potential juror misconduct. Midway through the trial, one of the jurors handed the deputy a written note. Now, I'd like to point out here that the note didn't say, what's the difference between sexual assault and rape? And it didn't say, will you define that? It said, will you tell us, I'm paraphrasing something, but use the phrase, will you tell us what the difference between those are? Which are we considering? So that note comes in. The parties talk about it. They say, we'd like you to inquire of the juror to make sure they're not talking about the case prematurely, because at this point evidence has not been completed. The trial court declines to do so. The only remedial action the trial court took was to read essentially the same instruction that the trial court had been giving up to that point, which was, please don't discuss the crucial aspect here, the crucial question, was the trial court needed to confirm that there was no premature discussion amongst the jurors. The only way to learn that was to inquire of that specific juror who had submitted the question. Now, had the trial court done so, the trial court might have excused that juror, might have kept that juror on, and that question would have been up to the trial court's discretion. But when you look at the case law, what it says is that once a proper inquiry has been made, the decision about excusing or not a juror for an amiss trial, whatever that was to be, is in the trial court's discretion. And here, there was no inquiry. Is there a law that says there has to be? Is there any discretionary? There's not an explicit law that says it has to be. I would suggest that it is implicit in the case law that talks about the inquiries, because in those cases, I think Runge is the first, I mispronounced it, Runge. Runge. Runge. Yeah. Isn't part of the discretion to decide whether to inquire? And I mean, isn't that pretty clear in the case law as well? Well, actually, it may be there was an inquiry, and maybe even it should have been best practices to conduct the inquiry. But you're not equating failure to follow best practices with use of discretion, are you? Well, what I'm suggesting is, and this is what I say, I think it's implicit in the case law that there is some duty to make an inquiry. I think Runge was the case where they said, after an appropriate inquiry, whether or not to excuse is discretionary. There's another case, and I'm going to be on the name, cited in the briefing, that talks about how it would have been best practices for the trial court to have inquired of the juror rather than the person she was talking to. I think it was a prison guard of her law. But that was sufficient because the trial court knew from that what conversations that juror had. Well, isn't it a reasonable interpretation of this statement, please provide us with the difference between rape and sexual assault, which are we considering both are being used? Isn't it just as likely an interpretation of that note is that this individual juror has independently decided to ask on behalf of the jury the question? I certainly would agree that that is a permissible interpretation of that. I don't know if you can assign probabilities to it, because we just don't know. But if you acknowledge it's a reasonable interpretation, then where's the abuse of By failing to figure out which of those interpretations, because Justice, if you're correct, that it was equally possible. Well, if the one is they're talking about it, and the other is it's just one person, and we don't know, how can it be reasonable not to clarify that? Because it is a problem. Everyone would concede if the jurors are talking about the case before it's been submitted. But he does tell the jurors, you're going to be instructed at the end of the case, don't talk about the case. He does tell the jurors that, but he'd been telling them that before. And we still have this question from the juror saying, which are we considering? Will you tell us? So in light of that, it at least creates the possibility, it opens the door to the wondering, is the jury disregarding the instructions? So under the facts of this case, I would argue that it would be an abuse of discretion not to at least clarify that point. You don't need to bring all the jurors in. That would be premature. That would be a bridge too far. But this juror would say, I just want to make sure you're not talking about this with other people. Judge could have done it. Correct. Let's assume the judge should have done it. Is that an abuse of discretion? If he should have done it, I would argue that it is an abuse of discretion. As part of best practices. Yes. And that's where I'm standing. Not following best practices is not the same as an abuse of discretion. You would agree with that? I would agree with that. And I guess here's where I would clarify that. Best practices, so if the question is, is the juror talking, are the jurors talking amongst themselves? Best practices is ask the juror who you're concerned about. Now, that's best practices. There are other possibilities. You know, have these jurors been sequestered from each other? Have we talked to the person they were talking to? Whatever it happens to be. Some other way of determining that fact. But, so if there's best practices, there's less good practice, and then there's no practice, is what we have here, where the judge didn't do anything to resolve the question. He did not know. And with that, that's where I would argue an abuse of discretion. Because he doesn't have the information to make the determination. But he did something. He instructed the jurors. He did instruct the jurors, and it was essentially the same instruction that he had been given thus far. Which... And what do you, what do you have done different? Dismiss the juror? It would depend on... We don't know. If, and that's the question. If that juror had, if the juror who asked the question came in and said, no, that's just my question. Okay. Send him back and proceed along. It seems like the standard of review is very differential here with abuse of discretion. It has to be something that... I can't even imagine how we would know, under your scenario, how we would know what to do next, other than give an instruction that says, don't talk about the case? Well, I guess I should clarify. What did you say? How would we know what to do next from if the juror had been inquired? You're saying the only appropriate response was to inquire of the juror at a minimum? I wouldn't say that. The only appropriate response would be to have some information upon which to decide whether or not an inquiry was necessary. So if you... So you can't even concede to that question that you have to ask? Well, I'm not trying to dodge the question. I'm truly not. No, I'm trying to understand where the error is that you're claiming. And the reason I'm quibbling with the question is that I would not go so far as to say you always have to talk to the juror. That's the bridge too far for me. But you have to... I would suggest that it is an abuse of discretion to not do anything besides read the same instruction. That's where I would go. Okay. General, do you want to move on? Yeah, I'm sorry. I don't know. Not at all. No, I'm sorry. I'm reading roughly. The trial judge's discretion clearly extends to the initial decision whether to interrogate jurors. I mean, that's roughly your case. Yes. And why I would say that it would be an abuse of discretion here would be because the lack of any information upon which to base a decision to not inquire. If you've got the question, you have to answer it somehow or at least have some indication. Some investigation. Something. Exactly. Gotcha. Which I think is also an excellent segue for me to go to the second point, which also has to do with the failure to investigate an allegation that was made. This is, the second point is brought on plainly error. It alleges that the trial court plainly erred by failing to conduct an evidentiary hearing on the post-trial allegation of juror misconduct. What the case law says is that it's an abuse of discretion to fail to do so when there is a sufficiently, I'm paraphrasing, specific allegation of juror misconduct. Here we have what the jurors allegedly talk about and the person who saw them. So the only thing I would concede or I would suggest is missing there is which juror it was, the juror number. Well, the trial court could have found that out by saying, hey, this witness, who will talk to you? The trial court knew that. We'll come in and testify to that. What witness? What was presented to the court to raise that concern? It was included in the defendant's motion for a new trial, Your Honor. The anonymous source? The motion for a new trial described it as anonymous or didn't specify it. As to the hearing on it, it was made clear that it was a member of the defendant's family. So was it anonymous? Semi-anonymous, I guess, I would concede. But it wasn't anonymous in the sense that the trial court could not have followed up and received that information. The trial court wasn't aware that this witness will be made available to investigate this, if you wish. Did the trial court specifically ask the defense counsel whether he wanted to present evidence? He did, yes, Your Honor. The defense counsel said no? Correct. Well, okay. The defense counsel said maybe we should have some further investigation on this. And if you remember, I don't recall specifically, so I don't want to stake my claim as to that, but that may have been. And it may very well be that the failure to request a hearing, that that could have been some form of error on the defense counsel's part, but that's not where we are right here. This is why I brought this as a plain error. When the trial court knew this, the trial court should have investigated just to put the nail in the coffin and nail it down. And so, it's sui sponte, should have decided to have a hearing? Sui sponte said, if you said that this witness is available, and they have, then I'd like to hear from that witness. Now, if it hadn't provided that statement, different analysis would have. Okay. Quickly move on to your other arguments, since you're out of time. We've taken your time. I don't think you've taken it. It's my negligence. Points three and four have to do with evidentiary errors. Point three alleges the trial court erred by excluding testimony, an argument, and cross-examination that stems from a statement made by a witness that did not testify to material crimes of doubt. Point four alleges that that testimony should have been admissible as a statement against Mr. Delk's interest, and even if that were not the case, it should have been admissible under two other grounds. One was to explain the effect on the listener, in this case the officer, and the other was simply to ask the complaining victim, did you say this thing? Now, they could not have impeached you with it, but the defendant was only allowed to ask, were you flirting? That's different from saying, did you say, make this statement to the defendant, which touched directly on the issue of consent, which was part of the defendant's defense. That's, you know, if you don't buy that the information was, or that Mr. Delk's statement was a statement against interest and therefore admissible over a hearsay objection, it still had non-hearsay purposes for which it could have been admissible, and even if it wasn't admissible at all, asking the complaining witness, did you say this? Mr. Turner would have been stuck with the answer, but he should have been permitted to at least ask that question. And then the final point has to do with evidence that was submitted that states that the complaining victim had been a virgin prior to the incident. Before trial, that was excluded. During trial, the defense counsel asked the investigating officer, he asked him a series of questions about things the investigating officer did not follow up on. Did you follow up on why the victim's nails weren't broken if she said she had been scratching and fighting? A few other questions, and did you follow up, did she tell you that she called her boyfriend because she felt bad? Yes, did you follow up on that? Because the phone records reflected no such calls. The state asked to admit the evidence that she said in the middle of that statement, because I'm a virgin, that's reserved for him. Well, first, the state is not in a position to waive the victim's rights under the Rateshield Law, and that's what the state did here. But beyond that, the rule of completeness, even if it applies to the Rateshield Law, that statement did not make, the admitted statement, did not change the understanding of what the questioning was. The questioning was, she said she called him, she didn't. Did you ask about that? That was the line of questioning. The statement that I'm a virgin does not make that any different. It doesn't clarify something that the jury were to take and obey incorrectly. And I'm not... In the context of the entire substance of the statement... Yes. The notion that it's material to this case is the entire statement, and the defense attorney chose to leave a big part of it out. Well, the parties agreed to keep that part out earlier, but yes. And had the defense attorney later... I think one of the things the state suggested the trial court were concerned about is he might argue later that she was feeling guilty about it. And certainly, had he done that, had that come up at a later time, then there might be an argument that the admitted portion needed to come in to avoid a misunderstanding of what the statement was. But that's not the context of this question here. Just so I'm clear on this, you're not arguing that the Rateshield Law, a law by the General Assembly, trumps a Supreme Court rule... Oh, no. Like the rule of completeness. No. You're saying in the application of the rule of completeness, in this setting, was improper. Yes. Got it. And there are no further questions on that issue? Questions? No. Thank you. Okay. Thank you. Thank you very much. You'll have a few moments after the statement. We hear from the state. Mr. Nicolosi. Correct. Perfect. Good morning, Your Honors. May it please the court, counsel. My name is Justin Nicolosi. I represent the state of Illinois in this case. The state asked this court to affirm the defendant's conviction. Regarding the first issue, counsel said that the judge did nothing in this case. The state would disagree. The judge did do something. He actually considered the question that was posed by the jury. As I argued pretty thoroughly in my brief, this question that the jury posed was just about the legal definitions of two terms. That were being used interchangeably by witnesses at trial. They were discussing, they mentioned the rape kit and the sexual assault kit. I think multiple witnesses mentioned that. They used it repeatedly. This juror was wondering what the definition of those terms were. The state submits that the court did not abuse its discretion in instructing the jury that they would be provided all the legal definitions necessary at the end. This question did not suggest anything about the evidence in this case. It didn't suggest that some sort of extrinsic information was given to the jury in the jury room. It didn't suggest that anyone's mind was made up before. As I argued in my brief, those are the key considerations here. This question was purely about legal definitions. And the state submits there's no automatic duty for a court to inquire upon jurors. The judge considered this question, realized it was just about legal definitions, instructed the jury, no abuse of discretion on that issue. Regarding issue two, similarly here, as your honors were discussing with counsel, there's no specifics here of what this person in the gallery heard from this particular juror. And your issue two is what? Oh, I'm sorry. It was counsel's issue two. Whether the court should have inquired about the jury misconduct claim, about someone in the gallery had allegedly heard a juror discussing with a bartender things about the case, asking about whether they knew the defendant's age or knew him in the motion for new trial. The defense presented that and only that as evidence of asking for some sort of an inquiry into that issue. But they didn't even present the name of the juror. They didn't present the name of the gallery member. They just said this person would be willing to speak with the judge in camera outside the courtroom. The court found, as your honor had mentioned, the court had asked if there was any evidence to present. Defense counsel said no. They're still investigating. States admits that was insufficient to warrant any kind of inquiry. There's just no specifics. In my brief, I discussed the facts of the Kuntu case pretty heavily. I'm not going to go over that for this court this time. But that case involved specifics and details and names and certainly could point to some sort of prejudice. And in this case, there just simply is an insufficient substantive basis to even request an inquiry. So the state submits the court was proper on that issue. Regarding issue three, the state submits that the court didn't abuse its discretion in excluding the statements from Alfonso Delk. This is not admissible as a statement against interest for the reasons I discussed in my brief. It wasn't against Mr. Delk's interest in any way. This wasn't admissible for any kind of effect on the listener, as defendant argues in his brief. There was no effect. Delk gave these statements to the police. They didn't investigate them at all. So you can't. This witness was deemed unavailable. They were trying to make him unavailable. Yes, Your Honor. You agree that he was not unavailable? I agree he was unavailable. I can't really argue that he was available because they just couldn't find him. I think he had another warrant, and they couldn't. What if he was secreting himself from being a defendant or showing up? Are you available if you intentionally secret yourself? For purposes of testifying in another trial and being open to cross-examination, I would say you are unavailable. I don't know the law on that particular issue. I didn't research that. But I would say for purposes of our discussion, it would be about the same. If you can't physically get him into court to respond to questions regarding your role in this case, I don't think I could come up with a culpable argument that he was available, Your Honor. So the fact is he was unavailable, you can see, for these purposes. Yes. The statements were made close in time to the event. Yes. The statements were made to police in a formal, recorded interview, right? Yes. Okay. Doug did not benefit by making any of the statements. So we're down to whether the statements would subject him to civil liability. Yes. As I argued, Your Honor, in my brief, this does not, none of his statements do not subject him to civil liability in this case. They just were not against his interest in any way, shape, or form. Regarding Issue 4, which is the issue regarding the I'm a virgin, that was for him, a portion of McKayla Grogan's quote that was omitted, and there was a discussion, and it was eventually included back into that statement. As I argued in my brief, without that, the I'm a virgin that was for him quote, the jury is misled by what Sergeant Zaber provided to the jury. As the court even said at the sidebar when they were discussing with the parties, the court said, you know, without that portion, I would be confused, too. I would be misled because it sounds like that she is saying, I feel bad, I feel guilty, as if she made a decision to consent to sex with the defendant. With the I'm a virgin that was for him, that shows why she was upset. It wasn't a choice that she made. Something for purposes of this discussion was taken from her and taken from Spencer Suckup, who was her boyfriend. That is a critical part, as the prosecutor argued before. That's a critical part of that quote. And without it, it is completely misleading. And for the rule of completeness, it was important that that is included in the statement to give the proper context to what she was talking about. How do you see the appellant's contention that that testimony should not have been barred in the first place? Do you understand what I'm saying? I was talking about the testimony that the victim would offer was objected to as the basis for exclusion. I was talking about the rape shield portion of this. I think, as this court stated in 1997 in People v. Health, it observed that the rape shield statute shouldn't be mechanically applied to obscure relevant evidence. And I think, as Your Honor was discussing with counsel, the completeness doctrine supersedes the rape shield law in this regard because that is relative evidence. That portion of the quote was relative evidence, and it needed to be provided to give the jury the proper context to her statement. And I think, in that regard, the decision here was proper. That's all I have. If there are any other questions on any of these issues, I'd be happy to answer them. No, thank you. No, thank you. All right. Thank you. Thank you. Just very briefly, Your Honor, with regards to the appellant's second point, the State argues that there were no specifics. I would just reiterate there was no specifics as to the juror's misconduct. The defendant had alleged where the statement had been made, what the juror had been asking about, when it had occurred. The only things missing was the name of the juror and the name of the witness. The witness was available and could have identified the juror. So to the extent that those things are not there, it's because the trial court didn't inquire into it. As to the fourth point, the rake-shield issue and evidence of the victim's virginity, I would, again, also reiterate these questions were not asked of the victim. The context of the question was asked of the police officer as a series of questions about things that the police officer did not follow up on. And the question about her statement that she called her boyfriend was along with questions about, did you look at the phone records which showed no such call was made? So had it been a different situation? Had the defendant asked the victim about this? Had he tried to argue the point that while she acted like she was sad? That's a different analysis. How did the substance of the statement get in front of the jury? The police officer was asked about this. By who? By the defense attorney. So the defense attorney, as a matter of strategy, chose to put this information in front of the jury that the state argues is missing something important, asked the court to include the missing part they thought was important, and the court did. Correct. Yeah. My issue with this is they say that part is important, but to say that part is important takes it out of the context it was made in, the question was made in, and the context of the evidence was placed in front of the jury. In that context, the import of the statement was she called, said she called, she didn't. Why would the substance of the call be important at all then? If the only point is she said she didn't call and the evidence was that she called, why put any of the statement in front of the jury? I'm sorry, your Honor. She said she called and the evidence was she did not. Right. Sorry. I guess part of the statement, she didn't talk about why. I don't believe they submitted what she supposedly talked about. I'm sorry. She said she called because she felt bad. And yet if she would argue that that portion was irrelevant, then the state should have objected that that portion is irrelevant, not I get this other part in now. Because the import, again, from the context was clear. It's she said she called, she didn't. Okay. Further, I'd ask that you vacate the convictions. The relief you're asking for is to vacate? To vacate the convictions and remand for a new trial. Okay. And the last two contentions of error are to be reviewed under plain error? The statement? No, those were objected to at trial, and then they were included in the motion for new trial. Okay. So what is the plain error argument? The plain error is a point to the failure to investigate the claim of jury misconduct. Okay. Any other questions? No, thank you very much. Any questions? No, thank you. All right, thank you, Mr. Swanson. Thank you, Mr. Nicolosi. We appreciate your time here today. This matter will be taken under advisement. We'll issue an order in due course."
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"stt_transcript": "Okay the next case on the docket is 525-0744 Stodden v. Coles County Board et al. Mr. DeVore, are you ready to proceed? I am. Okay, you may do so. This is the Court of Counsel. Your Honor, on behalf of Mr. Stodden and the declaratory judgment action he brought against the County Board and Mr. Becker. This one I believe is a little more straightforward than what we just went through regardless of where the court comes down. This is an issue to where my client brought the declaratory judgment, not asking for money, that's true, but he doesn't have to. He can ask the court to declare the rights and obligations of the party as a controversy. Obviously everyone thought there was a controversy because there was a cross motion for summary judgment filed by the defendant. And what it comes down to, it comes down to you have statutory requirements on the assessor. As a creature of statute, she has to do certain things as it relates to assessments. She can hire people, et cetera, but she has the obligation under the law to assess property. I don't think the facts are in dispute that there became a point in time to where the board and the office and rules committee made the decision that assessments needed to be done. And so they went through a process and ended up getting and receiving competing bids. And I'll use this language and I'll probably elevate a little tone on some of them because what I'm doing is using language that's completely inconsistent with hiring an employee. They got bids again. The assessor didn't get bids, the County Board and the official rules committee, office and rules committee got bids. They went and got these bids, the committee vetted the bids, they sent a recommendation to the County Board and the County Board ended up accepting the bid of Mr. Becker to do appraisals. Now they say there's no written contract. I'll throw that in while I'm here. Again, that's not a defense that carries the day to suggest that, hey, I could argue there is a contract. I don't think it's really significant because he submitted a bid, they accepted the bid. He became a 1099 contractor and then the record shows after some taxpayers started complaining, they converted him to W-2, gave him an oath of office and called him a deputy assessor. So is this a case of was he an employee versus an independent contractor? Not so much as, again, I don't think that label carries the day significantly, Justice. I think it comes down to who did the hiring, right? I think an independent contractor is a factor to be considered, but the County Board itself isn't the one that goes out and gets private people to do it. No, but she can do it with the advice and consent of the County Board. Yeah, she can hire whoever she wants. But the language of doing it with the advice and consent of the County Board is in the It is true. So why is this not advice and consent? Because I think the record shows that she didn't go and seek out this to do it at all. She acquiesced. She acquiesced. I agree with you and I think if you read the Ashton B. Cook case, you have the same fact pattern where in Ashton B. Cook, the court said acquiescence doesn't get you there. At the time, the judge ruled on the summary judgment question. Is there any dispute that at that moment, at that moment in time, this was a deputy assessor? He wasn't there anymore at that time, sir. At the time they ruled, for the actions that were complained of, was he not a deputy assessor? At that time? Yeah. He was gone. Had been gone for a long time. The status being complained of, he had the status of deputy assessor. If he isn't, right? They gave him the status of deputy assessor several months after they brought him on board. That is true. Did he take any actions with respect to Stoddard's trust before he became deputy assessor? Does the record? The record doesn't reflect any of that. I think that the acts being complained of don't, that's not the linchpin. I think the actions being complained of, at least as I'm asking the court to apply the law, is the process they went through to bring Becker on board and how that occurred. Because when they brought him on board and they accepted his bid, clearly he was an independent contractor. And then after they started and taxpayers started complaining and asking questions, they slipped him to a deputy assessor after the fact. That's true. That's not contested. And she was involved in that. So from that moment on, the assessor said, you've got to do a 1099, you've got to do an oath of office, and he did all of that. To the extent she did all of that, after he was hired and started, then eventually at some point in time there was the trigger of an oath of office and switch you to a W-2. The record doesn't lay out whether she's the one that required that or accepted. She certainly participated in that. But I think the record is clear. That's her obligation as the assessor. I mean, who else would give the oath of office? True, she did. But I think the record too, ma'am, is important, is that when people started asking for the records of Mr. Becker, she started saying that those are his trade secrets and he's an independent contractor and you can't have those and we can't turn them over because they don't belong to the county. So again, you're going to see... Well, that's a different issue, isn't it? With whether county funds are being used and the information that's generated is public information or private. That's a whole different issue to me. You have a period of time that you're arguing about, if I understand this correctly. It's a very short period of time. Get the bids, hire Mr. Becker, and then he becomes a 1099 employee. He did. So you have this very short window where you're complaining that they violated a statute. I say they're violating the statute as implied by Ashton because, again, I think if you read the court... But for what period of time? I don't think the period of time is the question, ma'am. I would ask you to consider that the timing is the process of which they brought this gentleman on board to perform a task. So from the time they accepted his bid and brought him in, I think the court in its analysis can stop right there. What happened after that, I don't know is even directly on point. It's the process they went to go out and use... Again, they engaged a private contractor. They didn't switch to a public employee. That's okay. But they engaged and hired a private contractor to perform the statutorily prescribed duties of the assessor. That's where Ashley B. Cook says you can't do that. You as a legislative body can't go out and say, well, the assessor, we want somebody else to do this work. No, no. That's not what that case says. That case says you can't abdicate your responsibilities to that. Right? When the constitutional laws of the state create an office, prescribe its duties, and fix its compensation, no board, except by actions of the legislature, has the authority to contract with private individuals to expend public funds for the purpose of performing the duties which were imposed upon the officer. There's no contract here. I would suggest there was. They took a bid. He solicited bids. He gave a bid. The record shows they accepted the bid. Did they pay the bid? They started paying him the quarterly payments. Do we know that they paid the bid without a contract? They started making the quarterly payments to him which were in the bid. That's in the record, too. His actual bid says so much a quarter. They started making those payments to him so much a quarter. Then there was this concern that got raised. Let's call it six months. I don't think the time is relevant. Now we're under a W-2. Now they started making the same payments through a W-2 structure and not through the 1099. At the beginning, the payments were consistent with the bid. As a matter of contract principles, I'm pretty sure we've got raw and solid ground there. Okay. What is the harm? What is the relief that you're seeking? Again, through the declaratory judgment action is to establish the rights and obligations of the parties, which is what a debt action can do, to say that this board exceeded its authority by privately contracting with this gentleman to do the assessments of the job. I understand the theory. What's the harm and the relief? The harm is, again, the relief is merely to declare the rights of the parties to say it was wrong. We're not asking for money. No injury? Where's ... How do we grant ... How does the court grant relief in this case? The court's granting relief would agree with our request in the debt action to say ... But there's no more controversy. That was going to be my question. Whatever controversy may have existed at some point in time, at the time the court was being asked to act, what was the controversy as of that day? He was a deputy assessor. What's the ... Was a deputy assessor. What's the controversy? Okay, they did something wrong eight months ago. We want you to tell them that eight months ago they did something wrong. Is that appropriate in a declaratory judgment action? Yeah, no, it is, yes. Even though they fixed it? Well, we fixed it after the fact. Yeah. But again, we're complaining of the whole process. To say yes, hypothetically, sir, let's say you agree. You voted the law. You exceeded your authority. You hired a private contractor to do a public servant's job. That's ... To say, well, this court's not going to rule that because after they figured out they broke the law, they made him an employee and a deputy assessor, so it kind of cured the problem. That vitiates our ability to say you still broke the law. Well, but a court of review must, and even the trial court, must be able to look and there must be a controversy at the time of the action, of the DEC action. So, what Justice Clark and myself are wondering about is what was the controversy that existed at the time the DEC action was filed? That distinguishes ... Again, I paused it when I heard the question. I can answer that, but what's the controversy today? The controversy at the time the DEC action was filed, because I would agree with you, there would have to be a case in controversy at the time it was filed. And so, you can ... Analysis could be, and I understand it, there was a controversy when they hired her, hypothetically. Then, for whatever reason, they switched him to a deputy assessor through ... Again, I would suggest to you it was all to sob, because again, they gave him a limbo, sir. They changed the way he was giving his check. I don't believe that in and of itself means that they have remedied the problem that they treated in the first place. What day did you file the DEC action? What year did you file the DEC action? I don't have it in front of me, but it was well after that. He left in 2016 or ... What did he leave? 2021? Correct. He's talking about the time ... I don't know how to prove my case when I brought it down. Isn't it true that ... Maybe I'll put it this way. Isn't it true that he was gone at the time you filed the DEC action? That's correct, ma'am. And so ... They didn't raise those offenses in the trial court. I know, but we have to examine our own ability to grant relief. I understand your point. And I'm having trouble with the same thing Justice Clark is. I don't see the controversy at the time you bring the action. Had it been brought maybe in 2016? Different story, right? I understand your point. I believe the record ... I wasn't involved in that this case was brought ... I don't know if it was brought in the federal court or brought ... I wasn't involved in any of that. Okay. But by the time I brought up the case, I understand the history that you're talking about. Okay. A distinction. I understand the distinction, ma'am. Okay. So at least we agree there is a distinction. There's a distinction to be vetted by the justices. And again, on behalf of my client, I'm arguing that it still didn't relieve and it didn't remedy the ultimate controversy that he's raising and raising this DEC action is that the board exceeded its authority. If this court finds, yeah, you probably did exceed your authority, et cetera, but for these other reasons we're not in a position, I understand your argument. I still think you can get there. I understand what you've said, ma'am. Did we give any significance to the fact that Mr. Stodden is a trustee of the entity that's paying taxes as opposed to a taxpayer? I don't think so. I think that's a good question. I thought I'd get to that more just. I think the landmarks case that the court relied upon when it denied standing twice I think is well-received. Did that case involve a particular statute, though? It did, and we've argued that this case also involves two particular statutes, 200-9-80, 200-3-40, which says that she's the one that's hired to do the assessments. She's the one that gets to hire people, and those statutes were filed. I think maybe you're misinterpreting what I'm saying. That case involved a statute that was assumed to give an individual citizen standing. I don't think this is directly on what the other justices were asking you about, but I still have a question about the standing here, too. How is your plaintiff injured or his status affected by any of this? Understood, and again, to the extent we argued the statutes as discussed, the other status would be, and I would agree with the trial court, that even though he put his property in a trust, he was still the trustee and he was still the one involved, and so that was enough of a taxpayer injury. That's what the judge found, and we're asking you to consider that. But I understand your question, sir. The second thing is, the case you cited, I'm sorry, I forget the name. Ashton v. Cook. Right. That was somewhat distinguishable because that wasn't an abdication of duties of the office. This was the government hiring replacements, not under the supervision of the state attorney's office, wasn't it? Well, I believe that the Ashton court was the constitutional office of the state's attorney, and they hired private attorneys to go do the collection work for the state's attorney. Whether they were under his supervision or not, I don't know if Ashton got into that, but we've argued that Ashton was either a constitutional office or a statutory office, and again, Mr. Becker was doing all of this stuff, and again, I know they gave him the label justice, but again, I think the record is pretty clear that he was doing this work independently. My question to you is, isn't that case distinguishable for that reason that when you say they hired, in that case the county government hired these attorneys to perform work normally within the constitutional role of the state's attorney? Correct. But without the state's attorney's consent or supervision? They said he acquiesced to their hiring. And that state's attorney then sued, saying this was not a valid deputization because it wasn't through their office, correct? It had to do with the collection of, I think, the fees. That they had hired attorneys to perform a function of the state's attorney. Correct. Your argument isn't that, or maybe it is, that an independent contractor as an individual cannot also simultaneously be a valid deputy of a county officer? I think he could. I think if the facts in this case were that the assessor says, I have not enough resources because we just happen to be talking about two assessor's cases back to back and I think Justice Gates recognizes, and I concur, these departments are grossly underfunded. And so here, if she would have went and said, I need you to increase my budget, I'm going to go look for it, I'm going to hire someone, and I'm going to pay them as an independent contractor, I'm going to deputize them, I need you to approve what I'm doing, I need you to increase my budget, we wouldn't be standing here. But what we have, we have a county board who said, we're just going to go do this ourselves, we're going to hire this person, we're going to take care of it, it's not the assessor. She acquiesced. But again, they also acquiesced in Ashton. And this has to do, again, this ultimate question, irrespective of the timing that your justice has brought up, is a question of whether a legislative body can just say, we're going to go do this, your office assessor or state's attorney, you're just going to accept it. I think, overarchingly, that's the bigger issue. Okay. Thank you. Thank you, sir. Is there any other questions? No, thank you. No, thank you for answering my question. All right, you'll have a few moments after your opponent. Thank you, ma'am. Mr. Drinkwine, I know we went over a little bit, so in the event that happens with you, I'll give you the same grace. Thank you, Your Honor. May it please the Court and good morning, counsel. Chris Drinkwine on behalf of the Coles County Board and Mr. Robert Becker. The judgment of the Circuit Court of Coles County must be affirmed based on two undisputed facts. Mr. Stodden does not pay property tax in Coles County and Mr. Becker was a sworn deputy assessor who worked under the direction and control of the supervisor of assessments. Not only was there not a case in controversy when this declaratory judgment action was filed, there never was a case in controversy because that first fact, that Mr. Stodden doesn't pay property taxes in Coles County means that he didn't suffer an injury in fact to a legally recognized interest and therefore lacks standing. The second fact, that Mr. Becker was a sworn deputy assessor distinguishes Ashton v. Cook County because the private attorneys in Ashton were given full authority to independently perform legal services which were the constitutional duty of the Cook County State's Attorney. Whereas Mr. Becker... I just have a question. I apologize. Yes, Your Honor. Let's just take a moment in time. After the formation of the initial contractual relationship between Coles County and Mr. Becker, would you agree that Ashton tends to say... Ashton tends to apply? No, Your Honor, because the county board's and Mr. Becker's position is that he was always a duly appointed deputy assessor. Is that what the record indicates? He was sworn in late. He was. He was sworn in on June 1st, 2016. He was hired in 2015 in May. He did some very minimal work. Whatever he did before he was sworn in would not Ashton apply. Our position... If he was hired to independently do the duty of the supervisor of assessment, he was never hired for that purpose. He was hired to help the supervisor of assessment do commercial property assessments under her direction and control. If he was set loose to do the commercial property assessments on his own and it wasn't under supervisor of assessment, Biddle's direction and control, Ashton would apply because he would have full authority and he'd be usurping her statutory duties just like the private attorneys in Ashton usurped the constitutional duties of the Cook County State's Attorney. So, Your Honor, only if he was hired to independently act would Ashton apply during that period that you asked about. Thank you. In any event, the Coles County Board's position is that he was de facto a deputy assessor prior to being sworn in. So, Ashton is distinguishable because Mr. Becker did not act independently. And the circuit court was entirely correct on the merits in distinguishing Ashton, but the court should not have adjudicated the claim for declaratory judgment in the first place because Mr. Stodden lacks standing, which requires an injury, in fact, to a legally recognized interest. Mr. Stodden has not suffered such an injury as a result of the purported unlawful outsourcing of the supervisor of assessment's duties because he does not pay property taxes in Coles County. Our Supreme Court in the Greer case explained that one who is adversely affected, in fact, by governmental action has standing to challenge its legality and one who is not adversely affected, in fact, lacks standing. Mr. Stodden brought this action as an individual, not as trustee of his property tax-paying trust. He could have sued as a trustee on behalf of the trust because the trust, of course, has a distinct legal existence and can sue and be sued, but he didn't. Had he brought the action as a trustee on behalf of the trust, the property tax-paying trust wouldn't have had standing to bring this declaratory judgment action. Mr. Stodden does not as an individual. He's not a property taxpayer and he's not suffered an injury, in fact, to a legally recognized interest based on the purported unlawful outsourcing of the supervisor of assessments duties. Now, the Supreme Court said that the landmark Illinois... Mr. Stodden... Sorry. Yeah, Mr. Stodden. In his claim, he alleged he was a taxpayer? Did he? I mean... In any event, there's no... I'm trying to figure out what his representation to... And I don't have it in front of me. I'm asking you. What was his representation as far as his status that gave him standing originally? Well, on the north side of the V it's Mr. Stodden as an individual not as a trustee. I don't recall standing here what he alleged in his complaint as far as... Well, isn't it important to know how he represented his interest as opposed to looking at a piece of paper that has his name on it? No, I... I need to know did he represent that he was an individual taxpayer or did he represent that he was a trustee within the body of his pleadings? I don't think he represented within the body of his pleading either way. And we moved that is to say the county board moved to dismiss on standing grounds under 619 motion initially that was rejected and then we brought... What was the affirmative matter under 619? Lack of standing 619-A Okay. 7. And you lost on that. We did. We lost in summary judgment too. Both rulings were incorrect. Because by the time we got to summary judgment the record was clear that Mr. Stodden does not own property in Coles County and does not pay property taxes as an individual. That's right. And he did not sue as the trustee. The trustee is not a part of... The trust is not a part of in this case. He didn't sue as the trustee that's the only way that a trust can sue is through its trustee. I understand and that's why I asked you the question. What was his representation? Did he... Did he say he was representing himself individually or did he... make it clear that he was trustee of certain property? Perhaps... In the complaint, Your Honor, I don't think he mentions the trust. I don't... I'm not looking at it. I'm looking at the judgment. Or the... I don't believe he mentions... Because that issue was raised... He sued as an individual removed to dismiss because he didn't have standing because he doesn't own property. But I understand what you're saying. How does he characterize himself in the complaint? Standing here I can't answer that question. I know that by summary judgment we established for a fact he doesn't own property in Coles County and he doesn't pay property taxes in Coles County. I'm not suggesting an answer to you but somewhere in the briefs maybe it was Attorney Devorah's briefs or yours it was mentioned that it had been asserted that his interest was that he was a voter in the county and therefore had an interest in how the county complied with their official duties. My recollection is like I say I'm not trying to answer the question for you. Maybe it was just in the brief. Well I think that you're correct under the judgment it says that he pays he represents himself as a trustee in this judgment. But let's move on because I have a better question than I think we've been trying to get to with Mr. Devor and that is what is the controversy by the time this judgment is brought to the court? There isn't a But the court considered mootness right? The court considered and rejected mootness and I'm trying to find out why. Well I think the entire thing was always everywhere moot, non-justiciable, lacking standing all those things for all kinds of reasons. The timing aspect of it is one component of the justiciability but we think that the threshold issue is he never had standing in the first place. A tax payer never had standing because he didn't pay taxes. Right. A tax payer has standing in these kinds of cases because when there's an unlawful depletion of the county coffers by some alleged government action that's unlawful they have standing to challenge that because it's the tax payer who's going to be responsible for making up the depletion in the county's coffers. They can certainly do that. They have standing when they're alleging that there's unlawful government activity. But if you're not a tax payer, you don't have that standing. So Mr. Stoughton, because all his property is in trust and he's not paying taxes individually, he's suing as an individual, has no more standing to challenge this than does someone from Douglas County, as opposed to Coles. So tax paying is wrong. If I may though, the verified complaint in the first line alleges that Mr. Stoughton I know that he doesn't pay property taxes because that's established in the record and it's undisputed. I don't know that there are any other kind of I can stand here and speculate that Coles County probably has a sales tax. There's nothing in the record to say that he's ever paid that either. Did you brief the issue of an Illinois land trust and the status of a trustee of an Illinois land trust versus a non-land trust? Did you look at those issues? I did not. Because an Illinois land trust, which is what the court looked at, is a very different creature of law than the kind of trust that we ordinarily think about. So I'm wondering if the fact that the court noted it was an Illinois land trust was briefed by the parties here. It was not briefed by the The distinction between an Illinois land trust and a regular trust, I'm sure there are many, Your Honor. I don't know what they are standing here. But the only ones that would matter is, and I don't know that this is a distinction, the only distinction that would matter is if they were somehow not independent legal entities that can sue and be sued. And whether there's some distinction in who does the suing and the being sued. Because a regular trust can only be sued, and it can only be sued. matter. And we were proceeding Well, the court found there was standing for the Illinois land trust to go forward, Mr. Stoddard, because he was the trustee of an Illinois land trust, they allowed him to go forward, that he was an And that was his choice. We're an unwilling participant in this dispute. It's his party, and he brought it as an individual, not as a trustee. But these are interesting and academic issues of justiciability in their court, because we think it's a threshold issue, and this court should decide that this issue. But on the merits, the circuit court was entirely correct as The case goes down to section 3-40C of the Illinois property tax code, which provides that each supervisor of assessments may, with the advice and consent of the county board, appoint necessary deputies. Their compensation to be fixed by the county board and paid by the county. That's exactly what happened in this case. Supervisor of Biddle appointed Mr. Becker, a deputy assessor, under her direction and control. She did so with the advice and consent of the county board. However, Mr. Becker's was fixed by the county board and he was paid by the Mr. Stone's only argument before this court, and we're talking about a lot of other things, but his only argument in front of this court on this appeal is that Ashton B. Cook County is on point in controlling. But Ashton is readily distinguishable. I think we discussed that quite a bit already this morning. But unlike the private attorneys contracted in Ashton to autonomously and independently bring collection actions on behalf of the county of Cook, which is a constitutional duty only of the Cook County State's attorney, Mr. Walker worked under the direction and control of the supervisor of assessments to do one of her statutory duties, not independently, but under her direction and control. And therefore, Ashton B. Cook County is not controlling, it's not on point, and the circuit court was entirely correct for distinguishing the case and entering into the and the I mean, I'm not agreeing with that. In fact, in the case of Mr. Walker, in the case of his case, the circuit court was completely on point, and there was no question case. The statute doesn't say how a deputy assessor has to be paid. I think that he could be paid in any number of ways, and it certainly doesn't say how he's to be treated for tax purposes when reporting his income to the I.R. I've got a serious concern with how you just phrased that. appointed. There doesn't seem to be any dispute to the fact that whether he was operating with the acquiescence of the I.R. The Tax Office duties. He wasn't formalized until a later date, honor. June 1st, 2016. is there a document in front of later ceremony? A document? Yeah. No. But there is record site 583, common law record 583, his office. That's the first thing he starts coming into the court. No, he was hired May 12th, That's a very document that shows that. I'm so sorry, because I've got this feeling I'm interrupting, and I'm terribly sorry, but I'm really stuck on this. If your position is a taxpayer has standing because the government taxpayer believes has improperly spent money, and he is entitled to complain of that. How does he lose standing because later the fixes it, and isn't he entitled to say, on this day the expended this amount of money improperly, and I want a court to say it was improper. How is that a controversy? Is there not a after that date? Is there not a after that date? Well, I think that the standing issue assumes for purposes of the analysis that there was some illegal activity. It doesn't really matter when the illegal activity happened for standing purposes. He still needs to suffer an injury in fact based on that, and he can only suffer an injury in fact based on that. If I pay taxes and they improperly spent my money on that date. But he didn't pay taxes. That's a tax fix. I think you said he can complain that government monies which he provides was spent improperly. And for that purpose he has a controversy that doesn't cease later because on that date the government spent that money they weren't supposed to spend it. I'm assuming all those things your honor. I'm taking it out of your argument. At that point in time I suppose that's correct but he's later duly appointed a deputy assessor and it's the county board's position based on the cited in its brief that everything he did before that he was a de facto deputy assessor. Because he's just waiting on software during that period of He's not even coming into the courthouse during that period of And the testimony was that he did some preliminary spreadsheet work on his laptop. He doesn't start coming into the until June 1st and that's when he's sworn in. That's when he starts working. Seems to me that there's a lot of questions back there. There are but none of them matter for purposes of and the standing thing is Well now you're parsing out what he was doing in response to Justice Clark's question. Well he was hired but he really wasn't working. Because his question was temporal. I needed to focus on I understand but it seems to me that if you have to do that if you have to explain then there's questions of fact involved. Were they were they right for consideration? I don't think there's questions of fact that are mature questions of fact that are in dispute. I don't think Mr. DeVore would disagree with me on the material issues of fact. Hence the cross motions for summary judgment. So you thought it was right for summary judgment as well? The county board yes. The injury in fact is the standing issue. The mootness all those things and we would encourage the court to affirm on every basis supported by the record even those not or incorrectly rejected by the circuit court. But on merits which is the important part Ashton v. Cook County is not controlling for the reasons we discussed. The contract doesn't matter whether the duties arise from the statute the constitution doesn't matter all these things. What does matter is whether Becker was acting independently or not or whether he was assisting the supervisor of assessments with her statutory duties and he was. He was hired to help her with the commercial property assessments. That's part of her duties. He didn't do it independently like the lawyers that were hired in the Ashton case did. And that's the distinction and that's why the circuit court correctly distinguished that case and properly granted summary judgment for the Coles County Board and Mr. Becker. Okay. I'm sorry. Questions? Thank you. All right. I'm on the snag sometimes. I apologize. No problem Aaron. Thank you. Mr. Drinkwood, thank you for your arguments. Last time I was really reluctant to ask questions. Thank you. All right. Mr. DeVore. I always look forward to Justice Gates just put your hand up and tell me just quick topics. You're going to ask me some questions. I got a couple of things that I think will help because I think that's what the judge and the trial court did on the case and controversy justice. He said on the date they hired May 12th and they accepted the bid. That's the case and controversy that they can't wait a year and try to fluff up. I have Mr. Becker's bid put up here and I think it's important. It's in the record. They accepted his bid on May 12th, 2015. He shall start his commission on August 15th, 2015. His first payment is due according to his terms. He shall start his commission. That means he's going to start working on August 15th. Is that a commission to be an assessor? A deputy assessor? I propose to develop a credible valuation model using mass appraisal. Nowhere in his bid does he say I'm accepting the employee as a deputy assessor. The words deputy assessor don't come up. And what citations of the record are you using? On the complaint, the attachment to the complaint I propose to develop a credible valuation model. Nowhere in there does he say, now keep in mind they solicited bids. They didn't solicit bids for a deputy assessor. I think the court's going to appreciate this kind of window dressing of back in June of 16 was for an early payment of $7,187.50. Then in June, he gets his deputy assessor sworn in. I mean, come on. I think we've resolved, I would hope we've regardless of how you come down, that the when they hired him, accepted his bid on March 12th of 2015, that is a threshold question. That is right for a decision. You've got the other issues, standing, I respect you even raised that, That's right for adjudication. Did they exceed their authority by hiring this guy as an contractor to do this, to develop this assessment valuation model? It doesn't say in there I'm going to work under the direction. The record also shows, it's interesting, is that he also received additional compensation by helping the Board of If you're a deputy assessor, working for the assessor, you're not going to negotiate independently with the Board of Review for more money. And then when he was done with this proposal justices, when he did this, he just never showed up again. He's gone. Clearly we know what the essence of the hiring was. As to the standing, and again, I think, my client did, and I think you found it sir, when this was, he put in his mind he was a tax payer. I think the landmark case, and I think the fact that he is the trustee of the trust, gets us past the standing, and again, my client is just looking for you to resolve the case of that was there on March 12th and say that this board exceeded its authority. It's not an it's a real controversy that my client's asking for I have nothing else. To declare the rights and obligations that says that you exceeded your authority and you hired this person, the statute doesn't allow you the board to hire people, she hires people, and then what you did was improper. What would be the effect of that? The effect of that was is if you find that and you return them and send it back, the declaratory judgment action allows for my client to then take supplemental relief if he wanted to under the declaratory judgment. Attorney fees. Huh? Attorney fees. He's not going to file a supplemental action asking for some kind of other additional relief. Whether my client chooses to do that or not, not discussed in great detail, but ultimately this court would just be overturning saying that you got that wrong, they did violate the law on that day, send it back, and my client has options that he may choose to pursue it or not pursue it. Can you fix the problem by swearing in someone who hadn't been sworn in and ratify a payment that might have been questionable? I don't think that can be relayed back and say that corrects the fact that hypothetically sir, on the other hand, the trial with the trial court and would say that controversy on that date is still the question the court is being asked. I think it's Justice Kate's opinion. There seems to be a lot of factual disputes here. I know that's been denied that there's factual disputes, but for example, taking your position, again, I'm doing this out of a recollection, I believe in the case of was reminded that all the deputies had to be renewed. That was the date. Isn't that an element that might be a factual dispute? You can consider that, but I think the record itself, back in May 15, if you look at the bid, if you look at the minutes of the county board meeting, et cetera, they were accepting the bid. You won't find the same doesn't exist in the White House. One more please. It seems to me that part of your argument focused on how this was initiated. You're saying, if the committee didn't have enough resources, how did they know that? That's I think what he asked. Oh, I'm sorry. But she didn't ask for somebody to be hired. She didn't have the resources which she says in the record to do all these commercial appraisals. She didn't go and say, I need you to increase my budget. I'm going to go find and solicit a deputy assessor and I'm going to bring that deputy assessor and I'm going to move and ask you to appoint them and hire them with consent. They didn't do any of that. I don't think she ever said that. I think if you look through the record and I'm familiar, they called her to task because all of the assessments hadn't been done and all of the local business properties taxpayers were complaining that they were all under assessed. You've seen injustice. And they asked her, why aren't you doing these? And she was like, I don't have the resources. And the answer wasn't to give her the The answer was they supplanted her "
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"stt_transcript": "Case number 26-144, Amazon.com Services, LLC v. Perplexity AI, Inc. Thank you, Your Honor, and may it please the Court, Chris Mischel for Appellant Perplexity AI. I'll aim to reserve three minutes for rebuttal. A preliminary injunction is an extraordinary remedy, available only where a plaintiff shows likelihood of success, irreparable harm, and that the equities favor altering the status quo. Amazon cannot make that demanding showing here. At bottom, Amazon seeks to stretch criminal statutes that prohibit computer hacking to sue perplexity simply because Amazon wants its own customers to access its website in its preferred way. That novel theory fails to satisfy multiple elements necessary to support a statutory violation, each of which would constitute an independent ground to reverse. On top of that, equitable considerations, including the promotion of new technology, competition, and consumer choice weigh heavily against enjoining perplexity at this early stage of the litigation. The motions panel in this case was right to grant a stay, and this Court should now reverse. The most straightforward ground for reversal, and where I think the Court can both begin and end, is the first element of Amazon's claim, and that is whether perplexity intentionally accessed Amazon's computers. The answer to that question is no. As the Supreme Court explained in the Van Buren case, accessing a computer has a technical meaning. It means entering that computer's system. Perplexity did not do that here. Perplexity developed a browser that users can download onto their own computer and then use to access Amazon or any other website. Yes, sir? Didn't the assistant – so I'm trying to understand who, under your theory, performed the accessing. Did the assistant access the Amazon computer? No, Your Honor. I think the most straightforward way to understand it is that the user accessed the Amazon computer. That is, the user of the Comet browser with the assistant that was developed by perplexity. I think the most straightforward, familiar example is that users of, for example, Safari or Chrome access websites all the time, but no one would say that Apple accessed the website simply because a Safari user navigated his or her browser there, nor would anyone say that Google accessed a particular website simply because a Chrome user navigated there. Counsel, but isn't another way to frame what is happening is that the user is giving the key to perplexity and perplexity is then entering Amazon's servers or computers. So much of this case turns on the proper analogy. You use the Safari analogy. Your friend on the other side uses the friend with the key to the safety deposit entering the bank. So why isn't that the proper analogy, the safe deposit analogy? I think a couple of responses, Judge Tong. I think first, the safe deposit box that my friend refers to and that this court referred to in PowerVentures really goes to the unauthorized access element of the claim. And here we have a threshold element that was not at issue in PowerVentures, and that's the access requirement. I'm happy to talk about the safe deposit box, but I think this case can be resolved on the more straightforward ground that there's no access in the first place and therefore no need to assess whether that access was unauthorized. And so to go back to, you know, I think in a sense you could say that the user of Safari hands the keys to Apple to go access the website. I suppose my friend, you know, could argue that, but he hasn't argued that and that would be a truly radical expansion of the Computer Fraud and Abuse Act. Under that kind of theory, if there was a, you know, dark web hacker who used Safari to go access a particular website, that website could bring a CFAA claim not only against the hacker but also against Apple. And there's simply no basis in the case law for that, particularly given that the Supreme Court and this court have consistently construed this statute narrowly in recognition that it's a criminal statute designed to achieve limited purposes. Counsel, I understand your attempt to distinction of the safe deposit box by saying that question goes to unauthorized access. But I'd like to return to that point again. I mean, isn't the friend in that analogy seeking to access, you know, the bank and the safety deposit box? And the bank is saying, no, you don't have authority. The friend doesn't have authority to enter. So I think the friend might well be trying to access in that hypothetical, and that's why that hypothetical goes to the unauthorized access point. I think the case could be more resolved more easily on access, but it can also be resolved on unauthorized access in our favor. And I'm happy to address that directly. The difference between that case, PowerVentures, or that hypothetical is that the friend was trying to do something that the user itself couldn't do. In that case, the friend was trying to carry a shotgun into the bank. That's the example that this court gave in the PowerVentures case. Here, the user is not trying to do perplexity, presuming for purposes of answering this question that it is accessing Amazon, is not doing anything that the user couldn't do. In fact, if you wanted to devise a hypothetical in which it's clear that the developer is not doing anything the user can't do, it would be this case, because the user, by definition, provides all of the instructions to perplexity. Perplexity can't do anything without direction from the user. And I think- But once those directions are given, then there's, as I understand it, the assistant connects to the perplexity server, correct? In some cases. To get instructions, right? It goes to the model at perplexity server, and then it's communicated back to the user's computer, and then access occurs without the user doing anything more than having given that initial instruction. That's the way it works, right? I don't think so, with respect, Your Honor. I mean, I do, I think there are two different directions of communication here. To some extent, I think your question does capture this. The user connects from his or her individual machine to Amazon. That's one direction of communication. The user does, and I think this second part is captured in your question, does also connect to perplexity. But what doesn't happen, and this is the critical point, is that perplexity does not connect to Amazon. And when you're looking at a statute that uses the words intentionally access in their technical sense, intentionally enter a computer system, as the Supreme Court and Van Buren construed this statute, perplexity is simply not accessing Amazon in that sense. There's an intermediary, which is the user, and there may be two separate conversations, but there's, technologically, you know, but there's no technological connection from perplexity to Amazon. Judge Smith. I'm sorry, do you have a question? No. With respect, Judge Tong, we're not imposing that limitation. What we're imposing or seeking to enforce is simply the statutory text, which says intentionally access. And again, I think to go back to your Honor's question, what's critical about intent, and this, you know, the word is intentionally access, it's the user's intent that is driving the access to Amazon. It's the user that is saying, please go rank the categories of paper towels that are available on Amazon. The perplexity assistant itself, the Comet browser's assistant itself, is an inanimate piece of technology. It does not have any intent, just as Safari and Chrome don't have any intent. And to read into the statute the notion that a browser, including an AI-assisted browser, has its own intent, such that it is intentionally accessing the website, I think would be an extreme expansion of the statute, and at a minimum- Have you preserved that argument, counsel, the intent piece of the intentional access language, or are you just arguing access? No, no, no. I think we've argued intentional access throughout the course of the case, and that's the language of the statute. I think our reply brief in particular discusses this, but we've preserved that argument throughout. And I was going to say, I think that would be a novel and broad construction of the statute, which at a minimum is improper in a preliminary injunction posture. After all, we are here only on the appeal of the preliminary injunction, and the question is, should this court adopt that novel interpretation in order to essentially freeze perplexity in place for potentially one to two years while the litigation unfolds, or should the court simply let the litigation unfold in the natural course? There's another element that I'd like to talk about, and I think this is another clean, straightforward way to reverse the preliminary injunction, and that's the loss element. I think the court could decide the case entirely on that without confronting any of these other issues we've been discussing. This comes from Section E11 of the Computer Fraud and Abuse Act, and as the Supreme Court said in Van Buren, the definition of loss in the CFAA requires a showing of technological harm. This court in the High Cue decision, footnote 12 in particular, repeated that construction, saying, quote, the civil remedy requires a showing of technological harm, such as the corruption of files. I think Judge Breyer's persuasive opinion in the ExCorp case says the same thing, and even the Tenth Circuit's opinion that my friend relies on attributes that position to the Fifth Circuit. So the law is quite clear that a showing of technological harm is necessary, and Amazon does not make that showing here. Counsel, what do we do with the statutory definition of loss, though, that seems to stretch more broadly? It says loss means any reasonable cost to any victim, including the cost of responding to an offense, and here I think Amazon has argued that there is such loss. Right. Your Honor, I think the Supreme Court, of course, was interpreting that language in Van Buren, and if you read the whole, as I know you have, the whole statutory definition, there are a number of references that can only be interpreted as referring to concrete technological harm. For example, it refers to restoring data, program, and a system to its condition prior to the offense, or damage from an interruption of service. Damage itself is a defined term. That's an E-8 of the statute. It refers to an impairment to the integrity or the availability of data. So all of those are technological meanings, and as the Supreme Court said in Van Buren, that's not surprising because this is a technological statute. I think the answer directly, Judge Tong, is that if you just read the words responding to an offense in isolation, they might well have a broad meaning, but applying canons like the Noscost or Associus canon, you read the statute, you know, words in a list to have the meaning of surrounding words, and I think that's what the Supreme Court was doing in Van Buren. I think that's a, not only is that a Supreme Court opinion that's binding of its own force, but I also think it's a persuasive construction of the statute, applying that canon and applying the overall premise that the Supreme Court and this Court have frequently applied to this statute, which is that it has a technological focus. Counsel, I understand your argument that the user is sort of the intermediary or is the one directing perplexity comment in terms of directing the purchase, making the purchases on Amazon. So you have perplexity, the user, and then Amazon, and then your argument is because perplexity is not the one accessing Amazon, you know, there's no direct connection or there's no sort of immediate interfacing between the two entities that there is no access. Now, Amazon makes the argument, well, that's, the Internet consists of a network of computers. So, you know, if I'm adopting your rule, I want to be careful that I'm not undermining that understanding of the Internet because a user may be accessing a website and have to go through perhaps various different servers. There's no direct access or direct connection. But I think we would say that the user is still accessing, or maybe not, I don't know, but can you help me? I'm honestly struggling with that concept. I think you might well be right about that, Judge Tong, and our position doesn't depend on any quarrel with that. In other words, and I want to return to the concept of intentional access, you might well say that, again, take the worst case scenario, the hacker that everybody agrees is covered by this statute. If the hacker hacks into Amazon using some kind of intermediate computer like a router or a server or something like that intentionally to hack into Amazon, we're not here to argue that that is not covered by the statute. This case is critically different, though, because Perplexity is simply the developer of the browser, and all of the intent to go to access Amazon comes from the user itself. Why can't we infer intent, though, from the fact that Amazon claims that Perplexity is trying to circumvent the gates that Amazon has erected to prevent Perplexity from entering its servers or to prevent the user who is using Comet from entering Amazon's servers? Why isn't that at least some indication of intent? So I think it's not an indication of any intent to do anything other than what the user itself wants to do. I think, again, that question maybe goes more to the unauthorized access prong as opposed to the threshold access question. But Perplexity is no differently situated than – I return to this, but I think it's a critical analogy – no differently situated than Apple and Google in that, yes, Apple and Google and Perplexity all provide a browser that users can use to access websites. But you would never say that Google intends for me to visit NinthCircuit.gov this morning because that's what I typed into my computer when I was looking up the address of the courthouse. Or if you were going to say that, you would be radically expanding the Computer Fraud and Abuse Act. That's certainly not the theory of the decision below, and I don't think this court should adopt that in the preliminary injunction posture. I think I've eaten into my rebuttal, so I'd like to reserve whatever I can. Thank you, Counsel. Thank you, Your Honor. Thank you, Your Honor. May it please the Court. Hagen Scotten for Amazon. And with the Court's permission, I'd like to start where my opponent did, which is with the access element. Perplexity accesses the secure areas of the Amazon store exactly the way anyone accesses a website and exactly the way the term is used in Van Buren, the way this court consistently used it. It sends electronic signals that go into that site and do things that take pictures, that send data back, that put items in the user's shopping cart. That is always how the term access is used, and I think it helps to walk through an example, because I think, Judge Hinderaker, you actually described it exactly right. There was nothing to caveat. Suppose the user gives a command, and I'll use Perplexity's example. This is the example their chief technology officer gave. Buy a 12-pack of paper towels. They type that in to the Comet browser. The Comet browser asks Perplexity's servers, what do I do with that? And then Perplexity's servers say, go to the Amazon store. Perplexity's servers, the reasoning layer, the work is all done by Perplexity, say, display the user's credentials. They say, look around. They say, find the cheapest paper towels. They say, put it in the user's shopping cart. And at the end, they may say, now go back to the user and ask if they want to buy it. But at every step of the train, Perplexity is driving. That makes it a term. But isn't Perplexity driving at the instruction of the user? And so in a sense, isn't the AI assistant the user's agent? So I think it is entirely fair to say it is the user's agent, just as in Power Ventures. There too, the user wanted the access done. The user there was using a simpler agent that invited his or her friends from Facebook to the defendant's rival website. The user said, do this for me. Please, Power. It pressed a button. It clicked a button. And then Power automated the process as the user's agent, just as here. And here's really the easiest way, or another easy way to tell. It is undisputed that if you sever the connection between Perplexity and the user's computer, everything stops. There's no more buying. Nothing's getting put in a shopping cart. The agent doesn't work anymore. So Perplexity is not doing it. If the user is accessing, it should keep going, right? If the user's at their computer, they say, buy me the 12-pack. But you sever the connection, it stops. There's no way in which it is only the user accessing. And I did also want to dispel what I think is a false dichotomy. The court is correct that we're talking about three entities, user, Amazon, and Perplexity. The fact that the user tells Perplexity, go ahead and send your agent there. Go do this for me, does not mean that Perplexity isn't also accessing it, right? Two people can do something. If under any standard of law, if I tell someone to do something and they intentionally do it, they too are intentionally doing it. So if I were to tell somebody, please trespass on my neighbor's property, and they knew it was private property, they knew they weren't allowed there, and all the other elements of trespass were met, and they went there, they would still be intentionally trespassing even as I told them to do it. Counsel, this raises a question for me. So if your theory is correct, isn't the user exposed to criminal liability under the CFAA? No, Your Honor. I mean, not without a whole lot of facts that aren't present here and are seldom present. This court has made very clear in cases such as Nozzle that conditions of use and terms of use do not suffice to put a user on notice. And therefore, that's the only way a user here might know they're not supposed to do this. Perplexity, of course, got a call from our CEO, or sorry, got a call to their CEO, got a cease and desist letter, got multiple technical blocks which they intentionally circumvented, and continues to access right now. I mean, some of it's sort of a little absurd to say we don't intend to go there. That is why they're here. They intend to go to the Amazon store. A user, by contrast, isn't on notice. And this court has said that repeatedly in narrowing the CFAA to make sure that your random user can't be held liable. Also, they probably don't do $5,000 worth of damage. They probably also don't obtain anything, and so on and so forth. In some other scenario where they're doing all those things after getting a cease and desist letter, you have someone who's starting to look more like a hacker than a user. But that's not any user. This also, by the way, Your Honor, fundamentally distinguishes this Safari example, which really never came up in the district court for very good reason. Perplexity itself says that it is nothing like these passive web browsers my friend is now relying on on appeal. I'm going to quote, and this is page 81 of the record excerpt, or actually the supplemental record excerpt. What sets Common apart is its agentic capabilities, the ability to find information and act on it intelligently and autonomously. It also says that it is unlike passive browsers. It is unlike Safari, which passively display whatever content websites throw at a person. If you cut your connection to Safari, you can still use Safari because Safari is not being guided by Apple. Apple isn't doing anything when you are using Safari. I mean, it made the program, but it's not doing it. It is in some ways, Your Honor, the difference between a car and a taxi. If Your Honor looks up a lot of sort of common sense explanations of what a browser is, it's often likened to a car that the user can drive to websites, which are like places. That's not what the agent is. By perplexity's own admissions, these are sworn admissions, they're ads, it's like a taxi. And you can give instructions as generic as, take me to a scenic site. And if in taking to a scenic site, the taxi decides to drive over barricades and drive into some secure area so you can see the Statue of Liberty really up close, that taxi driver is trespassing and doing it all wrong. You may or may not be if you just told the taxi driver, take me somewhere. So this Safari thing is not only really not preserved, it illustrates the fundamental distinction here on the agent. Counsel, I'm still stuck on the potential of criminal liability for the user. So the user could be on notice that, well, perplexity can't access Amazon servers. But if the user nevertheless insists on using the Comet browser in order to make purchases on Amazon, isn't the user knowingly complicit under your theory? Well, no, Your Honor, for a couple of reasons. And one, I just want to, the premise, the Comet browser, which does function like Safari, is not what's at issue here. Comet, that's all fine. It's just this agent feature. If the user specifically triggers the agent and is on notice, now, I don't know how they would get on notice. There's no mechanism. But if for whatever reason, they kept doing it, and Amazon takes the time to send them individually a cease and desist letter that says, please stop sending your Comet agent to our website. And then they do all the things that have been done here. They breach barriers. They ignore this and so on. At that point, I think it is fair to say their access is unauthorized, just like the individual friend in this court's, the PowerVentures bank example, eventually does become liable for trespass. And sure, the owner of the website could too, if they kept pushing their friend into the room after the bank said, your friend is not allowed in our bank. Please don't send them back here. But it would be an extremely high threshold. And again, you have all these other elements. My friend wants to rely on the access element. But there's a lot of other elements. Even if the friend is on notice, are they doing damage? Are they at the $5,000 threshold? Are they obtaining information? Once you get to that phrase, where you've got somebody who just keeps doing these things and inflicting the sort of technological harms, I'll get to that in a minute, the perplexity has. Sure, in that case, an individual person could be on notice. That looks nothing like any of the examples this court has given in cases like BRCA or NOZL, which are about terms of use or computer conditions. None of those threaten an employee or, sorry, a user with liability in the least. It's not really until they turn themselves into the exact kind of hacker the perplexity is that they're starting to face liability. And I will take a second with the court's permission to address the loss element, which I think is the only other element my friend has raised on argument. And there, I think he is correct that courts have construed the very capacious language of the CFA to, using canons like no secure associates. Let's look at the examples here and narrow it. In fact, this court did it in an opinion written by Judge Smith called Andrews versus Sirius XM Radio. That was a couple of years before Van Buren, but it really says the same thing. That the harms here have to be technological harms in the sense that they're harms that result directly from the intrusion. They can't be things like, for example, figuring out what the person who stole the data is going to do with it. That's moxie pests. So that is not the sort of harm. Or to choose an example, many district courts have rejected after Van Buren, attorneys fees for things like what I'm doing today are not covered. But where it is an engineering harm, a technological harm inflicted by the intrusion, it's covered and everything here is. All the costs here are Amazon engineers doing things to repair the system, to restore it so that it no longer falsely charges advertisers based on things that only comment and no human is seen. To unblock accounts that were automatically blocked because Amazon security software sort of went off and blocked not just the agent, but the user. Or to investigate and fingerprint the agent. Many courts post Van Buren talking about what technological harm is, we use identifying the agent as a classic, or the intruder as a classic example. That's what fingerprinting is. It's these engineers trying to figure out how is this thing getting into our system? What is this thing? Where is it going? So these are all classic technological harms. We're leaving the court of the need to reach that. And I would be remiss if I didn't mention a whole other reason the court need not reach it, which is the CDAFA, which my friend never mentioned. District court very explicitly did rely on, both in its order at page five, and also you can see it's the transcript at 138 to 140, where the district court says, California state analog is broader. Exactly the two elements we've discussed today, access and loss. It completely eliminates the loss argument, which the district court said, and said that's why I really don't even need to think too hard about this question for the CFA at this stage. It's undisputed that it has no such constraints on loss. It's also broader on access, where it includes causing to be accessed. And it defines access to include things like communicating with. My friend has not, and he couldn't because it's waived. They had many opportunities to raise in the district court, has never suggested that the access here would not satisfy the CDAFA. Is the theory under state law that perplexity is causing the user to access? If we don't agree, let's say we don't agree with the direct access, your argument against the direct access point, that it's perplexity that's causing the access of the user. And in my mind, that all collapses. I'm not actually aware of a principle of law under which perplexity doing all these things isn't itself accessing. But to buy perplexity's theory, your honor has to say, well, it's the user doing it. But we know that all the steps, all the actions being taken that push the agent to the store are actually being taken by perplexity. And we certainly know that it is doing it intentionally. And I think that really, sorry, Arne. So I do have a question. And this case is difficult in part because we're dealing with a statute from 1986. It was updated in 1990 something. And it involves AI, which is a new technology. It's not really built for these circumstances. And so to the extent there's some ambiguity in access and whether it should apply in this instance, does the rule of lenity have any purchase here? I mean, is that something we should be looking at? If we're going to err, should we err on the side of not finding a violation? Because my concern is that there's going to be unintended consequences that flow from whatever we do here today. And they're hard to foresee. And this is a difficult case in that sense. So I want to address sort of each of the thoughts in Arne's question. And to start with, I would reject the idea that there's really anything pathbreaking here. You're right that the rule of lenity has a role. But there's a reason, sorry, my friend never argued it and they didn't mention it in their briefs. And that's because it's already done that work. This court considered the rule of lenity in cases like High Q, where it drew the exact line the district court relied on here, which is to say, almost all the web is public. You can go there, it's not affected by the CFA. I don't care if you issue a cease and desist letter, you can't keep people out of it. But where you are in a password protected area, the website owner can restrict you. That was a rule of lenity ruling. It's already baked into the line we've drawn here. So I don't think there's anything more for the court to do, but to apply the very settled law. And I should add, Your Honor, in terms of unintended consequences, I think Your Honor should look at the software developers brief, the finance industry brief, the airline industry brief, all of which help understand the real danger of unintended consequences. It is perplexity's rule that is novel. It is not only contrary to what this court said, applying the rule of lenity in High Q and Power Ventures. It is contrary to the norms by which developers operate now. It is a given norm, just like it would be in any form of private property, the website owner can keep people out of their private spaces. Developers rely on this to innovate, protect theft, to be accountable for their own systems, so they can control things and protect customer experiences, develop the best possible product. That is the norm right now. It is perplexity's submission that is new. Perplexity is saying, no, we need to break down those barriers so we can penetrate them. The record evidence is undisputed that its competitors, which have the same technological capabilities that do, and I'm referring specific to Brave and Microsoft Edge, they could go into the Amazon store, but they don't. If a user says specifically, go there, tries to push them in, they say, for security reasons, I cannot go there. They respect the settled rules that are both this court's rules, the law's rules, and the norms here. This Mad Max world that perplexity wants, where if a single user gives you their password, you can send in an AI agent which can do harm on a far more massive scale than an individual human because it operates so quickly. That's the virtue of AI as well. That's the new rule. All Amazon is really asking for is that this court apply the same settled norms that have always guided innovation, right? Property owners can protect their private property from trespasses. You can innovate everywhere, but let the property owner keep their own spaces safe and decide when to invite in these new inventions. That's not in any development in the CFA or CDAFA. I see only about 20 seconds left. Happy to answer the court's questions. Thank you, Your Honor. Thank you, counsel. Thank you, Your Honor. Just a few quick points in rebuttal. First, on the preservation point, I'd direct the court to 3 ER 515 paragraph 23 and 3 ER 521 paragraph 5. Those are two examples from our declarations where we expressly make the comparison between perplexity and Safari and Chrome. So that example has been used throughout the case. And with respect, I don't think my friend distinguished it at any meaningful level. Ultimately, I think most of his arguments would also apply to reach the conclusion that Apple is accessing Amazon simply because a Safari user directs his or her browser to Amazon. I think the best attempt to distinguish that is this discussion about communications between the user and perplexity itself. And we were talking about this a little bit in the earlier argument. There are situations in which the user communicates with the perplexity server. But that's, again, nothing that's out of the ordinary for regular browsers like Safari and Chrome. There are features of those browsers like autocomplete or autotranslate or autofill, which are familiar to anyone who uses the internet, in which a user of the browser will communicate with Google or Apple before then going to a different website. And that, again, I think it proves far too much to suggest that Apple or Google are accessing the website in that situation. To use the paper towels example, again, yes, there is a communication between the user and perplexity in which perplexity says to the user, here are the ranking of the paper towels. But then the critical point is that the user then goes to Amazon to buy the paper towels. That's not fundamentally different than if I was sitting behind my desk and I asked my daughter to look at my screen that had Amazon on it and say, which paper towels should I buy? If she says, go buy this 12-pack and I go do it, she is not accessing Amazon.com. She and I are having one communication. And then in the technological sense, the only access to Amazon is from me, the user on my machine, not to perplexity. So I think that fundamentally resolves the access element. And at a minimum, I think under principles of lenity and particularly at the preliminary injunction stage, given the potential unintended consequences and ambiguities, this court should allow the litigation to play out rather than the harsh remedy of a preliminary injunction. My friend mentioned some amicus briefs. We have amicus briefs on our side as well. The Electronic Frontier Foundation, Mozilla, which is the developer of the browser Firefox that I think is in a position to understand this case well, submitted a brief on our side, in particular on the access element that I'd urge the court to consult. And I would say, you know, all of those things, in addition to the lack of reparable harm, the equities that favor consumer choice and innovation and competition, all of which we outline in our brief, all of those point to if this court views this as a close case, you should reverse the preliminary injunction and allow the litigation to proceed. I'll just say one word about the loss element. I think my friend largely conceded that it does require technological harm, but what Amazon has alleged is not technological harm. I think my friend even said what we mean is, you know, harm that follows from technology, but that's not what Van Buren says. I'd urge the court to look at pages 566 to 68 in the third volume of the ER. That's where Amazon describes its harms. They are not technological harms of the type that the statute covers and that Van Buren and IQ and X Corp have all said are required. The CDAFA, the state statute, the claim fails on the access requirement for the same reason that this does. Amazon does, excuse me, perplexity does not cause the user to access Amazon any more than Apple causes its users to access Amazon because they have a Safari browser. Can I ask, does an AI agent ever have intent? I mean, I think that's a kind of profound question and one that suggests there should be no preliminary injunction entered on that theory. You know, I think the better way to understand what we call agentic AI in this case is I believe what your honor said, which is that the AI is the agent of the user. The AI is the agent and the user is the principle. That's the agency relationship. Couldn't there be code or instructions or learning that's included in there or baked in there that leads the AI agent to do things that aren't exactly what the user is asking it to do, but maybe go back, maybe it's getting data and taking it back to an LLM model to train it, things like that I could think of. And these are the sort of things that are going through my mind and I'm a lawyer, so I'm struggling with this. So am I and fair enough, you know, and I'm not here to make pronouncements about the future of AI or to embarrass the future, as I think the Supreme Court said in a recent decision in this area, but I think the area of technology, but I think that all points strongly toward not entering a preliminary injunction in this case. I would also say just on the record of this case, the more far-fetched AI hypotheticals, which are maybe possible down the road, you never know, are not presented in this case. It's undisputed among the parties and we cite these portions of the record in our brief that in this case, the perplexity browser only responds to the user. It is the tool of the user. It can only do things at the direction of the user. So maybe there's new developments on the horizon that would present different issues, but those would be for different cases. And I think that's all the more reason, to decide this case on the more straightforward basis. The last thing I'll just say, and I hope you don't reach this. It's in our brief, the bond requirement. We don't think you need to reach that because we think you should reverse the PI, but if you're going to affirm the PI, the bond or rule 65C of the Federal Rules of Civil Procedure say that there has to be a bond if there's going to be loss. There's no doubt in this case, there would be serious loss to perplexity if the preliminary injunction were left in place. The district court simply said it couldn't figure out what the right amount was. So it put zero as the amount, but that can't be right. That's a paradigmatic abuse of discretion. And at a minimum, the court should remand for further consideration of that issue. Thank you, counsel. The case is submitted."
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