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"stt_transcript": "Yes, thank you, Your Honor. Matthew Haubman for defendants here. I'd like to reserve five minutes for rebuttal, if I could, and may it please the court. Idaho's laws protect and preserve women's health and the lives of unborn children. They don't prohibit any medical treatments during pregnancy that also protect unborn life. And thankfully, many such treatments exist. Idaho's laws are also consistent with the vast history of state regulations of abortion discussed in Dobbs. The large majority of those statutes prohibited abortion unless necessary to save the mother's life, with a small minority allowing for abortions for therapeutic reasons. But the district court's injunctions here create an abortion-on-demand regime. They leave it up to the subjective judgment of doctors to determine a risk sufficient to justify abortion. I have a going in question. Do you regard Dobbs as having overruled the part of Casey and Rowe that said that an abortion to protect the life of a mother was separately protected from, well, let's call it an elective abortion, but an abortion to preserve the woman's choice? Do you regard, I'm asking now about the life aspect, not the health aspect. I think on the life aspect, that's not relevant to this case. It's not part of this case. That's why I'm asking the question, because I think it's logically connected. And I'd like to know what your position is with regards to the life. So Rowe and Casey had no occasion to talk about that life-preserving one, because all the statutes at that time and historically had allowed for the life-preserving one. But it did speak of it. It did say so. It did say that. Whether you think it's sort of or not, it did. Yeah, it did say to preserve the life and then to the health. But I think because of the historical regulation of the life-preserving abortions and the allowance for them, that's a separate question from the therapeutic exception which Rowe and Casey required. So I don't think that Dobbs directly speaks to the life exception, but it does speak to the therapeutic exception, because that's what the focus of Rowe and Casey was on. And by overruling Rowe and Casey and overruling that therapeutic framework, it then returned that issue specifically to the states like Idaho. But I think, to Your Honor's point, that's consistent with the historical understanding, because all those statutes at the 14th Amendment's ratification did allow for the life-preserving exception, which Idaho's law allows today. So Idaho's law is consistent with those laws and is consistent with the regulation of laws under Dobbs, but not Rowe and Casey. So, Mr. Hoffman, if the statute in Dobbs prohibited elective abortions but provided an exception for medical emergencies, Justice Alito's opinion didn't really address this exception. Why should we not read this omission as implicitly allowing a woman has a constitutional right to an abortion for extreme medical emergencies? So I think, Your Honor, as the other side points out, the question presented in Dobbs was about that elective abortion provision, but the holing in Dobbs was not so limited. And, in fact, the Chief Justice's concurrence criticizes the majority for exceeding the scope of the question presented and going beyond elective abortions, and that's what the logic of Dobbs is. I don't think that's answering Judge Callahan's question. I think she's asking that because Dobbs did not specifically address what we're calling for therapeutic abortions, didn't it implicitly leave open the right to therapeutic abortion under the Constitution? No, I don't think it did because it said that states may regulate or prohibit abortion. That's the line in the Dobbs opinion written by the court and in overruling Roe v. Casey, which required every state law to have a therapeutic exception. So I think that Dobbs did address this question and was not limited to elective abortions because I think that's the reason why the Chief Justice only concurred in the judgment is because it wasn't so limited. What he said wasn't what he said. He said he didn't talk about elective versus non-elective inquiry, whether therapeutic is elective anyway. But he was troubled by the majorities going beyond the specific prohibition in that case that was on appeal, which was 15 weeks. Right. And I think also, Your Honor, it was about the question presented too, which did relate specifically to elective abortions. I think that's what the Chief Justice discusses in the majority response to that saying, the parties then asked us to overrule or to decide these cases. And so that's what the court went on to do. So we do think that Dobbs establishes this, but the history also establishes it because under that framework, the plaintiff has a very high burden of showing a significant historical basis for a deeply rooted right. And Dobbs says that's a legal right that the plaintiff needs to show existed in history. But plaintiff doesn't have any sources saying that there is a legal right to a therapeutic abortion. There's no case saying that. There's no even 14th Amendment ratification era source saying that it is such a fundamental legal right. And I think that. Yes, Your Honor. I was just going to say, I think that establishes that there cannot be a fundamental right because Dobbs says there needs to be a recognition of a specific legal right. What is your position as to whether there is a fundamental legal right with regard to the right in general to seek medical care? I don't think medical. I think that this court has precedent on that. I think there's the National Association of Psychiatrists versus the California Board of Psychiatry or Psychology. And so that kind of discusses like there needs to be the historical foundation and there's not specific treatments or something. I think that there could be kind of a general right. But again, what the fundamental right analysis is focused on is like this specific right. And so this court. It seems to me that there has to be in general, even if there's no case law, presumably because nobody doubts that if the state decided. Decree that you couldn't go see your doctor, then there would be a fundamental right either within the life provision or within liberty provision. It's just never happened. The adverse has happened. And the right to not be subjected to mandatory medical care is fundamental. Right. Well, I think that's a different situation. But it seems unlikely that you have a right not to have medical care, but not a right to have medical care. But I think that does point out that the difference between that and this case in that there were those state statutes that prohibited the abortions and except for life preserving reasons. But then there are other statutes that did allow for therapeutic reasons. So it's not just like everybody assumed that there is a right to do this because the state statutes, in fact, provided for different things. And that shows that I was asking a predecessor to me as a predecessor question, which is whether there was a fundamental right to seek and obtain ordinary medical care. I think it's possible that there is such a right. But the right here is completely different from that, because as the court pointed out in Dobbs, that there's a very different interest at stake in the unborn life, which is what I would come in then in ministry. I mean, if you have in other words, the question is, what's the location of the woman's right to begin that she's claiming? And it seems to me it's a right to seek and obtain medical care. Then that's not the end of the story, but it's the beginning of the story. That is, then there are other and there are state interests. And the question is, are the state interests adequate? But you don't. And the state interest in protecting the fetus would be an interest which could be considered. But first, you have to know what the underlying right is. Right. I agree, Your Honor. You have to define you have to carefully define the right. That's the first step of the inquiry. But what the Supreme Court in this court said in Reach Community is you can't define it at too high a level of abstraction like just the right to medical care. It has to be defined with regards to the specific historical practice. And abortion has been with us since the common law or even ancient times. And so there has to be that specific right to an abortion for these reasons, especially because of that interest in unborn life. So that's what if I claimed a right to have an open heart surgery, it would be separate from the right to have a knee replacement. I can't. Yeah, but I think the fundamental problem here is that this is an unenumerated right. It's not an explicit right provided by the Constitution. And so when you're dealing with unenumerated unenumerated rights, you need a very high level of specificity. Otherwise, the answer to my question is, yes, that would be a separate right to have an open heart surgery from having a knee replacement. Well, I mean, I think it has to be connected to the specific historical practice here, which is what I mean. That is kind of like the whole issue here, too. So, for example, the Supreme Court in a recent case, Department of State versus Munoz. And they said that there's a right to marry, of course, a fundamental right. But that did not extend to the fundamental right to have your non-citizen spouse come into the United States. So what we're looking at is this specific historical right at issue here, too. And I think that that has been rejected by the historical sources and that this would be permitted under. There's no case saying that it was permitted or a secondary source. Mr. Hoffman, I wanted to ask you a question about Justice Alito's discussion of the history and tradition in this particular case. And I'm going to ask your friend on the other side the same question. So she gets a sneak preview. But the district court's discussion of the history and tradition of the right to a health preserving abortion. It appears on some level to plow through the same ground that Justice Alito discussed in Dobbs, but it reaches a different conclusion. So let's just say even if Justice Alito's view of history is not my view or is myopic or whatever, would it be your position that we're bound by it? And that was an error that the district court made in plowing through the same traditions, the same history, but just viewed it differently than Justice Alito? Or was it different history? I think that if the district court looked at the exact same history in the Supreme Court and came to the opposite conclusion, then I think that would not be permissible because this is the situation of a fundamental unenumerated right. And so it's a quintessential legal reasoning decision. Did that happen here or was it different here? What's your position on that? Because obviously I think your friend on the other side is going to say, well, no, it's a different right or it's something different. What's your position on that? I think the district court looked at the same history, but then just misinterpreted it basically because it looked at the statutes in Dobbs and it said, you know, no matter the details of the statutory language, the life meant health, which is inconsistent with the historical record. And that, you know, in the common law, there is always the protection for therapeutic intent. Whatever it was, it wasn't anything that Dobbs looked at because Dobbs wasn't looking at the question of therapeutic abortions. So it never answered, looked at that question or answered that question. Well, I think there I mean, it looked at the history of state statutes regulating abortion. It lays them all out in the appendix there and notes that all of them allowed life preserving abortions. So I think it did look at that history. But it didn't discuss what that meant or whether there were other considerations as to the breadth of that or whether there were other considerations as to what the intent provisions meant or whether there were or what the common law was with respect to therapeutic or medically required or said to be medically required abortions and other abortions. It just never looked at any of that, which is the best evidence that it wasn't deciding. Well, I think I mean, it did cite some evidence that looked at the Hales discussion of the proto felony murder rule, which comes up in this case again. But I think irrespective of what Dobbs said about that, I think the historical record contradicts the district court's claim on therapeutic intent, because the plaintiff's expert admittedly relied on inference and connecting unrelated discussions about therapeutic intent. With regard to Judge Callahan's question, the answer has to be that Dobbs did not do the history that's relevant to this. You're separately saying that the history that is relevant to this comes out the same way and that Dobbs' methodology applies. But that's different from saying that Dobbs actually did this. Well, I think that yeah, I think either under either framing, though, there that that would apply to this case and that that that disposes of this case, I really think, because if Dobbs is discussing the same history and saying that the Constitution has no fundamental right to abortion, that it's not in there, that states may regulate or prohibit abortion, then that is, again, this case, though, too. So if hypothetically here, if the statute did not include the life of the mother, would this withstand scrutiny? Or is there is there does a mother have a fundamental right to her life? So does that does that have to be present in any abortion statute? I don't that's not the issue I think that's raised by this case. I think the district court. No, it's not. But I'm just saying if Justice would Justice Alito say that a mother has a right to her life? You know, I can't I can't say what Justice Alito would say. I think that that's present in all the historic statutes. I think the calculus is completely different in that case. So, you know, I'm not entirely sure what Justice Alito would say. But again, that's what the district court recognized is not this case, because that's what Idaho law allows. And that's consistent with the historical analysis in that it allows mothers to protect their lives. And it's very different when you're talking about just a vague therapeutic exception, like the broad one that the district court said here, where there's no indications required for a specific mental health diagnosis or objective criteria or even a second opinion. But it essentially just licenses the subjective judgment of doctors. And the district court acknowledges that doctors can disagree, reasonably disagree about what indicates abortion and suggests or intimates that even the C-section risk would lead to an abortion. But that would just kind of blow a complete hole in Idaho's ability to regulate this procedure. The district court owes the injunction, instead of reading as it does, incorporated the language from the statute that was at issue itself in Jobs, where that is a condition on which based on the basis of the physician's good faith clinical judgment, an abortion is necessary to preserve the life of a pregnant woman whose life is endangered. Or when the continuation of the pregnancy will create a serious risk of substantial and irreversible impairment of a major bodily function. If that was the injunction, would that be okay? No, I don't think that. I mean, I think that this court could certainly narrow the injunctions, but I think the complete stay is appropriate here because Idaho has a law and it's irreparable injury anytime there's a federal court injunction against the state law. But more fundamentally to the point is that there has to be the historical evidence showing that such a legal right existed there. And plaintiff has not provided has not been at his burden to provide that historical evidence in that case. So I don't think a narrow injunction on that basis is appropriate because there's not the history supporting that. I think to the factual point, the question that's unrelated to that, I just this this injunction that the district court issued. Is there a bright line between health and life? I mean, it seems like the litany of the kinds of conditions or diseases or threats of harm that they discuss here could also be threats of death ultimately. So I'm having a hard time understanding, you know, with respect to certain of these diseases and conditions like needing a kidney transplant, which is, you know, where I mean, difficult to get anyway. But like if you need a kidney transplant, doesn't that threaten your your life as well as long term harm if you don't get it and it doesn't take? I mean, I don't see what the line is or even if it's clearly indicated in the injunction that was issued. I don't think the injunction clearly defines it, which is a big problem with it, but I do think that there is a definition. I think that doctors are trained to know that Dr. Krause testified to that, that physicians would know it can separate a risk of life from a risk of death. And the second point on that is you look to the Idaho Supreme Court's decision in Planned Parenthood, Great Northwest versus state. And there it authoritatively interprets the statute and gives doctors a lot of guidance and also a lot of discretion under the risk of death. It says there doesn't have to be a certain percent chance of death. It says there doesn't have to be a necessary immediacy and it allows doctors in their subjective judgment to kind of decide these risks. There's not a reasonableness standard. So that gives doctors a sufficient leeway. The Idaho Supreme Court said it's consistent with their exercise of professional judgment. So I think that that case also gives doctors the proper delineation and that's boosted by the testimony of Dr. Krause. Dr. Krause also went through a long list of those medical conditions and situations in which a plaintiff said that Idaho's law wouldn't allow him to treat his patients and identify the risk of death. So, you know, pre-prom with the signs of infection is a risk of death. What Your Honor pointed out about the kidney transplant, one of plaintiff's patients had end-stage renal disease. And to Your Honor's point, I think that is a risk of death and that's what Dr. Krause says. And Dr. Krause's conclusion, again, is that doctors would be able to identify those situations, especially with advances in modern medicine, which allow early induction of labor to protect the baby and then allow the mother to get treatment. And with expectant management techniques, which many witnesses agreed were available during pregnancy. So I think that this is a line that doctors can draw and that's consistent with regulation of the medical profession. Let me ask you this. I know that there's an initiative on to add some rights to this particular statute on the November election, I think. If that initiative were to pass, would that then moot the challenge here? No, I don't think it necessarily moots it. I mean, first, it wouldn't go into effect until January. And so there would be ongoing injury if the injunctions continue against Idaho's current law. We don't know if the initiative is going to pass. So I don't think that certainly doesn't moot this motion. Would it moot the overall case? I think that requires more legislative analysis of the bill. But I do think that there may not be overlap, especially with how expansively the district court defined this injunction. It appears in the state that the state entities have not sought a stay of the injunction issued in St. Luke's health system versus Labrador. To what extent, if any, does the district court's injunction in this case allow for performance of abortions that are not authorized under the injunction in St. Luke's? I think much more, many more. First of all, as even St. Luke's, who wrote the amicus brief, acknowledges, that St. Luke's injunction does not apply to mental health abortions, which the district court's injunction provides expansive permissive leeway. So that's a big one. Second, plaintiff testified that there was conditions that he would have performed an abortion when the St. Luke's injunction was in effect, but that he theoretically couldn't. So I think he believes it doesn't protect him. And then third, in Justice Barrett's opinion in the Moyle-Mtala Supreme Court case, she said that Idaho's Defense of Life Act remains largely enforceable, even with the Mtala injunction, and this injunction sweeps much broader than that. So the St. Luke's injunction is much narrower than this broad rights defined by the district court. So it remains largely enforceable because that injunction and this one only apply to health issues. So in general, if you don't have a health issue, the statute's enforceable. Yeah, well, it doesn't apply to mental health issues. St. Luke's even said that. So I think that's definitely a big one. And two, the St. Luke's one applies to medical emergencies in an emergency room only, which is not – this injunction is not so limited. It's really any risk of health as determined by a doctor. And again, plaintiff testified about that, that he believed he wasn't protected by the St. Luke's injunction. So it's broader. So if – hypothetically, if you're correct that Dobbs forecloses the arguments that appellees are making, and that also that it was the same history and tradition that Justice Alito went through and just came to a different conclusion, therefore we would be bound by it, wouldn't it be appropriate not only to whether grant the stay but just remand and say you win outright? Your Honor, I couldn't object to that. All right, I know you wouldn't, but it's my reasoning. What am I missing here? I mean, I think in terms of some reversal, if the historical evidence is silent as to a therapeutic abortion, which it is, I think plaintiff can establish his case, and it would be appropriate to reverse on that basis. So I agree, yes. And I know I only have a few seconds before rebuttal. I think Judge Ward-Lam may have had a question earlier. I do have a question. I'm just wondering if the Attorney General plans to issue any enforcement guidelines or plans to make any more clear what constitutes the path to life or death that would justify a woman's therapeutic abortion? Because one of the problems here seems to be that as you acknowledge or conceded that the kidney transplant example would justify the abortion, but Dr. Seay says I'm at a loss. I don't know if I can go forward with this or I can't go forward with it. I'm not sure of any future guidance. I think that the Attorney General's position in this case is that that Planned Parenthood case from the Idaho Supreme Court provides a lot of guidance to physicians. The plaintiff admitted that he hadn't read the case. He didn't understand the law in that respect. So I think there's sufficient guidance out there for doctors. Dr. Krause and Dr. Hughes testified that they understood Idaho's law and how to operate under it. What about the Atkins decision? As I understand it, that hasn't been appealed to either. Is that right? That's correct, Your Honor. Yeah, it wasn't appealed. But it was only a declaratory judgment as to those specific parties. And it's somewhat unclear as to what it provides in addition to the statute. I think the better interpretation is the Idaho Supreme Court's one, which physicians can understand. Regard yourself as bound by that? The Attorney General is bound by it, certainly. But the declaratory judgment was with respect to those two individual or the individual plaintiffs in that case. But Dr. Sabe could not rely on it, in other words. Well, I don't think, yeah, no, I don't think he could rely on it directly. I think he relies on the Idaho Supreme Court. But, two, I don't think that the Atkins one provides any more guidance that would be helpful to a physician than the Idaho Supreme Court's decision. It seems to provide some more guidance. But you're saying that it's not binding, so just that? Unless there are further questions, I'll reserve the remainder for rebuttal. Can I clarify? I'm going to clarify that. Yes. Are you saying that the Planned Parenthood Great Northwest v. Idaho is binding on the physicians or not binding? That one is definitely binding. Yeah, that one's definitely binding. It's the authoritative interpretation of the statute by Idaho Supreme Court. Absolutely. Thank you. Okay. Ms. Toedt? Thank you, Your Honor. May it please the court, my name is Stephanie Toedt, and I represent the appellee, Dr. Stacey Sabe. The injunction entered by the district court in this case is narrow. It would enable only a small number of patients each year to obtain an abortion. But for those patients, access to that care is vitally important. As the district court found, some are at risk of permanent organ damage, sepsis, and loss of future fertility. Some would need to delay cancer treatment or discontinue critical psychiatric medications. As was discussed, Dr. Sabe had a patient last year with end-stage renal disease who would have lost her place on the kidney transplant list without an abortion. Now, today, the state takes the position that that patient could have had an abortion under existing law. But at the same time, the state takes the position in its briefs that if an alternate treatment is available, then abortion is not authorized. And here, the patient with renal disease was on dialysis. There was an alternative to organ transplant, but the patient determined, based on medical advice, that the transplant would have been in her best interest and would have given her the best chance of full quality of life. Because people with high-risk pregnancies have a right to life and health-preserving abortion care, and because the injunction is tailored to protect that right, the state is not entitled to the extraordinary remedy of a state-pending appeal, and the court should deny its motions. You're locating the right to life and health-protecting medical care in the Due Process Clause protection of life or life and liberty, or what? That's correct, Your Honor, and that is another feature of this case that makes it different than Dobbs. Whereas Dobbs squarely focused on the 14th Amendment's protection of liberty, this case also raises the 14th Amendment's protection of life. But the liberty interest in Dobbs that was discussed at least was a privacy interest or an autonomy interest, but not a medical interest. That's correct, Your Honor. But it's really weird and probably explicable. No one has come up with any case law specifically protecting the right to medical care. There's case law specifying the right not to have medical care, and there's the prison cases that you talk about. But probably because almost nobody doubts it, but there is no such case law, is there? I am not aware of it, Your Honor, other than the implication of the 8th Amendment cases and the 5th and 14th Amendment cases about the right of those who are in government custody to access medical care. I'm not aware of any cases discussing the right of people who aren't in governmental custody to access medical care without undue interference by the state. But I think that is because it's either because it's so obvious or because no state has ever tried to deny that access. It just hasn't come up. There are cases about the government's ability to regulate the practice of medicine, but that's different. The existence of a fundamental right doesn't foreclose regulation, and the Supreme Court has said this in a variety of contexts. For example, there's a First Amendment right to free speech, but the government can regulate the time, place, and manner in which speech occurs. Similarly, there's a Second Amendment right to bear arms for individual self-defense, but the government can regulate arms consistent with historical practice. And so the ability of the government to regulate medical care doesn't foreclose a fundamental right to access medical care. And here, that right is really derivative of the fundamental rights to life and health. Ms. Toney, I'm struggling with some very bold language by Justice Alito in what appears to be pretty unequivocal. In an opinion joined by four other justices, Justice Alito stated that, quote, and, quote, Why isn't that the end of the story? That's a pretty, that's, I can understand that easier than everything else that we're talking about here. Yes, Your Honor. The question before Dobbs was whether the Constitution protected abortion generally. And the court held that there was no general right to abortion, but it did not consider whether there was a specific right to life and health. But do you deny that that language is there in the opinion? And some of the other justices are saying, hey, you don't need to go that far. The other justices seem to acknowledge that Alito went there and he got there. He was able to count to five. That's, you know, whether that's right or whether that's wrong. You know, I'm an intermediate court here. Well, Your Honor, I certainly don't deny that that language is in the opinion, but I have a different interpretation of what it means. I think the other justices don't have your interpretation of it. The other justices say you don't need to go that far. Well, I did. Yes, I think the concurrence by the chief justice says you don't have to go so far as to overturn Roe and Casey. You can limit those decisions in some respects. But I don't think those decisions, certainly the concurrence, wasn't addressing life and health. Yes, and then the Supreme Court, but then Justice, the chief seems to think he did overrule Roe and Casey, right? Yes, Your Honor. And I agree that Dobbs overrules Roe and Casey. It just does it on grounds that don't address the right to life and health. Aren't there actually two separate rights recognized in Roe and Casey? The second one being kind of not discussed very much. The first is this autonomy, privacy right of a woman for self-generation, self-agency. The second, which only shows up at the end of Roe and then gets a little more recognition in Casey, is the right to a therapeutic abortion. I mean, abortion to preserve the woman's life or serious health problems. And there was just no discussion of that second one at all in Dobbs, was there? It was mentioned that that existed, but that was it. It was never alluded to again. That is correct, Your Honor. The court did not analyze that specific issue. And the dissent notes that. It's not just an issue. What I'm saying was a separate holding in Roe and Casey. There was A and B, and they didn't discuss B. I think that's correct, Your Honor. That was not the focus of the court's analysis in Dobbs. It wasn't the question that Dobbs was endeavoring to answer. Was it anywhere in the briefs? Did anybody ever discuss it? I mean, this is why I think it's important whether there is or isn't a fundamental right to medical care, because that would situate the whole thing, that whole right in a completely different place from Roe and Casey's elective abortions discussion. And I don't know if we need to resolve that now. We're only in a stay motion, but it does seem to me to be a critical question here, both as to what Dobbs was deciding. And I didn't get the fact that there's no you haven't found any case law about it one way or another. Disturbing. Yes, Your Honor. In terms of whether the briefs addressed this issue, I can't speak to the amicus briefs, whether there is any amicus brief that might have touched on it, but the parties briefs did not. The focus of Dobbs was really on the viability line. That is how the case was briefed, and it wasn't briefed under the history and tradition standard because Dobbs announced that standard. And so the arguments in the evidence presented in the briefs don't quite align with the way that the court subsequently addressed the question. But I think that's a separate question, a completely separate question. What Dr. Seib has never done an abortion for mental health reasons. Is that right? That is that is correct. Your Honor, he has not had occasion to do that. Before the statute here was enacted and afterwards. That is that is correct. The statute prohibits that care before the statute was enacted. There were other doctors in Idaho providing that care, but Dr. Seib was not. So why does he have standard challenge now? Because he is a maternal fetal medicine specialist. It is within his scope of practice, and he has stated an intent to provide that care in the future if he is no longer prohibited from doing so. In the past, that kind of care could be provided in outpatient abortion clinics. But because of the abortion bans, all of the outpatient abortion clinics have now closed. So there's no no place other than a hospital based practice like Dr. Seib's for a patient to obtain that kind of care. Now, he is not a psychiatrist. Would he be qualified to determine the risk of suicide, for example? All OBGYNs and maternal fetal medicine specialists have training to assess mental health risks, including suicide risks. Dr. Seib testified at his deposition that he would likely want to consult with a psychiatrist or at least another colleague before making a mental health diagnosis. So I promised you that I would ask you that the District Court's discussion of history and traditions of the right to health preserving abortion appears to plow through the same ground that Justice Alito's discussion in Dobbs did, but reaches a different conclusion. Even if Justice Alito's view of history is myopic and we don't agree with it, why aren't we bound by it? Because the Supreme Court has said in two recent cases, both New York Pistol and Rifle Association v. Bruin and United States v. Hamani, that courts engaging in historical analysis should rely on the historical records compiled by the parties in a particular case. And that means that the parties in one case are not bound by the historical evidence presented in a different case. And in fact, Dobbs... Does that mean that somebody could relitigate Dobbs, the same issue as in Dobbs? I don't think the same issue, Your Honor, because the court has resolved the ultimate legal issue in that case. But because this case presents a different legal issue, the parties aren't bound by the factual record that was presented in Dobbs, but they are free to build their own factual record. And in fact, Dobbs did not do a deep dive on this issue. It did not look at all of the historical sources that were presented in the case. And it did not look at sources through the same lens, through the lens of trying to figure out the scope of protection for life and health-preserving abortions. But wouldn't they look at the same stuff that Alito did? Judge Windmill did consider many of the same sources, but those sources say lots of different things. I hear your argument, but I think you're saying it's a different lens, and that's why he gets to see it differently. I'm not hearing you say it was different historical evidence. There was a lot of overlap in the historical evidence. Some of the historical evidence was different. But, for example, the Supreme Court relied heavily on scholarship by Dr. Keown and Professor Dallapena. Dr. Keown does an extensive analysis in his book of the status of life and health-preserving abortion in England in the 19th century, and concludes that it was broadly available, including for mental health indications, and that it was legally sanctioned. Dr. Dallapena says in his book, although he doesn't look specifically at this issue, he says that abortion at various points in history was generally prohibited except to preserve the life and health of the pregnant woman. The very same sources that the Supreme Court relied on reached different conclusions about therapeutic abortion than they do about non-therapeutic abortion. The Supreme Court in Dobbs didn't focus on that because that wasn't the question that they were trying to answer. What matters most to the constitutional analysis is how the public understood the status of therapeutic abortion at the time the 14th Amendment was ratified. And the record in this case demonstrates a broad societal consensus that abortions performed for medical reasons were lawful. Doctors in both the United States and the United Kingdom performed life and health-preserving abortions openly, and they weren't prosecuted for doing so. The state contends that abortions were understood to be lawful only when strictly necessary to prevent a pregnant woman's death, but the record doesn't support that. How do you read the predominant language in those early statutes? And now, although not in this Idaho statute, was to preserve the life of the mother. The Idaho statute, interestingly, is recast to saying something about preventing the death of the mother. But what does preserve the any of these sources or any of the medical understandings of it? Talk about what preserves the life means. Suppose somebody could be a paraplegic. Is her life preserved or is her life, in fact, impeded or not preserved? Yes, Your Honor, the medical sources do discuss this and they equate life-preserving abortions with abortions performed to prevent serious long-term disability. The medical literature conflates these issues and doctors in one breath say abortion is lawful when necessary to preserve a woman's life. And then in the very next breath list as lawful indications for abortion, things like general ill health, where there's a chance of a patient becoming an invalid for life or long-term physical disability or a condition that would leave the patient as a physical or mental wreck. Doctors didn't distinguish between life and health in the same way that the state of Idaho is trying to do here. They saw those things as on a continuum and ultimately intertwined. In attempting to assign discrete meanings to those terms, the state is superimposing 21st century usage and 21st century politics on 19th century language. Would you concede that your argument on death from self-harm is weaker than the other arguments? Because obviously there are other measures that can be taken besides an abortion to prevent a woman from committing suicide. And as the regulation of abortion has been returned to the states, why can't the state require that those other measures rather than abortion? Because, Your Honor, as the record in this case demonstrates and as the district court found, in some cases, in some small number of cases, abortion is the most effective way to prevent suicide or other forms of legal self-harm resulting from serious psychiatric illness. Alternate methods, alternate treatments aren't always as effective or effective at all and they carry their own risks. We have a right to life, but you don't have a right to kill yourself, right? That is correct, Your Honor. And Dr. Seib's patients or patients seeking abortion, life-preserving abortions, don't want to kill themselves. They want to stay alive. They want to remain alive. That's why they want the abortion care to avoid serious relapse of psychiatric illness. Is there evidence in the record that the abortion actually eliminates the suicidal ideation? There is evidence that abortion can seriously diminish the risk. The record shows that pregnancy impacts a patient's body in ways that affect the metabolism of medication. And so pregnancy dramatically increases blood volume and it does that in a progressive way over time so that, you know, in the second trimester, blood volume is much higher than in the first trimester. Similarly, a patient typically gains weight over the course of the pregnancy and their hormones change and shift all in ways that affect the way the body metabolizes medication. Early abortion enables, in some cases, a patient to stay on their medication in the same dose that they were originally taking, allows the medication to remain effective. But as pregnancy continues, the dosage of the medication may no longer be effective and our expert psychiatrist testified that it can be really hard to titrate medications during pregnancy. In some cases, patients just even after the pregnancy, because of the impacts of carrying the pregnancy to term, no longer respond to medications in the same way. The record also shows that there are some psychiatric medications that are just incompatible with pregnancy because they pose a serious risk to fetal development. And so those are some of the reasons why medication, for example, just keeping a pregnant person medicated isn't going to adequately treat their psychiatric illness. Similarly, hospitalization not only is not effective for all patients, we had expert testimony that patients have taken their lives while hospitalized, it's also a tremendous incursion into a patient's liberty. And we're talking about, you know, keeping someone hospitalized potentially for months, and that doesn't speak to then the risks that they would face in the postpartum period as a result of the impact of the progressive impact of the pregnancy on their body. And so the district court's finding that alternative treatments aren't always effective is well supported by the evidence in the record, and the state hasn't come close to showing that it constitutes clear error. Can I ask a question? The district court modified its injunction to apply only to Dr. Tsai, but this is a facial challenge to the statute, correct? I wouldn't describe it as a facial challenge, Your Honor. It's an as-applied challenge, but it's as applied to circumstances, not to individuals. How can it be an as-applied? Because I would envision an as-applied would be, here's a patient who's pregnant, who's been diagnosed with X, Y, and Z, and the state's prohibition on therapeutic abortion in this case will cause her to die. Yes, Your Honor. It seems odd to me that if you're going to attack the statute, you should be arguing for an injunction against general enforcement of the statute, not just against Dr. Tsai. He's not the only person who performs abortions in the state of Idaho, correct? Well, I agree with that, Your Honor, yes. The district court's injunction applies to the attorney general who voluntarily intervened in this case, as well as the Ida County prosecuting attorney, and it bars those two officials from applying the statute to any doctor treating a patient at risk of death or serious and lasting injury. And the scope of the injunction was appropriate, and it was error. But the district court dialed it back, and you want it back to the universal injunction as opposed to specific as to Dr. Tsai, right? Again, Your Honor, I wouldn't characterize it as a universal injunction. Well, but that's why the district court dialed it back under CASA, right? The district court did cite CASA, and that was inappropriate because Trump v. CASA concerns the grant of federal court equitable jurisdiction by the Judiciary Act of 1789. And it analyzes whether the English High Court of Chancery in the 18th century issued injunctions of a certain type. This case is brought under a later enacted statute, Section 1984. I guess my point is that's why the district court dialed it back. That's my understanding. Because the district court issued something much broader initially than CASA came out, and then the district court pulled it back, right, and limited it to Dr. Tsai. CASA came out before the district court. Why did the district court dial it back? You can say that the court was wrong to rely on it, but that's my understanding of why the district court dialed it back. Yes, that is my understanding, too, that the district court relied on CASA based on the attorney general's arguments about CASA. But I think those arguments in the district court's reliance were incorrect because… I have three questions about the breadth of the injunction, one of which relates to the CASA question. As to the CASA-related question, your last argument is that there has to at least be a provision for Dr. Tsai's colleagues. Isn't that implicit in any injunction, the notion that people who are in concert, or does it have to be spelled out? But it is ordinarily spelled out, but does it have to be spelled out? Given the high stakes in this case, Your Honor, which entail felony criminal liability, I think it needs to be spelled out. That wouldn't totally satisfy your concern, right? I mean, that seems like it should happen ordinarily under understanding about an injunction. And I don't know whether Judge Wynn-Mull intended to eliminate it, but that wouldn't completely satisfy your concern. Is that right? That's correct, Your Honor. We think that the scope of the injunction as originally entered is proper, and there's no valid basis for staying it even in part. Is it true that it's originally written, it still only applies to this one county? That is correct, Your Honor, because Judge Wynn-Mull dismissed the other county prosecuting attorneys from the case. Originally, there were 44 county prosecuting attorneys named as defendants. The district court concluded that the requirements of Article III standing were only satisfied for the eight county prosecuting attorney and dismissed the others. I have two other questions about the scope of the injunction. One is, does the injunction apply to mental health issues other than with regard to the death of a pregnant woman from self-harm? Does it apply to other mental health issues? If a patient is facing serious and lasting injury from a mental health condition, then I believe the injunction applies. Do you agree that Paragraph 2 is applying to that? Yes, and that's for example, if a patient is facing a serious risk of relapse because they would have to go off their medications, but a doctor doesn't necessarily deem them to be suicidal per se. Is that serious and lasting harm if they could restart their medications after the pregnancy was over? That is a case-by-case determination. What the record shows is that it really depends on the patient's medical history and the particular medications that they're on. In some cases, a patient can't just restart the medications afterwards, and after pregnancy, some medications don't work the same way that they did before. My other question, which I think I asked Mr. Hoffman, was whether the language of the injunction is flimsier than it needs to be. The non-negligible risk language seems to have come out of Atkins, but it's awfully low. What I was wondering is whether if the injunction mimics the language of the statute in Dobbs, a life-endangering physical condition arising from the pregnancy itself or when the continuation of the pregnancy will create a serious risk of substantial and irreversible impairment of a major bodily function, which is considerably clearer. Would you object to that change, or would you find it? I guess my question is, where does this non-negligible risk come from, and is it essential to your position? Your Honor, it's not essential to our position, but it comes from the state court limiting construction applied in the Atkins case. That case is binding on not only the attorney general and the Ada County prosecuting attorney, but on the entire state of Idaho, because under Idaho law, a party can sue the state. And because the state officials chose not to appeal, it is binding on all of them. In that case, it related to risk of death, not risk of substantial, so it wasn't the same issue. That is correct, Your Honor. The U.S. Supreme Court has repeatedly cautioned lower federal courts against attempting to rewrite state statutes, even as they try to salvage those statutes, and cautioned courts against engaging in essentially legislative work. What the district court did here was appropriate. It took its cues from the statutory language, preserving as much of that as possible, as well as the state court construction. It wasn't the statutory language. How does that reflect the statutory language? The part of the injunction that refers to good faith. Oh, right. No, I understand that part, but I wasn't questioning that part. Yes, non-negligible risk comes from the state court decision. I see that my time is up, and thank you. All right. Thank you, counsel. Mr. Hoffman, I think you had some time reserved. Thank you, Your Honor. I'll do three quick points in the short time. So, Judge Berzon, on the right to medical treatment there, you noted that there was no precedent either way. I think that at least shows that there are serious questions on the merits here, which means a stay should be appropriate. And to be clear, Idaho is not denying medical treatment. Abortion doesn't treat mental illness, as Judge Callahan noted. There are a variety of other treatment options available. A plaintiff discussed Dr. Payne's testimony about treatment resistance. But kind of to your point, Judge Berzon, that stops after pregnancy. Patients can retake their medications. There's a record on this. I mean, that all raises the question which you both discussed somewhat in your briefs and which I don't know the answer to, which is whether the clear error standard applies here or not. Right. I don't think it does because it applies to the entire classification of cases, so they must be legislative facts. Also, the second point is that plaintiff tries to use those facts to define a constitutional right, and so that the constitutional review standard of de novo should apply. On the precedent for the medical treatment case I cited earlier, Judge Berzon, it's 228F3rd at 1050. I think that kind of discusses this issue a little bit. My second point is on Dobbs discussing the same history. Ms. Totey noted that Dobbs cited Dr. Keown, Dr. Della Pina extensively. It viewed this history, and to view it from another angle, Dobbs could have said that it was not deciding the question of therapeutic abortions, as the dissent noted, but the majority did not say that. Instead, it overruled Rowan Casey and Totey. Despite what the dissent said, it didn't say that it was, and it uses the term non-therapeutic abortion several times. It uses the term abortion well, and it uses the terms elective abortion, and it never talks about a therapeutic abortion. It just doesn't. It says states can prohibit abortions, and I think the third point then is that regardless of Dobbs, the historical record here does not establish a deeply rooted fundamental right because no contemporary ratification era source says that, and so I respectfully request this court grant to stay. All right. Thank you, counsel. The appeal and side versus members of the Idaho Board of Medicine and Raul Labrador will be submitted, and this court is adjourned for today. Thank you. This court for this session stands adjourned."
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"stt_transcript": "Mr. Shaw, you may begin when you're ready. Thank you, and may it please the court. Judge Carter's preliminary injunction requires HUD to continue relying on LASA to allocate and manage hundreds of millions of dollars in federal funds even though the district court largely accepted the extensive evidence of LASA's malfeasance. In fact, LASA's problems are so severe that Los Angeles County, which together with the City of Los Angeles, created LASA, has already withdrawn over $300 million. I don't think that's really the issue, and I don't think that was the district court's issue as well. The concern really is the timing of it and where that leaves LA DOT and Los Angeles. So let me ask you this. Between April and the time that you decided to suspend LASA, what new information came to the government's attention? I know that there were a couple of audits and reports done in May, but it's not clear to me from the record what information in those audits that was new, instead of information that went back years and that were known to HUD. Well, I do think that the two May audits that we referred to in our brief did confirm that the issues that had been identified continued to persist, and there was also, very importantly, a new OIG investigation that was launched into whether LASA had violated federal laws. And in fact, it is pending that investigation that LASA was suspended. I would just also say that, you know... Let me have you pause there, because I want to make sure I understand your answer. So it's the same problems that have persisted, and the OIG investigation is the new information. Is that what you're saying, Mr. Shaw? Well, it's a confirmation of continuing problems. So this is not a case in which, for example, there was a long-ago instance of misconduct, and the government is just acting now. You know, it's confirmation that problems, that severe problems, continue to exist with LASA, and that, in conjunction with the OIG investigation, you know, prompted HUD to act. But again, the question here is not whether HUD had adequate evidence to act at some prior point in time. I mean, what's under review is the... or what Judge Carter enjoined is the suspension of LASA that occurred on June 11th. So the question is whether there was adequate evidence to support that suspension, and whether Judge Carter erred in his analysis in concluding that the suspension was arbitrary and capricious. So again... Part of the language of the statute requires, and I think you sort of just mentioned part of it, which is whether there's adequate evidence to justify an immediate suspension. So I think I'm also interested in understanding what really changed that led the government to decide that the suspension needed to be immediate, which is part of the statutory requirement. I do agree with your honor that there is a requirement that the government have... that the government determine that immediate action is necessary to protect the public interest. And in fact, HUD did so. But there, again, the question is not what evidence has changed, but whether at the time the decision was made, which was on June 11th, there was reason to conclude that immediate action is necessary to protect the public interest. And HUD laid that evidence out extensively in its June 11th letter. It said that immediate action is necessary to protect the public interest. And furthermore, that in light of the fact that LA County had suspended over $300 million of funding to LAHSA, thereby requiring significant staff reductions to LAHSA... Hold on. When did that happen? Let's see. I think the decision might have been made earlier, but the effective date of the suspension was just this summer. I believe it's either June or July. So that was after April. So that's one thing that happened after April. Yes, that's right. The funding from LA County ceased after April. And what's LA City's status? I thought the city also was saying they may take away funding. Yes, I think that the City Council has discussed taking away LAHSA's funding. I know Mayor Bass has suggested in the press that LAHSA is dysfunctional and that the city should stop funding to LAHSA. Has the City or the County ever done that before? I'm sorry, have they ever suspended funding? Yes. Not that I'm aware of. And I think that LAHSA is aware that the game is up because LAHSA has, in fact, not applied to continue in its roles with the COC for fiscal year 2027. Let me ask a more practical or logistical question, which is, why wouldn't LA COC be able to step into the shoes to receive the funding if LAHSA is not permitted to do so? I mean, the timing of the suspension, I understand, created this, I don't know what to call it, so catch-22 is the word I'm going to use, but feel free to utilize a different phrase, but essentially making it impossible for LA COC, because of the timing, to receive the funds. Is that something that could happen that would preserve the status quo, so that the funding doesn't get distributed to any other entity, but also not to LA HSA? I want to be very clear on this point, because this is extremely important. There is no sense in which removal of LAHSA as the collaborative applicant prevents the LA COC from receiving the funding that it would otherwise receive through the fiscal year 2026 competition. In fact, the direct-to-HUD process that HUD has designed reserves 60% of the maximum funding for the LA COC for renewal projects. So, these are projects that LA COC has already chosen to fund in the past, and they will get 60% of funds reserved for them. For the other 40%, those funds will be competed for in the same way as Tier 2 funds for COCs across the country. So, LA project areas will be able to compete for these Tier 2 funds on an equal footing with projects and COCs from all over the country. Let me make sure I understand that, Mr. Saul. From HUD's perspective, LAHSA is out, but LA COC is not the substitute collaborative applicant, and instead there will be this kind of direct-to-HUD application process, right? And is that how the 60% is going to be determined? In other words, there are priorities that were set by LAHSA that presumably they're working on in terms of making sure where that money goes to all of the different service providers in LA. What happens to all of that priority? So, in the direct-to-HUD process, we'll not rely on any priorities set by LAHSA, and that is one of the features. I mean, that's not a problem. I mean, that's expressly what HUD wants, is not to have to rely on LAHSA's allocation and prioritization decisions. But, you know, again, within the realm – now I'm speaking to sort of the 60% of funds that are reserved for renewal projects. With respect to these funds, again, this is – we're looking at the universe of projects that have already been funded by the LA COC in the past. Within that universe, the – But is HUD required to do that by statute, or you're just committing to do that? That's what I'm confused about. That is what is required by statute for other COCs. It is not required by statute for LA because of the suspension of LAHSA. But notwithstanding the fact that HUD is not statutorily required to do so, it voluntarily chose to reserve 60% of funds for renewal projects, which is, again, the same – Well, you think – can I back up? Because the 60% you have to give – you have to give, I mean, that's not – it's the 40% that they have to compete for. But the 60% is going to go to LA COC. Is LA COC – it's actually an entity, though, right? Yes, it is an entity. And I may have been unclear with my language. When I say goes to LA COC, I mean to providers within LA. So back to Judge Desai's question, can LA COC – I don't know if this is what she was asking, but could the money go to LA COC as a collaborative applicant? I'm assuming the answer is no because they don't – they aren't set up to act as a collaborative applicant. But I'd be interested in your answer. Yeah, so I'm not sure if LA COC has ever asked to be a collaborative applicant or whether that would be feasible to do so. I mean, what I can say is that HUD has never ruled out the possibility of LA COC selecting a replacement collaborative applicant, and HUD, you know, obviously would have to approve that. But that is actually something that's expressly spelled out in the NOFO. Right, but that can't happen. I think – Isn't there a timing problem? I'm sorry. Yeah, isn't there a timing problem with that now? And maybe your representation that HUD hasn't ruled it out or HUD is open to it is suggesting that there may be an exception to the deadline that's in the NOFO for LA COC to apply as a collaborative applicant now, even after the deadline's passed? So, let's see. I'm not – I'm not sure, you know, what – I'm not sure if HUD has made a – I can't make any representations currently about the deadline. I know that that's something that HUD is thinking about. I do agree with your honor that I think it is practically very difficult at this point for another collaborative applicant to step in. And, you know, they would have to run a local funding competition and then prepare a consolidated application and submit that in time for the application deadline. So, I think practically it would be very difficult. I would just point out that, you know – It can last even act in 2026. I guess we'll hear from them. But I don't understand what – I mean, they've lost funding. They've lost 250 employees. So, I guess I don't even understand what's happening in 2026. Yeah. Unfortunately, I can't speak to, you know, what efforts they've made so far. But I would just point out that it has been over three months now since loss of suspension. And during that time, obviously, LA COC could have nominated a replacement for LASA and asked HUD to approve that. Well, but Judge Carter says that that process takes several months. Do you agree with that? Or is he overstating that? I'm sorry, that the process for – The process for a new collaborative applicant to step in, he says, takes several months. You know, I can't speak to that. I think there are some letters in the district court record that suggest that the city and county were prepared to possibly act as collaborative applicants. But I don't have, you know – I don't have a clear view on – So, what does this mean as a practical matter? Judge Carter makes a big deal about, you know, housing first versus treatment first. Is that what we're dealing with here? Because that to be what was driving his decision was he did not like HUD coming in to say, we're going to upend how this has been done for, I don't know, you know, according to him, 20 years. Is that really an issue? Or is he creating an issue that doesn't actually exist? Yeah, I think he is creating an issue that doesn't actually exist. Because, again, if we go back to the tier one, tier two distinction, you know, I think, plaintiffs have never explained why, you know, these policy priorities that they claim the government is trying to enforce would be manifested through this direct-to-HUD process. Because, again, for tier one funds, we are only looking at projects that LACOC has already chosen to fund, and we're at least funding 60% of those, or at least 60% of that funding. Can you be specific where that commitment is, either by statute or in writing from HUD? Because I think that's one of the great fears, is that the 60% direct-to-the-applicant, you're going to come in and say, well, we don't want, you know, we don't want these providers who've been working with us for 20 years. And you said something about for other COCs. Well, I don't think it's in the statute. Yeah. So, I have to distinguish here between LACOC and other COCs. For other COCs, it is required by the 2026 Appropriations Act. I understand that. But when you suspended LASA, then it goes into the direct-to-the-provider. So, what is hampering HUD, other than its own statements here in court, to stick to these prior priorities? So, the HUD actually laid out, you know, in extensive detail, how it's going to allocate funding in the direct-to-HUD process. And that's in Appendix 3 to the 2026 NOFO, which is... The direct-to-HUD process has been implemented? What's the status of that? I mean, it is, the direct-to-HUD process defined in extensive detail in the 2026 NOFO that was previously vacated, but now has been restored by the State Pending Appeal granted by the First Circuit. So, again, you know, this is a, this NOFO sort of lays out the rules of the competition. So, it establishes how funding will be allocated through the direct-to-HUD process. Has it been implemented? Has the direct-to-HUD process been implemented? I mean, it's implemented in the sense that it's a part of the NOFO, which is now in effect. So, it defines how the competition will be run. But obviously, the actual implementation of it will not happen until all the applications have come in and are scored and funding is allocated. Do you know whether HUD has been receiving applications through that process? Service providers? Uh, probably not yet. I mean, I don't, I can't say for sure, but obviously, the, the District of Rhode Island had vacated the NOFO, and so there were no applications incoming. But the First Circuit has now stated that they could- The process is just getting started. Yes, exactly. Can you help me understand what's happening with the fiscal year 2025 contract? Are there still conditions that are not fulfilled? Because I know either it was LACLC or lack of sweeping that suggested that there are some administrative matters that need to be taken care of. But given the commitment of funds, there's just really no reason why HUD is refusing to countersign those agreements so that the funds can go to the appropriate service providers. Can you help me with that? Yeah, so, so, um, with respect to, I, what I can say is that with respect to agreements with entities other than LASA, to the extent that there have been delays in executing agreements, there is no difference between those in the LACLC and others. So, so if there have been delays, you know, that those agreements have been treated in the same way as those from other CRCs. Now, with respect to LASA specifically, what I can say is, you know, one reason that HUD is not executing those agreements is because with LASA suspended, you know, executing a new grant agreement with LASA would be in violation of the suspension and department regulation. And so- What does HUD intend to do with that? Because that to me is the classic catch-22 situation, right? HUD's not happy with LASA for good reason, it appears, and now HUD won't work with LASA anymore. Let's assume that statutorily you have a right to do that. But there are these fiscal year 2025 commitments have already been made. What does HUD intend to do about that to basically get the funds to the service providers so that services can be provided on the ground? Just as a practical matter. Yes, absolutely. As a practical matter, first of all, again, with respect to the non-LASA grants, those will be processed in the ordinary course. And if they would otherwise have been appropriate to execute, then HUD will be executing those agreements without regard to LASA suspension. Now, only with respect to the grant agreements that are specifically with LASA, I think this is in the McKinney Declaration adopted 71-2 in the district court. HUD has not yet made a decision on what to do with those. I think it's trying to decide what potential remedial actions it should take on a sort of case-by-case basis. And one possible remedial action that HUD could take is to transfer those grants to another entity that can administer them as opposed to LASA. And I apologize if you've already addressed this. At page 12 of Judge Carter's order, he says, finally, HUD has failed to execute grant agreements for a number of organizations who received award letters earlier this year. Is that what you're talking about? There's this list of service providers that are impacted. I guess that comes from the Reed Declaration. Is that accurate or do you disagree? Unfortunately, I haven't sort of fact-checked those particular organizations, but I do agree that in general, there are agreements that have yet to be executed with LASA for projects that are run by LASA's sub-recipient. And HUD is not executing at the current time in part because, again, with LASA suspended, executing the agreement would enter into a new transaction with a suspended entity. But you're representing that HUD is going through them to the extent that there are sub-providers who are not involved with LASA, that those agreements that we're moving them out to the timelapse, right? I'm sorry. With respect to agreements that do not go through LASA. All of them involve LASA's involvement, and that's why none of them are being signed right now. No, I want to clarify that. With respect to the funding that goes to the LACRC, some of that funding goes directly to project sponsors who, you know, entirely outside of LASA. So LASA coordinates their applications and submits a consolidated application on their behalf. But when those grants are actually made, the funding goes directly to those grant recipients, and LASA is not involved at that stage in the process. There are also some grants that LASA receives directly and are intended for sub-recipients and LASA receives and distributes that funding to those entities. And those are the projects I'm referring to here, where to the extent that there are agreements of that latter type that have not yet been executed, HUD is not currently executing them because, again, it would be a new covered transaction in violation of the suspension regulation. Can I ask you just one more thing about page 12? Because after he goes through this, Judge Carter says this lack of funding comes despite the Consolidated Appropriations Act of 2026, in which Congress expressly required HUD to issue 2025 awards. Is that an accurate reference? Yes. I think it's slightly complicated, but in the Appropriations Act, Congress said that HUD could simply renew awards, which HUD did. And then there's also a statutory deadline for obligating funds for grants that have been awarded, and HUD had also met that deadline. So all of the funds are issued. Is the difference then that Judge Carter is correct that that required HUD to issue 2025 awards, but issuing awards and funding the awards are different? Yes. So there's the issuance of the award, then there's the obligation of the fund, and finally, the execution of the agreement. So for the grant to issue, those first two steps have been completed, but the execution of the agreement has not. And there is usually a delay in between those. So again, as we explained on our previous... But that's my question is, does the 2026 Act obligate you to pay that out? That seems to be what Judge Carter is saying, and I'm not sure that's correct. No, I don't think that's correct. I think the statute requires awards to be made, but it does not require the execution of agreement. Right. So once the agreements are executed, because HUD has the responsibility or the right to require preconditions, so once the awards are... Or the agreements are executed, that's when the actual funds are dispersed, right? Yes. An executed grant agreement is required for a disbursement of funds. Is there a statutory deadline for the execution of the agreement for fiscal year 2025? There is a regulatory deadline that says that after all conditions are satisfied, the agreement must be executed within 45 days. And the only condition, according to HUD, that's not satisfied at this point, that basically prevents the execution of the agreement is loss of suspension, or is there more there? Unfortunately, I can't speak to all the granted issue and whether there are other unsatisfied conditions, but certainly the suspension of LASA is a crucial problem that prevents all of the agreements with LASA that have yet to be executed from being executed. So let me ask you one final question. I know I'm not really strictly adhering to the clock, because actually the facts are moving so fast on the ground, and we really need to understand how this works. And so don't worry about that. And I will definitely give you time to respond after Ms. Axel and Ms. Myers have a chance to respond to the panel's questions as well. But LACLC represented in their briefing that they are now actively interviewing and considering applications for subsequent entities to come into place. And they expect that they'll be able to do that. I don't know if it's aspirational or not, but they hope to do that by the time the PI expires, which is weeks from now. So assuming they come up with a substitute entity, is HUD contemplating just taking that entity in place of LASA and then everything moves forward, or is that an extended process that's going to blow past all of the deadlines for fiscal year 2026, assuming that a substitute entity is found by the time the preliminary injunction expires? I think the district court required a status update on sort of the search for a new collaborative applicant by, I think, October 13th. And I think by that time, I think it, you know, there will be too late for a collaborative applicant to step in and, again, take all the steps to submit an application in time for the deadline. And can LASA then take on that role and step in instead? Would that be satisfactory to HUD? You know, I can't make that representation. I mean, what I can say is that, you know, again, I think HUD has never ruled it out, but I think it would require action at a much quicker pace than, you know, what the district court has. Well, but the October 13th deadline, isn't that for fiscal year 2027? That's not even for fiscal year 2026. I guess, yeah, I think that's exactly right. That's what the district court contemplated with that order was a new collaborative applicant for fiscal year 2027. And that's what LACOC says it has been doing is searching for a new. So, you're not actually giving us a lot of comfort that a new collaborative applicant, in fact, I think you're telling us that a new applicant is not feasible for 2026. I'm not ruling it out. I'm just, I am pointing out that it would be very difficult logistically for that to be complete. And again, I would just point out that LACOC has had over three months to try to identify someone and, you know, the city and county have both said that they could potentially do it, but they have not, LACOC has never nominated a replacement for LASA that HUD could consider. Judge Wynne, I know we're out of time, but can I ask a couple of questions, Phil? No problem. Go ahead. Okay. One is I am confused. I know in the grand scheme of things, this isn't the most important thing, but Judge Carter keeps using the $241 million benchmark and you've been very firm down to the penny almost that it's like $239 million some odd dollars. Can you help me understand the discrepancy there? I, you know, I think we have the right numbers and I think, I think, I think maybe LASA's complaint also has the same numbers that we do. So I'm, I'm confident those are right. I'm just not sure where Judge Carter... You don't know where he came up with the $241 million? No, and I... $2 million given all that's gone on here. And that is, that is the 60%, right? There's, there's no... No, I think that's the whole amount, isn't it? Yeah. I just want to, let me finish my question. So I want to understand, is there a disagreement between whether we need, there needs to be a calculation of 60% of $239 million, or if $239 million constitutes the 60%? No, $239 million is the full, that is the maximum amount of funding available to the LACRC under the program rules. And so that is based on, that's called the Annual Renewal Demand. It's a sort of specific measure of FENDEC funding that was given to the LACRC in past years. The 60% is a subset of that and... So that's like $144 million or something like that? Approximately, yes. Right, and as to the Annual Renewal Demand of the $200, I'll use your number, $39 million, 60% of that is Tier 1, and that's going to be presumptively awarded. That's what you're saying? Yes, that 60%, so the approximately $140 million that Judge Asai mentioned is reserved for renewal projects for projects that have already been funded by the LACRC. All right, thank you very much. Can I ask one more? Sorry to belabor this, but I think that, can you help me understand what Judge Carter meant when he said in his first injunctive relief, he said, first HUD is ordered to distribute the approximately $241 million that was earmarked for the LACRC by Congress in fiscal year 2026. His injunction is only effective until October 27th. Do you read that to require HUD to distribute that money before October 27th? I don't understand what this even means. Yes, to be honest, it's not entirely clear to me either how he intends that to be effective in the expiration date of the injunction. To be honest, I don't have a clear answer for that, but we do that as requiring the distribution of all $239 million according to the priority set. Not necessarily by October 27th. When would that happen? It comes back to the December 1st and then 45 days after. Yes, exactly. The awards would have to be made on December 1st, and then obviously the actual obligation and execution of the agreements would occur on the timeline that occurs after December 1st. Okay. Right, because we're still dealing with the fiscal year 2025 agreements, and then once the 2026 awards or commitments are made by December 1st, then we start that process for fiscal year 2026. Yes, that's exactly. All right. Well, thank you very much. Let's hear from Lhasa and the intervener. Ms. Axel, Ms. Myers, I understand you're splitting time, and obviously the extra time that I gave to the government will be given to you as well, so don't worry about the, I think, seven-minute, eight-minute split that you'd come up with prior to today's hearing. Who is going to start? I'll start on behalf of the plaintiff. I represent Lhasa. May it please the court? I think I would like to start, if the judges would permit, with simply sort of answering the question of what Lhasa has been doing. I think there's a big misunderstanding here. So, Lhasa is, as you know, a joint powers agency. It's a Brown Act agency. Everything it does is fully public and reportable. It plans well in advance. It has regular commission meetings, and so for fiscal year 2025, L.A. County took its action to create its own agency. That was not a complete defunding of Lhasa. That is absolutely not true. L.A. County is still Lhasa's largest funder today. It simply took its own grants and created its own agency to administer. Are you saying that was for 2025 or for 2026? It's implemented in 2026, Your Honor, but it was announced in the summer of 2025 as an agency, again, a Brown Act agency. Are you referring to the representation from your friend on the other side that said this is the event that was sort of the new incident that would justify the immediate suspension? It was this sort of defunding, and that's what you were talking about. It's not a defunding, and what you're clarifying here is that they created a competing organization and took some of those grants away from Lhasa, but it wasn't a defunding. Correct. In fact, Lhasa's budget for 2025-2026 was announced last summer. 2025 was $830 million. This year, fiscal year 2026-2027, beginning in July, is $400 million. The difference is what L.A. County took to start its own agency, but Lhasa has still continued to exist and has five major functions. Hold on. I'm trying to This still took away $400 million from what? That Lhasa had a full year to prepare for and did prepare for, so nothing happened in June. It was all prepared for and internalized by them, so that includes we even continued to do our HMIS functions, our CES functions, our PIT count functions. The PIT count, which HUD relies on, and in fact, during the period of the alleged suspension, HUD has accepted our numbers on the PIT count. We finished it. We conducted it in June. We finished it in July, published the numbers. We've run the HMIS system. That has 25,000 support tickets a year and 400 users across the county who rely on that data. Literally, a homeless person comes into a service provider and accesses through the service provider, uses lots of systems. Let me ask you this. I don't think you would disagree that HUD has the authority to, if it finds that one of its grant awardees is engaged in misconduct or if there's fraud and abuse and some of these allegations that they have levied against Lhasa, what is its remedy? What can it do? What would you propose that HUD do to be able to feel comfortable funding, to the tune of many hundreds of millions of dollars, an organization that it has an OIG investigation that says there are concerns? It doesn't have that, by the way, just to say. It doesn't. It opened an OIG investigation two weeks before the suspension. We believe the whole thing is pretextual, by the way. What it had to show in order to justify an immediate suspension is adequate evidence. The court just didn't reach that. If you were the merits panel, you would see we have complete arguments on why there is that. Wait, wait, wait. Counsel, let's back up. I don't think it's fair to say the court didn't reach that. The court said it has exhaustively addressed that issue and there is more than ample evidence to support corruption within Lhasa. I'm fine to talk about the second part of it, but I don't think it's fair to say that the district court didn't find that HUD was appropriate on the first issue. I would agree that Judge Carter is no fan, Your Honor, but he specifically said the court does not take up the issue of sufficiency. Only because he'd already addressed it. No, I think he didn't address it. He just simply went to immediate harm and he decided on two prongs that they had to satisfy that they could not satisfy the immediate harm prong. The entire opinion then turns on that. Let me ask you about fiscal year 2025. I just want to make sure I understand the facts so that there's a practical solution if Judge Carter implements that. I think that's good for the unhoused population in Los Angeles and should work out for LACOC as well. For the fiscal year 2025 contracts that haven't been executed, is Lhasa involved in all of them? Because Lhasa was the collaborative applicant. Sorry, this is the fifth rule, Your Honor. Lhasa submits these as a direct applicant. I also want to touch on this if I can, even with respect to whether or not these organizations would be renewal. They wouldn't because Lhasa applies on their behalf. There are 54 organizations. These are service providers. We submitted declarations. This is unrefuted and HUD doesn't even mention it in any of its briefs. These are domestic violence service providers. These are transitional youth service providers. These are disability service providers. Lhasa is the applicant. These are called sub-grantees. Lhasa has been doing this for decades. They prepare the application on their behalf. The declarations we provided say these agencies don't even have the resources to do their own application. Lhasa applies on their behalf, then gets the grant. Then when reimbursement requests come in, Lhasa submits those reimbursement requests on their behalf and processes the funds to them. All of these grant agreements are with Lhasa. I also want to defang this conditions idea because the Q1 and Q2 agreements were already issued by HUD. We dropped a footnote and said you should not consider the McKinney Declaration. It was submitted on the motion for stay and not just as a formality but because we didn't have a chance on a 24-hour ex parte basis to submit opposing evidence here. There is a process by which HUD imposes conditions. Q1 and Q2, those would have been done already. Those grant agreements have already been issued to Lhasa. Lhasa signed them and sent them back. Then the suspension came in and HUD refused to countersign. As to Q3 and Q4 agreements, we are now also 90 days past when those have been issued. If they were going to issue conditions, they would have done so already. What you're saying is that as a practical matter, in prior years, Q1 and Q2 would have been funded, meaning actual disbursement of funds by now. It's a two-step process, just so we're clear. I think this also maybe needs to be clarified. When the grant agreements are executed, the funds hit something called the ELOC system, but they're only drawn down as the reimbursement requests are processed. This, again, goes to the lack of irreparable harm here. HUD needs to sign these and make these payments processed. Lhasa can't continue to do these functions. Can you address what is the significance of the PI terminating on its own terms on October 27? Even if we were to deny the stay request by the government, what does this mean for what's going to happen between now and October 27 and what happens after October 27? Are you all seeking a permanent injunction at that point? The court did a merit hearing in February, so I presume, but again, I somewhat have to presume that the court will revisit the terms of the preliminary injunction at the October 27 hearing. What I believe Judge Carter intended to do is he found the suspension arbitrary and capricious because there was no immediate need for it. What he intended to do then was implement the status quo for this year, 2026, which in grant terms is fiscal year 2025, that the grants would continue to be paid as they were and that he would provide a soft landing maybe for the future. I think that's exactly what he's trying to do. That's what he's saying with the COC application and the $241 million. That's what he's saying with the grant agreements is 2026, which is FY 2025 funding should continue. FY 26 funding, which is loss of finishing the NOFO, which by the way, it began this process in April, and I will refer you to the Reed declarations. They're very detailed about what Jessica Reed's job is, which is to prepare all the collaborative application stuff and started back in April through all these very bureaucratic Brown Act compliance sets. Judge Carter said that should that process, which provided appeals for service providers who were denied, they had opportunities to come to the commission, that should continue. LASA should finish that application and go forward. Then the COC should have time to make a transition plan for the future into 2027. That's what he's trying to do. I believe at the October 27 hearing, that's what will continue to happen. He will hear from the COC on its future plans, but he will make sure that these ways in which LASA has done its functions, functions that are funded by the city, by the county, in a coordinated fashion to address the region's needs. The government's position, Ms. Axel, is that, well, we don't want to work with LASA anymore. There's good reason not to do it. We've implemented, which we're committed to do under the statute, this direct to HUD application process. That will be an adequate substitute because the 60% of the annual renewals of the ARD, HUD is going to comply with that. Whether it's statutorily driven or regulatory driven, they are going to comply with the tier one funding based on prior years priorities, I guess, set by LASA. How do you respond to that? Help me understand why that process is inadequate. Yeah. In prior years, this ratio was more like 90-10 instead of 60-40. In a region that's as huge as LA County is, that's a lot of money and a lot of organizations that will not be refunded, will not be funded again. The selection of that 60% is critical to allowing the region to actually plan ahead for this shift in HUD priorities. I know Ms. Myers is really prepared to discuss this as well on behalf of the COC. We would both to the declaration from actually the head of the LA County new agency. You're saying it's inadequate. You're saying that even the commitment by HUD to fund the 60% is still not good enough because they aren't going to honor the LASA priorities for where that funding goes for the tier one dollars? Two things. I think there is some misinformation here and it's still not been underlined. 54 service providers are not considered renewal applicants and they can't apply on their own. They're just out of business through this direct-to-HUD application process. Hold on. That's a third-party harm. Wait a second. Wait a second. You're saying that as to the statute, and this is why I was pressing the government, but the government has represented that they are going to do that. Do you disagree that the government's going to do that? Correct. They can't the way they set the system up. I do feel like the litigators here don't really know how this works. These people really don't even have a number to apply as a renewal applicant. LASA was the renewal applicant. When there is a new collaborative applicant, that person can step into LASA's shoes and do that. No, but they can do it direct. They can do it direct. They can do it direct. Why can't they do it direct? It's not how the system works. It's not how the bureaucracy is set up within HUD. You literally have... Let me give you another example, Your Honor, that you can verify yourself on the web. Hold on. Hold on. Let's just take a break because you're going to have time, but you're talking really fast, and I'm not sure you're answering the question. All that I understand this to be is the government... No, they may be not telling the truth. I don't know, but they are saying, look, we are going to go to those entities that previously were funded, and we are going to prioritize them, and they're going to pay them directly. I don't understand why you say that can't happen. They have not set up, Your Honor, actually the bureaucracy that would allow people to do that, and it's very difficult to do. You literally have a number. You have an access to the system. There are some organizations like the LA City organization that apply alone. They have their own numbers. They have their system. They would be considered renewal. The people under LASA would not be considered renewal, nor do they even have... Help me understand why it matters that they're considered renewal. Because in order to provide that region stability, which HUD is saying it's going to provide by doing its own picking, you have to get to that 60% renewal amount. I was going to point you to the Mahan Declaration, which shows how important this is. Which declaration? Sarah Mahan. I think COC did make that part of their appendix. This is a super complicated system. Typically, HUD has funded mostly permanent supportive housing. Mostly the city and county have picked up transitional interim, getting people immediately off the streets. HUD intends to shift priorities this year, both in terms of the number of renewal applications and in the type of project to be renewed. If the region only finds out in December or January what that is, that means service providers immediately dropped with no time for the city or the county to rejiggle their web of support to make all this work together. That's why it doesn't work. Congress intended for this, for the region to have months of notice through the application so that they can make their own changes. Hold on. Hold on. You just made a pretty broad statement. You said Congress intended to have months. What leads you to believe that? That's the HEARTH Act itself and the way it structured the COC program, Your Honor. I believe that. That's how they structured the program, but they've also said that when... I know we have a question about whether immediate action is required or not, but there is a provision by which they can go direct to funding. So, I don't think it's fair to say that Congress didn't contemplate this problem. Well, I think... Look, again, we think that Judge Carter was absolutely correct and deserves discretion on the fact that if lawsuit is not properly suspended, if there's an APA violation, then he can throw out the remedy as well. But the NOFO itself also had provided an opportunity for the COC to substitute a collaborative applicant, therefore, to actually meet what was Congress's intention that the region plan. Can I ask you about that? Because you said... I understand you believe Judge Carter got that right, but can you cite me to any authority that says that because an agency has not taken action in the past, it cannot, therefore, take action in the present for past violations? I don't think anybody's saying that, Your Honor. I don't need authority for that. Well, no, that actually is exactly what Judge Carter is saying. Judge Carter is saying that because you didn't take action in the past, you are preempted from using those past violations for the current suspension. Judge Carter is saying that given the past history, which all of this only has to do with administration, the prior history of grand administration issues, they could not point to alleged new issues and say somehow that requires immediate action. Why is that required? Can you point me to any case law that says that a new, immediate harm that didn't preexist a year ago, but it's not an immediate harm? No. Okay, but can you show me any case law? Because I didn't read Judge Carter to cite any case law. Can you show me any case law where an agency is precluded from relying upon past violations? I wouldn't say that there's case law that they're precluded. Nobody's arguing that. Judge Carter said that, Ms. Axel. Again, Your Honor, respectfully, I think what Judge Carter said is I don't mind- But you're saying you don't have any case law that says that they're precluded from acting on prior violations or prior- I think there is a case, organized kill versus the case of USDA 795S3-956 that says an agency can't discard prior factual findings without a reasoned explanation. I think that goes to the fact that HUD, in addition to having this information in the past, also made, and I want to underscore this, in May, it made new grants to LASA. It issued those award letters. Under the NOFO, the 2024-2025 NOFO, which was in effect, HUD had to consider all the very same factors, LASA's ability to manage its programs, LASA's fixed fiscal responsibility, all the same factors are spelled out in the NOFO, HUD considered them in May and disregarded those findings in June after just awarding money. So, I think we do have that authority that says they can't just disregard their recent factual findings and then claim this sort of immediacy about them. All right. Thank you, Ms. Axel. We've taken you, again, well over time. So, unless your colleagues have any additional questions, let's move to Ms. Myers. Thank you, Your Honors. And may it please the Court, Shala Myers on behalf of the Los Angeles Continuum of Care. HUD's immediate suspension of LASA, which has effectively led to the disbanding of the COC for purposes of the collaborative application process, has caused unprecedented and significant disruption to the region, as evidenced by the oral arguments. I still don't quite understand why LACOC can't designate itself as the collaborative applicant. In the shoes of LASA, that seems to be setting aside whether HUD acted suspiciously and arbitrarily in suspending LASA. There's a long history of mismanagement and problems that Judge is so short that can LACOC just step in instead of finding another entity saying, okay, well, we know what the collaborative applications look like. We know what the priorities are. We'll serve as the collaborative applicant for fiscal year 2026 and then make whatever decisions for 2027 at a later point in time. Can that happen? No, Your Honor. Simply because the Continuum of Care is a group of stakeholders who have come together to, importantly, for purposes of this, set the priorities for the region and engage in the collaborative coordinating process that Congress requires. It does not have the administrative capabilities to serve as a collaborative applicant itself. Your Honor, and importantly, that does not mean that the LACOC was not in a position throughout this entire time to designate a new collaborative applicant. And I want to address... In terms of designating a new collaborative applicant, LACOC indicates that it's actively looking for one and expects to have that done by the status conference at the end of October. Is that right? You'll have that done before October 27th? Yes, Your Honor. And importantly, Judge Carter's preliminary injunction requires the COC to seek a collaborative applicant for FY 2027. But the COC has, since it received the remedial measures, order from HUD, been undergoing the process of designating a new collaborative applicant and, in fact, made that representation to HUD in its response to the remedial measures in July of 2026 in the 30-day window that it was given to respond and specifically requested the opportunity to designate a new collaborative applicant. HUD responded by indicating explicitly that if remained suspended, it would move forward with the direct-to-HUD application process. So, the representation by the government... It didn't give LACOC an opportunity to bring in another collaborative applicant for fiscal year 2026? Absolutely not. The COC has been requesting that as an alternative since the COC... Explain to me why HUD's preferred approach of direct-to-HUD applications would be inadequate. The direct-to-HUD application process, with all due respect to the government, is not simply a matter of one-for-one replacement. The collaborative application process allows a region to engage in coordination of the dedication of resources. They have been undergoing that process. The LACOC sets the priorities for the region, and LAHSA puts together the collaborative application. As Ms. Axel pointed out, that has been ongoing since April to determine what the priorities are. HUD is only funding 60% of the renewal projects, which means the COC is in a position of needing to replace 40% of its funding, and they have been working with funders throughout the region to prioritize which renewal projects will be put forward for funding and to replace and fill in those gaps. That has been part of the collaborative application process this year, which is unprecedented, has required a considerable amount of collaboration, and that's exactly what Congress intended. Council, you keep saying as if this is unprecedented, but you were never guaranteed that 40%. That's what's creating the hardship here. In fact, you might still get the 40%, right? Your Honor, we are talking solely about the 60%. If the collaborative application is allowed to be submitted on behalf of the COC, projects will know tomorrow, presumptively, that they are funded in FY 2026. They will know tomorrow. The direct-to-HUD application process means those projects, 140 of them, have to apply directly to HUD, starting who knows when. But Congress contemplated that. Everybody's freaking out about this. I have no doubt that I do not understand everything on the ground. Let's just take that as a given right now. But Congress provided for this. We got the whole problem of whether the APA was violated. I understand that. But this idea that, oh, this is unworkable, Congress specifically said this is how it could work. It might have been wrong. Maybe Congress had no idea, the same as I have no idea. But that's what Congress did. How HUD is using the remedial measure process here is unprecedented and likely not- That may be. That may be, meaning it's never been used before. But it's also likely not what Congress intended because the COC process allows, and the NOFO allows, a collaborative application or a collaborative applicant to be replaced. So, if, in the event that a collaborative applicant cannot serve- Hold on, counsel, because this is kind of important. I mean, you say Congress contemplated. Congress didn't put in the immediacy requirement. HUD put in the immediacy requirement. So, Congress said, look, if a collaborative provider, sorry, I've got the words wrong, if a collaborative provider cannot function, I don't think anybody's doubting, except for LASA, they still think they can do it. But nobody else in the entire world thinks that LASA can do it. So, they've met the statutory requirement and the statute says then HUD can go to direct to the grantees. Importantly, your honor, the statute explicitly provides a 30-day response period and perceives this as remedial measure. Hold on. I'm very interested in this. Where's this 30-day response period and what are you talking about? It is in the same provision that HUD is citing with regards to the remedial measures. Where Congress allows the HUD to implement remedial measures, it provides a 30-day response period for the COC to respond to the proposed remedial measure. And in that time, the COC responded and requested the ability to replace the collaborative applicant. What HUD is effectively saying here, your honor, is- Well, hold on. I think this goes back to Judge Wynn. I think everybody's asked this question. Can you replace the collaborative applicant in 2026? Yes, if the COC is given sufficient time to do so. And your honor, this is where- That's what your complaint is, is that it wasn't done in January. It was done in May. And so, you were put behind the eight ball. Even worse, your honor, it wasn't until HUD's reply brief that HUD has indicated its willingness to allow the COC to replace the collaborative applicant. The record on this point is clear. The COC went to HUD during that 30-day remedial measure period and asked for the opportunity to replace the collaborative applicant. HUD was explicit that it would not allow the COC to replace the collaborative applicant. It was moving forward with the- Because this is a new issue, and I think it's actually a pretty important issue. And I got to be honest, I don't know where to go from here. Are you saying, Ms. Myers, that the representation by government counsel today, that they're not ruling out- I think he said multiple times the phrase that he continues to use is, we're not ruling out the possibility that LACOC can stand in the shoes of LAHSA for purpose of the collaborative applicant. But I think it will be very difficult, or for our practical reasons, it may not be possible, but we're not ruling it out. Are you saying that that is a change in position that initially when LACOC sought to do that, the government, HUD expressly denied that request? Well, your honor, that is exactly our position. And it's not that HUD denied it, it's that HUD did not respond to it, and rather make publicly that it was moving forward with the direct to HUD application process in any circumstance in which the government found that the COC did not have a relevant collaborative applicant. And your honor, I think this is where HUD has stepped far outside the bounds of what Congress- Is that your best argument for arbitrariness and capriciousness, is that the provision allows LACOC to bring in a substitute collaborative applicant, but the government refused that. And because of that, now the timing is too tight for LACOC to bring in the collaborative applicant for fiscal year 2026. Is that your argument? Our best argument with regards to arbitrary and capricious is that HUD failed to take into account the implications of its suspension on the region. And your honor, it's only- Can I ask you about that? Can I ask you about that? Because I understand that's a practical concern. Judge Carter hammered that down. Where is that in the statute that HUD has to do that? That HUD has to consider the relevant factors? It's in the administrative procedures after all, and this is a straightforward application- Whoa, whoa, whoa, whoa. That's not true at all. Where is it in the statute? What it says, the only requirement that I read in the statute is that HUD has to make a determination that the collaborative applicant is unable to comply with its duties. You're now saying there's a separate part. It doesn't come from the APA, Ms. Myers. Where in the statute does it come that HUD also has to consider the... By the way, I think they may have considered it, but I want to know where in the statute it says that that something they have to do before they go direct to the applicant. It's in a 30-day provision that allows the COC to respond, and also the fact that these are remedial measures, and that's important. The COC could have cured losses, inability to serve as a collaborative applicant. And that's the important piece of this. It cannot be the case that intended that if a collaborative applicant cannot serve, that the COC is immediately out of compliance. And we know that- Ms. Myers, I'm totally with you. Ms. Myers, I'm totally with you on your policy arguments. I'm totally with you. I want to know. You say Congress couldn't have conceived that. That's great. So show me where Congress said that. I'm going to go look at that 30-day provision, but I don't think it says what you say it says. Your Honor, HUD itself contemplates that in the event that a collaborative applicant is not able to serve, that the COC can replace the collaborative applicant. That is in the NOFO. That is on page 58 of the NOFO. And it was also in the notice provision. Congress gives HUD the authority to put forward a NOFO related to it and set forward the requirements. The requirements provide that HUD will allow the replacement of a collaborative applicant if, as here, the collaborative applicant is not able to serve. Mr. Shaw said that LACOC had three months to designate a collaborative applicant. And it sounds like that might have been in time for fiscal year 2026. Are you saying that based on the government's prior position, that it was going to proceed to provider applying directly to HUD, that because of that, you didn't designate a collaborative applicant in time? Is that some sort of like a reliance interest argument? No, Your Honor. HUD was explicit that it was moving forward with remedial measures and a direct to HUD application process. No, I understand that. But Mr. Shaw said earlier in today's argument that it would have been willing to take a collaborative applicant. And he mentioned specifically the three-month time period. Right? And, Your Honor, this is a problem with HUD shifting positions in this litigation. That's what I'm asking you to clarify. Is it because LACOC relied on that prior representation that HUD was going to go directly to the application process that's provided in the time? Because the moment I agree, it's too late now. Right? Given the timing, it's too tight. Absolutely, Your Honor. And it is not so much that the COC did not scramble throughout this entire time period. They've been working diligently to replace the collaborative applicant. But HUD has been explicit that the LACOC could not replace the collaborative applicant. They have explicitly stated- You have a substitute collaborative applicant that can step in now because it seems like HUD is willing to consider that, setting aside how tight the timing may be. Yes, Your Honor. The COC is in the process, irrespective of the preliminary injunction, the COC is in the process of going through- Again, this is a Brown Act-obligated body. It has a charter. It is going through the process of designating a new FY 2026 collaborative applicant who can stand in the shoes of LASA to submit the application if there's sufficient time. The reliance issue comes in, Your Honor, that HUD has made this representation and changed its position now at a time when it says it's too late for the new entity to submit the application. Where can we find this stuff? I don't want to short shift your argument, but I got to be honest, this is the first time I'm hearing it. So, where can I go to read about this? Specifically, HUD's position relative to the collaborative application? Yeah. HUD made that representation on- Just tell me where I can go. Just tell me where in the record I can go. Sure. It is in its court filing to the district's court that was submitted on July 21st when it informed the district court that it was moving forward with remedial measures if LASA remains suspended. Also, we cited to the COC the continuum of care website, which is HUD's representation and its NOFO. We also provided the NOFO in the record. Your Honor, we're happy to brief this issue. Again, literally in the reply brief, it's the first time that HUD has represented anywhere- The reply on the stay. The reply to the collaborative application. The reply on the stay is the first time? Exactly, Your Honor. The reply to this court on the stay. And Your Honor, that's exactly the problem here. And I would point the court to- Ms. Myers, could you finish that sentence? In the reply brief, it was the first time that HUD has made any representation that the collaborative applicant could be replaced by LACOC. That is the first time ever in the course of this litigation that HUD has made that representation. Ms. Myers, I just want to ask a logistical question, which is, if way back when, notwithstanding HUD's explicit statements that it would not accept a substitute collaborative applicant, LACOC had made a decision to proceed anyway with applying itself or putting forward a substitute applicant, what would be the steps to do that? What would you have had to do? Is it as simple as sending a letter stating, here is the substitute collaborative applicant? Is there actually a process that you have to go into some sort of computer system and HUD has to allow permissions and an application number to do? I'm just trying to understand whether- I mean, it's one thing to not proceed because you're being told it's futile. We're not going to accept it. It doesn't matter. And it's another thing if it is practically impossible to actually take the steps to do that. The LACOC would have and is prepared to submit a letter to HUD and to the field office. And then HUD has to take administrative steps to actually change the permissions to allow the new collaborative applicant to proceed on behalf of the COC. So it's all back-end work that HUD has to do in order to actually apply for- allow the COC to switch the collaborative applicant and the new collaborative applicant to apply. There are also significant administrative burdens related to switching. The collaborative application is an arduous process. It is required and the planning for this started in April in the COC region. And so the COC was prepared to adopt a new collaborative applicant and remains prepared to adopt a new collaborative applicant had that been an option available. But absent the availability of it with the stay in place, loss of proceeding with a collaborative application made significant sense. Had HUD met with the COC, responded to the COC's remedial measures response and said, yes, you can proceed. We were- you're changing our position. You can, in fact, proceed with a new collaborative applicant. Then the COC would have moved forward with its proposed collaborative applicant. So as you stand here today, your- your- the request that- for relief that you have asked from Judge Carter and then from this panel with respect to the injunction is that your preference is still to have LASA continue in that role because of the, you know, the difficulties in onboarding an entirely new collaborative applicant. But if that is a sort of your second choice would be to implement a substitute collaborative applicant. Those are the- is that a correct summary of your position? Exactly, Your Honor. What is at stake right now is eight days. There are eight days before HUD has set the deadline to apply for 200- To direct to HUD. For the direct to HUD. No, for the 4.1 billion dollars in funding. HUD has set a deadline of September 30th. And, Your Honor, just as a minor point, but Judge Nelson, I do want to appreciate your point about the 239 versus 241. The 241 number came from- that was HUD's original allocation. They did a recalculation in the interim period that got to the 239. They released an amendment to the prior calculation. Do you agree- do you agree that it's 239? I'd like to, like, find some commonality here on any issue. Do you agree that it's 239 and not 241? Yes, Your Honor. This is- this is the shifting nature of what is happening at HUD, is that this is- it was a recalculation that HUD issued. Okay. Thank you for explaining that. All right. Thank you very much. Unless my colleagues have any additional questions for Ms. Myers, we can go back to Mr. Shaw. Can I make one final point, Your Honor? And I think this is an important piece. Go ahead. But, importantly, last week, the United States Supreme Court in the United States Postal Service versus California dealt with a very similar issue and declined to issue a stay of a preliminary injunction. And Justice Kavanaugh's position and concurrence in that case is extremely helpful, I think, for purposes of this. Justice Kavanaugh said, while the- while the regulations themselves may be legal, this is effectively a timing issue, is that the U.S. Postal Service's actions were arbitrary and capricious because the state and local governments did not have time to implement the regulations without significant disruption. And, Your Honor, that's exactly the point here. We are not taking issue with the potential that loss that could be debarred down the line, but this is simply here on a stay motion of a very limited injunction that will stop the chaos that is occurring in Los Angeles as a result of the suspension. So, I appreciate the extra moment to make that point. Thank you. Mr. Shaw, can you- Oh, thank you. You addressed the argument raised by Ms. Myers in terms of HUD's almost very immediate decision that LACOC would not be given an opportunity to bring in another collaborative applicant. No, I mean, that's just simply wrong. I mean, HUD has never made a decision that LACOC cannot replace its collaborative applicant. And I, as far as I'm aware- I think what she's saying is that HUD gave notice of its intention to, or immediate suspension of LASA. There was a 30-day period during which LACOC could have responded, but that HUD took the position, I don't know if it's in court or directly to LACOC, but at a minimum, she said in a filing on July 21, the government took the position that if LASA remains suspended, it would proceed to the alternative of requiring providers to submit direct applications. And so, I guess if you piece it all together, there wasn't an opportunity within that 30 days for LACOC to come in and say, wait a minute, give us, I don't know, 30 days, 45 days, 60 days to come up with a substitute collaborative applicant. So, let me break that down. So, the June 11th, I'm sorry, the June 18th letter did give LACOC 30 days to respond regarding the remedial measure, and I believe LACOC, in fact, did so. I think what they are relying on is sort of the distortion of what the government has said. I mean, the government- Did HUD respond to LACOC's July 17 letter? Yes, they did file a response to the government. Now, I don't think the government has- No, no, no, yeah. Yeah, that's what I'm asking. Did the government respond to LACOC's- No, and as far as I'm aware, there's not a document in which the government has directly responded to that letter. All of the statements that I think Ms. Myers is referring to are statements which are consistent with the June 18th letter is that this is HUD's current plan. We are going to proceed with direct to HUD. That does not mean that LACOC cannot or is precluded from nominating a replacement collaborative applicant. I mean, that was the plan outlined in the June 18th letter, and HUD was planning to proceed with that, but they never, ever excluded the possibility of a replacement collaborative applicant. That just simply is not correct, and there is no document that I'm aware of anywhere in the record or on the web or anywhere that makes the representation that LACOC cannot proceed with a replacement. As a practical matter, let's say that we denied the state pending appeal, perhaps with regard to money. We'll have to sort that out because even LACOC adopts a narrowing construction of what Judge Carter may have meant by his order to immediately disperse the funds, and HUD implements the direct application process, which sounds like it's barely getting started right now. And then at the status conference, the LACOC comes into court before Judge Carter and says, now we have a substitute applicant. Can HUD pivot then from the direct application process to accepting the substitute applicant? Or are you saying that would work out? I mean, I think that the main difficulty, the logistical difficulty here is primarily on the collaborative applicant's end as opposed to HUD's end because all the work has to be done by the Just to reiterate what you just said, at page 17 of Judge Carter's order, he says the consolidated application typically takes several months to prepare. Is he right or is he wrong about that? I mean, unfortunately, I'm not familiar enough with the process to be able to speak to general timelines, but, you know, it is an involved process and normally requires running a local funding competition and then preparing a consolidated application. So, yes, I do think that is the case. Judge Carter's concern, right, that there's no way they can find a substitute collaborative applicant. So, now we're really, as a practical matter, from Judge Carter's perspective, and it sounds like he's right about that, either go with the direct application process or allow LACOC to submit for fiscal year 2026 its application. You know, as a practical matter, that may be, those may be the only two practical choices. But, again, I would just point out that LACOC did have a long period of time in which HUD has never said that it was not allowed to nominate a new collaborative applicant. In fact, did you invite, did HUD invite LACOC to submit a substitute collaborative applicant? I mean, I'm just really troubled by this, what seems like a gotcha argument, which is, you know, we're not, we're going to set forth our priorities and say we're doing it this way, we're suspending LASA, and we're moving to the direct application process. Then you get a letter from LACOC that says, we don't agree with that, we object to that, there's all these logistical and practical problems, we'd like to have the opportunity to submit a substitute collaborative applicant or step in to that position ourselves. There's no response whatsoever from HUD. I think you've acknowledged that there was no response. And then, but you're sitting before us today arguing, well, they should have proceeded to do that anyway, but if they had, we, you know, it's unlikely, we're not ruling it out, but logistically and practically, it's unlikely that it would have been timely and that it's possible on the given timeframe. So, it just, I'm curious to know if HUD is in search for a solution to the problem of its own making, did it reach out to LACOC and try to come up with the solution or invite them to submit an application for a substitute collaborative applicant? Not as far as I'm aware, but I would just point out, first of all, that again, this is not, you know, HUD is not coming up with some process out of the blue to replace the collaborative applicant. I mean, this is a process that Congress has specifically authorized for this very situation where LASA has been suspended, cannot perform its duty in applying for funding by virtue of the suspension regulations. And this is specifically what Congress thought would happen with that, you know, applicants would go directly to HUD and ask for funding. So again, the idea that this is some crazy solution that HUD came up with and is using it to sort of, you know, or some form of pretext is simply incorrect. I agree with you, Mr. Shaw, but can you answer two questions? Number one, has this ever been used before? Has this direct to funding ever been used before? And secondly, can you address the arguments that are made that HUD is just judge Carter mentioned some of this and we've heard it today that, you know, HUD can't do this. Yes, I'm happy to. Not statutorily, but pragmatically just can't do it. Yes. So I'm very happy to speak to that. As for the first question, I'm not aware of that. I personally am not aware of any instances in which it's been used before. But certainly, there's actually substantial evidence in the record about the practicality of the direct process. And actually, I would point the court to the dentry at docket 64 in the district court docket, which is a letter from the city of Los Angeles. And at page four, the city actually says, and I quote, the city views the direct applicant approach outlined in the prior paragraph as a potential temporary solution to ensure continuity of care in the city, should the court not enjoin HUD suspension of lawsuits. So certainly in the city's view, this is a viable solution. We also explain both in our brief and in the declarations below why this is actually feasible. You know, first of all, from HUD's end, I mean, HUD is in the business and has been in the business for decades of, you know, accepting applications, scoring them based on rating criteria, and then awarding funding accordingly. I mean, this is HUD's bread and butter. So obviously, HUD- And it's also said that the process is complicated. And obviously, you're talking about a lot of providers here. Is there a process that's set up where providers can directly apply without the need to get a number from HUD or anything like that? And the mechanics of it has already been set up? Or is it still in the process of that? I'm happy to speak to that. I mean, I think the HUD has tried to make this process as easy for applicants as possible. And first of all, I would just point out, you know, these applicants already have to apply through a local funding competition. So they already, just in the normal course, even if LASA were still a collaborative applicant, they would have to prepare an application and go through that process. So really what this is doing is just taking out the middleman and having these applicants submit their applications directly to HUD as opposed to going to LASA. Furthermore, I mean- Again, you don't have any indication for the panel as to whether applicants are flooding in. I think it's just open. I don't think applications have been received yet. So I don't think it's actually occurred yet. But I would also point out that HUD, by technical assistance, has been preparing step-by-step guidance for applicants and stands ready to provide technical assistance to any applicants, which, you know, it already does just through the CRC competition more generally, but also specifically here is able to provide applicants technical support to ensure that they're able to get their applications in. So again- If LASA is allowed to remain the collaborative applicant, what's the deadline? I'm sorry, the deadline for a for a application, a consolidated application? Right. I think, unfortunately, I don't have the exact date, but I did want to make clear on in this that certainly to the extent that a direct to HUD process is used, HUD is considering giving an extension of the application deadline to applicants in the LA area because obviously, you know, there's been a lot of uncertainty about what's happening here. So that's something that HUD is currently considering. You're saying if you go down the direct to applicant route? Yes. So that's something that- Without an extension, what's the deadline for the direct to HUD application process? Currently, you know, without an extension, it would be the same as the deadline for everyone else. And I'm actually looking at- We still don't know what that is. Is that in a week or- The deadline is September 30th. September 30th. Which is the current deadline. Regardless of whether it's a collaborative applicant or not. Right. But again- Would you give an extension? I mean, what I'm trying to figure out is what do we need to decide and when? And I mean, you came in and said, hey, you wanted relief by September 14th. We gave an administrative stay. Now we're grappling with the merits. Do we have to act by September 30th? I mean, I think- Now we're dealing with just the stay motion pending appeal. Now- Right. If we get to that, we can address mootness when we get to the hearing on the appeal at the preliminary injunction. But things are moving very, very quickly. So that's why- That's exactly right. What the deadline is. Because at this point, it sounds like if we grant the stay pending appeal, in effect, it's going to go to the direct to HUD application process. If we deny the motion pending appeal, then LAHSA is going to have to be prepared to step in and meet that September 30th deadline. Yeah, I think as a practical matter, that's correct. As a practical matter, that's what the panel has to grapple with at this point, right? I think that's correct. I mean, obviously, time is of the essence for everyone in this process. I want to be clear about where- because this is very- It's the collaborative applicant now that is the time is of the essence. The money actually is not, because the money is not going to go out until February. Well, end of January or February. And I thought this was being driven by the money, but it's actually being driven by the collaborative applicant process and the deadline on the 30th. And I think all of those, unfortunately, are relevant deadlines. I mean, obviously, there needs to be enough coordination in the process so that whoever is supposed to apply can get their application in. I mean, again, as I was saying, I think HUD is considering an extension of the deadline for- Well, but I'm confused. LAHSA presumably has already been preparing its application because that was what the court- entered its injunction. So, anyway. All right. Yeah. My concern, Mr. Shaw, frankly, is that just as a practical matter, with September 30 being the deadline and with the direct-to-HUD application process just getting started, that the providers in LA would have the bulk of the country's providers wouldn't be able to pivot in time to submit an application, not to mention that the priority set up in prior years and outcome going to be all messed up. But I understand. I understand your argument. So, unless my colleagues have any additional questions, I really appreciate all counsel for appearing and providing very helpful clarification. LAHSA, could I speak to the deadline? Well, no. Unless it's not September 30. Is it September 30 as it currently stands? It is, but there is also HUD processes that kick in even a week before. So, you know, LAHSA has to submit the list of recommended providers to the LACOC- No, I appreciate that. And that's my point, right? Like, LAHSA would be the only one that's ready to go, it sounds like. All right. Does Melvin justify any additional questions before we conclude this hearing? No, thank you. Thank you very much again to all counsel. The hearing concludes and we'll issue our decision. We'll try to be as speedy as we can, given the timing of it. But you really put us in a position of trying to grapple with a very complicated factual situation in short order. We appreciate your time for matters with it. Thank you. Thank you. This court for this session stands adjourned."
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"stt_transcript": "So our final case for oral arguments today is 525-0898 Boyer et al. v. Illinois Pollution Control Board et al. Is it Mr. Jacober? I pronounced that, did I get it right? And we've got Mr. Neumeister, correct? Yes. I believe we've had Mr. Neumeister a couple times lately if I recall correctly. It's been my pleasure to be here several times, thank you. I don't know if that's a good thing or not, but... Counselor, are you ready to proceed? Yes, I am. Go right ahead. Okay. Before we get started, I should add, I believe... I think counsel is here, or is there... Is there anybody here on behalf of... Is it Copper Fire? Or is that your client? No, I represent the Boyers, Your Honor. You got the Boyers, okay. I can speak to that very briefly. I represent the Illinois Pollution Control Board only. I received a phone call, and I told this to opposing counsel already, I received a phone call when I was parked outside the courthouse this morning from Copper Fire, the other co-respondents' firm, and they said that they would be standing on their briefs and not having anyone here today. Okay. I know they didn't file the acknowledgement or argument that I saw, but that's everything that everyone knows. And I appreciate that. I just wanted to make sure procedurally everybody knew what was going on for the record. So thank you for giving that information to us. Thank you. Okay. With that, go right ahead, counsel. Thank you, Your Honor. May it please the court, counsel for the Illinois Pollution Control Board, my name is Matthew Jacobo, and I represent Doug and Jerry Boyer, the appellants. As an introduction, this case is about a bar and restaurant that plays live music from large amplified bands at levels that would be equivalent to what you would hear at a concert at a stadium five nights a week and two times during the day of the week, but included in those five days. So they play live music on Wednesday, Thursday, Friday nights, all day Saturday and Saturday night, during the day on Sunday and Sunday evening. And this location, Copper Fire, shares a wall with the home of my clients. These are commercial-type buildings in downtown Belleville, Illinois. And my clients bought their building and built their loft in this building before Copper Fire existed. They also own a business that sits on the first floor, the street-level floor of that building. These are old brick buildings. We're here for one simple reason. The respondents have refused to turn the live music down at Copper Fire to a reasonable level that would not interfere with the Boyers' enjoyment of life. So for over seven years, the Boyers have been forced to contend with the noise pollution from the amplified music at Copper Fire. Since Copper Fire moved in, the live music has disturbed their daily lives, disrupting their sleep, their ability to watch television, operate a peaceful work environment in their business, read books, or even have a regular conversation in their home. The unrebutted evidence from every witness in this case, including the Boyers, their family members, their neighbors, other business owners in the downtown Belleville area, and even the respondents' own customers, all confirms that the amplified live music unreasonably interferes with everyday life. The Board's conclusion to the contrary is against the manifest way of the evidence. There are four critical errors in the Board's Section 33C analysis that we outlined in our brief and I want to talk to you about today. First, the Board invented some arbitrary two hours per week framework to minimize the 18 hours of weekly interference down to two hours, deciding that the right to peaceable enjoyment of their home only begins at 10 p.m. This framework is found in no statute, no regulation, no precedent in the state of Illinois, and it also defies all logic. First, telling the Boyers when they can go to bed, but also assuming that the Boyers don't want to enjoy their home at any time before 10 p.m. It treated decibel measures as a dispositive bar despite the courts and the Board's own precedent holding that testimonial evidence alone can establish noise pollution. It credited Copper Fire's self-imposed limits as compliance when the limits exceed the Boyers' expert recommendation, the only expert who testified in this case. Further, those limits by Copper Fire's testimony are unenforced and the limits are admittedly violated at the owner's discretion, at Copper Fire's owner's discretion. And it found evidence of economic and social value of Copper Fire without being presented with any evidence of such. We're asking that the court reverse the Board's October 2nd opinion and order and remand for proceedings consistent with the manifest weight of the evidence. Standard review is manifest weight of the evidence. We contend that the Board's decision is against the manifest weight of the evidence, and the case law says that that burden is overcome when the weight, when the opposite conclusion is clearly evident from the evidence that was presented. Section 33C is the, as I outlined, is the standard through which the Board analyzed this issue, and that's found in 415 ILCS 5-24, which prohibits noise that unreasonably interferes with the enjoyment of life. The unrebutted testimony and statements of eight separate witnesses established that the amplified live music from Copper Fire played 18 hours per week through a shared wall unreasonably interferes with the Boyers' sleep, conversation, ability to watch television, read, and enjoy their home. We outline all of this evidence in our brief. If the court would like me to go through that, I know you guys aren't big fans of going through evidence in an appellate argument. I just want to get some confirmation on the decibel levels, and I know you said that's not dispositive. The Board can rely on the testimony that has been presented in reaching its decisions, but here your client did have an expert who did testify that the sound level was tested in your client's loft. Is that correct? That's correct, Your Honor. And it never exceeded 39 decibel level. Is that accurate? That is accurate, Your Honor. And then I believe there was testimony that your client's expert tested the sound in the hearing room when everyone was silent and that level was 46 decibels. Is that accurate or not? When you say the hearing room, you mean in the amplifier? I understood that to be, maybe I misunderstood the record here, in the hearing room where this hearing took place. Oh, I'm sorry. Yes, he did do that, and that was below. And it was 46. So the maximum level in your client's loft with the music being played was below that. That is correct, Your Honor, but I'd like to contextualize those findings. So decibels are a very confusing measurement, and they are counterintuitive because they are not linear. So saying that 39 decibels or 10 decibels, I'm sorry, let me back up. The World Health Organization's recommended decibel level for sleep is 30 decibels. 39 decibels, while that doesn't sound like a lot more above that, is actually two times as loud as what that standard is. A 10-decibel increase is perceived by the human ear as twice as loud. And I can't understand that. I'm not a scientist, but that's what the expert testified to. He further testified to that while, yes, the hearing room was 47 decibels, there was air conditioners running, there was a lot of equipment around the room and everything, there's a difference in that level of sound versus a level of sound that is based on persistent and repetitive amplified music, as opposed to white noise, essentially. White noise is more tolerable for conversation or for even going to sleep than amplified music is because of the percussive effects of amplified music, which there's testimony that lawyers could feel the music inside of their heart. They could feel the percussive effects of the music. Did I answer your question? Yes, thank you. Thank you, Your Honor. Further, decibels are not dispositive. Numerous cases from the Illinois Pollution Control Board or from the Court of Appeals find that news that's based on testimonial evidence without numeric exceedances have been sufficient to find that sound has been a nuisance. Those cases are Rohde versus LTD Commodities. That's a Court of Appeals case from 2005. Discovery Soft Group versus the Illinois Pollution Control Board case, another Court of Appeals case from 1995. Pfizer versus Henry's Double K LLC. That's an order from the Illinois Pollution Control Board from 2021. Charter Hall Homeowners Association versus Orville and Transportation Systems, another Pollution Control Board case from 1998. In all of those, the Pollution Control Board or the Court of Appeals found that with no expert, no measurements, no decibel readings, just based on the evidence, and I would posit less evidence than was presented to the Pollution Control Board in this case, that the noise being created by the offender had an unreasonable impact on someone else's enjoyment of life. The second factor of 33C, where we believe that the Court erred, is the social and economic value. The Court simply found that Copper Fire has social and economic value, and weighed that against the Boyers, against the manifest way of the evidence, because there was no evidence presented whatsoever by Copper Fire. The only evidence, if you can characterize it that way, is testimony from the owner of Copper Fire that small businesses have value, and that this small business would be impacted if they had to turn the music down to 85 decibels inside of their location, which the expert witness said would positively impact the decibel level in the Boyers' loft. This Copper Fire, I'm assuming from the record, is located then in what's called Live Music Row. Is that what it's referred to as? I don't know that that's an official designation, but there are people who call the Main Street in Belleville Live Music Row. There are a number of bars and restaurants that have live music as part of their offering to their customers. Okay, so live music is an attraction to people in this particular area. Correct. Now, is Copper Fire the closest live music venue to your client's building? Yes, it is contiguous. They share a wall. They have two separate buildings, but their walls butt up to one another. Most notably, Your Honor, Copper Fire is the only live music venue in downtown Belleville that shares a wall with a residential home. I was about to ask that same question. I think you stated earlier that the Boyers purchased and then made their loft prior to Copper Fire beginning their business. They had priority. Going back to what Jessica Bollinger said, this is that area off from the square that there's lots of things going on in that downtown area. Yes, I'm sure you're familiar with where the courthouse is. They have the roundabout in front of the courthouse. This is the area that runs, I'm horrible with directions, I think to the east. I think you may be right. My question is, was this area known as this live music row, or was there evidence presented that this area was like this prior to the Boyers taking ownership of this piece of property? There was no evidence either way presented to that effect, Your Honor. There's been a lot of development in downtown Belleville. What was presented, though, is the Boyers purchased their loft from the developer who was developing this historical building, went bankrupt, and they purchased the entire building and then finished their loft in that building. That was kind of the first development of redeveloping Main Street in downtown Belleville. I think you can read into the record that the live music didn't come until later. As part of the record, almost all of those other live music venues testified that if they had a complaint, they turned their music down. They do everything they can to make sure that the music that they're having doesn't interfere with anyone else. Do we know from the evidence what their sound levels were? I know there's evidence here that Copper Fire reduced the sound level to a maximum of 92 on weekends and 88 during weeknights, or at least that's what they were requiring their bands to do in their contracts. Do we know what these other establishments were doing? We know that it's much lower than that based on their testimony or their public statements. One, they don't have amplified bands, and two, it's usually a one or a two or a three-piece band. Copper Fire would have a five-piece rock band in there with two guitar players, a drummer, a bass player, and a singer, all amplified. So dramatically different characteristics of the bands or the performers who were playing. I see my time is up, but I'll be prepared to come back. Unless you have any questions. No further questions. And obviously you have your rebuttal time. Yes. Thank you, Your Honor. Thank you, Counselor. Good morning, Your Honors. Thank you, and may it please the Court and the Counsel. I am Assistant Attorney General Dave Neumeister on behalf of the Illinois Pollution Control Board. We know what unreasonable is, and this is an it. Unreasonable is constantly being kept awake all night, and those are other Pollution Control Board decisions. It's buildings shaking. It's documented health problems. It's multiple neighbors, residential neighbors, not being able to use their property. It's neighboring operations doing business or operating essentially 24 hours a day. It's a lack of compliance or mitigation efforts in any respect, and those are situations where an unreasonable interference has been found. But what the Board found here is that there was indeed some interference with the buyers' enjoyment of their property. It did not rise to the level of unreasonable. Now, we're certainly not asking this Court to be a rubber stamp here. We're only asking that you focus on and recognize the evidence that supported each of the Board's findings in MRB's, in my co-respondent's favor, and then apply the manifest way to the evidence standing. And the result of that is affirming the Board's decision. So let's focus on the evidence that supported the Board's findings on the reasonableness factors under Section 33C and the ultimate finding that there was no unreasonable interference. So if we start with the character and degree of the interference, the Board's finding here was based on evidence of Copper Fire's live music schedule and the sound levels. Now, first, there was one three-hour period four days a week and two months Saturdays. There was no music at all on Mondays and Tuesdays or on Sunday nights, which I believe is a bit of a correction to what my opponent said. Sundays was only two to five, and that's on page 409 of the record. The ALJ made that, or the Board made that finding in its decision. The other four nights were limited to three-hour sets. There was nothing during the day on weekdays and nothing before 2 p.m. on weekends. All of the sets were limited to three hours, and that left plenty of music three times. So if we're talking about sleep opportunities, or in my opposing counsel's words, being told when to go to bed and when to sleep, except for the weekends, music cut off at nine on Wednesdays and Thursdays. And according to Illinois Pollution Control Board standards, what the IPCB has designated as nighttime hours are 10 p.m. to 7 a.m. And the Board found that there was only—I want to say this the right way. Sometimes I talk too fast. I have to check myself. The Board found that there was only an exceedance of the recommended decibel level for sleep of 30 decibels two hours a week, one hour on Fridays and one hour on Saturdays. So it only impacted those IPCB-designated nighttime hours for two hours a week, and there's nothing arbitrary about an IPCB regulation. Otherwise, the sound levels in the apartment were within normal ranges, according to the Boyer's own expert, Mr. Vittiniani, and I believe I'm saying his name correctly. And he could not replicate a sound in the hearing room that was as low as what he recorded in the Boyer's apartment. And the Boyer's testimony on impact was contradictory, such as only being a distraction on weekends, requiring no more than turning up the TV during those certain hours and building a lake house to get away from COVID restrictions rather than to get away from the live music. So given all of that evidence, the Board was entitled to give greater weight to the objective sound measurements and the limited duration of the music, and that's what the Board did. There's evidence in the record under the Manifest Weight Standard to support it. Now, if we turn to the practicality and reasonableness of reducing emissions and the subsequent compliance standard, I'm going to address those together because I think they're basically based on the same evidence. The Board's findings here were based on the evidence that Rene Eichholz, one of the owners of Copper Fire, did whatever was practical and feasible to reduce the sound levels and to comply with the sound emission standards and to respond to Jerry Boyer's complaints. Ms. Eichholz installed sound absorption panels after considering other cost-prohibitive measures that she said the cost was crazy in respect to running her business. She tried moving the stage to different locations within Copper Fire, and when Ms. Boyer said that that made the sound worse, she moved it back to at least get back to a level that she knew she could work with. She worked with the bands to keep the sound policies within specific limits, and the record shows that she actually cut off a couple of bands and fired them, reducing their pay, and never hired them back. She turned the sound down as low as she could in response to those complaints and still be able to run her business. And she basically implemented Mr. Bithanyani's recommendations, and he agreed that what Ms. Eichholz and MRB did was economically feasible. And he also testified that it wasn't clear if any of the measures that they were taking would have satisfied the Boyers. And even Ms. Boyer herself acknowledged that sometimes those steps helped, and that's contained within the Exhibits E-28-37 that has a whole power of text messages between Ms. Boyer and Ms. Eichholz. And I don't want to overplay that particular response from Ms. Boyer, but there was at least one comment that she made after Ms. Eichholz turned down the sound, and she said that helps. And also, copper fire was never cited for any noise ordinance violations, even though police went to the facility with sound measuring devices. And also, the Boyers' ordinance violation claim was thrown out on summary judge, which was never challenged and so was not part of this appeal. So that evidence was enough to support the Board's findings on MRB's behalf, especially in an area with a significant commercial activity that was indeed a regional live music destination, and that's what it's become. Is there any discussion in the record about these other venues not having amplified music or having smaller sized bands with fewer people as a measure that could have been implemented by copper fire? Was that ever discussed here during the proceedings below? No one testified on the evidentiary record from the other facilities. It was by way of public comment and by way of some evidence put in. This is not a technically objectionable term, but by way of hearsay, if you will, that the other venues did various things to keep their noise levels lower. The evidentiary record wasn't developed in terms of decibel level measuring or taking any of the steps that Ms. Eichholz took to try to keep the sound levels under control. But those public comments or those proper considerations by the hearing officer? I believe that the hearing officer noted the public comments in his decision, but they would be one piece of evidence that could be considered. But again, what we have to consider everything here in the context of is the Rule 33C factors, and that's what the board did here, especially taking into consideration all the efforts that Ms. Eichholz made to try to satisfy the complaints and still be able to run her business. And in the other cases that appeared in the record where unreasonable violations were found, especially within the context of the Pollution Control Board decisions, there were no mitigation efforts taken by any of the offending venues, or at least not anything to the degree that Ms. Eichholz took. And those are substantial factors that the board can consider in the context of Rule 33C. What she did to try to comply, especially in the context of the limited amount of the live music schedule that played. And as to the social and economic value, well before this case, there have been pronouncements by the board, and in other cases, that small businesses such as bars and restaurants do add social and economic value. And that was a finding not only that the board was entitled to make based on the evidentiary record, but also based on statements that were made in other cases. It's important to note also that when Copper Fire was approved, it had to go through, and this is in the record too, it had to go through the downtown Belleville Development Committee, I don't know if I'm stating the proper name of that organization correctly, but substantially, that's what it was. The mayor was on the committee, and Jerry Boyer was on the committee. And they approved Copper Fire as a venue, and the mayor loved the idea of having another live music venue in downtown Belleville on its live music road to make it a regional live music destination. And Renee Eichholz said that they wanted to make it a destination, they told the committee that. The mayor loved the idea. And she also testified that once they developed this policy to contractually limit the bands, the decibel levels that the bands played, she said that that policy was well known through the St. Louis Metro live music community, that Copper Fire didn't have this limitation in place. I mean, she installed equipment so the bands could see what their decibel level was and stay within it. And the fact that there was no evidence of wages and taxes that Copper Fire paid to its employees and to various municipalities or taxing organizations, the board recognized that, that the fact that it's been recognized that businesses such as Copper Fire add to the fabric of a community, provide social and economic value, that the lack of tax and wage information was not enough to move that checkmark out of Copper Fire's box in its favor. And it was obviously a suitable source, the board found, based on the testimony. It was a suitable source of sound, if you will, for that area because of downtown Belleville, downtown Belleville being such a destination. I mean, it opened on St. Patrick's Day, and there were already 20,000 people downtown the day it opened. The record shows any number of festivals, activities that were going on in downtown Belleville before Copper Fire opened, and that's in the record as well. And what does the board consider 33C factors and this court reviewing the board's consideration of those factors? It looks like five factors. Is it three to two, or is there one factor that can be dispositive, or is it an overall? I understand our standard is manifest weight, but how do we look at those factors? One at a time, and one does not get any more weight than the other. The way that the board did it, the board found in favor of Copper Fire on four of the five. And as to the fifth, the board found that it was neutral. I found that interesting because the fact that it found neutral was that the petitioners here had priority. They lived there before Copper Fire was established, but they still found that as a neutral factor. Yeah, on the suitability of the sound source, Justice Vaughn, you're correct. That's the way that the board did it. The way that I read the board's decision, they did a balancing test, if you will. Value to the community compared to the priority? Right. That also that Copper Fire was responsive to complaints, tried to comply, limited its live music performances, and was not the only other source of sound in downtown Belleville. And they balanced that out. Instead of waiting for Copper Fire, they gave the board priority, or they gave the lawyers, rather, priority of use found neutrally on that count. So four factors analyzed one at a time under manifest weight for the board, the neutral factor being the fifth. Unless your honors have any further questions, I'm prepared to stand on my briefs. As to anything else, I would just state that all of the evidence taken together under the manifest weight standard is enough to affirm the board's decision, even if the lawyers do cite some contrary evidence. The board's decision here was not against the manifest weight because there's evidence to support it. And I thank your honors for your time and attention and the chance to speak with you here today. No other questions. Thank you. Thank you. Thank you, your honor. I don't know where to start. I think where I'd like to start is this concept of Copper Fire was approved by the development board and this lawyer was sitting on the development board at the time Copper Fire was approved. That's true. However, the application of Copper Fire to the development board was as a restaurant and bar, not as a live music venue. That came after Copper Fire was approved as a restaurant and bar. That was never presented to the development board that that's what they were going to do. So I think that's just a complete red herring in the case that shouldn't distract from whether Copper Fire is an appropriate venue for downtown Belleville in its current iteration. Yes, a restaurant and bar is perfectly reasonable for this part of Belleville. Yes, a restaurant and bar that has live music is perfectly reasonable. But they are a restaurant and bar that has live music with a shared wall with a residential building and a business whose music is disturbing both the business and the residential building. There's a lot of evidence in the record that supports that. When the pollution control board looked at practicality and reasonableness and looked at the various things that Copper Fire did, including putting in some sound deadening material, one thing that Copper Fire didn't do ever was turn the music down. And the pollution control board decisions and court of appeals decisions on these are consistent through all of the cases that the easiest way to obey a sound nuisance is to turn the music down. But didn't they do that by putting these limits on the decibel levels that the bands could play at? They did, but the evidence, Your Honor, shows that they regularly exceed those limits. And that Ms. Eichholz testified, she thinks that they could have the decibels at 99 and she'd still be in compliance. There's further testimony that Ms. Eichholz herself has said that the sound is a beast to control and that it just echoes through. This is a large, like a two-story open space, and it just echoes through there. What the expert recommended was a maximum of 85 decibels for the bands. Not a minimum, but a maximum. Copper Fire is, their minimum is 85, their maximum, their stated maximum is 92. So they haven't done the very simple, practical, free solution of turning the music down and just see how that works. They've never been willing to do that. And so I would say just that alone, on factor four, the technical practicability, it weighs heavily in favor of the Boyers and against Copper Fire, as does the fact that on the economic factors, in Pfizer versus Henry's double K, which I discussed earlier, the board weighed the absence of economic evidence against the respondent. Copper Fire had their chance to present this evidence at the hearing, and they just didn't do it. So they want the board to just assume that there's economic value of Copper Fire because they're a small business. And I think everybody understands and acknowledges that small businesses do have economic value. But when we have case law that says without it, we're going to weigh that factor against you, that's their duty to present that evidence, which they didn't do. The lack of any noise violations by the city of Belleville is another red herring, Your Honors. The police chief testified about a local ordinance and its enforcement. May I finish, or do you want me to? Go ahead, I'll finish your statement. Excuse me. Which does not look at section 24 of the Illinois Environmental Protection Act. This is a criminal enforcement threshold. And what the chief testified is that his department purchased sound meters, and when they get a complaint about a business, including Copper Fire, he instructs his officers to stand 25 feet away from the bar or restaurant outside on the street and measure the noise and determine if it's too loud. It has nothing to do with what's going on inside at the Boyers residence. If there's any further questions. No further questions. No further questions. All right, thank you, Counselor. Thank you, Your Honors. We'll take the matter under advisement. We will issue an order in due course. We appreciate your arguments today."
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"stt_transcript": "So our next case is 05-25-0278 Edwards v. Illinois Human Rights Commission. I've got Mr. Edwards via Zoom and I've got Mr. Tillman here. Obviously with Mr. Edwards being via Zoom we'll work with everybody to make sure everybody can hear and what not. We'll be patient with that. Hopefully we won't run into any issues. Can you hear me okay Mr. Edwards? I can hear you. I'm just going to turn the volume off so I can hear you. We can hear you. Okay. Hopefully we'll get meeting. So Mr. Edwards are you ready to proceed? We can hear you. So I want to take this opportunity to thank you for your master equivalence. Mr. Edwards also testified that he was not privy to any other documents beyond the interview materials. And Mr. Payton who was also one of the interviewees could not recall taking the application of the candidate into the interview. The process effectively flattened different objectives of credentials into the same education and training score. And that produced a margin of only .300 and then Payton swore to, you know, leave the regiment in Ms. Cutler for the job of the case supervisor. Ms. Taylor, who actually did the job to Ms. Cutler, did not testify. The respondents identified her approving mother based on the high score of the candidate, but it does not identify any independent comparative review by Taylor of the candidate's degrees, certification, application, or experience. The scores were therefore the, the scores was the product of the challenge process. There was not independent proof that the process, of the process was wrongly. The commission required, it was required to test Ida's explanation against the whole circumstantial record. My client, he's asked his court to reverse an interjection on the sex discrimination claim or an alternative to dedicate and revamp for the correct pretext analyst. The stage two, you know, of Michael's initial brief observed the argument that Ida failed to provide competent evidence tied his exerted non-discriminatory reasoning to the action decision-making process. They have heard of Mr. Taylor and Mrs. Schwartz, who were the interviews and the scores, and were also the ones who recommended Ms. Cutler. The respondents identified Ms. Taylor as the formal approving official, but as I mentioned before, they did not call her as a witness. And she approved, and she approved Cutler for the position because Cutler had the highest overall score. The form that she knew does not contain testimony explaining what Cutler had considered. But she compared the candidates, or how she compared the candidates, or whether she independently reviewed their qualifications. You know, Michael's qualifications were substantially superior to those of Cutler, and that's based on the fact that he had a complete master's degree, which was contemplated by the post dean, the job post dean. He had professional qualifications that were directly related to the clinical rehabilitation work, and had additional relevant experience. As I mentioned, the majorship commander, he had substantial eye-dog experience and prior CSS service. Cutler had some relevant supervising and temporary CSS experience, but she did not have a master's degree. And she had no comparable identifiable professional certifications. So that's just what I'm pointing at, what Ms. Cutler said. Mr. Edwards, can you hear me? Yes, sir. If I may interrupt for just a quick question, is it your position that Ms. Cutler did not meet the minimum requirements set forth in the job posting, or is it your position that your client's qualifications were superior to Cutler's? You know, most of your donors, she did not, the posting required a master's degree. She did not have that. You know, it was her position that she had nine hours for the master's degree, but she did not have the degrees that was contemplated in the posting. She did not have that. You know, the other thing, you brought up subjectivity, which is central to this, and a record to this. There are witness reports saying that the historian was subjective. He also testified that education was subjective. And that the material was subjective-based for him, too. So I said, there's no set rules for determining what education, training, experience that made a master-level background equivalent to a master's level qualification described in the posting. Ms. Cutler had a bachelor's degree. She did not have a master's degree as was stated in the posting that was required in According to his testimony, the only learning that they had from the interview was just the interview information. They did not have access to the applications or the material that Mr. Edwards and Ms. Cutler allegedly had. All they had was their testimony, what they told them. And I don't know if that makes the point, but what Ms. Cutler told them was what they made the recommendation on. There was no examination of her background at all. Only the testimony that she gave. And when you look at the background of what she had, the record supported that she testified that she had 15 hours and that she was currently working on her master's. But she had not attended any coursework in 10 years. Ms. Edwards had everything that the posting required that they have for a position. Mr. Edwards, during the interview process of the candidates, in particular your client and Ms. Cutler, was there any evidence presented as to any differences in terms of the questions that were asked of the applicants, things of that nature? Was any of that presented in the evidence? You know, not that I can recall, with regards to, you know, other than the fact that my understanding that the images came in at different times, that we don't know exactly what questions were asked. But it was written about Ms. Edwards that he was asked questions that was different than what they were asked Ms. Cutler. Given the fact, you know, that Ms. Edwards had a master's degree and that Ms. Cutler had a bachelor's degree, you know, the distorting difference was, you know, 0.300. Ms. Cutler had 3.107 and Ms. Edwards had 2.817. So, you know, that, you know, there's no explanation as to how, you know, when opposing so that a master's, that a person with a bachelor's degree, you know, could have, end up with a higher score. And this score was based in education. They had a higher education score than what a person with a master's degree had. So basically, we were saying, you know, that the respondents, you know, Ms. Taylor did not independently review the candidates when she approved Ms. Cutler's application. And her only reasoning was that Cutler had the highest score. That was the only basis, you know, for that. It was not based upon qualification. It was based upon the score. And, you know, they're saying, you know, that that score was what you used to reject Michael's evidence concerning how the score was produced. You know, that is when the secular, you know, speeds through inquiry, you know, three stages, you know. The first was that they approved, is that to watch the, the coming part of the commission with regards to examining the basis for the score that they gave Ms. Cutler. And that's what they were basically saying, you know, that the whole process was very subjective. It was not really based upon the qualifications of the client, but simply upon the highest score. When we were asking that there be a reversal in favor of the sex-execution claim and a demand for a termination, a warrant of the appropriate relief, alternatively, you know, they take a demand for application of the correct of pre-sex evidence to the existing administration record. I have no further questions. Well, thank you, Mr. Edwards. If you have any questions, Dr. Stone. Let me follow up. I'm just struggling with my hearing and my vision. That's fine. I was just asking the Justices if they had any further questions. No further questions. No other questions. Thank you. Okay. So, Mr. Edwards, you'll have your rebuttal time in a few moments. Mr. Tillman. Mr. Tillman. Good morning, Your Honors. Good morning, Counsel. May it please the Court, I'm Assistant Attorney General Brady Tillman, representing the State Respondents here. We request that this Court affirm the final administrative order of the Illinois Human Rights Commission. The merits of this case come down to one primary factual finding that this Court reviews under the manifest weight of the evidence standard. Under the third prong of the three-prong test for employment discrimination, the Commission found as a matter of fact that the scoring of Ms. Edwards, excuse me, Mr. Edwards and Ms. Butler's interviews were not pretext for gender discrimination. And that factual finding, which this Court considers prima facie true and correct, is supported by the record. Mr. Edwards argues that one out of the five criteria used to score the candidates, the education and training criteria, was improperly scored to prevent him from getting a promotion based on his gender. More specifically, he insists that equal scores given in education and training are inexplicable because he has a master's degree and certain professional certifications and Ms. Butler, although she partially completed her master's, did not have those precise credentials. At the outset, I'd like to point out that Mr. Edwards faces a very high bar of proof here because he relies entirely on that disparity in credentials. Both this Court and the Seventh Circuit emphasize just how high that bar is. This Court has said that the superiority of credentials must be so obvious that the respondent's reasoning is unbelievable. And the Seventh Circuit has described the need for the gap in credentials to be so substantial as to slap you in the face. There is no such gap here. Initially, I think it's important to frame the promotion of Ms. Butler in the context of the interview process and also the essential functions of the clinical services supervisor position that was at issue. Let me ask about the interview process and I ask this question to Mr. Edwards. Was there any evidence presented of any disparities in the nature in which the interviews were conducted of these two applicants in terms of questions that were asked? Anything along those lines? That, let me start by saying that argument was not made in the appellate brief and Mr. Edwards cited that he's forfeited that argument with respect to the arguments here. But with respect to the merits of the argument. There was one count that was dismissed for lack of evidence. Correct. There was one count that was, with respect to the two counts in the complaint. Yes. There was one count that was dismissed because it was abandoned as it was never argued. Yes. Okay. And I think that the evidence that we're speaking of is more relevant to that count in particular, but that's an unfair terms and conditions of employment count. Yes. With respect to evidence in the record, I believe Mr. Edwards testifies to two things that occurred during his interview. As an initial matter, I don't think we can compare what happened between the interviews because there is no evidence about the questions asked in the other interviews and the extent to which they may be different from Mr. Edwards. But beyond that, the questions that were asked him, one was, they're both clarifying questions about his experience, which are typical questions in this context. One question was confirming that his, Mr. Edwards' position at the time was major, which would only serve to improve his candidacy for the position. And the second question that was asked of Mr. Edwards was whether he had his certified alcohol and drug abuse certificate, which again would also be a credential that would only serve to improve his candidacy. So those were the two questions that Mr. Edwards testified were different, even though he couldn't know they were different with respect to his interview. And he also alleged that the interviewers were talking low and looking down during the interview. So to speak a little bit more about the interview process generally, the interviewers asked 15 questions of each candidate. And they grade those responses on a one to four scale, where the number corresponds to a qualitative assessment of the response. So if the interviewer believes that the credentials are unsatisfactory, then they give a one. If they believe the credentials are acceptable, they give a two. Very good, a three. And excellent, a four. Were the questions the same for both applicants? There were different questions, were there not? Same questions, Your Honor. Of course, as Mr. Edwards' counsel points out, there is a subjective aspect to deciding whether someone's response is, for example, acceptable versus very good, just as there are subjective aspects to evaluating a candidate's credentials in any interview. And to turn for a moment to the position at issue, it's fundamentally a supervisory position. The position was clinical services supervisor. So in fact, it's supervising supervisors and the rest of the staff that provides counseling services within the correctional facility. And to answer another one of Your Honor's questions, having experience equivalent to a master's degree in a behavioral or social science or having a degree itself was a minimum requirement for this supervisory position. And Your Honor, to again address your earlier question to Mr. Edwards' counsel more, I think that the job posting language of the posting speaks for itself. In the first sentence under the minimum requirements section of that job posting, I'll read it verbatim here. It says, quote, requires knowledge, skill, and mental development equivalent to completion of four years of college supplemented by a master's degree. So Mr. Edwards' interpretation reads out that entire phrase about equivalency and gives it no meaning. And what did the ALJ find or that the commission adopted with respect to why Ms. Butler's qualifications met that equivalent of four years of college supplemented by a master's degree in behavioral or social sciences? What was the evidence that they found that supported that finding? I don't know that the finding shows up in that specific way, Your Honor. I can, maybe it would be helpful to speak to the findings underlying the third prong of the analysis. All right, go ahead. Thank you. So with this context in mind, the process, the functions of this supervisory position, I think it becomes clear how an interviewer can grade this education and training criteria the way that they did here. So there are two questions that comprise this education and training criteria. One question with respect to education and one with respect to training. The education question was, what is your highest level of formal education? And the candidates were asked to confine their responses to coursework relevant to the position. In Mr. Edwards' interview, he tells the interviewers that he has a master's degree in rehabilitation counseling, which again is the minimum required academic experience here, and he doesn't otherwise identify any other coursework that seems especially relevant to the position. So he identifies he has a bachelor's degree, but that is in business management, and he doesn't have, for example, a professional doctorate or a PhD or some other advanced degree more than a master's, which again is the minimum required academic experience here. So in that context, an interviewer's grade is education as acceptable, which is a two, rather than a very good as a three. Is that reasoning unbelievable? I submit that that reasoning is not unbelievable. Ms. Butler tells the interviewers that she has a bachelor's degree in criminal justice with a minor in psychology. It feels directly relevant to the work of the position here. And she also partially earned credits for her master's degree. Is it unbelievable, then, that the interviewers determined that her education as well was acceptable, a two, rather than unsatisfactory, a one? No, it was not unbelievable. With respect to training, the candidates were asked to describe any training that will enhance your chances of success in this position. In Mr. Edwards' interview, he generally describes trainings that are relevant to the patient-facing aspects of this position. So he identifies counseling technique trainings, being a DUI service provider, your analysis training, among other trainings. The interviewers consider that very good, a three. Is that unbelievable that they would? I submit that it is not unbelievable. Ms. Butler describes training relevant to a different aspect of the supervisory position, which are trainings that are relevant to leadership and administrative functions. So she identifies hostage negotiator training, crisis training, supervisor skills training, and military training. The interviewers also each decide that her training is very good, a three. Is it unbelievable that they did so? I submit that it is not unbelievable. And so those are the only two scores that Mr. Edwards complains of. He does not object to the scoring of the other criteria, the other 13 out of 15 questions passed, including Ms. Butler's higher grades on questions, whereas the interviewers testified, and as the record demonstrates, Ms. Butler gave more specific and direct answers to the questions. And I'd also like to point out that the suggestion that those two questions were the interviewer's vehicle for discrimination here is belied by a mathematical problem as well. Even if Mr. Edwards had received fours on these disputed questions, he still only would have tied Ms. Butler's overall score, which I believe only further demonstrates how the record supports the commission's finding here. So in sum, the commission's finding that the grading of Mr. Edwards and Ms. Butler's interviews were not pretext for discrimination, was not against the manifest way of the evidence. It is hardly unbelievable that they were graded as they were. Certainly Mr. Edwards should be commended for his master's degree and his professional certifications, but they just aren't especially distinguishing here in the context of this position and where Mr. Edwards was seeking a position against a candidate who also had over 17 years of experience in the Department of Corrections and almost half of that as a supervisor as well. So regarding the other issues on review, state respondents will rest on our briefing. Of course I'd be happy to answer any further questions from the court. Just one question pertaining to the issue regarding discovery sanctions. I believe in your brief you argued that this issue had been forfeited on appeal because it was not raised in the written exceptions that were filed by Mr. Edwards for the ARJ's findings and recommendations. Is that correct? That's correct. We argued that this court could not review this challenge because Mr. Edwards failed to exhaust his administrative remedies, which is a little distinct from the forfeiture argument. Failure to exhaust administrative remedies? Yes, Your Honor, and I'll note in that regard that Mr. Edwards' reply argues that this shouldn't be exhaustion because the purposes of exhaustion were served based on the exceptions that were filed. I disagree with that. As Mr. Edwards notes, the purposes of exhaustion are to develop the record and to let the agency apply its expertise and to correct its own errors with respect to the challenge. And because Mr. Edwards, although he did file written exceptions, he did not specifically raise the challenge to these discovery sanctions in those exceptions. And so the commission never considered it or applied its expertise. Any other questions? No further questions. Thank you, Your Honor. Thank you, Mr. Edwards. Mr. Edwards, you can proceed with your rebuttal. Your Honor, I would note this is basically less, and that is that Michael Edwards presented a very certifications, you know, as a part of his reviving job about, in addition to his master's degree, a number of certifications that he had. You know, he was a counselor. He had certifications, you know, for that. You know, the only thing that Mr. Butler had, you know, was a master's degree. You know, the posting was very specific about what the departments were. And that was that you had to have a master's degree based upon the posting. Now, there's more than one posting. It was the posting that took place a year before where Michael Edwards was the only applicant, and he qualified for it. They removed that without, you know, notice to him. And a year later, Ms. Butler did not apply for that position. A year later, they reposted the position. Ms. Butler applied for it. When she applied for it, she applied for it, you know, after the deadline, you know, for the application. You know, nevertheless, she never had a master's degree as required. She produced no documentation to support any complaints about her experience. Michael Edwards didn't. You know, we have mentioned those in our briefs about exactly what he produced, you know, with regards to his application for this position. You know, he was extremely qualified for this. His qualification was, as you can use this term, you know, jumping off the page. So, you know, there's no evidence, no testimony to support anything that could use any objective standards in looking at the applications. But I have no comment on that. Any other questions? No further questions. Well, thank you, counsel, for your arguments today. We will take the matter under advisement. We will issue an order in due course. Thank you all very much."
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"stt_transcript": "So our next case on the docket is 525-0364, People v. Abbott. I've got Mr. Denning and Mr. Marshall. You ready to proceed, counsel? Go right ahead. Your honors, opposing counsel, may it please the court, my name is David Denning and I'm representing Mr. Tyler Abbott. Mr. Abbott was convicted of multiple counts of unlawful possession of firearms by a felon. His conviction should be overturned for two reasons. First and most importantly, at trial, the state failed to prove that Mr. Abbott actually or constructively possessed those firearms. Second, under the Bruin test, it was flat banned against all felons... I want to talk to their counsel. Yes, your honor. I'm going to be honest, there's no reason to beat that dead horse in this courthouse. People v. Smith, People v. Stevens, People v. Rodriguez, we've addressed both arguments thrown at us. This entire court has found it's constitutional, so I'm not trying to be flippant, but that issue has been litigated in this courtroom and it's been decided. And I know at least two of us are on a couple of those panels, I can't remember if Mr. Bollinger is or not. I was on Stevens v. McCain, I was on Smith v. Barberos, and another case you had, Abbott v. Rodriguez. So, I think, I don't want you to waste your time on that argument. Fair enough, your honor. I was also about to say I know there's a Illinois Supreme Court case pending and it might have huge bearing on this case anyway. So, yeah, I absolutely intended to spend most of the time on the first argument. So, first, to eliminate actual possession, Mr. Abbott was arrested somewhere between a fifth of a mile and one and a half miles away from the address that was searched and then brought to that address. So, he wasn't even there, there were no firearms found on his person, no firearms in his vehicle, so no actual possession. For constructive possession, the statement did show that Mr. Abbott had both knowledge of the weapons or where they were and that he was exercising immediate and exclusive control over that area. And he was not, your honors. First, because he wasn't there at that location, two other men were. One was asleep in his vehicle in the driveway and one was on a cot in a living area. And when officers interviewed that man, it was Ricky Williams, he told officers that he lived there. He remained there on that cot for the entirety of the search. So, since other people were there, Mr. Abbott was not. He was not exercising immediate or exclusive control. No one saw him touch these firearms and there were no fingerprints or DNA evidence. The evidence that the state did rely on, they found a FOIA card that had expired in 2023, so the search is in November of 24. A FOIA card that expired in 2023 and was revoked anyway due to his felony conviction. They found a passport that expired in 2019. They found a high school diploma from several years before. They found a mail dated October of 23 addressed to Tyler Abbott. Also, it's important to note that the FOIA card had a different address on it. And they had legal documents from his prior case, also 2023. So every document that they found was from, I think the most recent was just over a year before the property was searched. So even taking all that evidence, even making reasonable inferences, I think the reasonable inference there on behalf of the state would be that Mr. Abbott probably resided there or at least had access to those areas in 2023. The fact that there was nothing newer than that makes it seem much more reasonable that he did not live there at that time. Counsel, didn't the defendant claim at one point that he primarily stayed in the home's living room and kitchen and did not generally go into the rest of the home? He does say at some point, you know, he goes through the house to make food and then leave. He said he hadn't been through half the house in a certain amount of time, which means he has been through some of the house. But visiting the house is not the same as him residing there. It's definitely not the same as him having access to all of these locked rooms or locked out buildings or... Okay, I have the impression that the defendant was acknowledging that he was living in the house at the time these weapons were found. Is that contrary to your understanding of the record? It is, Your Honor. Maybe it's not crystal clear, but it seems like he has some familiarity with the property for sure. But that he was living there at the time, no, I don't think that's clear from the record, Your Honor. Especially because somebody else was living there or at least staying there at the time. And because Mr. Abbott was elsewhere at the time of the address. Didn't he make a statement to the police about my house, my locks? Didn't they find mail there that was addressed to him and located at that location? So they did find mail from the year before. And he does repeatedly in the video, as you can hear him say, you know, he's upset about them breaking his locks, upset about breaking into the room. And he uses that expression, my locks, throughout the video. But that doesn't mean that he controlled, he knew he had the felony conviction. So bought the locks, handed over the keys, he said his dad has the keys and there was no evidence to the contrary. So even if he thinks of this as his locks, even if he thinks of some of the property inside those rooms or buildings as his, if he doesn't have access to it, then he can't be in immediate or exclusive control. Weren't there personal items found in one of the safes with the guns, like a passport or some identification? Yes, Your Honor. A phone card, passports, and I think some cash were all in one of the safes. But again, the passport was, I think, expired in 2019. So I think a reasonable inference there would be that at one point he locked those things away and then handed over the I don't think there's a reasonable inference to be made that he somehow continuously had access when officers did not find keys on his person or in his vehicle or near the lock box. I mean, they had to resort to breaking open one of the rooms and prying open that lock box themselves. So arguably, I mean, these were found throughout the property. And so, you know, that kind of goes to your argument about he didn't have access maybe to those. But was there not, if I'm looking here, in his bedroom a shotgun and a crossbow maybe they found in his, quote unquote, bedroom? Well, in a room that also contained his diploma and legal documents. He doesn't ever say it's his bedroom. That was one of the rooms that was locked. And again, you know, maybe the reasonable inference there would be that he had access to that room prior to this, but not after he had the need to put locks everywhere. Hmm. At one point, did the defendant refer to this house as, quote, his house? He might have said that, Your Honor. It's unclear enough in the record, I mean, because when the defense counsel moved for direct a verdict, I think, the trial judge even said, well, I haven't heard who owns this house yet. And so he considered that as a fact. So if the trial judge hadn't heard, you know, didn't think it was clear, I think that's a fair assessment of the record there. I think, Your Honors, that the fact of the keys is kind of the most important issue. Because he can have a kind of ownership interest. If he, presumably, you know, he was a firearm owner for years, his court was actually expired, even though it would have been revoked. So he's a firearm owner for years with no firearms crimes. I mean, his only convictions are vehicle related. So after his conviction, he locks everything up. And he can still think, like, oh, those are my firearms or my property. But if he doesn't have the keys, he doesn't have exclusive control. And if somebody else is living there, he doesn't have immediate and exclusive control of that area. Happy to answer any further questions, Your Honors, but otherwise I will conclude. So the defendant said that the shotgun discovered in the bedroom closet was not his, but he agreed to clean it for someone, correct? That sounds right, Your Honor. And I think he does say that a crossbow in there was his. But if he's acknowledging, then, that he's cleaning this weapon for someone, then why are we to presume that he didn't have access to the home, the locks? I don't remember that specifically being said in the video, Your Honor, but still, if he doesn't have the keys, if he's relying on somebody else to open these areas, then he doesn't have exclusive control, Your Honor. Let's see, my time has expired. Is there a question? No, no questions. And honestly, you'll have your rule of thumb. Okay. Good morning, Your Honors. Mr. Vinnie. May it please the Court, my name is Trent Marshall for the State. I don't have a lot to add to the State's brief. I would concede that the case might have been closer without the defendant's implicit admissions. There's a lot of them. I got the sense on the early ones, he's trying to talk his way out of it, and by the end, it's almost acceptance when he's laying on the ground talking to them. If you could correct me, counsel, my references to what I understood from the record, am I No, sir, you're not. And he never said, that is my bedroom. But he did specifically reference things like, I can't have the bow, I was cleaning that weapon, when he's in the back of the car. I mean, he complains to them specifically about trashing his locks, cutting his locks because they could have just, you know, used the drill, I guess, and unscrewed the hask. He was quite upset about that. That said, the video is also, I got to say, he doesn't come across as an unlikable bad guy, not that it's wrong. With respect to the second issue, Justice Duwez has been litigated in this court, and in two days, I think, the Supreme Court will schedule to release Benson, 131-191, and maybe we'll have a definitive answer, because I think the defendant in that case, same argument here, it was a Ford car, forget it, it was non-violent, whatever it was underneath, and they said, we'll take it. So, we should know Thursday, maybe, on issue two. Are there any other questions? Appreciate your time. Thank you. Thank you. Thank you. Thank you, Your Honors. Very briefly on rebuttal, one other fact that I neglected to mention is that the multiple officers testified that there was no power to that residence, and that's, it doesn't conclusively say anything, but I think the reasonable assumption there, reasonable inference is that the person living there was not paying power bills, and so, it's, the conclusion that seems more likely is that Mr. Abbott probably resided or at least had access to every part of that house in 2023 when he got the felony conviction for driving on a revoked license. He locked everything up, started living elsewhere, and occasionally still visited parts of that property. I think everything else has been addressed, Your Honors, so if anything, if there are any further questions, I'm happy to answer, but I don't have any other questions. Further questions? Thank you, Counsel. Now, obviously, we'll take the matter under advisement. We will issue an order in due course. We appreciate your arguments today. Thank you, Counsel."
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"stt_transcript": "So our first case this morning is 525-015, People v. Davis. I've got Ms. Ingram here on behalf of the defendant, Mr. Atwood, on behalf of the state, correct? Yes, sir. You ready to proceed? Go right ahead. If you'd please state your name for the record. My name is Amanda Ingram for Mr. Mike Davis. I would like to focus my time today on the first two issues. First, reasonable doubt and that counsel should have requested an accomplice instruction. Trayvon Brown Nelson planned an armed robbery just two days before this shooting. Davis declined the invitation to participate in this robbery and suggested that Trayvon get a job instead. O'Neill was also in on this plan, alerting Trayvon to where guns were located in the late afternoon just prior to the shooting. Trayvon, O'Neill, and Thomas were together all evening at a barbecue at Ashley's house and going around town drinking and doing drugs. Davis was not present for any of these activities. He was not there. At 1.34 a.m., Trayvon texted an acquaintance that the armed robbery plan was in motion. We're fixing to go get guns and then KT's stuff. Trayvon told police that he spoke directly to Khadija Graves that night, but Graves denied ever seeing him. At 3.02 a.m., O'Neill FaceTimed Trayvon, so we know that Thomas and O'Neill are still alive at that time. Trayvon's account of what occurred between 3.02 a.m. and 3.45 a.m. is not worthy of belief. According to him, Davis was with them in the car and there were no problems. Davis went into his house, returned, and for no reason, completely out of the blue, shot both O'Neill and Thomas repeatedly. Trayvon had a clear motive to blame Davis as he was the one who planned the armed robbery of Thomas with O'Neill. There was at least some evidence of that robbery because in addition to Trayvon's multiple text messages detailing his intentions, Thomas' bag was left unzipped, open, and with his keys inside and nothing else. No currency was recovered from Thomas. Davis had not been with that group for the entire night and had no reason to shoot two people completely out of the blue. By contrast, Trayvon and O'Neill were in on a plan to commit an armed robbery against Thomas and were with him drinking and doing drugs for the whole night. Notably, Trayvon maintained that both victims were finished from the right side and that Davis walked from one side of the car to the other, but the autopsy established that all of the gunshot wounds traveled from left to right. Trayvon was on the left side of the car and had blood spatter on his body and his clothes. Additionally, Trayvon was admittedly under the influence of drugs and alcohol that night, which supports the idea that the armed robbery he planned went awry. He exhibited extremely bizarre behavior that night, driving around for half an hour with the victims dead or dying in the back seat. He did not seek aid with them. He eventually switched cars and used O'Neill's Jeep to go get a girlfriend. He called a separate girlfriend 24 times and by the time he returned to her, she had loaded her SUV with suitcases and those suitcases were never searched. Trayvon also asked one of the responding police officers if he would give him a hug. In addition to Trayvon's testimony about the shooting being unbelievable, the remaining evidence after the fact is inefficient to establish that Davis was the shooter because it only establishes actions after 345, which is when Davis drove away in Grace's car. Davis did clean and dispose of the guns with his uncle's knowledge. These activities took place after the fact and in no way established that it was Davis and not Trayvon who shot these victims. His uncle, John Carter, specifically testified that the reason he assisted Davis with this and alerted the police was that he believed him to be innocent and he would not shoot his friends. In short, there was reasonable doubt in this case where the conviction rests on the testimony of Trayvon Brown Nelson, a violent felon with a clear motive not only to rob one of the victims in this case, but to place the blame on anyone other than himself. This reasonable doubt argument dovetails with the second issue that counsel should have requested an accomplice instruction so that the jury would have reason to apply even greater scrutiny to this incredible testimony. IPI 3.17 should be given if the witness rather than the defendant could have been the person responsible for the crime. This IPI wholly aligns with the defense strategy to persuade the jury that Trayvon was the killer here and not Davis. There was no valid reason to omit it. The state's argument on appeal is that such a request would have enabled it to seek an accountability instruction. But as the trial court rightly found, accountability was not an issue here. The state's position at trial was that Davis acted alone. And Davis' position at trial, and now, remains that Trayvon acted alone. Accountability only comes into play when two defendants provide aid to one another before or during the offense, not after. While an accomplice participant has performed some action that relates to the offense, that participant may be accountable, but only if the participation is before or during the offense. Davis was prejudiced by the jury not having this instruction. It cannot be understated how significant the accomplice instruction is, and in turn, how significant the lack of this instruction can be. Had it been delivered, the court would have told the jury just prior to beginning its deliberations that the testimony of the state's primary witness, the only one to say that Davis was the shooter, was to be treated with additional scrutiny, suspicion, and caution. It is not difficult to envision such an instruction impacting the jury's deliberative process. Where the state's case against Davis turned almost entirely on the credibility of Trayvon Brown-Nelson, a reasonable probability exists that the outcome of the trial would have been different and the accomplice instruction, had the accomplice instruction been delivered. There were other, I'm sorry, Your Honor, do you have a question? I do have a question for you. How do you deal with the warning of the instruction that says when a witness says he was involved in the commission of a crime, does that present any problem to you? It doesn't present a problem because the committee comments to that instruction specifically require that it be given even when the witness denies participating in the defense. So the committee envisioned this exact scenario when it came up with these instructions. Okay. There were other objectively unreasonable decisions by counsel, including not cross-examining the firearms witness at all, allowing an unqualified witness to testify about cell phone geolocation data, and failing to ensure that Dates' status as a parolee and access to Khadijah Graves' gun was not before the jury. The failure to offer the accomplice instruction was prejudicial on its own at a minimum, but combined with these other errors prejudiced Davis because this was a very close case. These cumulative errors rendered the outcome of this trial unreliable and fundamentally unfair. In conclusion, Trayvon Brown Nelson planned an armed robbery. He and O'Neill spent the entire afternoon and most of the night with Thomas drinking and doing drugs. Thomas was not included on any of the text messages and had no idea he was being targeted in this way. The violent plan went awry and Trayvon chose the nearest person to take the blame. Trayvon's testimony is incredible and should not be viewed as sufficient to uphold this conviction. Further, the jury should have been given instructions to view Trayvon's testimony with additional caution and suspicion, which would have aided them in accurately assessing his credibility. The prejudice against Davis for this unreasonable omission cannot be overstated, for the outcome completely hinged on the jury finding Mr. Brown Nelson to be credible. For these reasons, and those outlined in the brief, this court should either reverse this conviction outright or remand for a new trial. Any other questions? No, thank you. Thank you. I believe we have time for a rebuttal. Good morning, Your Honor. Counsel. My name is Nicholas Atwood, and I represent the people of the state of Illinois in this matter. The defendant has raised a number of issues, so I'll just take them in the order that they were presented today. The first claim the defendant makes is that he wasn't proven guilty beyond a reasonable doubt, and he primarily bases this on a credibility determination made by the jury of Trayvon Brown Nelson. And I think it's important to remember, when we're on appeal, we're looking at this evidence in a light and most favorable state. We're not retrying this case, and we're deferring to those credibility determinations because they had the opportunity to observe these witnesses in person. And the defendant first argued that Trayvon lacked credibility because he was intoxicated and he exhibited bizarre behavior. We don't dispute that he exhibited bizarre behavior or that he was intoxicated, but importantly, that's not a basis for lacking credibility. It simply goes to the weight of one's credibility. Importantly, we don't know how intoxicated he was. There was no blood test done or anything like that. And I think what's really important for the court to know is that he was sitting in this vehicle when the defendant brandished two firearms and murdered two people right in front of him. And he also believed the defendant was going to kill him. He was clearly in a state of shock, and that continued on after he drove around with the bodies in the back of the car and in the passenger seat because the officer's body-worn camera showed that he was still in this excitable, scared state. He even asked the officer if he could have a hug. So clearly, this was a man who was alarmed and feared for his life and was having difficulty rationalizing what he'd seen. But he fronted all of that to the jury. They heard all of this evidence. And they found him credible. And they found him credible in part because, you know, as our courts have determined, when you see something that's shocking, there is a still capacity for reflection. That's the basis for our excited utterance exception to hearsay. Sometimes, even if you're intoxicated, you see something shocking, you remember what you saw because time slows down. And I submit the jury used their common sense, and they considered that. But they also considered how all of his testimony was corroborated by independent evidence. Trayvon said the defendant got out, and he shot from the rear side of the rear driver's side of the vehicle. All the bullets went left to right. He said he went around to the right side, and he used the word, finish them. But it's apparent that he may have missed. And we know that there's evidence that he went around and tried to finish them from the right side because there's apparently a bullet strike on the back of the rear of I think on the, whatever that is between the glass and the back window. So there's evidence supporting that. Additionally, he said there were two guns used. We found 9mm and .45 caliber firearm shell casings at the scene. He said that Khadijah drove him away from the scene, Khadijah being the defendant's girlfriend, and she drove a white car. There were tire marks where the vehicle was parked in front of the area where the shooting had occurred, and the flop cameras recorded her leaving at around the same time from that area. So there was significant independent evidence that corroborated every single thing that he testified to. Was it weird that he drove around with these two dead bodies in the car? It definitely was. But is that evidence that he committed the murder? Notably, the blood splatter pattern is all along the right side of his body, indicating that when the guns were fired, the blood splattered onto him while he was still seated in the car, not from outside the vehicle. A forensics expert testified that there was no evidence of stifling or anything like that on the bodies, which meant that the guns were fired from at least 18 to 24 inches away. If he had fired, turned and fired from the front driver's seat at these individuals, there would have been evidence of stifling while he was seated right next to him in the passenger side. So we have to consider all of that evidence. In light of his bizarre behavior, does it really outweigh all of this corroborating evidence? I submit to you that the jury found that it did not outweigh that evidence. Moreover, what other evidence do we have of this defendant's guilt? First of all, he fled from the scene. His claim was that he wasn't there at all, but we know that his cell phone data indicated that he was. And what did he do with the two firearms? First he stashed them at his Uncle Johnny Carter's house, and then when Johnny came home, he happened to come home while the defendant was retrieving them. And then what did he do? He bleached the guns to destroy the DNA, and then he followed Johnny to the lake to dispose of them. Initially, the defendant said he never went to the lake and he didn't have the guns, but of course the flawed camera data proved that wrong because the defendant was in exclusive possession of the red Chrysler that followed Johnny's truck to the lake, and then the two firearms were found in the lake. Now importantly, and this gets a little bit to the accountability instruction, it was a reasonable trial strategy not to seek that instruction for precisely the purpose that you're talking. In People v. Hollingsworth, they quoted Justice Shaffer in People v. Parks, and he said, it is quite unfair as a statement to a lay jury, not lawyers, not the committee that comes up with jury instructions, a lay jury, it uses the term accomplice witness, and by doing so it tends to tell the jurors that the defendant participated in the crime if it does not actually tell them that he did so. So when you bring in the fact that I'm accountable with this witness, you're tying yourself to a crime. The theory of this case was he wasn't even there, and the only person who could definitively put him there was Trayvon, whose credibility has been attacked for various reasons. That's a reasonable trial strategy because the State requested an accountability instruction. If you say this is my accomplice, you open the door for that. On page 588, 589, the parties discussed back and forth about it, and the judge did say there's not evidence for accountability here, but it was only because defense counsel had not argued that that was the theory of the case. There was some evidence that could be used to support it and certainly create reasonable inferences. They said they would revisit it if counsel made such an argument, and so the fact remains. Counsel argues, well, he only, accountability requires aiding and abetting during the commission of the offense. Well, I think that's meritorious for two reasons. First of all, he got rid of the firearms, right? And so the commission of the offenses, this murder occurred, and then he's disposing of these firearms, aiding and abetting Trayvon. That's one continuous force of conduct I would submit to you. Second, and devastating for a defendant's case if he were to request this instruction, there's two firearms. If he says this guy is an accomplice, the jury and the State are going to argue and reasonably infer, oh, one gun for each guy. That would explain why he bleached the firearms, because his DNA is on the firearms, because he used them during the commission of the crime. It's much easier for the State to prove this case with an accountability instruction, because it's very logical. The jury is going to make that reasonable inference. The State is going to make that argument. And so defense counsel did not want to open the door to that. She wanted to rely on the fact that the occurrence witness may lack credibility. There was no definitive proof that he was there. She had the help of the girlfriend, Khadijah testified that she was with him, but then that fell apart. She was proven to be lying. She said she took a new Aurora when she hadn't. Other evidence ended up disproving that theory. But the fact remained, counsel only got the facts that she has to work with, and she made the best argument she could. But if she requested that accomplice instruction, that accountability instruction, it's a very low bar to bring that in. And so I submit to you, that would have made it much easier to prove beyond a reasonable doubt, because it easily explains why would he go to the trouble of bleaching the firearms if his DNA wasn't on them from using the firearms. It makes no sense. It also works in the context that he had both firearms, and he used them. If he would get any other situation, it just doesn't support counsel, and I think it lowers the bar for conviction. And so one of the other things I wanted to mention, Johnny Carter, when he testified, counsel noted that he thought this might equip the defendant. That's why he had him throw the guns in a lake where they could be found. That wasn't the defendant's understanding of any of this, and Carter obviously wasn't a witness to the crime, so I don't put much weight on that. Another thing I wanted to mention before I get into the other issues, there was a typo in my brief. I cited Illinois Supreme Court Rule 410, which counsel pointed out there is no Illinois Supreme Court Rule 410. I meant to cite Illinois Rule of Evidence 410, which discusses using pleas as evidence against the defendant, and I submitted to the court that it would be equally improper to use that against the state. Defendant argued in the appellate brief that the state was willing to negotiate during the trial, which meant that it clearly didn't have faith in its own case. I just think that's an improper argument to make on appeal, so it's not evidence of anything, and it certainly wasn't evidence that was before the jury, so I just ask your honors to ignore that. Regarding the testimony of the forensic expert, Haley, the firearms tool marks identification, FRIE has established, it's generally accepted, that these tool marks can be testified to. It's not new evidence. Counsel wanted to argue that some studies that were cited in federal cases from 10 or 15 years ago were relevant for her to cross-examine the expert witness and try to reduce the effect of that testimony. First of all, the federal cases use the Daubert standard, which is a much more stringent standard to meet than the FRIE standard. The FRIE standard is just general acceptance of those principles. Secondarily, the case that the defendant relied on, Williams, was a second district case. They gave the opportunity to cross-examine there, and they found that, look, there's no reason to challenge this. This isn't a new theory of a case or a new theory of this evidence, and all this evidence is already admitted through cross-exam. Now, in this case, there wasn't an extensive cross-examination, but there was an 11-page direct examination that got into all of these details, including the microscopic analysis that compared these firearms. But importantly, what I want to note for your honors, it wasn't relevant to the theory of the case to challenge whether these were the firearms or not, and that's, one, because the defendant said, I wasn't there. He didn't say, I was there and I didn't use these guns. And second, even if you took that evidence out, there's not going to be a reasonable probability of a different result, because look at the chain of evidence we have tying those firearms. Two firearms used at the scene, 9mm .45 caliber, those are the two firearms the defendant had at his uncle's. Those are the two firearms that the defendant cleaned with bleach. Those are the two firearms that the defendant threw in a lake. It's an unbroken chain of custody showing that these were the firearms that were going to be used. So is this extra evidence from the expert prejudicial? I would submit to you that it's not, because the jury is going to make that connection anyway. I see that I am out of time. Do your honors have any questions about remaining issues that you would like me to address? No, thank you. I will ask that you affirm the defendant's conviction and sentence, and we'll rest on our brief for the remainder. Thank you. Thank you. All right, your honors, I just have a few points that I would like to make in rebuttal. First, is any reasonable doubt argument comes with the qualifications that, of course, the juries or the fact finders do not have? Well, I think it's fair to say that the jury's determination is not unfettered. I think it's fair to say that the jury's determinations are entitled to deference. But it's not unfettered deference, and this Court is certainly empowered to take this review of the record with all of the reasons that I have described and find that the jury came to the wrong conclusion. Secondly, there is zero evidence in this record that Khadija Graves is the one who drove Mr. Davis away from the scene. That is not what Mr. Trayvon Brown Nelson testified to at all. This is in the record at page 195. He says that Davis gets into the car himself and drives away from the scene. There is no evidence in the record that Khadija got in the car and drove away. This Court should not find to the contrary. The argument about whether Trayvon was in the front driver's side seat when he shot or whether he was outside, the fact remains he admitted that he gets out of the car. So when he gets out of the car, on the left side, on the driver's side, he would have been 18 to 24 inches away or farther than 18 to 24 inches away if he was, in fact, the shooter, which explains the blood splatter and it also explains the gunshots going from left to right. The evidence of flight, frankly, is equal to both because, yes, Davis did go away from the scene, but so did Trayvon Brown Nelson, and additionally, he called his girlfriend 24 times during this 30 to 40-minute ride after the fact, and what does she do? She packs the suitcases, loads up the car. So the fact of flight is equally applicable to both of them, and also remember that Mr. Davis turned himself in. He surrendered. So there is not this flight where he has to be chased down to be brought in to justice. He comes in. He knows they're looking for him. He turns himself in. Additionally, I want to point out that two of the state's cases about this particular concept, Soto and Harmon, in those cases, there was undisputed proof that the defendant was the shooter. In Soto, there was surveillance footage clearly showing that the defendant was the shooter. The court relied on this after-the-fact evidence, the flight, the disposing of weapons, in order to look at those defendants, the state of their minds, to establish whether or not they had a reasonable belief in self-defense. We do not have undisputed proof here of who shot the guns. The idea that the word accomplice is simply too damaging should not be given any credit at this point. We know that Mr. Davis was involved somehow because he cleaned the guns and he disposed of them. We know he's involved. That doesn't make him accountable. Accountability and accomplice, there is some conceptual overlay, but they are distinct concepts. And accountability, again, as the trial court rightly found, was not at issue here. There were two firearms, and remember, it was Trayvon Brown Nelson who specifically wanted to go get the firearms with Andrel O'Neill. He texted, or yes, Trayvon texted Rashawn Voorhees that he and O'Neill were about to go get the guns. This is about two hours before the shooting. So the fact that there were two guns does not necessarily mean that it was Mr. Davis who had them when we have a text message from Trayvon Brown Nelson specifically saying he's going to go get the guns at 1.30 in the morning. Lastly, I would like to point out that John Carter is a credible witness. His uncle, there's no disputing the fact that he seems to be a hardworking citizen who went to the police because he thought that his nephew was innocent, that this information would be exonerating to happen. That is, he's the most credible civilian witness in this case. With that, Your Honors, if there are no further questions, I'll briefly conclude by imploring this Court to look at the entirety of this case and find either reasonable doubt or that the evidence in this case was so close that the outcome is unreliable and Mr. Davis should be granted a new trial. Any questions? Thank you. Thank you, Counsel. Thank you. Obviously, we'll take the matter under advisement. We will issue an order in due course."
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"stt_transcript": "Case number 25-2356, Luciana Clark versus City of Chicago. Good afternoon and welcome. Each side will be asked to state your appearance for the record before you begin presenting your argument. You'll also be given 20 minutes each in order to present your argument, with the petitioner having the opportunity to reserve time for rebuttal. Petitioner, please state your appearance for the record. Good afternoon. My name is Terry M. Lachek. It's L-A-C-H-C-I-K on behalf of the petitioner, Luciana Clark. Okay, and would you like to reserve time for rebuttal? Yes, five minutes will be fine. Okay, very well. You may proceed, counsel. Thank you. May it please the court, counsel. This matter comes before the court on the appeal of the plaintiff, Luciana Clark, following the entry of summary judgment in the court below by the Honorable Judge Barrett. The case arises out of a trip and fall on a public sidewalk at the O'Hare Airport complex outside the Hilton Hotel that occurred on December 1st of 2020. Ms. Clark was walking along a sidewalk outside the Hilton when she stepped into a defective area of missing concrete between two concrete slabs, causing her to fall and become injured. The sidewalk in question at the time and before was maintained by the City of Chicago on a date of the occurrence and for some time prior to the occurrence, sidewalk in that particular area had fallen into disrepair. In particular, one section of the sidewalk between two adjoining slabs had deteriorated to the point where there was a depression or a hole in that area and that hole measured approximately four feet in length, approximately three to five inches in width, and about a half an inch in depth. The condition had existed for a period of time before and in fact in 2019 was part of an area of the sidewalk or that particular area outside the Hilton that had been the subject of a request for to be designated for repair, a request for funds in order to do the construction or the repair work that needed to be done. In fact, at times prior to and since the occurrence, there has been ongoing construction and repair of various portions of that particular area. We've all walked the streets of Chicago and it is not uncommon to see small areas between the sidewalk squares to be in disrepair or start to chip. Why isn't this de minimis? It's not de minimis, Your Honor, because the general rule in cases of this type is every case is to be taken on its own merits or its own set of facts. There's no bright line rule, as I'm sure the panel is aware, as to what constitutes de minimis. It's not necessarily the depth of the depression that causes the effect of condition. There are other aggravating or surrounding circumstances that can be taken into account. For example, a one-half inch depression might be considered quote de minimis unquote, but this is an area in this particular case that was in fact three to five inches in width, so it's not simply a height discrepancy between the two adjoining slabs of one-half inch. There's actually missing concrete. It's also four feet in length as it's been described in the record. Some people may call that width, but in any event there are photographs that are part of the record which depict the area that we're talking about. So when you take into consideration all the circumstances surrounding this particular defective condition, I think at the end of the day, the other part of the analysis is would a reasonable person find that an unreasonable risk of harm was presented by this particular condition, and that is dependent on the particular facts of the particular case, and I think based upon all the circumstances here to answer your question, we have a situation where the surrounding circumstances, not just the depth of the depression, the width of the depression, the length of the depression, but all of the surrounding circumstances taken into consideration raise questions as a fact as to whether an unreasonable risk of harm was presented. Let's move to your next hurdle though. What evidence establishes that the city had noticed of the condition? In the depositions, I'm sorry, in the depositions of Mr. Harney and Mr. Tagler, well, I'll talk about Mr. Harney. Mr. Tagler was out there after the occurrence, but in the deposition of Mr. Harney, he indicated that in the summer of 2019 he had indicated that that area was part of a general area that was in need of repair, and he submitted a request for funds and authority to go ahead and have repairs in that area done. So there is... Can you explain what you mean by that area? Was it this particular hole or was it something around that hole? What was exactly designated for repair? I believe the record shows it's the general area, including the area where Ms. Clark fell. I don't know that there is any particular reference to that actual hole or depression in the concrete, but it was part of the area in a requisition submitted by Mr. Mr. Harney for consideration for repair. Is it clear from the designation how big an area we're talking about? Well, as far as... Yes, Mr. Tagler went out after the fact, I believe, later in 2021 and measured it, and that's where the dimensions of half an inch or so in depth... No, I mean the area that was designated for repair. Is it a block? How big an area is designated for repair? Your Honor, that's a question I don't know specifically. There is documentation in the record with respect to that, and photographs do show areas where there are steel plates on in other areas, not this particular area. Horses that are put up to designate areas that people should avoid. So it's kind of a large area, and it looks like it's an ongoing project. And these are steel plates. You're referring to those big things that cover holes that we can just walk right over? Correct. Those were in the general area, and in fact, they're referenced in Ms. Clark's deposition as something that drew her attention away from the particular defect that caused her to fall. The steel plates that she saw, one of which was above sidewalk level, and she wanted to avoid that at the time or immediately prior to her stepping into the depression or the hole that caused her to fall. Which I guess gets you to your next hurdle. If it is not de minimis, is it open and obvious, and then do you need to show a distraction? Can it be not de minimis and not open and obvious, or is it clearly open and obvious if it's not de minimis? I'm not sure that the law is clear. There are mountains of cases on these questions, but to answer your question, Your Honor, I think that a condition can be de minimis and open and obvious. I think there are cases which hold for that proposition. There's no question about that. I think that in this particular case, the distraction is an exception to the open and obvious. And in this case, there is evidence that Ms. Clark's attention was drawn away from the condition by a steel plate or steel plates, which distracted her from being able to observe and appreciate that particular hazard at the time that she was walking there. So what aggravating circumstances apart from what we see now, apart from the size of the defect, and apart from the city having noticed that would support liability? That's sort of your next hurdle, your next hurdle. I apologize for that. That's okay. Aggravating circumstances are the length of time that the condition existed, and it existed at least as far back as 2019, given in the documentation and the record that the city had looked or requested authorization or funding for repair of that area. The fact that when Mr. Tagler went out and measured, or there is evidence in the record, it's that I believe it's Mr. Hagler did admit that a condition that was or a gap that was two inches in width would be considered hazardous or dangerous, or he would consider it. And we have evidence that the condition was at least three inches and as much as five inches in width, and that condition had existed for a period of time prior to this occurrence, and the city was aware of that condition. That's an aggravating circumstance, and I think that that has to be taken into account. And again, it raises a question of fact, which is really it. Ultimately, what we're talking about is whether it was appropriate for the trial court to enter summary judgment, and I think the court erred in entering summary judgment. There are questions of fact that should have been decided by the trier of fact, in this case should have gone to a jury, should not have been decided as a matter of law, as was decided in this case. I would also point to the fact that when we talk about, and I'll circle back to the distraction in the steel plate or plates being a distraction, one of the things that should be considered is that the city created that distraction. The was responsible for the placement of those plates in the area, so they created the distraction that drew Ms. Clark's attention away from the defect that actually caused her to fall. So taking all of this into account, into consideration, circumstances as a whole, there are certainly questions of fact which were inappropriate for the entry of summary judgment in this case. That really summarizes my argument. Answering your questions. If you have other questions, I'd be more than happy to answer them, but given that, I think I've covered everything I hope to cover for the court. OK, thank you very much. Appellees Council, you may proceed. Good afternoon, Your Honors. Keith Yamaguchi on behalf of the City of Chicago. May it please the court. One thing I do want to start off with before presenting argument is to clarify a couple things that Council had mentioned. Number one, Council had mentioned that the area of the sidewalk which plaintiff allegedly tripped on, the or was designated for repair based on the documentation in the record, but that is incorrect. If we look at Mr. Harney's testimony, he specifically was asked, and this is on in the record C-671, he was specifically asked if the requisition forms that were made exhibits at his deposition entailed repair of the sidewalk scene that's at issue here as opposed to the broken sidewalk that was adjacent to this sidewalk in which there were metal grates which covered a bunch of equipment which had what Mr. Harney did call bad concrete. Obviously, with that repair work, and this is in evidence in some of the photographs we have in the record, the one specifically taken by plaintiff's husband, show the steel plates and where they were positioned primarily to cover those metal graded areas. I also wanted to clarify that Mr. Pat Tagler, he's the safety director at the time of the Department of Aviation, he did not testify as to anything involving a two-inch defect being a hazard. Mr. Yamaguchi, the trial court decided this as a matter of law, and my question for you is simply, what evidence in the record would support finding that the defect was de minimis as a matter of law? I think very simply, the de minimis rule applies to this case because the broken sidewalk seam at issue is a half inch deep, is less than a half inch deep, and despite the front to back width, I say front to back just so there's a, we're clear as to when we use width and length, but the front to back width is, front to back being the direction the pedestrian is walking. The variation is three to five inches in this case, but the vertical displacement throughout is less than a half inch, and it's our, the city's position that a reasonably prudent person should not anticipate some danger to persons walking upon the broken sidewalk seam in this case. In addition, there is insufficient evidence of aggravating factors or exceptional circumstances in this case to make the broken sidewalk seam actionable. It was daylight. The sidewalk seam is shown in the photographs, clearly visible. There was, according to plaintiff's testimony, there was one sole individual who was walking on the sidewalk at the same time that she was, so it was not congested by any means, and plaintiff testified that there were metal plates that she observed. They did not obscure her visibility of the broken seam per her testimony, and the evidence from the photographs in the record taken by her husband reveal that these steel plates were off to the side by the benches where the metal grates were located, and what that really demonstrates from an evidence standpoint is plaintiff observed both this pedestrian and the metal plates as she walked back, and she testified to that, but before she encountered the broken sidewalk seam, the pedestrian and these steel plates, these are not obstacles that you encounter suddenly and have to take evasive action to avoid. To avoid an oncoming pedestrian and stationary metal plates as she walked back, plaintiff simply had to walk down the sidewalk she had walked previously that same day through a path that she wouldn't be stepping on metal plates or walking into a pedestrian. So the city's position is there are no aggravating factors as those identified in the cases cited by the appellant. Just before you move on, I want to go back to the portion of the sidewalk designated for repair. You're saying that designation for repair had nothing to do with this seam in the sidewalk. Is that what you're saying? That's correct. That is the testimony of Mr. Harney when he was presented with the requisition for the cement repair work that was supposed to be done. The requisition, I think, dated in 2019, and there was some clarification that was by one of the former co-defendants that was asked of Mr. Harney that what was the scope of that requisition, and as I noted before in the record, he clearly stated that, I mean, the question was, so it's your testimony that only applied to the concrete around those grates. He answered yes, and next question, it didn't apply to the sidewalk that we've been talking about with the expansion joint, and he said no. Okay, and that's in record at C-671? That's correct. And so are you questioning, are you saying the city didn't even have notice as to this crack? Because are they not relying on this designation as the notice that the city had? I would say the city did not have actual notice of this broken sidewalk seam. I don't know if I would, I'm not going to concede that they had constructive notice, but to be fair, for the city to be looking at repairing what they term bad concrete around these grates in an area on the benches, which is adjacent to this concrete, the way some of the work is done is when a project is done, and the funding is designated for that project, they will try to get the contractor to do things, for example, a sidewalk seam. Right, and since they've gone out and looked at this area, they probably, somebody at least saw this crack probably, could have, may have. I think that's a reasonable. Okay. So, Councilor, are you denying that there have been other complaints about this particular crack? Yes, I'm not aware of any complaints about the broken sidewalk seams. How do you account for the city's prior reports, knowledge, and the uncompleted 2019 repair requisition? Because the requisition, again, was not for the broken sidewalk seam that we're talking about at issue. It was for the sidewalk. If you look at the photographs, you have the sidewalk, and then adjacent to it, running parallel. On the other side of the benches? And the metal grates. And those run, I believe, down two of the sidewalks that kind of run in this courtyard in the back of the Hilton Hotel. But that is where the requisition, and that's the testimony of Mr. Harney. That's what the specifically applied to. Just to be clear, you're talking about what's on the other side of the benches from where this seam issue is? Correct. Okay. I also wanted to just state that as far as any testimony of Mr. Harney, and to the extent that appellants are claiming that his statements provide some type of aggravating factor. First, I'll point out that that statement was made without any supporting legal authority. But from a factual standpoint, I'll just point out and highlight, Mr. Harney, he's the city's Deputy Commissioner of O'Hare Airport Facilities. It's a huge job. And his personal opinion about what types of broken sidewalk seams potentially pose safety hazards are not aggravating factors. Mr. Harney testified that he was not the end-all, be-all, that those was a specific question asked of him. End-all, be-all decision-maker on sidewalk repair projects. Those projects involve multiple groups at the CDA. And of course, not surprisingly, they involve budget issues, scheduling issues, and they try to tie them to related projects. And his personal opinion about the potential hazard of a broken sidewalk seam creates, doesn't, the hazard that it creates doesn't alter the fact that the city has to decide how it's going to sidewalks over the thousands of square feet of concrete at O'Hare. But he is that person that is on site that would be able to, I guess, make the recommendation. Isn't that correct? No, the way it typically works from his testimony, he is at the airport, mainly because all the trades people and the others that report to him are stationed at the airport. But he does rely on employees, other people who are walking through areas to identify potential areas that might need to have repair. I think one of the important aspects from his testimony, as he stated, is to get from the Hilton Hotel to the terminal, while you physically can do it going through this courtyard. The vast majority of guests at the Hilton Hotel or traveling passengers who are staying there, they go to and from the Hilton Hotel through the underground terminal, pedestrian terminals, mainly because there's four separate terminals. It makes the walk safe. She's not a guest. We're talking about a, I guess, an employee, if you will. Correct. Employee, very familiar with the courtyard. Required to go there. She was very familiar with it. She was very familiar with the condition of the concrete, condition of the courtyard. Well, that takes me to the open and obvious. Was it open and obvious simply because she takes that route somewhat regularly? Or are you stating that it would be open and obvious to anyone walking through there? I am stating that it would be open and obvious to anyone walking through there. I will just say the City will submit that with regard to the open and obvious argument, it's our position that Appellant has acknowledged that this particular broken sidewalk scene is open and obvious. Their response brief doesn't really address whether it is or not. It basically addresses whether there was a distraction exception to the open and obvious issue. Yeah, well, why isn't the existence of and significance of the dirt, the rocks, the debris, and other conditions not a question of fact? Why wouldn't that be a question for a jury rather than the judge? Well, I think the issue with regard to when we're talking about the actual contents that might be seen in this particular broken scene, there is no evidence, Your Honor. I would submit that the only evidence showing what might be lying within this broken scene are the photographs taken by the City's Pat Tagler. Those were taken 10 months later after a full winter season. I don't believe those are probative as to the issue of what is shown resting at the bottom. Plaintiff was asked specifically those questions to describe what was in the sidewalk scene that she tripped on. She was unable to really provide any testimony other than she stated that they were close to some bushes and I think that was... Well, wouldn't a jury have to decide whether or not those plates were a distraction? You talked about the positioning of the plates and that she wouldn't have to try to avoid the plates or anything, but isn't that something that a jury could decide? No, I don't believe so, Your Honor. I think that in this case, as far as the case law in evaluating distractions under the open... distraction exception under the open and obvious doctrine, I think there's case law which supports that, for example, pedestrians are not a distraction to something that's an open obvious doctrine. I think in this case, the case that comes to mind to me is the Postram case and that's a case where it specifically points out, the court points out that the plaintiff cannot call an exception based on the condition of the surrounding sidewalk to say that it distracted her from the condition which caused her injury. That was... I'm kind of paraphrasing that, but we believe that that case stands for the proposition that there are no issues of the distraction exception that need to go to a jury in this case, that it's an open and obvious... But this isn't just a sidewalk. She's not just claiming that the other part of the sidewalk was a distraction. She's saying that these plates that someone working on behalf of your client intentionally placed there to, I guess, address some other potential hazard that that is what was the distraction, not just the other sidewalk. Well, I don't think her testimony says that she was distracted by anything. Her testimony is that she was trying to avoid the steel plates and as I stated before... That's not the... Okay. Okay. And the trial... You're talking a lot about this, but the trial court never decided this on the basis of open and obvious. That's correct, your honor. The trial court ruled on the de minimis doctrine that this was a de minimis condition and said that it did not need to go. So if we disagree with you or disagree with the trial court regarding the de minimis issue, where does that take us? Well, I think if you're going to disagree with the trial court's decision on de minimis, I believe the issue of open and obvious is before this court and would have to be evaluated. And you believe that we should make that decision in the first instance or should we send it back for the trial court to make that decision? No, I believe that or the city believes that this panel should make that decision. It's a decision that can be made as a matter of law and should be made by the court of appeals. And so what evidence support would support us affirming this on the basis of open and obvious? Give us... And I know you've been talking about it the whole time, but I'm not there yet. The open and obvious is the evidence we have is the photograph. It's a light-colored slab of concrete and in the sidewalk seam is a dark-colored, you know, broken seam because the pavement has been removed. So it appears you have some dirt and there's a stark contrast in color, which as a pedestrian walking sidewalks everywhere, it's not uncommon. So I'm a guest at the and I'm pulling my luggage, walking through there for the first time. Your position is that I would notice this crack in the sidewalk and be able to, well, notice it sufficiently in advance so that I could avoid it. Absolutely. And I'm sorry, go ahead and finish. I was just going to say, just from a reasonable person standpoint, I didn't want to say me, but as a reasonable person, absolutely. And I'll ask you the same question I asked opposing counsel. In your mind, something could be de minimis and still be open and obvious. Yes, absolutely. Okay. So in the city's position, the trial court summary judgment ruling in favor of the city of Chicago should be affirmed that the city has no duty to repair de minimis defects. And the economic burden would be too great and impractical to impose a duty on the city to repair shallow sidewalk defects, less than a half inch depth, even with a three to five inch front to back width, particularly where there is insufficient evidence of any aggravating circumstances. And plaintiff in the city's view, exercising ordinary care could have easily avoided the broken sidewalk seam condition present in this case. The eroded sidewalk seam is one which is routinely encountered in an ordinary sidewalk. And lastly, the city had no duty to repair this sidewalk condition because as shown in the photographs taken by the city specifically at the record C-484 to C-493, the condition causing plaintiff's alleged trip and fall was open and obvious as a matter of law and was not subject to the distraction exception. And we respectfully request that the trial court's ruling be affirmed. Okay. Any additional questions from the panel? No. Thank you very much. Okay. Attorney Lacek. Lacek. Lacek. I'm sorry. I'm making it more complicated than it is. It's not apparent from the spelling. Okay. So would you like to utilize your time for rebuttal? Yes, and probably not all of it. Thank you, Your Honor. I think just two points. One, I'll address something that my opponent just said with respect to the reference to the financial burden on the city. Again, that's a bright line rule. That's the general proposition. But in this particular case, there's evidence that the city is doing repair work all around this particular defect in the a huge financial burden for the city to pay for or to pay for the repair of this particular defective condition while there's work going on there. So I think the argument that the financial burden would be too onerous or it'd be too burdensome for the city, that's fine for the general proposition. And it is the general rule. But in this particular case, and these cases are decided on their own facts, it would not have been overly burdensome for the city to have repaired this prior to December 1st of 2020. The other point I would like to make is that we were talking about Mr. Hagler and his opinion as to whether a two-inch gap poses a danger. That's what we're talking about here. We're talking about what would a reasonable person think about this particular condition, which makes it absolutely inappropriate to decide this question as a matter of law. This is a question of fact for a jury, for the trier of fact, and it was inappropriate for the court to rule as a matter of law that this condition was de minimis. And I think that that's borne out by the totality of the circumstances. I thank the court for its time. Okay. Thank you very much. We will take your arguments and, of course, the briefs under advisement and enter a ruling sometime in the near future. Thank you very much. Thank you all. Thank you very much."
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"stt_transcript": "You may proceed when you're ready. Thank you. May it please the court. My name is Sam Gray, and I'm an attorney for Adrian Dickey. After Adrian prevailed in a knowingly false lawsuit brought by Shawna and Alan Husted, he brought claims for abuse of process and malicious prosecution. Now, I want to be clear that Adrian didn't sue simply because he won, or even because he won and the district court found simply no evidence of wrongdoing. He sued because discovery in the state court lawsuit revealed that the Husteds possessed evidence that disproved the court allegations of their claims. Yet they sued anyway because prevailing on the merits was not their goal. Their goal was to harm Adrian, who the Husteds disagree with politically and dislike personally. Ultimately, Adrian's claims were dismissed, and the issues on appeal can really be boiled down to a simple question, which is can filing a knowingly false lawsuit to harm someone constitute an abuse of process and malicious prosecution? I'll start with abuse of process. And the analysis for this claim all focused on the second element of that tort, which is that the process was used in an improper or unauthorized manner. Specifically, the district court got that wrong for two separate reasons. First, the district court concluded that the Husteds' lawsuit couldn't be an act improper in the regular prosecution of the proceeding or an act unlawful or irregular, and also ignored the other allegations besides just the lawsuit, for instance, discovery abuses, severe ones. Now, starting with the first point of the lawsuit as an abuse of process, the court really looked to language of an act improper in the irregular prosecution of the proceeding or an act unlawful or irregular. And that ultimately stems from the restatement, specifically 682. And the district court interpreted that as meaning that a meritless lawsuit cannot support an abuse of process claim. To that principle, we agree, but that's not what we're dealing with here. There's a meaningful difference that wasn't recognized by the district court between a meritless lawsuit, one that simply happens to be false, and one that's filed knowing it's false, knowing that you will never obtain the relief that's purportedly being sought. What's missing here, though, I think, for both claims is something, it's like the improper purpose, which is, for example, I think this guy was running, or your client was running for office, so an allegation like, well, you know, he's very vulnerable right now, so if we could get a quick settlement and get some money, that'd be great, because he doesn't want to deal with it during the political campaign. That probably gets you over the finish line, but I didn't see anything like that. I saw what one side is saying, these are really abusive tactics, but I got news. Abusive tactics happen all the time in litigation. And so that's why I think courts have required this extra sort of extortion-like, it doesn't have to be extortion, extortion-like element for special damages and for a wrongful intent. Yes, Your Honor, so I think starting with how the claim was pled and the specific improper purposes, respectfully, I would say that the reelection type of behavior and harms were pled. I would say that what was pled for the improper purpose was pretty broad. It was that this lawsuit was specifically timed to, as you mentioned, coincide with Adrian's reelection campaign to try to harm his ability to effectuate his conservative political views. It was also for the primary purpose, as Adrian alleged, of harming his relationship with his and Shawna's daughter. That kind of stuff happens all the time in family law. As a state court judge, we saw that where one parent is trying to harm the other, often through litigation, and then everything is an abusive process or malicious prosecution. Your Honor, I wouldn't say that that would transform everything to an abusive process or malicious prosecution because I think the fact that what we're dealing with here is a knowingly false lawsuit, I think that that limits it pretty significantly. I think it's extremely uncommon that you had mentioned kind of the extortion-like element. It's pretty uncommon for a party to put what they're trying to extort in their prayer for relief in a lawsuit. We would say that doing so doesn't somehow save them from that claim. A wolf without the sheep's clothing is still a wolf. Sticking on that extortion element, I would say that ultimately it's not required. I think the district court's order did require it, though. If you look at specifically the language of the order, it starts by recognizing the principle that it's not required that's on page 6. The very next page, though, says that, put simply, Adrian hasn't identified anything that was extorted from him. And then ultimately at page 10, the same thing, that his claim fails because he doesn't allege a collateral advantage. Do the allegations of witness tampering and destruction of evidence put this in a different category than the frivolous case? I think that the allegations of fabricating evidence, deleting evidence, bribing testimony, all of those allegations are important for two separate reasons. One, it's important because those are all factual allegations that support the reasonable inference that Adrian's claim was brought for an improper purpose. And by that I mean a purpose other than obtaining a proper court-ordered remedy. And that category of cases has been recognized as an abusive process in at least four cases in Iowa. Van Stelten, Schmidt, International Motors, Poonzack. That's the first part where it comes in. The second is it goes back to that first point where I think the judge got this wrong, which was concluding that a lawsuit can't be the basis of an abusive process claim. We disagree with that, including for those cases that I just mentioned, but it also ignores those discovery allegations. Iowa follows a very broad definition of process. They follow the definition in the American Jurisprudence Treatise, and that defines a process as including discovery. And so then the question is, was that conduct in the discovery improper or irregular in the proceeding? And I would sure say fabricating testimony, bribing a witness to put on the academy performance of her life. I would certainly say that those are outside the ordinary prosecution of the proceeding. You know, I think we've touched on the two points on abusive process, so I'll just very briefly say on malicious prosecution that we stated a claim there as well. I think that the biggest problem with the district court's ruling is that she recognized the correct standard, which is looking for a special injury not present in like causes of action. But then the analysis was totally absent of applying the injuries to like causes of action. It would not be surprising if some kind of a family law dispute, for instance, caused relationship harm. But accepting Adrian's allegations, this was a case about a security interest, and irreparably damaging the relationship with someone's daughter is not a natural damage that would flow from a security interest case. And that kind of analysis, the like causes of action, was totally absent from the district court's ruling. Unless the court has additional questions, I'll reserve my remaining time for rebuttal. All right. And you may do so. All right. We'll hear from the appellee. Counsel, you may proceed. Sorry, I apologize. I left one thing. Good morning, Your Honors. Brittany Levine on behalf of the appellees, Shawna and Alan Husted. What this case actually boils down to is really a second attempt to recover attorney's fees after a contingent lawsuit filed by the Husteds. Recognizing that this is really just an impermissible second bite at the apple, the district court, in applying the appropriate Iqbal Twombly standard, determined that the allegations of this complaint did not nudge it from conceivable to plausible, given the contents of the complaint itself. And the court's dismissal of this improper lawsuit should be affirmed for three reasons. First, the district court did apply the proper test. What the appellant is trying to recharacterize the district court's recognition of the high standard as imposing an additional burden, and that is just not the case. It's recognizing the context that a court needs to know in order to assess plausibility. Second, there was no improper purpose or motive asserted in the complaint. For each of the allegations that were alleged, Iowa state courts have said that does not constitute an abuse of process for malicious prosecution. Well, has there ever been a case quite like this one? There have been very similar cases like this. For example, Johnson v. Farm Bureau, which was an Iowa Supreme Court case. And importantly in that case, the Farm Bureau had filed a reverse bad faith claim, which had not been recognized at all in Iowa at that time. And then also for abuse of process claim as well. That's a frivolous claim, but I don't see the same allegations of tampering with witnesses and destroying evidence. That is correct, Your Honor. It was focused on the merits or lack thereof and for putting forth a new theory of liability as opposed to the discovery issues. With respect to the discovery issues that you've raised, Judge, are found in the third restatement of torts, which is just instructive here. But it does reference that discovery abuse is not sufficient for an abuse of process. And further, when you look at what the remedies are for discovery abuse, that is within the vessel of the initial complaint. And that lawsuit is where the remedies for discovery abuses are appropriate. Counsel, if the primary purpose of the hostage here was not an impermissible or improper or illegal purpose, what was it? The purpose of the lawsuit was to recover the insurance proceeds for a vehicle that the hostages, including Corrine, had compensated for the insurance policy for several years. So your position requires us to believe that recovering insurance proceeds was predominant or predominated over the purposes of harassment and embarrassment and things like that? Not exactly, Your Honor. That was the primary purpose, was to recover the funds. But the reputation… What does the word primary mean? Is there really evidence that that was the primary purpose rather than harassment? Yes, Your Honor, for the fact that they continue to pursue the case. But there's evidence that they knew it was baseless. That's incorrect, Your Honor. At least not at the time they filed the complaint. I would like to direct the Court's attention to the fact that Mr. Dickey's complaint references the Husted's Iowa State Court action. And therefore, this Court can consider those pleadings, and they have been referenced and encompassed by Mr. Dickey's complaint. If you look at, and actually even within this complaint as well, there's evidence to show that the Husted's did not actually know at the time that Mr. Dickey was a lien holder. And that even comes from Mr. Dickey's own pleadings. Mr. Dickey, in the underlying Iowa State Court action, asserted counterclaims against his daughter. He asserted a total of three. And then asserted counterclaims against Allen and Shawna Husted as well. And in that, the counterclaims actually state that the Husted's were not aware of the lien until they tried to recover the proceeds of the insurance. And it was after the accident that they learned. Who was the title holder of the vehicle? The title was in the name of Corinne with Mr. Dickey as the lien holder, is my understanding. Right. So, who would be entitled to the insurance proceeds? In this case, it was the, at the time the lawsuit was filed. Wouldn't it be Corinne? And Corinne was a... Well, she's not a party to this lawsuit. Corinne was a party to the underlying Iowa State Court action. But not this lawsuit. Correct, because Mr. Dickey did not sue Corinne in this matter. Okay, but you're saying the Husted's wanted to recover insurance proceeds. Yes, sir. But they were not entitled to them if Corinne was entitled to them. They were compensating for the insurance benefits. And then also another component of their lawsuit... So, what would the primary purpose of the Husted's be to recover insurance proceeds rather than harassment if they were not entitled to recover them? They pursued a claim also for unjust enrichment because they had paid compensation for the insurance proceeds, which were then paid out ultimately to Mr. Dickey. So, that there is their interest. And they also assumed a position of being the guardians for Corinne Husted at that time. So, they were, just to be clear, your argument is that they were suing on her behalf because they were the guardian? Is that, no? No, your honor. There were two components of that. The Iowa State lawsuit was initially filed by Corinne in her individual capacity as well as Shawna and Alan Husted. Later on, they were appointed as the guardians due to Corinne's mental and emotional implications that affected her ability to represent herself. So, maybe I'm confused. She was a party to the original lawsuit to recover insurance proceeds? Correct, your honor. But she is not a party here. And then also, I do, to go back to my point about that there's actually evidence in the complaint and then the Iowa State pleadings that show at the time the Husted's were not aware that there was a lien, is even in the complaint itself there is a screenshot of a text message exchange where Shawna Husted is asking Corinne Husted, was there an agreement? Did he send you anything? Those types of questions of where she was exploring, was there a factual basis to pursue a lawsuit? To which Corinne responded, I don't know. And what happened in the underlying state court case is what we see frequently in litigation, is that memories have faded. We are looking three years after the purchase of the vehicle. Even Mr. Dickey, in his own counterclaim, stated that the Husted's were not aware of the lien. And then you go back through and you do some electronic discovery and you find text messages and emails that provide greater context that our memories have faded. That is typical in the litigation process. And just because then the Husted's did not end up getting a judgment in their favor, does not mean that pursuing that action was for an improper purpose. They also included the treasurer due to the fact of there was a failure to perfect the security interest and the Husted's had a good faith belief that the security interest was not appropriately registered. And that's why they included the treasurer who moved to dismiss the complaint in its entirety and only one claim for civil conspiracy was actually dismissed at that stage. I want to get to what could have been. This is not far from getting over the finish line, at least in my view, even under your view, which is had there been an allegation that said Mr. Dickey is running for election, this was a means to extort him trying to get a quick settlement so it wouldn't hurt his re-election prospects. Would you agree that that would have gotten them over the finish line had they included that? No, Your Honor, because this court is bound to the rationale of Johnson v. Farm Bureau, Iowa Supreme Court case from 1995, where the court said that even an improper motive or malicious intent is not enough and that the defendants in that case had brought their claim to gain leverage for settlement. Just the same here, if we were to adopt the question you just posed, is if they had pursued for hopes of settlement, that is still a proper purpose. As you so astutely recognize in family law, it is very contentious. There is fight and malice. What's the difference between a favorable leverage and extortion? I mean, where does that line get crossed? Well, here there was nothing that was extorted outside the scope of the discovery process itself. Yes, there might have been some discovery mishaps, but all of the conduct was within the normal part and parcel of litigation. Where it would cross the line to extortion would be, for example, either you pay this or you need to resign as your position. It has to be something outside the scope of what a lawsuit could actually allow you to prevail. I see that my time is winding up. If I may very briefly address the special injury for the malicious prosecution. Just very briefly, Your Honor. Very briefly. The special injury is akin to search of a seizure or confinement. Here, what plaintiff is proposing is essentially a special test just because Mr. Dickey was a legislator. But Iowa courts have consistently shown that there have been two medical malpractice cases where the courts did not put this special injury analysis in the light of just because you're a doctor, your reputation then carries greater weight. They held it to the same standard. And it is what plaintiff is arguing is not appropriate for a federal court to expand the scope of Iowa's rationale, which is to look at special injury just uniformly across all defendants, which is the appropriate framework. And if not, Judge Rose recognized that it is not appropriate for her to expand policy. That is for Iowa's state legislature. Thank you so much for your time, and we ask you affirm the dismissal. You may proceed. Thank you. There are a handful of points I'll briefly address. Initially, I will say that on the standard of pleading in the district court's application of a higher bar, I just want to clarify that's not my characterization or my language. That's Judge Rose's language at the bottom of page 5 of her order, where she's the one who interprets that restrictive view as meaning a higher pleading bar, and that's simply incorrect. On the discovery abuses question, I will say that Restatement 24 that the Husteds rely on has never been adopted in Iowa. By contrast, American Jurisprudence 2nd has, and that confirms Adrian's theory on the discovery abuses point. On the point of needing to extort something outside of the litigation, first, as explained, extortion is not an actual requirement. If we look to the Restatement, for instance, 676, it describes that there are, quote, numerous situations where an improper purpose can be found. Extortion is just one of four examples. One or the other is where a party knowingly files a false lawsuit. Finally, on the medical malpractice case examples that were just brought up, I think that is, frankly, a very great illustration of why Adrian did plead special damages. In those cases, the court considered the damages to the doctor and said, yeah, obviously if you're sued for malpractice, you're going to lose patients. People are going to be skeptical about hiring you as a doctor. The question that needs to be answered here is the damages to Adrian's re-election campaign, to his ability to represent his constituents, and perhaps most crucially to the relationship with his daughter. Would those have been present in other security interest cases? And the answer is no, and as a result, the specialty damages have been that. Thank you. All right. Thank you very much, counsel. We appreciate your arguments this morning. The case is submitted. The court will render a decision as soon as possible. Does that conclude our calendar for this morning? Yes, Your Honor. All right. Very well. The court will be in recess until 9 o'clock tomorrow morning."
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"stt_transcript": "26-1286 from the Eastern District of Missouri, Carl Rose et al. v. Sheriff Wes Drury et al. Alright, Mr. Reitman Cash, we'll hear from you first. You can lower the podium as well. Thank you. Chief Judge Colleton, and may it please the Court. Under this Court's precedence, an officer executing a judicial order must form a reasonable belief that the order covers the property he is seizing. These officers formed no belief at all. They told my client that they didn't know what the order covered, and then they handed that decision off to my client's political adversary and his attorney. But even if this Court disagrees with us on qualified immunity, it should reverse as to the claims against the private actors, who have never argued they are entitled to qualified immunity. The dismissal of the claims against the private defendants, Cottle and Dormier, was based on a state action test that the District Court applied sua sponte, that defendants notably do not endorse on this appeal, and that this Court has only ever applied in the context of suppressing evidence in criminal cases. That was wrong, and this Court should reverse. I welcome the Court's questions. Counsel, explain to me on your qualified immunity argument, why you think the District Court got it wrong. So, there's two, I guess there's two qualified immunity arguments. One is about who decided what to seize, and one is about who was present at the seizure. So, on who decided what to seize, what this Court has held is that an officer must form a reasonable belief that what is being seized is covered by the order. I think the allegation that's kind of at the core of our case on this point is just that these officers plainly did not have any opinion about what was being seized. If you take a look at the video that's attached to the complaint, you'll see Dormeyer, that's my client's adversary's attorney, walking through the house and deciding what to seize. And the officers are just there, you know, with their guns flanking Dormeyer, not saying anything, never interjecting. And it's clear that, you know, just deferring to Dormeyer can't be enough, because if you look at the video, you'll see that Dormeyer clearly wasn't making any decisions on what to seize, based on what's in the order. You know, Dormeyer spent most of that... What was the limitation in the order? What couldn't they get, based on that order? So, the order is directed at Carl Rose's personal property. That does not include marital property, because that's not Carl Rose's personal property under Missouri law. Now, we understand that, like, in a lot of situations, it's going to be hard for officers to tell the difference between personal and marital property, and we're not saying that the officers have to, you know, heed every objection at the scene. We're saying that officers have to form an opinion about whether what they're seizing is covered by the order at all. And these officers very specifically, or we allege, these officers very specifically said, we don't know what this order covers, and when Cottle and Dormeyer get here, then they'll tell you what they're taking. And then if you watch that video attached to the complaint, you'll see that, I mean, the officers just do not have an opinion about what this order covers, or whether, you know, what they're taking, whether what Dormeyer is taking is pursuant to the order. So, I think a good example of this, Judge Smith, is several times throughout the video, Dormeyer demurs on whether they're going to take something, based on whether he thinks his client will want it, personally. Not on whether it's Carl Rose's personal property. So, there's like an antique shelf. He's asked whether he's going to take that. He said, I'll talk to my client about that. The couple's bed, he said, I'll talk to my client about that. And the problem with that is, like, that's not how this process is supposed to work. This is property being seized by the county so that the county can auction it and generate value. And then the value goes to the creditor. The property doesn't just go to the creditor. And if the police are sitting by, watching the creditor's attorney make decisions about what to seize. Isn't that what happened here? The property that was seized was ultimately put up for auction? Yes, absolutely. So, you're saying they seized too few items of property because the client didn't want some of the property, and that violates the Fourth Amendment because they didn't form an opinion that it was seizable? No, it's not too few or too many. The issue is whether the officers themselves are forming a reasonable belief that the seizure is happening according to the order. A subjective belief? No. So, it's a Fourth Amendment test. So, it's an objective. The question is whether there's an objectively reasonable basis. So, what do you mean that they have to form an opinion? You mean a subjective opinion? Or do you just mean as long as the opinion that was manifested objectively is reasonable, then it's a permissible seizure? It's the latter. So, they may objectively form the opinion that whatever was seized was seizable. So, they didn't. I don't think a reasonable officer in this situation could have formed that opinion. Again, I encourage you to watch the video attached to the complaint. While you're talking subjectively, what they subjectively formed as an opinion, but objectively they allowed the property to be seized. So, objectively, an officer watching a private citizen decide what to seize based on criteria that is plainly not related to the judicial order could not form a reasonable belief that the seizure is happening according to the order, that what is being seized is the property subject to the order. Counsel, it seems the language of the court order is so broad that it says that they were entitled to levy defendants' personal property to satisfy the judgment. If it's his residence, virtually anything there could be thought of as dispersonal property. And that what wasn't could be sorted out in the interim until a sale takes place. A few points on that. First, personal property does not mean all property found at a person's marital home. Second, again, it's about whether these officers had a reasonable basis to believe that everything being seized was covered under the order. And these officers did not. These officers, I mean, this is what I was just saying to Judge Colleton. And third, you know, the existence of post-deprivation procedures, this court — I don't know what the practice would be in Missouri, but was this unusual to have legal counsel present to give advice about what was seizable and what was not? Yes. So our understanding is this is extremely unusual. We state in the complaint that the sheriffs at the scene said that they had never heard of a seizure like this in 35 years of doing this. And, you know, I just — I think the reason for that is that when you have a seizure that is not related to particular property but is instead meant to generate value, the creditor's attorney is not going to know anything that's going to be helpful. Was there an opportunity to retrieve things that wouldn't have qualified before the sale? Yes. There was an opportunity. So there are post-deprivation procedures. My client was pro se at the time. He filed several motions with the state court. He didn't follow the exact procedures that he was supposed to. But I want to be clear that under this Court's precedent on Bonk, Audio Odyssey, and the Supreme Court, the existence of post-deprivation procedures does not cancel the underlying constitutional violation. It might go to damages. That's a separate issue. But that cannot be a reason to dismiss. I mean, I think that would violate on Bonk and Supreme Court precedent. Counsel, in practice, if we re-adopt the ruling or the principle that you're advocating for, how would that play out in the real world if, you know, the sheriff shows up to seize property? Wouldn't somebody just claim that everything in the house is marital property and not theirs? And what happens then? So I think in the real world, the vast, vast majority of seizures are going to be perfectly fine. This is a very low bar. All the officers have to have is a reasonable belief that the property they are seizing is covered by the order. There is already a precedent in this circuit, the Johnson case from 1999, that says that the officer doesn't just have to take the word of the person at the scene as to whether property is personal property or subject to the order or marital property. So, again, we're not saying that that's, you know, that that's the line here, so they should have just packed up and left. We're saying that the officers who are ordered to seize personal property should have formed an opinion about whether the property that was being seized was, in fact, covered by the order. And they can't just hand that decision off to private parties who, we allege, have no superior knowledge. And, you know, this can cash out differently if the private parties do have superior knowledge. There are situations where a seizure might justify an officer deferring. For example, we cite a case from the New Hampshire Supreme Court where there is a seizure of certain animals and the officers rely on the expertise of, like, a local animal organization about how to do the seizure. That makes sense. I think what we're talking about here is a situation where officers abdicate the decision entirely and they abdicate it to people who have no knowledge whatsoever, no superior knowledge to the officers about what should be seized. Did the folks with the campaign T-shirts come on the property to help carry stuff off, or did they stay off property? The folks with the campaign T-shirts came on the property. And, as we allege, they caused a lot of damage also while they were carrying stuff off. And that brings me to the other qualified immunity arguments that the Supreme Court has held, that if police officers are going to bring private people into the search of a private home, the private individuals need to have a direct relation to the police's constitutional justification for entry. And, you know, that is a general principle, but here we do think that there's an obvious violation of that more general principle. The only justifications that we've heard at any point throughout this litigation for the private parties being part of this search, from the other side, is it was up to the creditor under Missouri law to decide what to take, which is just a misunderstanding of Missouri law. And then the other justification is that they were there to help carry stuff off. But if that counts as a direct relation to the constitutional justification for entry, then police can just bring whoever they want into any private home by, you know, handing, as literally as muscle. I mean, you could imagine a situation where police officers bring private people into a home and have them do the handcuffing, have them do the carrying away of suspects. And if that, you know, that's physical help, if that's enough, then I'm not sure Wilson stands for anything. If I could briefly turn to the state action point. Even if you disagree with everything that we've just said, you should still reverse as to the claims against the private defendants. The private defendants have never argued they're entitled to qualified immunity. Their argument is that, or the claims against them were dismissed based on the state action test that we have explained is wrong. This Court has never applied in that context. I'd be happy to answer other questions about it. But the thing I want you to understand is, you know, these are separate issues. And a reversal on state action is completely possible even if you disagree with us on qualified immunity. I'll be back up on rebuttal. Thank you. Well, on the state action point, you're saying they're subject to the Fourth Amendment even though they're not? What's your theory on the private persons? So our theory is that the test for state action is context specific. And in the context of the private people seizing private property, you know, when public officials are present, the test essentially boils down to whether the government has cloaked the private people in a kind of authority that allows the private people to take the property where they otherwise would not be able to do so without it being theft. So a good example of this is there's Thompson v. Cockrell, this case from 2025, this Court's case from 2025. That was a situation where an officer was at the house for a breach of peace call, and the gate was unlocked, and some private person walked in and stole a bike. And this Court said that's not state action because the private person can steal the bike, you know, regardless of whether the officer is there. But this is the polar opposite of that. This is private people who would not have even gotten into the house if there weren't officers with guns anywhere. So your point is that they are, therefore, state actors subject to the Fourth Amendment? Yes. All right. And if what they did is reasonable, then there would be no claim against them. Well, so I think the issue with that – Is that right? Not quite. But if what the officers did – the question of whether what the officers did was reasonable is different from the question of whether what the private parties did was reasonable. Well, I didn't say it was not different. I said if what they did is reasonable, then they would not be liable. Is that true? If private parties' actions are reasonable, which is an issue that no party has briefed here, and they have never argued, if that is the case, then the private – the claims against the private parties would fail. But the private parties have only ever argued that the police officers' actions are reasonable. And they seem to – I think they think that they have like a derivative – Why would their reasonableness be different? So all of the arguments we've heard about – If you're claiming they're state actors. So all of the arguments we've heard about the state actors' unreasonableness have been about how there are these competing duties under state law for sheriff's officers and how there's a judicial order that they have to follow, and if they don't follow it, none of those arguments would apply to the private actors. I'm not sure how it would cash out. I mean, we've responded to – Well, if you're saying the reason they're state actors is they're cloaked as part of the police operation, why wouldn't – why wouldn't it also follow that the reasonableness inquiry is the same? So it wouldn't follow because I guess just, you know, a core part of 1983 is that liability is individual. And there are different factors going into the reasonableness calculus of private actors. Private actors can't just do something because there are police there, right? And private actors don't have an order directed at them. And private actors don't have any competing duties under state law. And, I mean, frankly, I guess we're getting into the weeds of an argument like the defendants haven't made. They have not argued they're entitled to qualified immunity on the basis of their own actions being reasonable. They are saying the sheriff's actions are reasonable, and derivatively, therefore, there can't be a Fourth Amendment violation. But that's not how I think this Court should do the analysis. All right. Thank you for your argument. Would you – is it all right – I know my time has run out now, but would you mind if I came up for a few minutes of rebuttal? Well, we usually don't add more time, but we'll consider after we hear from the police. Let's see. Mr. Plunkett, are you first? Yes, Your Honor. Very well. We'll hear from you. And, Your Honor, I will be speaking for the first portion. We have counsel for Dormier, who will be taking the second portion, and counsel for Caudill taking the third. May it please the Court, counsel, as I said, I represent – or I don't know if I said – I represent Wes Drury. I represent Chief Deputy Meredith. And you had some questions previously, Judge, with respect to whether this is an object of reasonableness test. I want to just go right at that. It is. We're talking about the Fourth Amendment. Object of reasonableness is what takes precedence. You heard some discussion earlier from counsel with respect to the Johnson case. That's in 1999 from this Court. And I'll quote it. To argue that the dispossession becomes unconstitutional simply because the deputy serving the writ should have known these facts beforehand borders on the frivolous. I believe those were the closing words of Johnson, and that's very important because in Johnson this – the allegations were that a boat, I think a trail or two, were taken from the driveway where the writ said any and all personal property of the judgment debtor located at 1812 West Arlington, Lincoln, Nebraska. Well, that should sound very similar to what we have here, all personal property of the debtor. As it turns out in Johnson, the deputy was wrong. That was actually property of someone else. But this Court still found that there was qualified immunity. And the attorney for the debtor was telling the deputy, don't take that boat. That's not the debtor's. And this Court said, you don't have to heed warnings from some stranger attorney. That's not the obligation of the deputy. But in Johnson, weren't there – doesn't the Court point to reasons that the deputy's decision was objectively reasonable, like the boat was about to be moved and he asked for proof of ownership that wasn't produced? Yes, yes. And here, to analogize that, the video is attached to the complaint. So we had some questions earlier on opening oral argument with respect to what was it that took place during that search in the video? Well, Mr. Dormeyer asked questions, sure. But the allegations were that my clients were there, and they were. You can see Wes Jury in the video, and Ron Meredith is taking the video. So that's also in the complaint that they were there. So how was it objectively reasonable then to seize the pink horse tack when they're being told this is my daughter's? And what would be the objectively reasonable reason to believe that that was not true? Because there was no allegation either in the complaint, nor did the video say anything about that pink horse tack being the daughter's. In fact, all the property that was identified, because the plaintiffs were there too, the adult plaintiffs were there during that walk-through, and they stated, as you see in the video, this property is grandmother's, or this is a children's bedroom. And Mr. Dormeyer says, okay, well, we're not going to take that. So to your point on reasonableness and objective reasonableness, when the response of the plaintiffs themselves say, they don't say this pink horse tack is my daughter's. They leave it alone and don't talk about it. Well, to the point with respect to, we're at the debtor's house. The sheriff deputies aren't there to weigh evidence. And Missouri has a procedure for all of that. Was the daughter a minor? I believe so. Under Missouri law, would she have separate property from the parent? I believe personal property can be owned by a minor. I thought about the same thing. But she has an intervention ability just as any person could through a next friend. It could be owned by the father, or it could be owned by the daughter. That's right. Do you think it's therefore unclear, sort of like with the marital property? Correct. And if it was anything like my household, my father constantly reminded that I don't own anything when I was a minor. It was all this. Did I just hear you say that you think that the outcome would be that the daughter should have gone and found a next friend to participate in the court proceedings after her horse tack is taken? That is the proper procedure for Missouri law. Why should a minor have that duty to have to go to court to get her stuff back? It's the same as any third party that has an interest in things that are being seized from property. It's the same rights as anyone else would. So that would be, that's the answer. So when we look to objective reasonableness, it's not that Dormeyer is questioning. It's the answers that plaintiffs give, and that is in the presence, and the answers that they don't give, and they don't say set this aside. That is knowledge that's in the complaint, and it's objectively reasonable for officers on the scene armed with that knowledge to make decisions on that. Now, we know under Duval, which is a state court case, if the deputy doesn't seize certain things, the deputy can be sued. And the Missouri Court of Appeals reversed and said, no, this goes to a question of fact, when the deputy showed up on the scene and the wife said, this is all marital property. And the deputy said, okay, well, if it's marital property, I'm not going to take it. Well, now that deputy is subject to civil liability. So we're coming into, and I know you had a question, Judge Smith, with respect to kind of the future implications. Think about a share, and we don't look in hindsight. Look at the things that are presented to these deputies at the time. Do they become liable to the creditor for not taking something, or do they take something with a contention that they're not obligated to listen to from the debtor for the Fourth Amendment? That's an impossible situation as an arm of the court, I would argue. And if you think about future implications, that rule that I believe plaintiffs would suggest you have would put deputies and sheriffs in a bind when trying to execute writs of and levying on property pursuant to court orders. So I think a few years after Johnson, Judge Levinsky Smith, I believe maybe one of the first opinions that you wrote, because it was a few months after you took the bench and was appointed, was the Coons case. And we know from the Coons case that there were individuals, kind of shifting gears a little bit, that there were individuals that helped take the property and store them for the sheriff's department. That didn't render it unconstitutional. And we also knew that that involves some marital property as well. Again, that didn't render it unconstitutional. So we have two Eighth Circuit cases, Johnson and Coons, that inform the officers, put the officers on reasonable notice of what's proper and what could be improper. There are no cases, which is the plaintiff's burden to cite, that are controlling on the point that what the deputy and the sheriff did here was unreasonable. That is critical for qualified immunity. So turning as well, I believe there was one point that came up with respect to the presence of the attorney. Well, Missouri, the argument isn't that the attorney gets to decide what is taken. That's not it. The argument is under the Mather case, which I cited in my brief, that compliance with, by the sheriff, it says where the plaintiff gives directions. Compliance by the sheriff relieves the liability of the plaintiff. And again, we're looking at directions of the plaintiff, which can speak to the attorney. And we're trying not to put the sheriff and deputies in this impossible situation where they're liable if they do and where they're liable if they don't. Turning very quickly to absolute immunity, unless there are other questions about qualified immunity. This is a court order. As mentioned, it was very broad. But we know from decisions from this court that it's not the absolute letter of the order, and it's too stringent to say that that's how absolute immunity applies. If you go beyond the four corners, you're automatically not within absolute immunity. No, that's not true. Pevelone v. Thomas is a case affirmed by this court, which authorized it by the circumstances. And I would urge this court with the video that the circumstances, given the writ, given the walkthrough, given the video that's a part of the complaint, they are doing what is commanded by the court and knowing going into these proceedings that afterwards, the Missouri court can have all these proceedings determine, okay, is it marital as a matter of law based on evidence we receive, and is the presumption rebutted, which is another, it's a judge task, not a sheriff task. So I see my time is close before I hand it over to defense counsel. Are there any other questions with respect to the sheriff and the deputy? Thank you for your argument. Ms. Weiler, we'll hear from you. Thank you, Chief Judge. Good morning. May it please the court, my name is Catherine Weiler. I represent Mr. Dormier in this appeal. I'd like to focus in my very brief time on two issues. One is the substance of the allegations themselves. I shouldn't say substance. The structure, the structural mechanism by which we evaluate these claims. These are claims alleging a constitutional deprivation under Section 1983. And so how does this court evaluate those claims and how does the district court evaluate those claims? There can only be liability if, number one, there is a constitutional deprivation, and number two, the actor was acting under color of state law. In this particular case, we're talking about an alleged Fourth Amendment violation for an unreasonable search and seizure in two instances. One related to the property taken. We've discussed that a lot today. The second relates to an allegation that it was unreasonable for Mr. Dormier to be present at the scene. That led to a question, I believe from you, Chief Judge Colleton, about whether it is normal for an attorney to be present at the scene in a situation such as this. And that's where the Tift case comes in. That's the Western District of Washington case, Tift versus Snohomish County. And the answer is yes. The court there specifically stated, quote, the court is unaware of any legal authority that holds that the presence of a judgment creditor's attorney invalidates a writ of execution or violates the debtor's Fourth Amendment rights. It's not a violation of the Fourth Amendment for an attorney to be present at a search and seizure in this type of situation. It's not a constitutional violation. And that leads, Chief Judge Colleton, to the second point that I believe you were making with opposing counsel. And that was the question about whether, because these allegations, certain of these allegations are against private actors, if this court determines that there is no constitutional violation, can there still be liability in the private actors? And the answer is no. There cannot be. Because there needs to be a constitutional deprivation at issue first. The second half of this court's consideration. What's the allegation against Dormeyer? Is it just that he was, his presence was unconstitutional? Is there an allegation that something he did while he was there violated the Fourth Amendment? So the allegation is that the search was unreasonable for two reasons. And it's the same allegation against the public actors and the private actors. It's not just that they allegedly took property. So it is both. Are you saying the answer should be the same as to the public defendants in Dormeyer? I am saying that, Judge, and even better for me, this circuit has said that. And that is specifically stated in the Johnson case. And that's what I'd like to close with. The court specifically said, quote, that a state actor violated their rights under the Constitution of the United States. That claim against the private actor must also fail. The same is true here. And we ask the court to make that finding. If there are no additional questions. Very well. Thank you for your argument. Mr. Bells, we'll hear from you. May it please the court. I represent John Caudill. You haven't heard a whole lot about him so far. And I would like, in addition to answering any questions, to emphasize the minimal role that he had in the complaint. Count one is a search and seizure claim against all defendants, unreasonable search and seizure. But the complaint makes it clear that John Caudill never entered the property. It sort of talks about Caudill civilians. And then it says, except for Caudill, they entered the property. There's also a video that describes everybody that's involved. It says who's wearing what. Mr. Caudill's not involved. He didn't enter the house. Is he the person that drove the truck away, though? Exactly. He was, according to the complaint, at the end of the driveway. And a person relayed a truck to him. So there wasn't any search. And on your point, I guess there could be an argument that there was a seizure. The truck was taken and then it was delivered to him and then he took it somewhere else. That truck is the one piece of property in the complaint that they say was owned by Carl Rose only. It wasn't marital property. So there can't be a Fourth Amendment violation with that piece of property. It's not part of their case. This whole case is about marital property. And the truck is the one thing that they say was Rose's only. It's also described by VIN, V-I-N, in the order. It was lawfully seized. So there wasn't any search and seizure violation by my client. I think if there's no underlying search and seizure by the other defendants, I don't think my client would be liable either. The next count is a conspiracy claim. A meeting of the minds must be pled with specificity. Is there a record to indicate why Mr. Cottle drove the truck away as opposed to the sheriff's deputy or someone with the government's authority? I don't think there's anything in the complaint that says why it happened. I don't know why. The count chooses a conspiracy claim. Does the claim allege who delivered the truck to Cottle? Yes, it was one of the non-defendant civilians that was there. I don't remember his name. It was just a person that was there. Sort of took it to the edge of the property. Cottle wasn't allowed on the property, according to the complaint. The conspiracy must be pled with specificity. There's nothing in the complaint about Mr. Cottle's meeting of the minds with anybody else. He never spoke with a sheriff or anybody like that. There was a planning meeting. He's not alleged to have attended it. And finally, the conspiracy has to have the objective of violating constitutional rights. But there's no allegation that my client knows anything about marital rights or tenancy by the entireties. And I think, lastly, ten seconds, the point of conspiring to take marital property would be very strange because these parties have an exemption right. They could just go and, you know, they have 20 days from execution to say, well, that property was exempt. We get it back. They didn't do it. It wouldn't make any sense. All the arguments you're making on civil conspiracy, the district court didn't get there, did it? Since it was just deciding that no constitutional violation, therefore, there can't be a civil conspiracy. That's exactly right. They just said no Fourth Amendment violation, so no conspiracy. Very well. Thank you for your argument. Thank you, Your Honor. Only if you want me. We'll give you two minutes, but please adhere to the limit. So, I want to hit on a few points on qualified immunity. My friends on the other side mentioned Kuntz. The only Fourth Amendment claim in Kuntz pertained to the magistrate judge not signing the judicial order. The court disposed of it in a footnote. It was a procedural due process. The language they quote from Kuntz is a procedural due process claim, and that is the only kind of federal claim the Supreme Court has held, is defeated by the mere extension of process. All the other, you know, all the other claims in the Bill of Rights are not defeated by the mere extension of process, which is what this court held in Audio Odyssey on Bonn. If you disagree with us about qualified immunity, I don't think that a finding that the sheriffs are entitled to qualified immunity gets you all the way to a finding as to the private defendants. So if the conclusion was that there's no constitutional violation? So, okay, so I guess the first point I was going to make is if there's just a finding of no clearly established violation, then that's not the same thing as no constitutional violation. But if you find there's no constitutional violation, then you have to evaluate every defendant in a 1983 case on their own terms and the question is whether the private actors were acting reasonably in the Fourth Amendment sense. And all the arguments we've heard about whether the public actors are acting reasonably, all those arguments are about how sheriffs have this special duty. Sheriffs can be sued by the creditor if they don't do this. You know, the order was directed at the sheriffs. If you're just going to say that the private actors are derivative of the sheriffs, then you're basically saying private actors, as long as they're there with the police, are never going to violate the Constitution. And I don't think that's right. Well, why would it be? Go ahead. Go ahead. I mean, you're saying the reason they're subject to liability at all is that they are state actors working under the umbrella of the police. So why shouldn't the reason of this inquiry be the same? So it shouldn't be the same because, you know, the fact that police are subject to, you know, specific duties under state law when the police clothe private actors in private authority, that doesn't make those private actors subject to all those same duties, subject to the same orders or the same state statutes. The private actors, my point is only that it is a completely separate issue that the defendants have never argued or briefed. Okay. And the cleanest path to reversal here, if you disagree with us on qualified immunity, is just say the district court applied the wrong state action test, we reverse and remand and you can let everything go besides that. Thank you so much. Thank you for your argument. 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": "25-3451 for the Southern District of Iowa, Dennis Donnelly v. Des Moines Register and Tribune Company et al. All right, Mr. Sir, we'll hear from you first. Good morning, Your Honors. May it please the Court? I think I've already reserved three minutes for rebuttal, if that's okay. You may, but you'll need to stop on your own because the clock will continue to run if you continue to speak. And the clock has started. There we go. Great. Good morning. So I know we're all excited to talk about the First Amendment today, but I think we should probably start with jurisdiction because it is, after all, jurisdictional. So the Class Action Fairness Act was enacted by Congress with a particular purpose. It was to prevent a litigation gamesmanship tactic that would take class action consumer protection cases against nationwide products and try to get around federal courts by suing with a class of people in a particular state under that state's law. And so we passed the Class Action Fairness Act. But Congress recognized at that time that there are class actions that belong in state court because they deal primarily with issues and victims in that state. And so there are a trio of exceptions, two of which are mandatory, that I believe are relevant to removal in this case. I represent a putative class. We have exclusively state law claims. And those claims deal with something that happened in Iowa to Iowans under Iowa law about an event in Iowa. So it seems to me it belongs in Iowa state court. The district court disagreed. And I think the two primary questions the court has to answer today are new to this court. There's no Eighth Circuit precedent interpreting either the primary defendant portion of CAFA's first removal provision or the principal injuries prong of the second provision at issue. So turning to the primary defendant prong, I actually think this is perhaps the easier of the two questions to resolve. And the best way to think about it, I think, is that a primary defendant has to be something more than a significant defendant. And that's because the two terms are used near one another in the same statutory section. And so courts point especially to the Eastern District of Louisiana's opinion in Caruso, which I think goes through this in pretty good detail. The Fifth Circuit's decision in Watson, I think, is good on this, although not quite as detailed. But the basic point is it seems correct that a significant defendant is less than a primary defendant. So the question here is, is Gannett, as the corporate owner of the Des Moines Register, a primary defendant? And my answer is no. It is the corporate parent. It is appropriate to be here because it sets standards for its employees at the company. But it is not a primary defendant in that it did not have a major role in the events that are at issue. Well, didn't the complaint allege that they were responsible for coming up with the poll and set standards for the use of polls? No to the first and yes to the second. So Gannett, as the corporate parent, did not sponsor the poll. The Des Moines Register Company, which is a separately incorporated Iowa company that's owned by Gannett, was responsible for both conducting the poll through its contracted pollster and then publishing the poll. What Gannett did, you're correct, Your Honor, is set standards for its newsrooms. And one portion of those standards is that it charges its employees to be careful with, among other things, polling data. We obviously believe they weren't careful here. But I would submit that setting standards for a nationwide corporation is not being a primary defendant, right? It's being a corporate parent. And there's a string cite in our brief of probably 6, 8, 10 cases. Do you hold them accountable for the damages you seek, the relief you seek? Yes. Iowa is a comparative negligence state. So eventually I think that would be a question for the jury. But yes, they are here because we hope to get money out of them, if that's what you're asking. So I think the primary defendant prong is best seen in light of the significant defendant prong nearby. The second sort of question that the case presents in this regard is the principal injuries prong. And that is, I think, probably a little bit more of a messy state of the law nationwide. There's kind of a Third Circuit case. There's obviously a Fifth Circuit case, Cheapside Minerals, which is what the district court relied on most extensively. And I'm always hesitant as a lawyer to come in and say, y'all should create a circuit split. I realize that is asking a lot. But respectfully, I think the Fifth Circuit got it wrong in this case. And if it's any consolation, I think the Fifth Circuit kind of created a circuit split with the Third Circuit anyway. The Third Circuit, I think, takes a more appropriate approach to defining principal injuries, which is to say that the injuries need to be concentrated in the forum state, but they do not need to be exclusive to the forum state. The Fifth Circuit's interpretation in Cheapside Minerals is that every single member of the putative class needs to be in the forum state in order to qualify for the exception. That, I think, is contrary to the legislative history, but I realize that's not the best guide in this instance. It's just the guide that the Third Circuit relied on in, I'm going to say it, Voting Jar. I think that's right. I think the better way to think about it as a matter of text is that it's the principal injury to the class, which is to say that the class as a whole needs to be injured in the forum state, but it's not that every single member of the class needs to be in the forum state. I think if you look at some of the examples you'll see in district court cases interpreting the provision, you know, they're thinking about something like an explosion at a factory, right, where a whole bunch of workers are injured. And so the event takes place in the forum state, but those workers, you know, might be in multiple neighboring states and commute in, something like that. And so the injury to the class takes place in the forum state, but not What's the injury alleged here? So the injury alleged here is that the Des Moines Register committed consumer fraud and that the injury to consumers is their subscription price that they paid. One of the elements of Iowa consumer fraud is that you have to have a specific dollar amount associated with the injury. And here that dollar amount, that injury, is the subscription price. And there are people across the country that paid the subscription price? Gannett has submitted an affidavit saying that, yes, Your Honor. I think those are my big thoughts on jurisdiction. I'm happy to answer any other questions on it. Otherwise, I know we're all really here for the fun part, which is not Iowa consumer protection law. It's the First Amendment. So in that case, I'll transition us to the First Amendment and talk about, I think, the two cases that matter most in determining this case. The first is the Animal Legal Defense Fund case. I think this Court's opinion in Animal Legal Defense Fund sets very clearly that actual malice is the correct standard for pleading a claim based on false speech in a private damages context. The other side, I think, is out to make this sort of categorical immunity for newspapers and pollsters and others to say that there are very limited exceptions to the First Amendment, such as defamation. And if you don't fit in one of these extremely narrow buckets, then it's all fair game. And I just don't think that that position can be reconciled with Animal Legal Defense Fund. I think that opinion is very clear that historic torts, including the torts that we've pled here, are not preempted by the First Amendment. It simply sets a standard that you have to plead actual malice. And that, I think, the district court agreed on, that actual malice is the standard. She simply, I think, erred in finding that we hadn't pled enough to show actual malice. So that's the second important case in determining the question we've presented, and that's Nelson Auto Center. All right, what Nelson Auto Center says is that in order to plead actual malice, you need to introduce enough in your pleadings to raise a reasonable inference. It's not to say you're going to win. It's just enough to say you've raised a reasonable inference of malice. Federal Rule of Civil Procedure 9 says malice can be pled generally. Our burden is eventually to show that the Des Moines Register and the other defendants either knew subjectively and intentionally that the poll was wrong, or at least had subjective substantial doubts about what they were doing. That's our burden at trial or at summary judgment. In order to get there, though, we don't have a window into the defendant's mind at this stage. There's no smoking gun e-mail that's already public. Those sorts of things come out during discovery. Or ultimately, we have depositions, and we, through the course of depositions, are able to ask, did you have subjective doubts about whether or not this information was accurate, and did you decide to run with it anyway? So the question for this Court right now on a motion to dismiss is, have we pled enough to raise a reasonable inference that they acted either knowingly or recklessly subjectively? Well, how do you do that? Well, what we have done is try to stitch together as many different elements or indicia of fraud, elements or indicia of subjective doubt as possible. And I think there are two in particular that I would highlight for this Court. One is just math. There's a one in 3.5 million chance that the poll was an honest mistake. That is to say, polling is social science, right? That on the day the poll was taken, the voters of Iowa believed this about the election within 3.4 percent, 95 out of 100 times, right? There's a margin of error at a confidence level. 3.4 percent, 95 out of 100 times. And so if you look at being off by 16 points, there's a political scientist who's done this, who's a former member of the Iowa State faculty, the chances of it being an honest mistake, that they just called the wrong people who were misrepresentative of the people of Iowa is one in 3.5 million. It seems like running with something that has that sort of likelihood of being erroneous would raise a significant reasonable inference of subjective doubt or knowledge. The second piece of information is that at the time, both Dr. Selzer and the Des Moines Register described the poll as stunning, shocking, surprising. Well, often when we use those words in our regular everyday lives, when something is shocking to us, sometimes our response is to say, gee, I wonder if it's true, right? Like that is a very normal human response when you get information that you don't expect, information that is contrary to everything else you know about a topic. When you describe it as shocking, you wonder is it the information is accurate or is it that everything else I know about the world is inaccurate, right? That's a very human response. And so when the Des Moines Register itself and Dr. Selzer herself have described the poll in this way, it seems like very good evidence for us at a pleading stage to say it was a reasonable inference that they had subjective doubt about it and they decided to run it anyway. Obviously, there are a number of other facts that we have in our complaint, which we lay out in our brief, but I would point to those two in particular as sort of the best to say that there's a reasonable inference under Nelson that we have raised this. And I see I'm three minutes on the nose, so I am happy to take any questions. Otherwise, I'll save my time for rebuttal. Very well. Thank you, sir. Thank you for your argument. Mr. Yoshimura, we'll hear from you. Thank you, Your Honor. May it please the Court, I'll be discussing the jurisdictional issues and time permitting some of the Iowa claim issues, and I'll reserve the rest of the time for Mr. Korn Revere to speak with you about the First Amendment. When it comes to CAFA, respectfully, I think Mr. Soar's summary of Congress's intent was incomplete. If you look at Section 2 of the legislation that contains the finding and purpose of CAFA, in which Congress stated that its purpose was to, quote, restore the intent of the framers of the United States Constitution by providing for federal court consideration of interstate cases of national importance under diversity jurisdiction, and specifically to prevent plaintiff's attorneys from keeping cases of national importance out of federal court. This case absolutely belongs in federal court. It's a class action on behalf of a putative class spanning all 50 states, concerning the nationwide publication of a poll concerning the U.S. presidential election in 2024. That certainly fits the bill. And, in fact, the subject matter jurisdiction of the federal courts is not contested. The structure of CAFA provides for elements to confer jurisdiction. Those have been conceded. What we are talking about today are these so-called exceptions, which, to be clear, do not divest the federal courts of jurisdiction. Rather, they're a mandatory abstention doctrine that's built into the statute. And the reason that that distinction is important is because it informs the framework in which we consider those exceptions. In the Westerfeld case from this court back in 2010, that framework is set out very clearly. First, we assume that the statute contemplates broad federal jurisdiction and that the exceptions are narrow, which is why there's a burden-shifting mechanism, and it's Mr. Sirr's obligation to prove the elements of the exceptions. But, importantly, and as confirmed by Judge Smith, your opinion in the Hargett case in 2017, we resolve any doubt as to the applicability of those exceptions against remand. And as the Westerfeld case said, that's because we're avoiding using the exceptions as jurisdictional loopholes to evade CAFA. So, as Mr. Sirr said, the two issues here are whether Gannett is one of the primary defendants in this case and whether the principal injuries were incurred in Iowa or in additional places besides Iowa. Does the record indicate what percentage of non-Iowa plaintiffs are a part of this class or would be a part of it? It does not yet. And the district court's ruling was clear that that's because she doesn't need to know that in order to reach conclusion on those two elements. Neither of them require a quantitative determination of how many members of the class are imputed in this petition. That's because when, I guess, we can speak specifically to the principal injuries prong because that's where the quantitative and qualitative dichotomy comes into play. The Cheapside case that Mr. Sirr mentioned, we would say, is the model for this court to follow. In that case, appended by Judge Judith Jones out of the Fifth Circuit, she did a very robust textual analysis of the statute to determine exactly what principal injuries means in context. And what she noted is that the quantitative part of the exception is a different element, and that's the two-thirds of the members being in the state requirement. And so Judge Eppinger in this case below said, I actually don't need to know the answer to that because under the Fifth Circuit case, the question about principal injuries has to do with the qualitative nature of the injuries here. And we've just heard from Mr. Sirr. I think it's pretty clear the only injury at issue are the subscription payments that subscribers from around the country and all 50 states paid to the Des Moines Register. Because of that, there's really only one type of injury if we're doing the qualitative analysis. There aren't multiple injuries that we need to weigh. Because there's just the one, the question is, where was that injury felt? And I think Mr. Sirr's reply brief notes that we're talking about the injury to the class as a whole. That injury occurred everywhere in the country. It doesn't matter if it was concentrated in one state or another because the principal injuries prong is not the quantitative part of the exception. It's the qualitative part of the exception. So as Judge Jones found, based on that textual analysis, when some plaintiffs sustain their primary injuries in the form state but others do not, this element, the principal injuries element, is not satisfied. Counsel, are there any types of injuries other than those relating to real property that would be able to satisfy this exception the way they're interpreting it? It's an interesting question. I think that most of the cases are about property. And, in fact, the example that Judge Jones wrote about in the Fifth Circuit case had to do with that exact issue. I think in this particular case, we don't need to cross that bridge because there's only one type of injury and only the one injury. But why would principal mean what you're arguing in light of the two-thirds prong? Why would Congress write it that way? Because quantitatively, they want a certain threshold of the members to be within the state. And then qualitatively, they want to make sure that the injury actually occurred in that state. But aren't you interpreting principal in a quantitative way by looking at a number of how many people are in the state? No. So what the Fifth Circuit is suggesting, and we argue it's the best way to do it, is to look at the number of injuries and then rank them amongst each other, which ones are the principal for the case. So the example that Judge Jones wrote about in the Fifth Circuit case is, you can, for example, imagine a case where bodily harm occurs in Texas and then there are related medical bills to be paid in Florida. There you've got two different types of injury, and so you have to weigh them against each other. What you're not doing is checking how many class members are in these places and then saying how many dollars are associated with them. That quantitative piece is left to the first prong. If I could switch gears real quick to the Homestead exception. So you've talked a lot about the Fifth Circuit under the other exception, but on the Homestead exception, you haven't talked a lot about the Watson case. Doesn't the Watson case say that your primary defendant can't meet everybody, and that's essentially what you're arguing in this case, that all defendants are primary defendants? I don't think that the Watson case stands for that necessarily. And, in fact, the Vodenichar case, the Hunter case, a number of other cases that we've cited state the opposite, that depending on the number of defendants and what they're alleged to have done, all of them may be primary defendants or only some of them. Certainly, it can't just be a singular defendant. There's not one primary defendant because the statutory text says that there can be multiple ones. We think that under any definition, whether it is some or all, Gannett has to be a primary defendant in this case. Judge Smith, as you were asking about the allegations in the petition, I'd just like to point you to a few of them. In paragraph 86, plaintiff has alleged that Gannett exercises editorial control over its affiliates to an extent unseen in other chain newspapers, and that the tie between Gannett and the register is specific to the poll in paragraph 72. And the causes of action, they specifically allege that Gannett is liable based on its editorial control of the register and that it seeks to hold Gannett liable for its influence over its local paper's newsroom decisions. And, in fact, the petition then cites a case called Sandman that confirms that that's the intent here. So Gannett is not merely on the hook as a parent. It's being alleged to have caused the publication of the poll. It is a primary defendant, and the exception does not apply in this case. For that and the reasons stated in our papers, we would ask you to affirm the district court's order in full. Thank you. Very well. Thank you for your argument. Mr. Korn Revere, we'll hear from you. Thank you, Your Honor. Your Honor, may it please the Court. The district court was correct when it described plaintiff's theory of liability as absurd and dismissed all claims with prejudice. Now, the plaintiff's argument essentially is that any subscriber can sue a publication if they become frustrated in believing that their news product isn't accurate. Now, just imagine how broad a theory this is. It means that subscribers to Fox News can sue if they believe that the product isn't fair and balanced, or a New York Times subscriber could sue the newspaper if he becomes convinced that the Times doesn't, in fact, print all the news that's fit to print. But the law doesn't permit such claims. That's why in Brandt v. The Weather Channel, the court dismissed a claim for a bad weather forecast that resulted in injury. The court described the claim as a novel and unprecedented expansion of the scope of tort law with no limiting principle, and the same is true here. That's why the plaintiff can't name a single case supporting the theory of liability in this case, and every court that has dealt with the claim that news should be treated as fraud has dismissed the claim. That includes Hollander v. CBS News, where the court dismissed wire fraud claims based on allegedly false and misleading statements about then-candidate Donald Trump. It also includes Washlight v. Fox News, which dismissed claims under the Washington Consumer Protection Act based on claims that Fox News had falsely reported about COVID-19. And it really doesn't matter which of the theories of liability that Mr. Donnelly tries to pursue. None of them provide a basis for liability, and all fail at the threshold. There simply isn't a false statement here based on an inaccurate poll. Now, Mr. Donnelly claims that the poll results were way off, and using various adjectives to describe how far off, and that it violates professional standards even to publish an outlier result. In fact, if you look at pages 37 to 38 of his opening brief, he says that a shocking result alone should be enough to show recklessness on a motion to dismiss. This is really nonsense, and it really just is an indication that Mr. Donnelly does not know how polling works. As a matter of fact, if you look at the complaint, paragraphs 101 to 104, it tries to make the claim that publishing an outlier violates the American Association for Public Opinion Research Code of Ethics, citing only snippets of that. Well, as it turns out, the association filed an amicus brief in this case, and they disagree with that conclusion, stating things like outliers are statistically inevitable, that stunning outliers may actually accurately reflect voter trends that other polls have missed, and that there is no way to know at the outset of a poll whether or not a given outlier is wrong or whether it captures something real that other polls have missed. And simply citing to the margin of error published with the poll shows that a poll is a deviation from its stated margin of sampling error. It can't unilaterally be characterized as a falsifiable statement of fact. There simply is no false statement here. And it's why the district court correctly concluded that the results of an opinion poll are not an actionable false representation, merely because the anticipated results differ from what actually occurred. So are you suggesting, then, that the court not need consider the First Amendment because you say the complaint doesn't plead the elements of the torts? Is that the point you're making? I think it would be a good thing for the court to issue a ruling on the First Amendment claims, as the district court did. But it doesn't need to because all of these claims fail for failing to satisfy the elements of the claim, beginning with whether or not there's a false statement of fact. But all of those cases, like the Brandt case, also deal with the First Amendment issues after dealing with the failure of a state law claim because they talk about what would happen if state law permitted such a claim. And if it did, it would bump up directly against the First Amendment. Now, Mr. Suram tries to rely on cases saying that they can, if it is a cognizable cause of action, then falsity can lead to liability. And he goes straight to the actual malice test. But even on the allegations that he has made, as the Gannett briefs point out, this fails under reckless disregard, that the facts that he has alleged don't add up to that. And essentially what he's saying is that if it fails to meet professional standards, then it can be evidence of actual malice. Why would actual malice be the correct standard here? Well, we've said that it's not. Actual malice is a strategic protection that applies to areas of unprotected speech. And so we have, from the beginning, resisted the idea that actual malice shall be applied. You don't get actual malice if you don't state a claim. But if you do, as Mr. Sur has asked, then it fails even under that standard. But our argument has been that this is not, okay, first it's not a false statement, but even if it were, that it wouldn't be a cognizable claim under the First Amendment. And that's because the case is based on a singular fallacy. And that is they claim that all frauds, if all frauds involve false speech, that any false speech can then therefore be a fraud. But the Supreme Court has disagreed with that proposition. In Madigan v. Telemarketing Associates, for example, it says just labeling an action as one for fraud doesn't make it so. And that a claim should be quickly dismissed if it doesn't plead the elements of fraud. And that's been our argument here all along, that there is no general First Amendment exception for false speech in general unless it falls into one of the previously recognized categories. And this one does not. Counsel, why not? Because isn't this different than the way you're trying to characterize it? The newspaper wasn't just reporting on news at a press conference or something. They were creating the news through what plaintiffs have said is a product. So why is that not different than the cases that you're relying on? They were trying to measure voter sentiment, as newspapers and pollsters have done for decades. And they made their best estimate. But having that forecast miss the mark and be inaccurate isn't a false statement and isn't the basis for liability. I know that my time is up. Unless you have any other questions, I will ask the Court to affirm the decision below. Very well. Thank you for your argument. We'll hear Roberta. Good morning again. I'll try to zip through just maybe four or five quick points. I'll start, Judge Smith, with the question you asked earlier. Is the exception limited to just property? And the two examples I would point to from our briefing, there's one case in California and there's another case in Montana. The California case dealt with donors to a nonprofit. The Montana case dealt with retirees. And even though most of the donors lived in California and even though most of the retirees lived in Montana, the courts nevertheless found that the principal injury was in those forum states. So I recognize it's district courts and not the Fifth Circuit, but I think those are useful examples that it's not just limited to real property. Perhaps moving on to Mr. Kornerbeer's arguments. First, he says there's no limiting principle. Actually, there are two limiting principles. The first is the actual malice standard. But the second is that a statement has to be falsifiable. To say all the news that's fit to print is not a falsifiable statement. To say that we have acted in accord with our ethical principles, one of which is that we are careful with polling results, well, that's a question you can take to a jury. To say that the information we have presented is accurate, well, that's a falsifiable statement that's different than kind of mere corporate puffery. So is actual malice the correct standard for these torts as opposed to a defamation case? So I think this Court's, I hope this is the right answer, so I think this Court's holding in Animal Legal Defense Fund is that when there is a cognizable legal harm, regardless of what tort label we apply to it, the correct standard for false speech is actual malice. In other words, we don't have particular torts like defamation and slander, and then anything else is fair game, right? So in Animal Legal Defense Fund, it's trespass. In the second Animal Legal Defense Fund case, it's lying on an employment application. Neither of those have been recognized by the United States Supreme Court in any precedent as exceptions to the First Amendment or cases where actual malice applies. Yet this Court says, I think correctly, that defamation and slander, the sorts of cases the Supreme Court has recognized, are just examples of the underlying principle, and the underlying principle is that harm to private interests can be pursued through private cause of action, and the way to do that is that you have to, the way that we protect the First Amendment interest while also allowing somebody to pursue an injury to their private rights is we apply actual malice. Do you think the Animal Legal Defense Fund case talks about actual malice? No, actually it doesn't. I think the Animal Legal Defense Fund case rejects Mr. Korn Revere's assertion that there are particular narrow categories like defamation and that any other private tort action is preempted by the First Amendment. I recognize you wrote it, so you're the authority on it. Well, it says what it says. I'm not sure it says what you say it says, but we'll have to look at that. That's fair enough. Thank you very much for your argument. Thank you, sir. 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": "Thank you, Your Honor, and may it please the Court. As the District Court recognized, when pharmacy benefit managers own their own pharmacies, that creates an irresistible opportunity for those PBMs to engage in predatory and anti-competitive practices. To protect patients by preserving fair competition, Arkansas enacted Act 624, which bars PBMs from owning pharmacies. Plaintiffs argued, and the District Court agreed, that Act 624 violates the Dormant Commerce Clause. That was error. Even assuming that plaintiffs count as out-of-state entities, Act 624 only differentiates between vertically integrated and non-vertically integrated pharmacies, and applies even-handedly regardless of in-state or out-of-state status. Under Exxon and its progeny, that is entirely permissible. At bottom, what plaintiffs are arguing is that states lack power to police anti-competitive and harmful practices when the perpetrators happen to be out-of-state entities. The Dormant Commerce Clause and the Supreme Court's cases, and in this case, this Court's Circuit, Sister Circuit's cases, do not give them that get-out-of-jail-free card. Counsel, at what point does disfavoring vertical integration cross a line into discrimination against out-of-state economic interests? Sure. So, I think I noted at the outset that I don't believe they've identified a single case where vertical integration was, or differentiating based on vertical integration was found to violate the Dormant Commerce Clause. I think that one case is instructive. It's called the BET Investment Advisors, I believe, in 1980 Supreme Court case where it was a Florida law that barred banks from owning investment advisory firms, but only if the bank was located out-of-state. So, I think that's instructive that really when the law itself is differentiating based on out-of-state status. Well, the plaintiffs argue on page 45 of the brief that Act 624's burdens fall exclusively on out-of-state interests. Is that true? Because if it is, I think there's a problem. Well, so no, Your Honor, I mean, at this time, as far as I'm aware, the divestiture provisions would only apply to entities that happen to be incorporated or based out-of-state, like plaintiffs. However, going forward, the law prevents any Arkansas entity from owning a PBM and a pharmacy if it's interested in doing so. So, the law applies even-handedly. And regardless, I think Exxon and many cases applying it, like Ford, like Allstate, like the Ninth Circuit, NAOO cases, they make clear that it does not matter if it so happens that a law only burdens out-of-state entities. That's just irrelevant to the Dormant Commerce Clause analysis. And really what that comes back to is what you're looking for in this analysis, which is true in discrimination cases in general. You're looking to whether the law treats similarly situated entities differently based on an impermissible factor here being out-of-state or in-state status. And as Exxon and as cases like Ford from the Fifth Circuit and the 2009 NAOO case from the Ninth Circuit made clear, vertically integrated entities are not similarly situated to non-vertically integrated ones. And so the relevant comparator here would be non-vertically integrated out-of-state entities, assuming plaintiffs count as out-of-state entities in the first place. Such as Walgreens. Such as Walgreens. Right. And the law does not burden them at all. And that was dispositive in Exxon. In fact, the law, Act 624, to the extent it confers a benefit on independent pharmacies, it does so even-handedly. Walgreens, Kroger, Amazon are just as advantaged by this law as truly in-state local pharmacies. So I think that really shows that this law, the burdens it applies, it's not based on out-of-state status. And in fact, the advantages it confers, it confers regardless of in-state or out-of-state status as well. Well, what I haven't heard you repeat or say here, that I guess is the reason for the answer that you've given, the reason that the law currently impacts or burdens only out-of-state PBMs, is that there are no PBMs in-state, is that right? As far as I'm aware, that's correct. There are no PBMs. I had some difficulty in the record in determining whether Walmart operates a PBM. Right. What is the record? So the record doesn't indicate it actually owns a PBM. I mean, they obviously put a lot of weight on that. But the sole article they cite on this point, it doesn't say that Walmart has a PBM. To the best of my knowledge, standing here today, it does not have a PBM. The district court didn't find it had a PBM and didn't address or consider the so-called Walmart exception at all in its analysis. So I don't think there's any reason or any basis for this court to make any finding to that effect in the first instance. Well, and just to follow up on Judge Shepard's question, where that leads you, I think doctrinally, is to discriminatory intent. In other words, you could set up something that looks facially like it doesn't discriminate, that it's even-handed and affects in-state and out-of-state. But you know deep down that it's going to really hurt out-of-state interests. And the district court said, well, not only do we have that, but we have it brimming with, I guess, discriminatory intent towards out-of-state PBMs. And so doesn't the combination of those two things hurt your argument? No, I don't believe so, Your Honor. I mean, if you look at the statements that they rely on in context, I mean, really what they're all talking about is patience and protecting patience. And incidentally to that, like any law prohibiting anti-competitive conduct or barring vertical integration specifically, it is going to advantage and protect non-vertically integrated firms. I mean, by definition, that's how a law like this works. So I think in context, those statements that they cherry-pick, they help us, not them. And regardless, I think that the purpose of the statute is best defined at this point by, you know, looking at the text of the statute itself and also the context. And here the text is a facially neutral statute that applies even-handedly. And the context is significant national concerns about the harms vertically integrated PBMs are visiting on patients. As reflected in the FTC reports, there's also current federal legislation currently pending that would do the same thing as Act 624. I believe that's Senate Bill 4509 and House Bill 8779. So I think when you look at that broader context, also Tennessee recently passed a law called the Fair RX Law, which also does the same thing as Act 624 and also exempts employee-only PBMs like the so-called Walmart exception does. But so when I think you look at that broader context, this notion that the law, that Act 624, is about protecting Arkansas' parochial economic interests really falls apart. And there's just no basis, no basis for it. Counsel, the Act near the beginning refers to the Federal Trade, says the Federal Trade Commission and the United States House Committee on Oversight and Government Reform have found evidence of, and then it states some findings. What's that referring to? Is that referring to a document somewhere in the record? Yes, sir. That's related to the two FTC reports, I believe, from 2004 and 2005. I do not have the precise appendix in front of me. Does that encompass something from the House Committee on Oversight and Government Reform? That's correct. There was also the Oversight Committee report that was similarly concerned about vertically integrated PBMs. And that's in the record? I'm not aware, actually, if that specifically is in the record, Your Honor. Well, if we go to those documents in the record or wherever they are, would we find some discussion of the concept or the idea of out-of-state PBMs? Was this issue of out-of-state versus in-state PBMs, was that a relevant consideration or issue that those bodies discussed? I don't believe so, Your Honor. I think they were all concerned about the effect PBMs, regardless of where they're incorporated or headquartered, are having on pharmacies and patients. So I don't think there's any specific out-of-state or in-state concerns. So that's the reference to have found evidence of anti-competitive business tactics that have driven locally operated pharmacies out of business. That's correct. Limiting patient choices, et cetera. So my other question is, what does the term locally operated mean? Right. So it's not locally owned, right? And I think the Pharmacist Association's amicus brief does a good job of noting that. I think what that's getting at is the importance of brick-and-mortar pharmacies, right? Because a Walgreens pharmacy would also be locally operated, even if the corporate parent is located elsewhere. And there's all sorts of evidence in the record of the importance of patients having that choice to go to a brick-and-mortar pharmacy if they need. Why didn't it just say brick-and-mortar? Sorry, what's that? Why didn't it just say brick-and-mortar instead of locally operated? If that's what they were referring to. I don't know the specific reason they chose that word, but they certainly chose not to say locally owned, and I think that's important. Was it defined somewhere? Is there a definition for locally operated? Or even local pharmacies? I don't believe so, Your Honor. But ultimately I don't think that this really matters to the analysis here, because as I mentioned earlier, laws that ban vertical integration by definition protect non-vertically integrated competitors. And in Exxon, in Ford, in the NAOO cases, and others we cite in our briefs, it was similarly about, in fact, in Ford, the Fifth Circuit even held specifically that the law was meant to protect independent auto dealers. So I don't think that that's an issue ultimately either way, but I do think the fact that it emphasizes locally operated rather than locally owned gets at what the legislator was concerned with. One thing I'd like to circle back on briefly on the Walmart point is that that exception, so it only applies even handedly to any entities that are a pharmacy that have a PBM only for their employees. So as I said, there's really nothing in the record indicating that Walmart even has a PBM, and further underscored by the fact, actually, that the Tennessee's recent law, the Fair Rx Act that I mentioned, Section 2I of it, I don't believe it's formally codified yet, but it has a similar exemption. And ultimately, there's a good reason for this difference, because employee only PBMs are not similarly situated to normal PBMs like plaintiffs. They don't have the same adverse incentives that normal PBMs do. First, they don't have the same incentives to steer, because pharmacy employees will presumably already shop at their own employer's pharmacy to begin with. And second, they don't have the same incentive to engage in predatory pricing practices, because there would be no reason, really, or not the same reasons, at least, for them to over-reimburse their own pharmacies, because as the plan sponsor for their employee's insurance plan, they're ultimately on the hook for their employee's pharmaceutical bills. On the Walmart exception, does it apply to, say, I'm just going to throw out a competitor of Walmart, Target. Target is operated in Minnesota, and I'm sure it has some locations in Arkansas. Suppose they had their own PBM. Would it apply equally? The exception, would it apply equally to out-of-state PBMs like that? Yes, Your Honor, that's correct. It applies even-handedly. So, as I said, there's not evidence that it was about Walmart specifically to begin with, but regardless, it applies even-handedly, and there's a good reason for it, because employee only PBMs are not similarly situated to normal ones. And unless there are further questions, I'll reserve the remainder of my time. Very well. Mr. Wall, you may proceed. Judge Shepard, and may it please the Court. Applying this Court's settled test for discrimination under the Dormant Commerce Clause, this is as clear a violation as this Court will ever see. The text of the law itself is protectionist. The legislative history is rife with protectionist rhetoric, and the law adds nothing of legitimate substance to the existing regulatory regime. Using every traditional factor, the statute fails. Indeed, it fails far more clearly than the laws this Court set aside in Hazeltine and SDDS. The District Court, therefore, correctly maintains the status quo pending this litigation so that hundreds of thousands of Arkansans would not need to immediately find new sources for the drugs on which they depend. I welcome the Court's questions. Counsel, is there anything in the statute that prohibits non-vertically integrated out-of-state pharmacies from operating in Arkansas? No, there isn't. It aims only at vertically integrated pharmacies. So why doesn't that undermine the Dormant Commerce Clause analysis? No differently than in Hazeltine, Judge Gratz. In Hazeltine, the state of South Dakota, just like Arkansas here, said we don't want corporations and syndicates owning farms in the state. And the state said, look, we're just aiming at corporate structure. We don't care where the corporation is located. It could be a South Dakota corporation. It could be out-of-state. And what this Court said is, no, no, there's no exception one way or the other. Being about vertical integration doesn't automatically condemn a law, but it's also not a get-out-of-jail-free card. You have to run the analysis. You have to ask, did a state, whether South Dakota there or Arkansas here, do it for a discriminatory purpose, or does it have discriminatory effects? And so if they are aiming at out-of-staters because the companies here, as the legislators said, are the big three. They control 72% nationally of the mail-order industry. If they're aiming to protect local pharmacies by going after large out-of-state players, the fact that there are some smaller out-of-state players who may also be advantaged in addition to the local pharmacies doesn't save the law. No differently than, you know, in Family Winemakers, for instance, the First Circuit, or the Katju case in the 11th Circuit. So the fact that Walgreens and Amazon are not affected doesn't undermine your analysis? Well, I'm not saying that it's not a fact on the other side. What I'm saying is you have to run the analysis, and what you have to say is, all right, look, Hazeltine, you have two of the four factors. Here you have all four. The text of the law, which is rarely ever the case in a Dormant Commerce Clause challenge, it says on the face of it they're trying to protect locally operated pharmacies. That doesn't, I mean, they've never made any argument about operated versus owned, but the only reasonable way to read that term is a pharmacy that is owned and operated in Arkansas. If all you mean is that it's operated by people on the ground, that's true of everybody, including CVS's pharmacies. Locally operated pharmacies are independent pharmacies. That's what the legislator meant. Mom-and-pop pharmacies, one-offs, owned by people in Arkansas, not by larger businesses. Two, the amendments. There were two amendments. I want to be very clear about this because it's very important. The first in February of 25 takes healthcare payer out of the law. That's a self-funded health benefit plan. States never disputed that that was designed to take out language that would have picked up Walmart. Then there is a second exception in March of 25 that writes in the 2F exemption. There has been some debate back and forth about whether that explicit exemption covers Walmart. It's a bit of a red herring in light of the First Amendment, but I will say just to be clear, we alleged below that it does cover Walmart because it is a PBM, and in their brief opposing, asking the court to dismiss the case, they said this doesn't only cover Walmart, it covers other people. And when pressed, they couldn't give any examples. Their briefing below, they didn't dispute it. At the hearing in front of Judge Miller, they said for the first time, we're not sure whether Walmart has a PBM. And I said, wait a minute, we've alleged it and you've not disputed it in your briefs. You have to take the record, Judge Miller, as it comes to you, and he did. And then in their opening brief in this court, they said nothing. So I think as the case comes to this court, the state has not put in reasonable dispute whether the Second Amendment covers Walmart, but in any event, the first one took them out of the Act. So that's Box 2. Box 3 is the legislative record. This is a stronger legislative record for Dormant Commerce Plus Challenge than I have ever seen. You have both sponsors of the Act. You have members of both of the other houses. You have a number of independent groups. You have the governor when she's signing the law. All of them saying the same thing. I mean, this is a quote from one of the sponsors. We don't want these big companies, these big box stores, sucking our business and taking it out of Arkansas. We want it to be going to our local pharmacies. It has nothing to do with Walgreens or Target or Amazon. It is targeted at the big players in the market that are the large, out-of-state, vertically integrated firms. They did a pretty poor job at it, though. I mean, if Walgreens and Amazon and others take up a pretty big share, that doesn't do much for protecting the local mom-and-pop stores. I mean, Judge Ross, I think what I would say is when you're talking about the major players, and you have something like some of these players that have only a few percentage points in the market, and then you have a large market share for the independent pharmacies, right, I'm not going to deny that maybe Amazon or maybe Walgreens will pick up a little bit. But what the legislators believed and what we know to be true is a matter of common sense, and what I don't think the state will dispute when it stands up in a rebuttal, because it's a factual matter. Everybody knows it to be true. The bulk of this will go to two places, independent pharmacies and Walmart. That's what the legislators believed. It's what they said. It's the way they wrote the law. And we were the only ones who introduced evidence on this below. We put in evidence saying in the couple of months after you passed this, CVS saw prescriptions shifting away to Walmart at a higher rate than they saw them shifting away to anybody else. In response, the state said nothing. Now, I'll grant that that's not a thick record because it's a pre-enforcement challenge, but as long as the state grants, we were the only one to introduce evidence, and they've never disputed it. As the case comes to the court, what was in front of Judge Miller, remember we're just in a PI posture, was that the main winners here were going to be Walmart and the independent pharmacies. Now, if they want to go back on a permanent injunction and they want to try to build a better record, they want to put in some evidence, they want to have some better arguments, they're entitled to do that as long as in the meantime the court doesn't allow the law to take effect because it would be hugely disruptive. You're talking one in five Arkansans who's going to have to find a different place to get their medicines. We're going to have to fire pharmacists. We're going to have to close every one of these pharmacies. How many? How many? What does the record tell us on how many would be closed? The record tells us upwards of 50 pharmacies. We don't know how many hundreds of employees, but we know it's in the hundreds. We know it's between two and five billion dollars in prescriptions. It's in the millions, right? It was, you know, depending on which numbers you look at, you're talking five to six million prescriptions a year. And the evidence we put in showed roughly one in five Arkansans. So the 50, are those all CVS? Mostly CVS, Your Honor. I believe 20 some odd or 30 are about CVS. And then there's some of the others owned by the other defendants too. Owned by other PBMs? That's right. For example? For example. So, I mean, you hear the three. Give me an example of them. The three major players in this are Express Scripts, Optum, and CVS. I believe Optum would also have to close pharmacies. We put in declarations on all of that below. And net total, as I say, you're talking millions of prescriptions a year. And so I think the district court sensibly said, look, I'm going to put this on hold pending this litigation. And if they want to come in and build a better record, fair enough. But as it stands now, I don't see how this case doesn't follow from Hazeltine. It has text, which Hazeltine did not. It has amendments to carve out the in-state players, which Hazeltine did not. It has a stronger legislative record. Hazeltine had that, but we're better off here. And in Hazeltine, it was just an STDS too. Look, you haven't shown that your law is going to be efficacious. That's a red flag that you didn't look to see whether it would do anything. Here, there are already laws in the books. There are already laws in the books that prevent differential reimbursement rates and steering. This is perhaps the most comprehensive PBM regime in the United States. Arkansas has a number of PBM laws, and the states never come forward and offer any explanation for what this is supposed to do over and above those specific laws. Now, so one of the things that concerns me about the argument here under the Commerce Clause is what happens to ordinary antitrust statutes? And in particular, vertical integration has antitrust implications. The Supreme Court has debated it for nearly 100 years. Some states have more aggressive antitrust provisions than, say, the Clayton Act or the Sherman Act. So what does that say about future, you know, maybe we don't focus on PBMs, but a future broader statute that is aimed directly at vertical integration? Look, Judge Ross, I want to be really clear. I think states can do two things that the decision here doesn't limit them in any meaningful way from doing. One, they can go after the so-called anti-competitive practices. If they think PBMs are up to something in Arkansas they don't like, they don't like the rates they're paying pharmacies, they don't like the way they're steering patients, they can go after it, and they've done that already in the existing laws. And two, even if they get to a point, unlike here, where they build a record to say, those laws weren't enough, right, you can still go after vertical integration. That's a case like Exxon, provided you don't do two things. One, you don't have a discriminatory purpose, and here it is all over the face of this law. And two, you don't have a hugely discriminatory effect. That's the footnote in Exxon, right? In Exxon it's 5% of the market, and the court says, look, as best we can tell, it just goes from the interstate refiners to the interstate dealers. But the court drops the footnote to say, but look, if the effect of this law was to shift a substantial amount of business away from the interstate to the local, that's a Dormant Commerce Clause problem. There are lots of ways the state can regulate, but what they cannot do is come in in a blunderbuss way and say, you know what, without any justification on top of our existing regime, carving out all in-state players, and in order to protect local pharmacies, we're just going after vertically integrated firms. Discriminatory effect is really slippery, though, in a global economy, right? Because, you know, like with these PBMs, they're all out – or most of them are out of state. That's true of a lot of firms in a global economy. So does discriminatory effect really work that well in the economy we have today? I know we have to apply it, but it's slippery. So I agree with you, Judge Cross. First I'll say I think this is the easy case because the district court decided it on discriminatory purpose, and that's the most straightforward route to affirming. The discriminatory purpose, it checks every box of Hazeltine and STDS. It checks boxes they didn't, and the legislative record is so much stronger than really any dormant commerce clause case I've ever seen or can find. I mean, if this doesn't violate the clause, I honestly don't know what would, given that the discrimination appears on the face of the act itself. But I take your point that if you went to discriminatory effect, there could be some tough cases, right? You could imagine Hazeltine would have been a difficult case if they had said, look, we're really concerned about sustainable farming practices. We went after those, and now we don't have any choice but to just get after the corporate form. That's a tougher case. And here if they had come in and said, look, we have a huge regulatory regime. It's probably more comprehensive with BBMs than any other state. Here's why it's not working. We've got our insurance commissioner here. Here's our problems. We're going to build a record. I think that's going to be a tougher discriminatory effect case. But we have been met with deafening silence. I'll grant we didn't have a lot to put in on effect, but we were the only ones talking about it. And still, they waited until their reply brief in this court to give any notion of what they think their current regulatory regime doesn't address. And the only thing they point to is they say the steering statute isn't about steering. All right, well, I read that subprovision of that law to be about steering. But even if you thought that were wrong, if they had addressed this earlier in the briefing, I would have also pointed them to A2A of that statute, D Romanet I, and H Romanet I. H Romanet I, Judge Ross, literally says you cannot improperly steer a patient to a pharmacy. Literally, I mean, those are the words. Improperly steer, I'm quoting. So I, as I stand here today, I truly do not know what the state thinks that its existing laws do not accomplish when it comes to PBMs. Because they've only pointed to two things. Maybe they'll come up with something new in their book. But the only thing below and the only thing in their brief to this court, and I think it's page 55, is differential reimbursement rates. They have a law for that. They haven't pointed to any problem with our defendants in the state. And they say steering. And this statute covers steering. I don't know what a PBM would do with respect to steering that they think this law doesn't pick up. And that's a pretty glaring red flag that this is not really about vernacular integrated firms. It's about what every legislator in Arkansas who addressed this said. It is about directing business away from the national players who are sucking it out of the state. And it is about directing it to independent or local pharmacies. And as admirable as some people in Arkansas may believe that to be, the one thing the Dormant Commerce Clause does not allow you to do is discriminate in favor of the local players. Even import producers a few terms ago. On that point about trying to figure out what the intent of this is, is this a case where we could say we're not going to pay attention to statements of legislators? Or is this a special case where we're bound to, in fact, do that? So, Judge Shepard, I hate to say heads I win, tails they lose. But here's what I would say. Because it appears on the face of the law, you could stop there and say this is the rare case in which the protectionist purpose appears on the face of the statute. We go no further. That's overt discrimination. If you didn't think the text alone was enough, then you would need to consider all the other factors. Because this court's cases have been clear that in discerning discriminatory purpose, you have to look at three things. You have to look at the text of the law. You have to look at the legislative record. And you have to look at whether the state has considered how the law is going to achieve anything over and above the existing laws. So, if you didn't think the text alone was enough, you would need to go to those other things. But I don't need it to win. Well, that's my question. Could we say, no, we're not going to? You could say. We're just going to look at the end product here. Because who knows why 100 members of the Arkansas House, why they voted a particular way. Can we do that? Or is there authority that says in making this kind of determination, yes, you must, this is evidence that can be submitted and should be considered? Yes. And if so, what's the case that says that? So, you have Supreme Court cases like Hunt that look at the legislative record. And you have this court's cases like Hazeltine and SDDS that do say it is one of the factors the court is required to consider in discerning a discriminatory purpose. So, I don't think you could reverse without considering it. I do think that would be inconsistent with this court's settled case law. But I do think, Judge Shepherd, you could say, look, this comes up on a PI posture. As it sits here before this court, given the fairly meager arguments and record the state put below, it appears on the text of the law. And the state did not meaningfully dispute either of the amendments below that carves out the in-state player. On that basis, we will uphold the preliminary injunction. We don't need them to look at the legislative history, though our court's cases do, but we don't have to if the court's uncomfortable with it. We will send it back, and if the state wants to build a better record or make better arguments to the permanent injunction, it can do that. But I don't think it can simply reverse the PI without looking at all of the factors. And if you go down the factors, we have them in spades. This is stronger than any Dormant Commerce Clause case that I can find in any court of appeals. Counsel, you've referenced the Hazeltine decision repeatedly and relied on it to some extent. I don't have Hazeltine in front of me, but my recollection was that the main problem in that case is that they exempted certain in-state corporations, especially where a family member lived on the land, and that was the discriminatory problem with that law. So I'm not really sure it supports your argument. So, Judge Ratz, I think I read the case a little differently, not to say that that wasn't also a problem, as here with Walmart, but I read it to say that the sort of two main factors the court is relying on, one, the legislative record. There, it's a referendum. There were pro and con statements. And the con statement essentially said, don't let this out-of-state company run this waste dump. And the court went on for this, several paragraphs, like the fact that the record, I said, rife or brimming with protectionist rhetoric based on the legislative statement in the referendum. And then it also said, look, you didn't consider any other alternatives. If you have a problem with sort of sustainable farming practices in South Dakota, well, then why didn't you look at any of that? You came up with this broad-brush law, and you didn't have any evidence in front of you that it was actually going to aim at any of the safety or environmental concerns that the state was putting forward. And I think exactly the same thing here, but in spades, because here it's not just that the Assembly doesn't have a record in front of it that this law is going to do anything. It is that there are already laws in the books that literally do the two things that they have claimed this law is meant to achieve. I don't understand, then, how the court could not say it appears just based on the record they've put in so far that this is protectable given the analysis in Hazeltine and STDS. If there are no further questions, thank you. Thank you, Counsel. All right, Counsel, we gave Counsel a considerable amount of additional time, so let's add a couple of minutes, add two minutes to his time, if you will. So you've got almost four minutes to respond. Thank you, Your Honor. And just picking up back, you asked about the FTC reports. They're in the record at Appendix 637 and Appendix 710. I want to pick up where you left off, Judge Gross, where you were talking about in Hazeltine that the law also applied even-handedly. And I think that that's the core point, again, here is that what the Dormant Commerce Clause is concerned about is when similarly situated entities are discriminated against based on out-of-state status. And that wasn't the case, or I'm sorry, that was the case in Hazeltine. That was the case in Family Winemakers, the First Circuit case that they rely on. The courts there specifically said that small and large wineries were similarly situated. So that's what that case came down to. And we know from Exxon and from the cases applying it, that vertically integrated status is a differentiator and that vertically integrated firms are not similarly situated to non-vertically integrated ones. Mr. Wall also talked about, he put a lot of emphasis on the legislative history. And again, it just can't be the case that a handful of, even if you interpret them as protectionist remarks, which I think in context they're not, but it can't be the case that even if they are, that somehow renders an otherwise constitutional law unconstitutional. Especially when the main statement he was relying on about sucking the economy out, that's from a podcast. It's not even part of the legislative record, properly speaking. It's not like it was made in a committee hearing or before the legislature as a whole. So I think that the probative value of those statements is very low given the text and context here. I'd like to pick up also on the Walmart point. Again, Mr. Wall emphasized that the record in this is not clear and suggested that it's up to the state to prove that point. But it's their burden and their burden to put forward evidence that Walmart has a PBM and that the law is discriminatory. And they did not do so. And the district court did not make any findings to that effect. Mr. Wall also pointed to the earlier amendment which exempted self-funded insurance plans from Act 624, which it originally applied to. But as I mentioned, with PBM employee only PBMs, they're not similarly situated to normal PBMs. And self-funded insurance plans are even less similarly situated in that they are directly on the hook for their employees' pharmaceutical bills. So there would be no incentive for them to over-reimburse themselves. Also, Mr. Wall suggested that Act 624 will force the closure of all these pharmacies in Arkansas. That's not necessarily true. They could just sell. And they could sell to another out-of-state entity. They could sell to Walgreens. They could sell to any number of firms. And Act 624 would be perfectly fine with that. And I think that that just underscores that there is no discrimination under the Dormant Commerce Clause here. And related to that point, Walgreens, again, and Kroger, Amazon, entities like that are also protected by Act 624. And there are statements throughout the record of legislators and sponsors of the bill, you know, noting that Walgreens would be protected by it and saying, hey, not even Walgreens can compete against these vertically integrated PBMs, for example, at Appendix 317. And we cite some other examples in our brief as well. Mr. Wall also alluded to the fact that there are other Arkansas laws on the books that deal with some of these problems. But the availability of alternatives and existing alternatives is really only relevant once you establish discriminatory purpose. In Exxon, Justice Blackmun noted that the things that the legislator was concerned about there were already prohibited by state and federal law, and that simply did not matter to the majority. For these reasons, we would ask that the court reverse and vacate the district court's order. Thank you. All right. Thank you, counsel. The case has been well argued. It is submitted. The court will render a decision as soon as possible. And we will take about a 10-minute recess at this time."
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"stt_transcript": "Judges of the United States Court of Appeals for the Eighth Circuit. Hear ye, hear ye, hear ye. The United States Court of Appeals for the Eighth Circuit is now in session. All persons having business before this Honorable Court may now draw near and they will be heard. God save the United States and this Honorable Court. Please be seated. Welcome to the first argument session of the new term of court. Madam Clerk, will you please publish the cases for argument this morning. The cases for oral argument in Division II on Tuesday, September 22, 2026. Cases 25-2494 and 25-2591. Iowa Association of Business and Industry et al. v. Iowa Insurance Commissioner. The second case, 25-2023. Jose Mandred-Liva v. Todd Blanche. The third case, 25-2649. From the Eastern District of Missouri, United States v. Tanya Haddox. And the last case for argument today is case number 25-3333. From Western Missouri, United States v. Antoine Tolfrey. The first case is Iowa Association of Business and Industry et al. v. Iowa Insurance Commissioner. Thank you. Mr. Valencia. I will just note that given how thoroughly over brief this case is, you will not go 30 seconds already a lot of time. Understood, Your Honor. I will be Chief Justice Rehnquist when the time is up this morning. Understood, Your Honor. Good morning. May it please the Court. Patrick Valencia on behalf of Iowa Insurance Commissioner Doug Oman. The District Court made two key errors here. So although there is a lot going on in this case, once this Court corrects those two errors, this case, relatively speaking, can become much more straightforward. These are the District Court's two errors. First, the District Court erred when it said that plaintiffs had standing to challenge laws that do not regulate them. Seventeen of the 26 challenged regulations regulate only PBMs, or Pharmacy Benefit Managers, but no plaintiff is a PBM. Correcting that error will narrow plaintiff's challenge from the 26 challenged regulations to just the nine that do, in fact, regulate plaintiff's plan and plaintiff's plan sponsors. The District Court's second error, key error, was that it failed to analyze the ERISA Insurance Savings Clause. That is a key step in the ERISA Preemption Analysis, which goes Preemption Clause, Saving Clause, and then DMER Clause. But the District Court stopped its analysis at the first step. That failure alone allows this Court to vacate the injunction and remand to allow the District Court to analyze the Saving Clause in the first instance. That would further narrow plaintiff's ERISA challenges down to just one remaining section. So once this Court corrects those two key errors, this case does simplify. It becomes one section challenged under ERISA and two under the First Amendment. So with that path laid out, I will start with standing. Plaintiffs are two plan sponsors, two plans, and an organization made up of plans and plan sponsors. No plaintiff pleads that it is a PBM, and the organization does not plead that it has a member that is a PBM. Yet they challenge 17 sections that regulate only PBMs. That much is undisputed. Their argument, though, is that they can challenge laws that don't regulate them because PBMs are the functional equivalent of an ERISA plan. That is a novel standing theory that takes this Court's case, Weavey, an ERISA preemption case in which standing was not at issue, and takes the ERISA preemption standard and applies it to Article III to dramatically expand Article III standing. Ordinarily, if you'd like to sue on behalf of a third party, you plead third party standing. Plaintiffs don't do that, and they couldn't even if they tried, because one of the key factors with third party standing is hindrance. You have to establish that there's a hindrance to the third party's ability to sue on its own behalf. Plaintiffs can't do that because PBMs are quite litigious, and we know that if we look at the table of authorities in these briefs. Many of these cases are brought by an organization called PCMA. PCMA is the PBM's trade association. So when the PBMs seek relief against the state law that regulates PBMs, they sue for themselves. So plaintiffs can't plead, nor do they even try, to plead third party standing. That should close the door to their ability to challenge 17 regulations that undisputedly regulate only PBMs. The district court's theory of standing, as I mentioned, was novel because it took the ERISA preemption standard and applied it to Article III, which would be improper because that dramatically expands Article III. The reason for that is there's- All preemption principles begin with Article III. That's just a crazy argument or a crazy misstatement of fundamental preemption law. Your Honor, the district court's theory here is that plaintiffs can have redressability against non-parties based off of this court's analysis in Weeby, which said that PBMs are the functional equivalent of plans. So what that then allowed by applying that here is for the plans and plan sponsors to sue on behalf of non-party PBMs without pleading third party standing. So it creates a back door to the court rather than requiring PBMs to sue on their own behalf. So what's your best case for no standing? My best case for no standing would be any case that requires redressability. No, you can't say any case. Best PBM case. Your Honor, there's not a PBM case here that addresses a plan trying to sue to ERISA preempt a statute. What's your best case? You tell me that they don't have a good case when I ask you for your best case. I think the best case would be if you look at this court's case in Weeby. There, Weeby had a regulated entity that was suing to get relief on behalf against the law that actually regulated them. Your Honor asked, what is the best ERISA preemption case? And the reason I said that is because it's difficult because there's not a case where standing has been alleged by a non-regulated entity trying to claim ERISA preemption against a law that doesn't regulate them. So plaintiffs point to Weeby. They point to a case out of the Tenth Circuit called Mulready. And in Mulready, if you look at that, that's PCMA versus Mulready. All you're doing is conceding it's a case of first impression. Exactly. You have no case. No preemption case, Your Honor. And that leaped out at me from your briefs. No preemption case, exactly, because the theory here applied by the district court was incredibly novel. And the district court and plaintiffs relied on cases where each one of those cases included a regulated entity. But this case, as to the 17 regulations that regulate only PBMs, does not include a regulated entity. So that's Mulready, McKee, Flowers, Weeby, Prudential. All of those cases included a regulated entity. So it is indeed novel. On the indemnification clause argument that plaintiffs raised. I think standing is fundamentally intuitive here. To me, you're the one that's pushing for a novel result. Your Honor, I think if we look at the district court's order, it proves why standing wouldn't be intuitive. Because what it required. You can pick away at orders all you want. I'm talking about the way the case fundamentally looks to me. And that is with all the PBM action all over the nation. This looks, nobody's ever thrown anything like this out for lack of standing. And that's because in those cases that you're talking about that are around the nation? You can distinguish all you like. I'm looking at it from a universal standpoint. And from what? The precedent we have to write. Oh, well, nobody could cite a case, so it's out of here. Good. Aren't you doing your job description? Your Honor, I think the issue here is redressability or a remedies issue. Well, redressability, if this all passes through, the PBMs are going to pass all these costs on. And that's what the actuary testified to. I mean, common sense will tell you that that's what's going to happen. And doesn't that look like a redressable loss? And if not, why not? It doesn't because if we look at this from a remedies standpoint, this order can only apply to parties before this case. The only way that the passed on costs that you're referencing, Your Honor, would be redressed by this court's order. You know, I'd love to take that quote and put it against all the cases where there's all kinds of collateral outflow, predictable and actual from decisions. I understand there's cases where an order could have incidental relief, but this is not one. And the reason is because the district court's order squarely required plaintiffs to file, actually, a list of all of the non-parties that should be getting relief under this injunction. So this isn't merely incidental relief that would be collateral to the district court's order. This was a central part of the district court's scope of relief. In order to redress the passed on costs here, the district court had to extend its order to give relief to non-parties. So it ordered plaintiffs within 24 hours after the injunction issued to file on the docket a list of all of the non-party PBMs. This isn't PBMs that are members of ABI, the organization plaintiff here. These are non-party. They're non-parties and they're not members of any underlying organization that is filed in any way. So your argument essentially is that if we look at the remedy sought, that the remedy sought will evidence the fact that there really is no Article III standing, because the remedy is necessarily directed at non-parties. That's exactly right, Your Honor. And this court's done that recently in the Sisney case, where it looks at how the remedy might play out here in order to determine whether there's redressability. And in that case, it did exactly what Your Honor just previewed. In order for there to be a redressable injury, the order itself would have to extend to non-parties. And that's why here plaintiffs can't challenge 17 regulations that only regulate PBMs, because in order to do so, the order has to extend relief to non-parties. So turning to the... So you're saying they've got to come back with a PBM as plaintiff who will immediately face enforcement action? That's correct, that a regulated entity, if they would like... The second half is the important part of my statement. Your Honor, I think the second half of your statement gets that third-party standing, that if there's going to be immediate enforcement against... No, you're saying the only people they could possibly come who would solve the remedy, redressability problem, is a PBM. And I say, who would then, if they did it, would immediately face enforcement by your client. I can't predict whether they would face immediate enforcement or not. The statute says so on its face. They're subject to the statute, that's exactly right. Right. And they're not before this court, so the remedy can't extend relief to non-parties under Trump v. Casa. I'm talking about... Okay. You don't want to talk about what I'm talking about. Your Honor, perhaps I'm not understanding. I apologize. I'm talking about what you're asking the world to say, that the only people that can sue us are those who we can immediately, while the case is pending, put them out of business. What I'm saying, Your Honor, is that to get relief against the state law, you have to be the regulated entity or you should plead third-party standing, and they don't satisfy either of those requirements here. So as to the ERISA preemption analysis, the district court didn't analyze the saving clause. ERISA has an insurance savings clause that says, even if a state law has an impermissible connection with ERISA, it still might be saved if it's a state law that regulates insurance. And the U.S. Supreme Court told us in Miller what that test looks like, and it's two prongs. Are you saying this entire statute is an insurance regulation, and therefore subject to the savings clause, the entire statute? No, we're not saying the entire statute, Your Honor. There are two sections that are in the cross appeal that we're not raising the saving clause as to, and those would be section 510B.4B.2B, and then the other one would be 8B.4A and B. Okay, what's two of those? Short name, short description. Yes, the short description of the first one is the third-party payer notice requirement, where they have to give notice to covered persons. The second one is the reporting and disclosure requirement that applies to PBMs. Okay. So those two we're not raising the savings clause as to, but we are as to the rest, and the reason is because they satisfy the Miller two-prong analysis. So the first step of Miller is that the law must be specifically directed towards the activity of insurance. Well, insurance is somewhat in the insurance business, isn't that correct? The activity of insurance or the business of insurance is what the Supreme Court- I don't understand how this is a-you're going to save myriad statutes from preemption by simply calling them statutes that regulate insurance. I just don't think that's what we have here. I think this is a statute that deals with the relationship between PBMs and providers and plan owners and providers and also beneficiaries. That's not an insurance statute or regulation. I think if we look at what the definition of a PBM is under Iowa law, and that's 510B.1 sub 15, a PBM is one who manages a prescription drug benefit provided by a third-party payer, and the definition of a third-party payer includes one who engages in health insurance. And so this law, even the parts of it that are directed only at PBMs, is specifically directed towards the activity of insurance. It doesn't have an effect on insurance, of course, but that's not good enough. Under prong one, it has to be specifically directed towards insurance, and the Supreme Court has said that it doesn't have to be directed towards an insurance company or an entity that is itself an insurance entity. It has to be specifically directed towards the activity of insurance. Has anyone ever raised this kind of argument before, this broad brush argument, that almost the entire regulatory scheme is out the window because of the savings clause? Has anybody ever raised that before? This is a unique case because there's a lot of statutes. We're not saying that the entire regulatory scheme goes out the door. We are going section by section, and we don't raise it as to a couple. I understand, but that's just a tiny bit that might be saved from the savings. There's a lot that's going on in Chapter 510B. This is just sort of 26 subparts of it. It's a much broader statute. There's a lot that's in there. We're not raising the savings clause as to each of them, but a threshold problem. I'm sorry. It seems to me it's an awfully ambitious aim that you've taken here with almost the entire statute, so I just want to make sure that I understood that that was your position. Going section by section, yes, that is our position for the ones that we raise the savings clause as to, and a threshold problem on appeal is that the district court didn't even analyze the savings. The district court sort of mentioned the savings clause and the so-called dimmer clause in passing, but I think implicit in doing that was the district court's assumption, assertion, feeling, holding, as it were, the kind of sub salendio kind that this was just not an insurance regulation statute. You're right. You're correct that the district court did mention the savings clause standard when it was laying out the standards at the beginning of its opinion. The opinion's over 80 pages, and it never analyzed the savings clause. That's true. And so I don't believe that it just quietly denied the savings clause arguments because if you look specifically at one of our any willing provider laws that applies to a third party payer, this is section 4B2A. This is governed by a Supreme Court precedent and Eighth Circuit precedent, the Prudential case in the Eighth Circuit and Miller in the U.S. Supreme Court, where both of those courts found in any willing provider law that applied to a third party payer fell within the insurance saving clause, and that's exactly what section 4B2A is. And so at a minimum, that should have had the savings clause applied to it. Here's a related question. I think you're saying that at least the self-funded plans are subject to regulation because they are, in effect, insurers and therefore accepted by the savings clause? So the self-funded plans first fall within the savings clause, but then they fall within the Deamer clause because the Deamer clause says that applications of the law to self-funded plans are sort of scooped back out of the savings clause, and those applications we concede, if you find that they have an impermissible connection with preemption, can't be exempted from that. I want to step back for just a moment. I'm still trying to figure out exactly what your position is as regards the district court opinion and the sub salento doctrine. When we look at a case where a district judge acknowledges that an issue exists and then they go on and they write in a manner which tends to indicate that they have made a decision, and that is that the doctrine being advocated does not apply in this case, and they just go on and analyze it, we don't usually just come back and say, well, they didn't analyze it, without first deciding are they wrong on that particular point. So it seems to me that really where we ought to be sitting is that the district court made a decision and that decision is not the decision that you want, and then why are they wrong on that point, because I think that's how we look at that, because otherwise what we do is we're directing district judges to write 400 page opinions rather than 80 page opinions. I understand, Your Honor, and if we didn't have a binding Supreme Court case Miller that held in any willing provider law that applied to a third party payer, then I might think that the district court did sub salento decide the issue, but I don't believe that this district judge just ignored Supreme Court precedent or the Eighth Circuit case credential. I think that what happened was this case was moving quickly, and it laid it out, it didn't recognize that we raised the savings clause, it laid it out as here's the standard for a risk of preemption, and then it just, by the time it got 80 pages later, it didn't get to it. Okay, so you're saying they just acknowledged it, they didn't acknowledge that you raised the argument, it's not that there's a difference there. That's correct. Because, you know, we see this mostly where somebody says, yeah, these are the issues that have been raised, blah, blah, blah, and you're saying that's not what this opinion did. That's correct, and I think that binding Supreme Court precedent tells us that, that a district judge is not going to ignore that without at least some conversation as to why that doesn't apply. We raised that in the district court, and the district court didn't discuss it. Now, going section by section, I could go section by section if that would be helpful to this court. There's obviously 26 sections here, so if you'd like to ask a question about a specific section, I can do that. I'd like to turn for a minute at least to the First Amendment analysis before I save some time for rebuttal. On the First Amendment analysis, if this court finds, as the district court did, that plaintiffs do not have standing to challenge a, to raise a First Amendment challenge to a law that imposes restrictions only on PDMs, then there would only be two First Amendment claims to analyze, and those would be the third-party payer notice requirement, which is section 4B-2A, and then it would be the third-party payer and PBM referral discrimination section, which is part of section 4-4. So under 4B-2A, this is a disclosure requirement. This disclosure requirement targets inherently misleading speech, and the reason it does that, and thus gets the lower standard of scrutiny under Zauderer, is because it is triggered when a third-party payer restricts its network. That's the inherently misleading speech, because when a third-party payer restricts its network, it does so under the guise that it's doing that to decrease costs, create a more robust network of providers and benefits and things like that. We are arguing that that's inherently misleading speech, and so then Zauderer applies. If this court finds that that is inherently misleading speech, plaintiffs don't make an alternative argument that this law would not satisfy Zauderer. But this law could also satisfy Central Hudson if the court doesn't find that it's inherently misleading. This court could look to the recent Ninth Circuit case that we briefed called Stolfi. Plaintiffs actually relied on the district court opinion from that case, which was then reversed by the Ninth Circuit. In a similar PBM disclosure law, the Ninth Circuit there said that states have a substantial interest in the free flow of information, and then that the law requiring disclosure of this ordinary economic information was substantially directed towards that substantial interest. And that's exactly what you have here, the third-party payer notice requirement that I'm talking about. All it requires is pharmacies to notify, or excuse me, third-party payers to notify the pharmacies within the geographic coverage area that the plan covers. It requires them to notify them of what the restrictions are to its network. That is just ordinary economic information that's letting them know what the terms of the game are if they want to take the playing field. And that is directed towards the state's substantial interest. As to the other First Amendment claim, which is the referral discrimination section, that's Section 4.4. Referral is one word within a broader statute. What does that mean? Who's referring what to whom? So if we look at Section 4.4, referral refers to a PBM, health carrier, health benefit plan, or a third-party payer. And the law says those entities shall not discriminate against a pharmacy by doing this list of conduct. And the list of conduct includes referral. I don't understand, but what is that? And that's exactly the question. So plaintiffs are arguing that referral means refer, and so they're sort of broadening it. What referral is, is just if you look at the list of the other ones, it is in that list. Participation, referral, reimbursement, or indemnification. So we should interpret referral within that list of activities. These are contract activities, participation, reimbursement, indemnification. So referral is necessarily conduct. So it's a PBM, or a third-party payer, or whoever else is under the statute, referring the prescription to their preferred pharmacy. To a pharmacy. Exactly. So it's referring the prescription, or referring the covered person, to their preferred pharmacy, their affiliated pharmacy where they get. Directing the prescription to a certain party. That's exactly right. And we know that based off the list of conduct that's in Subsection 4.4. And because it's conduct, then it's not subject to strict scrutiny as a speech regulation. It's conduct regulation. If we're correct on that statutory interpretation, plaintiffs don't make an alternative argument that if it is conduct, that that doesn't satisfy the First Amendment. I don't follow that. Sorry. As to the referral discrimination section, if we're correct, that referral is conduct. Plaintiffs don't argue that if it is solely conduct, enforcement of that law violates the First Amendment. So they don't make an alternative argument under that. So really what that analysis there comes down to is just a statutory interpretation question. If we're correct on our statutory interpretation of the word referral, then you don't need to reach the First Amendment question because plaintiffs don't make that alternative argument. I'll save that time for rebuttal. Thank you. Thank you. Mr. Shelley. Good morning. May it please the Court, I'm Anthony Shelley here for the plaintiffs. This case has become markedly easier to decide due to various developments this year, all of which favor the plaintiffs. Three new appellate decisions have come out straightforwardly endorsing the Mulready approach of striking as preempted state statutes that regulate any willing provider matters, as well as cost sharing between plans and beneficiaries. Those decisions most notably are the Flowers decision from this court, which actually cited the district court, Chief Judge Rose's decision, on a positive preemption ruling itself, making essentially Chief Judge Rose's decision somewhat of a persuasive precedent in itself. In addition, there's the McKee decision from the Sixth Circuit, and then there's the McClain decision from the Seventh Circuit. These decisions all negate broad swaths of arguments that the defendant just made. But besides the new case law, there are some developments at the federal level. The U.S. Department of Labor has issued proposed regulations regulating the PVM plan relationship. Congress passed new ERISA amendments in February. Those won't be in effect for quite a while. They won't be, but our point on that, Your Honor, is that they show that this relationship is subject to federal regulation. If it's subject to federal regulation, that means ERISA says whatever falls within ERISA's ambit is exclusively a federal concern. So Congress has shown this is an ERISA matter, albeit not yet regulating, but making it subject to regulation in 2028. Regulations aren't actions of Congress. Excuse me. Congress did pass, in February, statutes. The Consolidated Appropriations Act of 2026, Sections 6201 and 2 are ERISA amendments that regulate PBMs and plans with respect to their relationship with PBMs. And then the Department of Labor, in January and February, proposed regulations also regulating PBMs and plans together. And what they show is that this is a matter for federal regulation. If it's a matter for federal regulations, it's exclusive under ERISA because of the preemption provision. And as a result, it's off limits to the states. So it's not surprising that, given these developments, Mr. Valencia has decided to focus on standing and the Insurance Savings Clause because the preemption issues are pretty straightforward. I'd like to start with standing simply because so much time was spent on that, and I have just a few points to make on that. I think Mr. Valencia mentioned that there were 17 or so provisions at issue that related just to PBMs, but I read in his brief there were five on appeal and one on cross-appeal. So I only understood there to be six that addressed just PBMs. But this issue is easy because the Eighth Circuit has already recognized that plans have standing to challenge as preempted state laws applicable to their third-party contractors. So, Judge Loken, you asked for the best case. The best case on this is Prudential Insurance Company of America v. National Park Medical Center, 413 F3rd 897 at pages 901, 903, and 913. This case holds that Tyson's, which was an employer, self-funded plan. That's our court? That's your court, yes. It's the Eighth Circuit 2005 decision from this court. In that case, Tyson's, which sponsored a self-funded ERISA plan, was allowed to challenge in any willing provider law that applied solely to its contracted third-party administrator who was an insurance company. Mr. Valencia has argued that, oh, but there was also an insurance company present there, so that's who had standing. But the insurance company was suing for insured plans. Tyson's was suing for its own self-funded plan because the state wanted to regulate its third-party administrator. And on page 913, the court specifically says the injunction here held that it was preempted, by the way, which is its own problem for the AWP provisions for the state. But it specifically said the injunction will provide the state, or excuse me, enforcement of the statute is preempted and unallowable either directly against the self-funded plans or indirectly against the third-party administrator. Here would be a PBM. That really should end the matter since it's finding precedent, and the law hasn't changed since then. If anything, the law has gotten better. The Wiebe case that Mr. Valencia mentioned actually emphasizes the interchangeability and the functional relationship and equivalence, really, for better or worse, of ERISA plans and PBMs. The ERISA plans can't exist in providing pharmacy benefits without PBMs. So this notion that Prudential adopted is simply picked up again in the theory of the way Wiebe goes. I also want to just make two more short points on standing. One is that this isn't third-party standing. That's when you sue on behalf of someone else. And also, that kind of standing isn't even jurisdictional. It's Prudential under the Supreme Court's June medical decision, which is 591 U.S. 299. But we're suing on our own behalf, even with respect to the PBM provisions, because a PBM can only be liable or be fined with respect to its administration of a health plan. We're the health plan. So the state comes knocking on the PBM's door saying, you are maladministering, in violation of state law, the Vermeer plan or the Pella plan or the Iowa Bankers plan, and you better stop doing it. And here's an injunction telling you to stop doing it. Well, that injunction isn't just against the PBMs. That's against us, because the PBM doesn't exist in the abstract and isn't being enjoined just in the abstract. It's being enjoined because of its behavior for us. And so the injunction itself extends to us. There was a point made, I think, by Mr. Valencia that all these agents and contractors have been added to the case, and that's because we're entitled to complete relief. The Supreme Court said under Trump v. CASA, we get an injunction for complete relief. That means it extends to us and our privies, which would be our contractors, agents, and in this case, that's the PBMs. This isn't a case where we're suing for ERISA plans who aren't members of the trade association, who are similarly situated. That's what the Supreme Court was talking about in Trump v. CASA, where an ERISA plan might sue and the district court universally issues an injunction saying every ERISA plan out there doesn't have to comply with this law. That's not what we have here. The injunction was limited to our plans and those who administer it. So on standing, I think also Judge Erickson, you mentioned the indemnification issue. The judge, that's already been decided by the Second Circuit, and Chief Judge Rose agreed with it, that if the PBMs are going to be held liable for actions in association with our plans, that then under indemnification, they can pass on the liability and penalties to the plans. That's enforcement against the plans themselves. We would ask the court to follow that precedent as well. So that's another good case for us, Your Honor. So with that, I'd like to turn a bit to preemption. Again, the two sides seem to have difficulty in stating exactly which ones are at issue, but I understood 18 provisions of the statute to be at issue. Issue 10 were declared preempted by the district court, and we'd ask this court to reverse the district court on eight others. So we see them there being 18 altogether, and they're outlined in the questions presented in, as Judge Loken mentioned, some very long briefs. But the statutory provisions fall into six broad buckets. First bucket are the any willing pharmacy provisions. Second bucket is limits on cost sharing, differentiation, and calculation. That's limits on coinsurance, copay differentiation, deductibles. Then there's the dispensing fee that the district court addressed that applies only to retail pharmacies, not national chain pharmacies. Then there are, I guess we're up to about the fourth bucket, is planned PBM contracting requirements. Fifth bucket is reporting and disclosure requirements. And then there are the enforcement provisions last. On the any willing provider provisions, this court, again, in that same prudential decision I mentioned on standing, already held that any willing provider provisions are preempted by ERISA, at least for self-funded plans. And I'll talk about the insurance savings clause shortly. But the establishment of networks, Moridi says, is the quintessential matter of benefit design and benefit structures, which ERISA says the states cannot regulate. Moridi says that, and then Flowers, this court's own decision, picks up on that and says the same thing. So the AWP provisions are easily held to be preempted for self-funded plans, as are the cost sharing and deductible limitations and regulations. Those, again, were at issue in Moridi that this court and Flowers endorsed, and so they should be preempted as well, again, by settled precedent. As for the dispensing fee, there's been a lot of argument about this, because we admit that the dispensing fee, now the dispensing fee is, if the particular beneficiary goes to the CVS, which is a national chain, there's one price that they go to. Hy-Vee's, which is next door, for instance, in Des Moines, to CVS, the pharmacy is entitled to a larger dispensing fee. I'm sorry, what was the last thing you said? If the beneficiary goes to a CVS, for instance, they will pay a certain, the pharmaceutical will be distributed at a certain price. If they go next door to a pharmacy called Hy-Vee's, H-Y-V-E-E, which is not a national chain under the definition here, there would be a dispensing fee added, and the pharmacy would get significantly more money for that particular prescription. We argued this is a cost measure, and we admit that under the Rutledge case, that it typically would not be preempted. The problem here is that the Supreme Court in Rutledge also noted that, however, even a cost measure can be preempted if it has acute effect on an ERISA plan. And here, the legislature got very aggressive and made the statute effective within essentially 15 days after it was signed. The result was supreme dislocation for ERISA plans, that they suddenly had to pay so much more for these drugs. And the declarations in the record note that plans were ready to suddenly slash benefits, increase beneficiary co-pays, because suddenly the costs went much higher. That's the kind of acute effect that the Supreme Court was talking about that can make a non-preempted cost measure turn into one that is. We admit that if the state had been less aggressive and, say, set up the 2028 plan year or even the 2027 plan year for something like this, that might be a different story. That's what Congress did in its February statutory amendments to ERISA. They don't come into effect until 2028. But the legislature here said you've got 15 days, now comply. That causes acute dislocation, making the dispensing fee one of the rare instances in which a cost regulation is preempted by ERISA. The next bucket of state regulations is the regulations of the contracting relationship between plans and PBMs. On that side, we assert that this is a fiduciary function. How to set up a contract, the plan's contract with its service provider, to administer benefits is a matter of fiduciary concern. It, in fact, is addressed directly in ERISA Sections 406 and 408. That's 29 U.S.C. 1106 and 1108, where Congress had said, you may only enter reasonable contracts with service providers and you may only pay reasonable compensation and you have to get certain disclosures in that instance. So the state comes in and says, well, on top of what ERISA says, we want all these other things. We want all these other bells and whistles in your contracts and all these other requirements and limitations. It's an exclusively federal area subject to fiduciary decision making and enforcement against the fiduciary if they do it right. That's preempted because of the fiduciary relationship. With respect to disclosures and reporting, this Court's decision in Gearhart, we mentioned, still lives in its connection with holding. There was a reference to holding that's no longer relevant because the Supreme Court's subsequent case law does away with that. But in its connection with analysis, the Gearhart Court specifically said, forcing PBMs to make reports to the state about their plans, claims, not only as privacy problems, but it invades the central matter of plan administration that is governed by the disclosure and record-keeping requirements of ERISA alone, and the state cannot supplement those. And then the last bucket is the enforcement provisions. Those are pretty easily preempted under settled law, both the prudential decision of this Court, again, throws out enforcement provisions that were associated with an AWP law as preempted, and then the Supreme Court's decision in Aetna v. Davila makes plain that any additional enforcement measure applicable or affecting an ERISA plan is a non-starter, and only ERISA's remedies can be used. So there are no possibilities that legitimately invoke this statute, no circumstances in which this statute might not be preempted by ERISA? Not under provisions that we have asserted are preempted. We don't assert every single provision in the statute is preempted. We assert that the vast majority of provisions are, and the rest is inseverable from it because it's almost impossible to determine as an Article III court what the legislature would have liked and what it wouldn't have liked in that situation. But with respect to any provision, if it's going to be enforced against an ERISA plan, it has to be done through ERISA. It cannot be done through state law because of the special line of cases the Supreme Court has, most notably Aetna v. Davila, that says ERISA's remedies are exclusive even for saved state insurance laws. Even for what? Even for saved state insurance laws. So let's say Mr. Valencia had been right, which is not that some parts of this are saved as insurance regulations. If somehow an ERISA plan violated that, the beneficiary would have to sue under ERISA to say, you violated state law which has been transmogrified onto the plan because of the savings clause. So enforcement provisions are probably the most preempted of anything that the Supreme Court has talked about because of the special preemption that attaches to them. So that gets us to the insurance savings clause. Again, we're not exactly sure which ones we're fighting about because I think the briefing said there were far fewer that were at issue. But in any event, it's only relevant for provisions applicable directly to third-party payers who are insurance companies. This goes to your question earlier, Judge Arnold. For self-funded plans that are administered by PBMs, there's no insurance company involved in that situation. So this insurance savings clause issue is very limited to the situation where there is a third-party payer that's an insurance company. And due to the Deamer Clause, it doesn't cover the self-funded side. And even there, it could only be relevant to the provisions that apply directly to third-party payer insurance companies, which are very few because, as you also noted, Judge Arnold, the vast majority of the statute applies to PBMs, which carry no risk. They're not insurers. They're just administrators. So the issue is narrow in scope, but it's also, again, easily decided because, as I think Judge Arnold was noting, this is a law, overall, when you look at it as a whole, it is a law that seeks to regulate PBMs. It says so on the preamble. It doesn't say anything about third-party payers, ERISA plans, or anything. It's designed to regulate PBMs. They carry no risk, and therefore the first provision of the Kentucky v. Miller test, is it specifically directed at insuring entities? It's not. It's directed at a non-insuring entity, and the insuring entities, whether you're a self-funded ERISA plan or an insurance company, they're scooped in because the state thought, this isn't really going to be effective against the PBMs if we also don't try to directly regulate them in some ways. And so this is, it'd be one thing if the statute mostly regulated insurers, and there was a little bit of it that regulated PBMs. That would be like the Kentucky v. Miller footnote number one. But that's not what this is. This is a statute that, in wide measure, regulates PBMs and adds in smaller measure plans directly because it wants to perfect what it's done with respect to PBMs. And so that's not the situation that Miller was, and it's not one that allows for saving under the insurance savings clause. And I would mention Judge Erickson. I think this is a situation where Chief Judge Rose did decide the insurance savings clause issue because not only did she summarize what the law was on the insurance savings clause, but her injunction extended specifically to all the plaintiffs, two of whom could only be reached if she also was deciding the insurance savings clause. And I will note, as Mr. Valencia said, this was an urgent hearing and urgent process. So Chief Judge Rose needs to be applauded for the decision. She issued 90 pages in a very short order. But she had a lengthy hearing, and at the hearing she issued, which was very helpful, I thought, to both of us, a series of questions, 13 to each side saying, I want to hear about this at the hearing. One of them was specifically on the insurance savings clause. Tell me why the insurance savings clause applies or doesn't apply. And it had subparts. We argued that in front of Chief Judge Rose. So she had it all in front of her. She decided it, and I think she approached this, as Judge Arnold possibly suggested, that this doesn't look like an insurance statute. This looks like a statute that regulates contracting partners about the administration of plans, and therefore she didn't need to detail it, I suppose, in her mind, though I don't want to put words in her mouth. So that's the insurance savings clause. I'll just briefly touch on the First Amendment. The First Amendment involves three different provisions, we say. The health plan, PBM anti-referral provision, which Judge Arnold asked questions about. The PBM anti-promotion provision, which the district court didn't reach because she got one standing issue wrong, but we argue had she gotten that correct, she would have reached this. And then the health plan requirement that they have to, they have to divulge to all providers in a geographic area, even if they don't want to hear about it, their competitive requirements for being in the network. This is very sensitive corporate information that the state just willy-nilly says, you shall provide it to every provider in the geographic area, how to become a member of the network. The way Mr. Valencia tries to get rid of the district court's holdings on this is to say, well, this is all misleading behavior. Well, the district court was not willing to condemn the entire body of ERISA plans and the entire body of PBMs to be engaged in misleading behavior. She said, this isn't misleading behavior. What's happening here is someone calls the customer service agent at the PBM or at the plan and says, I have this very expensive specialty drug that needs to be administered to me. Which pharmacy should I go to in order to get it filled? And the customer service rep or directly the PBM or directly the ERISA plan says, you should go to, let's say, the CVS because we have a specialty network with them. This is a very expensive drug. They alone administer it for us because we need to guarantee volume to them in order to get discounts that we're getting from them on the pricing. So you need to go to the CVS. And, in fact, under the Iowa Bankers Plan, for instance, we will pay the coinsurance, but it doesn't count towards your deductible. So the beneficiaries, this is terrific. I get to go. I get basically the drug for free. Otherwise, it's a $100,000 drug. But I have to go to the CVS to do it. In that situation, supposedly everything is misleading in that situation because the beneficiaries' best interests are served by that. The plans' interests are best served by that. Maybe the PBMs too. I don't know. But for what it's worth, that's not misleading. That's actually a fiduciary requirement. You must help the beneficiaries determine how they can best get the benefits at the cheapest cost. And you also have to defray the administrative costs of the plan. To do anything other than promote the pharmacy that's in the network would be a breach of fiduciary duties. So that provision, those provisions, there's nothing misleading about that. As to the other provision that is at issue, this requirement that health plans have to send out their competitive information about how to be a network to everybody in a geographic area, whether they want it or not, that's not misleading either. The whole idea in setting up a network is you have to have a limited number of networks in order to get very discounted prices from those pharmacies because they have to count on volume. If the network is huge, the beneficiary can go to everyone and get the same rate, you're not going to be able to get the discounts from individuals. Again, that's not misleading behavior. That is behavior designed to further the fiduciary's obligation to keep the cost of the plan down and help the beneficiaries themselves. So the district court was right to hold that two of these provisions, and she should have held a third, are barred by the First Amendment, which also then supported her severability analysis. Wasn't one of those provisions preempted? Yes, this was a kind of Belt and Suspenders approach where she held the anti-discrimination provision, the referral provision fell on both sides. If we thought that was correct, we wouldn't have to reach this? Correct. And you wouldn't have to reach the contracting requirement, the obligation to send out all of your terms, you wouldn't have to reach the First Amendment issue there, too, either, because it's part of the Any Willing Provider, Any Willing Pharmacy provision, and if you throw that out in Arisa Grounds, you wouldn't need to get to it on the First Amendment. So as we noted in our brief, we'd ask that the court affirm much of what the district court did, and we'd ask that on cross-appeal that the court hold an additional several provisions are preempted, and that certainly there was standing in the situation for the court to be able to get to all that it did. So thank you. Thank you. Thank you, counsel. For Rebel. Let me start, Mr. Valancivi, with something that bothered me and we didn't get to before. It seems to me you are telling this panel to disregard the holding in which is in most situations absolutely contrary to binding Eighth Circuit and bank law. So where are we on that? So Flowers, as to at least let's start with standing, Flowers doesn't say anything about standing because there you are. I understand it doesn't cover everything, but it covers much of what you essentially were arguing. So what the law that was at issue in Flowers required. You can dodge it for another 10 minutes. I want an answer to my question. Do we, are you telling us not to view Flowers as controlling our panel? No, Your Honor. And we submitted a response 28 J letter on that explaining. You didn't cover that question. The question, whether it's binding. Yes, it's binding on this court, just as is we be in prudential. And so I'd like to talk about prudential for a minute because prudential found in any willing provider law that applied to a third party payer was saved. And so my friends referenced prudential as to standing, but in prudential, the regulated entity was a plaintiff. So one plaintiff had standing and the court went on from there. So prudential doesn't answer the standing issue here and it does answer the ERISA insurance savings clause issue as to at least the, any willing provider law that applies to third party payers, which is section four B two a. I'd like to touch on the indemnification clause point that was, was mentioned. I think it's important for the court. If it's going to analyze indemnification clause and whether indemnification clauses is what gives plaintiffs standing for the pass through costs. Look at those, the two indemnification clauses that plaintiff cited, they only cited two and they're at the appendix pages two 16 to two 17 and appendix page three 84. The district court determined that these indemnification clauses were standard, but those two clauses themselves are different from one another. Plaintiffs pointed to a case called Liberty mutual and said the indemnification clause there gives them standing here because, but the, the, excuse me, the indemnification clause in Liberty mutual allowed. I don't remember this arguing being argued before. They mentioned indemnification clauses. So I'm responding to that. An argument just now. Yes. What they mentioned the pastor costs that judge Erickson was mentioning. And so they relied on the indemnification clauses. I didn't hear the word indemnification that I believe they did. You want to, you want to add on to what you argued before? I don't your honor. I'm just responding to the, the point about pass through costs. So I'll turn next to the dispensing fee, the dispensing fee, the plaintiffs argue imposes an acute effect. If the court looks at what the U S Supreme court did in travelers in travelers, they are analyzed whether a cost regulation imposed an acute economic effect. And in travelers, the way to analyze the word acute, acute is not a statutory term. It was the term the court used in its opinion and acute meant some, some fee that was so great that it imposed effectively a Hobson's choice on the plan. What plaintiffs are arguing here is a different interpretation of acute. And they're saying it takes effect so suddenly, but they've at least conceded that under the travelers interpretation of acute, the fee itself is not so large that it imposes a Hobson's choice. The fee is $10 in some sense, a dispensing fee. Go ahead. And the fee in travelers was a 13% surcharge on hospital billing rates. And so $10 is quite, quite much smaller than the 13% surcharge in travelers. So acute has a number of meanings, depending on how it's used. It's a word with broad interpretations in the English language. And there's one that's commonly used in medical care. And that is that it has an immediate and substantial effect. And so, you know, somebody has an acute diagnosis of acute onset pneumonia or something viral pneumonia, that that's what that tells us. And then there's a sense in which we use acute as just being substantial and overwhelming, right? You know, and are you saying that the Supreme Court's opinion limits it to the second and not the first? Because what I understood them to be arguing is that the term acute actually does have both meanings. Both are common in the English language and both could be appropriately applied under these circumstances. But you're saying that really only the second meaning that it's overwhelming and substantial. I'm looking at the traveler's opinion as a whole and seeing what it meant by acute rather than looking at it as sort of a statutory term where we're going to look to the dictionary definition, which we ordinarily wouldn't do for a Supreme Court opinion. And the opinion as a whole and travelers looked at a 13% hospital billing rate and said, that wasn't so large that effectively opposed the Hobson's choice. And so we'd ask the court to apply that same theory here. The last point I would like to make is on severability. The plaintiffs argued that it's impossible to know whether the legislature would have wanted any of these statutes to stand on their own. That is wrong. The legislature told us twice. There's two severability clauses here. Iowa code 4.12 is a severability clause imposed on interpretation of Iowa statutes. And then within SF 383 itself, section eight is a severability clause. So we shouldn't be getting into a guessing game about effects on the market and things like that. This is not a factual question and the district court got that wrong. It should have taken the legislature at its word when it imposed a double presumption of severability in the Texas statute. Thank you, your honors. Thank you, counsel. The case has certainly been thoroughly briefed and argued and it's very complex and council stayed within the time limit, which is not easy in this environment, in this situation. So we appreciate that and we appreciate the effort and we'll take it under advisement."
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"stt_transcript": "Well, hold on. I'm sorry. Let's wait for Council Member 2 to be seated. All right. Very well. Please call the next case. 26-1158 from the Western District of Missouri, Jessica Gilmore v. Nexstar Media. All right. Mr. Groves, we'll hear from you when you're ready. You may adjust that podium on the right there so that the microphone is close to you. Very well. Can you hear me? Is it picking up on the mic? Why don't you start and we'll see how it goes. Okay. There we go. May it please the Court? Thank you. My name is McKinley Groves. I'm here honored to represent appellant in this case, Ms. Jessica Gilmore. The issue before this Court today is whether the District Court, in this case, aired an awarding summary judgment to Nexstar Media, Inc. when it directly and expressly declined to consider direct evidence of Nexstar's intent to force Ms. Gilmore to resign. And that specific evidence that I'm talking about is a text message from Taylor Becker, Nexstar's Director of Sales, to Jessica Gilmore that said, well, Jessica pretty much just lied to my face. Hopefully I made her uncomfortable enough, though, that she'll quit. In order to put this in context, and I think for the Court to properly consider this case, I think it's important to look at the timeline of events as they occurred. In July 22, 2024, Ms. Gilmore's mother fell due to a serious illness. She had a stomach ulcer issue, had to be lifelighted to Kansas City. Gilmore had to take paid time off. She took sick leave and eventually decided to file for intermittent leave under the FMLA to take her mother to various doctor's appointments up in Kansas City. She was approved for FMLA on August 20, 2024. And the very next day, there were two meetings, actually three meetings, that are very important. The first, Taylor Becker, that Director of Sales for Nexstar, met with HR contact at the Springfield office, Ms. Tara Walker, and higher up HR, Carrie Torgerson. The notes from that meeting are in the record at page 184 and 185. And there's FMLA in bold print at the top of those notes. And at the bottom, it says 60% at work equals 60% at budget. Meaning that if Ms. Gilmore was missing work due to time at FMLA, or time taking care of her mother, she wouldn't be able to meet her budget goals set by Nexstar. Immediately following that meeting, there was a meeting between Ms. Becker and Ms. Gilmore. Ms. Becker consistently and repeatedly asked Ms. Gilmore whether she was looking for other employment opportunities. And I'll admit to the court that Ms. Gilmore was keeping her options open, but was not seriously considering leaving Nexstar at that time. She executed an affidavit to that effect and testified to that at her deposition. But she did lie to Ms. Becker and said, no, at this time I'm not interviewing. I'm not looking for other opportunities. Immediately after that meeting is when Ms. Becker sent the text message I talked about earlier. So the statement that was made that she had spoken dishonestly to her supervisor was not a false statement? The statement that she spoke to her supervisor was a false statement. I will admit, and that is undisputed, Judge, that that was a false statement. So to say that she lied to her face was correct by Ms. Becker. But the real part that I think is important is that she said, hopefully I made her uncomfortable enough to quit. Now this was a text message that was intended for Chris Pruitt, the general manager and vice president of Nexstar in the Springfield office. This was based on conversations that Ms. Becker and Mr. Pruitt had prior to Gilmore lying to Ms. Becker. So I'm not sure that the lying there is that material to that. But the real point is that she wanted her to quit one day after she was approved for intermittent leave under the FMLA. Immediately upon receiving this message, Gilmore went, as she's required to, she went to Tara Walker, the HR contact, to say, how can I move forward working here when my manager, my director of sales, wants me to quit? Are there cases that would indicate that an exchange like this without more is sufficient to create intolerable working conditions? And yes, Judge, there are multiple cases. And I would say, I would agree with the court that I don't believe this text message alone is enough to cause a constructive discharge. I think this is a case where the court needs to look at the totality of circumstances directly before and following the text message. And I think what you might be getting to. How much time elapsed after the text message before she left? Yes, and before she left, and I'm getting to that. So right after the text message, she goes to HR. She says, I'm not comfortable meeting with Taylor Becker at this time. I'm complaining about Taylor Becker. And despite those clear objections, Ms. Walker allows Ms. Becker into the meeting. Gilmore is not happy with that. She then goes to meet with Chris Pruitt, not knowing that Chris Pruitt was the intended recipient of the text message. Chris Pruitt does three things in that meeting. First, he tells her that the text message was meant for him, but declines to discuss Becker's relationship with Gilmore or any path forward. Instead, he does a second thing. He attacks Gilmore's performance and emphasizes the importance of being at work. Saying, I understand your mother's dealing with an illness, but when my daughter had cancer, I still showed up for work. Because it's in those times that we still need to show up and do our best work, because there are people here that are counting on us. Knowing that just a few days prior, Ms. Gilmore was approved for leave under the FMLA. He then tells Gilmore, you have no friends here at Nexstar. And asks her to create a list of things that could be improved at Nexstar. I understand that the court may look at this and look at the case Ames v. Nationwide to say, well, if she didn't fill up the list, that might prevent a claim for constructive discharge. However, I think there are a couple of important things to note here about that list. First, that list was to address general complaints and was never going to address Becker and Gilmore's relationship at Nexstar. Number two, the people in charge of implementing the changes that would be recommended or requested by Ms. Gilmore, was Mr. Pruitt and Ms. Becker, who are exchanging text messages and conversing about wanting Jessica Gilmore to resign. And the court, in its opinion, expressly declined to consider the inferences that result from that text message, which I think is the clear error. Because I'd point this court to Sanders v. Lee County School District No. 1, where this court says if an employee quits because she reasonably believes that there is no opportunity or chance for fair treatment, that there has been a constructive discharge. Counsel, what was the reasonable belief for Gilmore to have when she didn't submit a list of things that could be fixed? I think the reasonable belief comes from the fact that the people, again, the people who are in charge of implementing the changes on that list are the same people who just a couple of days ago were saying, we want her out, we want her to resign. Some people that approved FMLA leave, too, right? They are the same people. Well, no, the people who approved the FMLA leave was a third party, UNUM, who actually approved the FMLA leave. Now, at the time that she was approved, they didn't fire her, they didn't demote her or anything like that. But I think this still falls under the retaliation under the FMLA due to the temporal proximity between the two. She files for FMLA, is approved for FMLA. One day later, she's told her bosses want her to resign. And I think that's where the reasonable opportunity, the reasonable belief that there is no chance for fair treatment comes into play here. And I think that's very important language from the Sanders case. But by ignoring the text message, which the court said it will not do because it was accidentally sent and therefore cannot be relied upon as an intentional act of the employer, I think ignores a couple of inferences because the content of the text message was not accidental. The intent of the text message was not accidental. The only thing accidental about that text message was the recipient, Jessica Gilmore. Ms. Becker still wanted Jessica Gilmore to quit. Ms. Gilmore was still intending to communicate that wish to Chris Pruitt. And also, the text message evidences that the behavior in the meeting between Ms. Becker and Ms. Gilmore was intended to force Jessica Gilmore to resign. And by failing to consider that text message, the court failed to make the reasonable inferences that Taylor Becker and Chris Pruitt were intending to make Gilmore uncomfortable enough that she would resign, that Becker's meeting with Gilmore was intended to make Gilmore uncomfortable enough to quit. You pair that with the temporal proximity between Jessica Gilmore getting approved for leave under the FMLA and the text message, I think that at the very least creates a genuine issue of material fact that should survive summary judgment in this case. I see I have four minutes, a little more than four minutes. If the court has any further questions, otherwise I'll leave the rest of my time for rebuttal. Ms. Garrido, we'll hear from you. May it please the court, Ms. Gilmore alleges that she suffered the adverse employment action of constructive discharge. However, Ms. Gilmore has not met the high bar that is required to establish constructive discharge. The evidence that Ms. Gilmore relies on to support her claim does not establish an intolerable working environment. Moreover, Ms. Gilmore did not give Nexstar the opportunity to improve the working conditions she claims caused her to quit. Therefore, this court should affirm the entry of summary judgment in Nexstar's favor. Turning to the first point with respect to Nexstar not creating an intolerable working environment, the evidence that she relies on doesn't establish that. As opposing counsel noted, Nexstar did approve her request for FMLA leave and granted that request. On August 20th is when the leave was approved. Mr. Groves relies on a meeting that Ms. Becker had before she met with Ms. Gilmore the next day on August 21st. That meeting was unrelated to what she was going to discuss with Ms. Gilmore the next day. Those notes are not an agenda of what her discussion was going to be. Ms. Becker's discussion with Ms. Gilmore on August 21st was limited to confronting her about whether or not she was looking for a new job while working for Nexstar. Are those facts in dispute that you just described? No, Your Honor. Those facts are not in dispute with respect to the fact that Ms. Becker met with Ms. Gilmore to confront her about whether she was looking for work. And Mr. Groves admits that Ms. Becker lied during that meeting. She did, in fact, lie and tell Ms. Becker that she wasn't looking for work, but she was, in fact, looking for work. That's on the Joint Appendix, page 73, where Ms. Gilmore admits that she lied to Ms. Becker. That meeting was solely limited to just confronting her about her looking for work. After the meeting, Ms. Becker accidentally sent a text message to Ms. Gilmore, which was intended for Mr. Pruitt. But because Ms. Becker didn't intend to send that text message to Ms. Gilmore, it can't be used as evidence to show that she sent that with the intent of trying to create an intolerable working environment. And immediately after sending that text message, Ms. Becker went to Ms. Gilmore to apologize to her and told her she's sorry that she made her feel that way. And so that shows that Nexstar took steps to ameliorate the situation that Ms. Becker caused. And so going back to just whether the text message itself creates an intolerable working environment, Mr. Groves admits that it doesn't. In his argument and on pages 4 and 16 of his brief, that the text itself doesn't create an intolerable working environment. Also, the text message that was sent was related to her lie that she wasn't looking for work. The text message doesn't reference FMLA leave, so the only reasonable inference that could be drawn from sending that text message is that it was limited to her lie about not looking for work, which is what the text message said. And as I said, they admit that the text message itself doesn't create an intolerable working environment. The other evidence that they rely on with respect to an intolerable working environment are the statements that Mr. Pruitt said. However, those statements are incomplete. While Mr. Pruitt was trying to sympathize with Ms. Gilmore by saying that when he had cancer and when his daughter had cancer, he still understood there were responsibilities and he had to go to work. But that was his attempt to empathize and sympathize with her. And to the extent they're considered insensitive, that is insufficient to establish an intolerable working environment. It's an objective standard, and objectively, it's clear that Mr. Pruitt was trying to sympathize with her. And importantly, the last thing that Mr. Pruitt asked her at that meeting was to create a list of ways that would improve the working environment that she claims was causing her to quit. And as Your Honor, Judge Smith noted, she never submitted that list to Mr. Pruitt. Why wouldn't the evaluation of these statements be something properly for a jury? Your Honor, because it's an objective standard and the district court was applying the law. And the law states that insensitive comments are insufficient to establish an intolerable working environment. And importantly, too, when you're analyzing whether an intolerable working environment has been established, you also need to look at what the company did to ameliorate any impact that the comments or statements or acts had. And here there are multiple items that Nexstar did to ameliorate what they did. Starting with Ms. Becker apologizing. After she sent that text message, she went to Ms. Gilmore to apologize to her. Ms. Wonker also texted and called Ms. Becker the next day on August 22nd and apologized as well. And offered to let her work remotely in case she didn't want to interact with Ms. Becker. But Ms. Gilmore declined that invitation and elected to continue going to work. And Your Honors, the other amelioration was Mr. Pruitt meeting with Ms. Gilmore. During that meeting, he explicitly asked her for a list of ways to improve the working environment and she declined to provide that. And so Your Honors, she has failed to establish an intolerable working environment. Especially because Nexstar did take actions to try to maintain that working relationship with Ms. Gilmore. But Your Honors, even if you did think that she established an intolerable working environment, which Nexstar denies, Ms. Gilmore still had to provide Nexstar the opportunity to improve these working conditions. And she hasn't done that. Ms. Gilmore was required to provide a reasonable... I'm sorry. Part of Ms. Gilmore's obligation is to be reasonable and not to assume the worst and not to jump to conclusions. And that's exactly what Ms. Gilmore did here. Ms. Gilmore didn't even provide the list. In that list, she could have stated things that she wanted done for the environment, but she didn't do so. And Your Honor asked about the timing of the text message to when she then quit. So the text message was sent on August 21st and she had that conversation with Ms. Walker on August 22nd. The phone call with Ms. Walker on August 22nd, Ms. Gilmore did. And Ms. Gilmore did reach out to Mr. Pruitt, but he was out on vacation, so he would have met with her earlier. But nonetheless, the meeting occurred on August 26th, which is the date that Ms. Gilmore elected. And so Ms. Gilmore then went and took FMLA leave because she knew she was on approved FMLA leave. And it's undisputed that no one discouraged Ms. Gilmore for taking an FMLA leave, and she knew that she could take that leave. So she took a few days from the 27th to September 1st for FMLA leave, and then on September 2nd, resigned. So before her resignation, she never submitted the list that Mr. Pruitt asked her to submit. And Your Honors, it should be noted that Ms. Gilmore never called the ethics line. That's undisputed, that she never complained to the ethics line about intolerable working conditions or how she felt that the meetings went with Mr. Pruitt or Ms. Becker or Ms. Walker. So Your Honors, I would just like to point that NXSTAR did grant Ms. Gilmore her request for FMLA leave. No one at NXSTAR discouraged her from taking FMLA leave. It's a very high bar to establish constructive discharge. Objectively, the facts do not support that NXSTAR created an intolerable working environment. Mr. Groves admits that the text message itself does not create an intolerable working environment. The evidence that he relies on notes from a separate meeting and a meeting between Ms. Becker and Ms. Gilmore, which was just limited to confronting her about her looking for jobs, and during a meeting where she lied, does not establish an intolerable working environment. The text message was limited to the confrontation and her dishonesty to Ms. Becker about looking for work. And so Your Honor, an intolerable working environment was not established. And NXSTAR, as I mentioned, took steps to ameliorate the situation and took steps to try to retain Ms. Gilmore and improve anything that they did that made her feel uncomfortable, which was evidenced by Ms. Becker's apology, Ms. Walker calling her and apologizing for how the meeting went, and Mr. Pruitt meeting with Ms. Gilmore and asking her to submit a list of ways to improve her working environment. And finally, Your Honor, even if you do find that an intolerable working environment was created, Ms. Gilmore was still required to give her employer a reasonable opportunity to resolve a problem before quitting. Here, Ms. Gilmore did not do that. She never submitted that list of ways to improve the working environment. She could have listed everything that she wanted in that list and see whether or not the company would honor her request, but she never did that. Instead, she quit. And so, Your Honors, for the reasons stated in NXSTAR's brief and our argument today, we ask that the district court's order be affirmed. Thank you. Very well. Thank you for your argument. We'll hear rebuttal. Counsel, if you could take a moment to address the concern about providing a reasonable opportunity for remediation. Of course, Your Honor, and may it please the court, let me address that straight away, because Ms. Garrido raised a number of issues, how there was no reasonable opportunity given. Well, Gilmore, immediately after receiving the text message, Ms. Gilmore went to the HR contact there in Springfield, Tara Walker, to give her an opportunity to address the situation between Jessica Gilmore and Taylor Becker. When she was not pleased with the outcome of that meeting, specifically, Tara Walker allowing Ms. Becker to intrude upon that meeting and not requesting that she leave that meeting, Ms. Gilmore made an appointment with the vice president and general manager of the Springfield branch, Chris Pruitt, gave him a reasonable opportunity to address that situation. Not only did Mr. Pruitt decline to address it, he actually made the situation worse. He criticized her work performance, which had been declining due to absences from taking care of Ms. Gilmore's mother. He told Ms. Gilmore she had no friends at NXSTAR. He emphasized the importance of being at work one day after Ms. Gilmore was approved for leave under the Family Medical Leave Act. Now, I understand that Ms. Garrido pointed out several attempts that NXSTAR made to ameliorate the situation. She pointed to Ms. Becker's apology. She pointed to Tara Walker's allowing Ms. Gilmore to work from home. And she pointed to the meeting with Pruitt. However, none of those are actual opportunities or attempts to ameliorate the situation, and here's why. Ms. Becker's apology was not, I'm sorry I made you feel that way. As she testified, it was, I'm sorry that you received that text. She never apologized and said she didn't mean what she put in the text. She never said, I don't want you to quit. What she said was, I'm sorry that you received that text. That is not an apology. That is simply, you got caught in, you caught me in saying that I want you to quit, and therefore cannot be considered an attempt to ameliorate the situation. Ms. Walker allowing Jessica Gilmore to work from home also cannot be an attempt to ameliorate the situation. First of all, that was a temporary solution only until Mr. Pruitt came back from vacation and was able to meet with Ms. Walker. If you'll look back in the meeting notes from the meeting between Ms. Becker and Human Resources, it explicitly says work from home is not an option. This was not a permanent solution. Further, even though Tara Walker told Ms. Becker do not contact Jessica Gilmore because of the situation between the two, Ms. Becker contacted Jessica Gilmore that day. I believe the record shows that it's just asking about an account at work, but it goes to show that Ms. Becker was not willing to honor any instruction from Human Resources regarding her behavior around Ms. Becker, and she was willing to violate express instruction from Human Resources in contacting Ms. Becker. Lastly, Ms. Garrido says that the meeting between Mr. Pruitt and Ms. Gilmore was an attempt to ameliorate the situation. Mr. Pruitt expressly declined to address that situation and instead turned it into a performance review and emphasizing the importance of being at work. Ms. Gilmore did not jump to conclusions here, but gave Nexstar every reasonable opportunity to address the situation, and it failed at each step. If Ms. Gilmore gave every reasonable opportunity, why didn't she submit a list? And, Judge, I'll acknowledge that I believe that that is the weakest point in our case. However, as this Court said in Sanders, that when the employee has a reasonable belief that there is no chance for fair treatment, in this case, Ms. Gilmore is submitting a list to be implemented by the very same people who are wanting her to resign. I think at the very least, and I see my time has expired, if I may finish my thought real quick. Quick, real quick. Okay, thank you. I think at the very least, all of this creates a genuine issue of material fact that is much more properly resolved in front of a jury, and I would ask that this Court remand this for a jury trial. Thank you, Your Honor. 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. Counsel are excused."
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"stt_transcript": "May it please the Court, this case can be resolved on a narrow ground. Section 1231A5 permits reinstatement only if DHS establishes that the petitioner re-entered the United States illegally. Here, DHS's own record includes an approved I-212 followed by a CBP encounter and DHS parole. Yet, the reinstatement record does not show that the officer considered those intervening agency actions or afforded the process required under ACFR 241.8. We are not collaterally attacking the underlying removal order. Instead, we are challenging DHS's present statutory authority to reinstate it. This Court's precedent supplies the framework. Ochoa Carrillo holds that this Court has jurisdiction to review and order reinstating a prior removal order. Perez-Garcia confirms that review reaches the predicate establishing DHS's authority to proceed, including whether the non-citizen unlawfully re-entered. The Second Circuit's recent decision in Santos v. Blanche provides additional persuasive support that the reinstatement order itself is a final order reviewable under… Now, this is the first of two inconsistent 2026 Second Circuit decisions? Well, Your Honor, all I can tell… I think you're talking about the first one. Aren't I right that the second…well, maybe I've got my jurisdictions wrong. Your Honor, this case came out of the Second Circuit on September 8th, and it provides… it spoke in terms of the Court's jurisdiction to review the reinstatement order, and in light of Riley has found that a reinstatement order is, in fact, a final order that is subject to jurisdiction. So the question before this Court is not whether the old removal order was valid. It is whether DHS lawfully reinstated it now. Now, Section 1231A5 requires a subsequent illegal re-entry. The administrative history here is unusual and important. DHS had already approved Petitioner's I-212 granting permission to reapply for admission after removal. Petitioner later encountered CBP, and at that point, DHS could have addressed the prior order and reinstatement. When is this now? That, Your Honor, occurred in 2019. So the I-212 was, in fact, approved in 2016. Three years later, in 2019, he appears and has an encounter with CBP in Arizona. This is when the alleged parole occurred. That's correct, Your Honor. And it seems to me, I understand what you're arguing, but it is not. He illegally re-entered with his son, and they then were allowed to go back across the border and re-enter for his son's removal proceeding. Well, Your Honor- So, you can call that a parole. I think it was anything but. I think it was. So, to me, we start out, he illegally re-entered. Well, Your Honor, I would submit to you that the agency's own precedent, though, takes a different position. Matter of Q. Lee specifically addresses exactly this kind of fact scenario. And in matter of Q. Lee, the Board of Immigration Appeals has specifically found that DHS's release of someone under 1225B applies as an exercise of statutory parole authority. Put another way, is at the point that CBP encounters him in 2019 and allows him to re-enter the United States. At that point, he is inspected and paroled in under statutory parole authority. They could have- He was not allowed in. He was detained, and then he was allowed to go back across the border. No, Your Honor. That is not correct. He was allowed- He was then allowed, because of his custodial relations to his son, to get his son's benefit of a time out, so to speak. No, Your Honor. That's also factually not consistent with the administrative record. What occurs is, is they give him a notice to appear so that he has to appear in court with his son. Well, why would a parole undo the fact that he is illegally entered? Well, Your Honor- That's the predicate for reinstatement, right? So how does a parole undo that? How does it cure the original difficulty? There's two issues to that, Your Honor. The first is, is that the agency action that is subsequent to his initial entry has to be reviewed as part of the agency determination under the regulations. That's what's lacking here. The question that the court is asking is not really before the court now, in the sense that we are- I don't think that's right. I think whether he illegally reentered is what we have jurisdiction to review de novo. That is correct, Your Honor. But I think where the disconnect is occurring is that the statute requires the agency fully review all of the evidence. So in 2025 is when the actual- I'm just talking 2019. But in 2019, Your Honor, there is subsequent agency action. There's intervening agency action that occurs after his arrival. To me, the starting question, once we have jurisdiction, is almost completely answered by the question of illegal reentry under the Supreme Court precedent. If he illegally reentered, then the first of the two- well, the last of the three things that have to be found before the shall remove kicks in, are there, is there. He illegally reentered. But, Your Honor, I think that that takes the statute too far. For the umpteenth time, by the way. No, well, it was actually the second time, Your Honor. The first time, he did not- once he illegally reentered, he began the process to finalize his legal status when he left voluntarily in 2013. And I say voluntarily, even though it was under an order of- overstaying to begin with that triggered the removal, right? I mean, did he enter on student- No. Some kind of a visa? That's right. He overstayed. He didn't overstay. It wasn't unlawful. It was the first unlawful entry. He then leaves in 2013 under an order of removal. That is not a matter that we are contesting. And when he- He comes back and gets- well, he gets stopped and- He comes back and is encountered by CBP in 2019. No, I'm talking 2013. In 2013, yes, Your Honor. That fact is not in dispute. And he concedes, well, yeah, I'm trying to illegally reenter. No, Your Honor. The only order that- He was inadmissible for multiple reasons. Your Honor, the only unlawful- the only reentry occurs in 2019. There is no pre-reentry. There's only- He was stopped at the border in 2013. No, Your Honor. In 2013, he enters and is then- he is, in fact, placed in removal proceedings. That is correct. But there's a reentry after an order of removal only occurs in 2019. Okay, but before you run out of time here, I was wondering. Tell me the effect of the employment authorization. Yes, Your Honor. Does that mean that deportation is deferred? Is that what you're suggesting? Well, at this point, Your Honor, under the circuit ruling, the federal court ruling in ICWC, he falls within the certified class membership in that case. He has a BFD, which is a bona fide determination, and he has his- I'm not sure that will have an effect on this proceeding. Well, Your Honor, what I'm saying is- In fact, he's in the class. I don't know that that has an effect on this proceeding. At this point, Your Honor, with the employment authorization in conjunction with the bona fide determination, he has deferred action. That is correct. What does that mean under immigration law? Forget about the class action. It would mean that there is a forbearance from removal. Say that again? There would be a forbearance from removal. So that would be the end of the case. Well, now we're in the direct action law. I'm sorry, Your Honor. Your argument is he has a BFP, so we have a direct action that prevents removal, right? No, Your Honor. It is a matter for the agency to consider as part of the regulations. It is not before this court in particular. It does provide context for the agency to consider consistent with the regulations as they are required to do. So then it has no effect on this appeal. It does not. The existence of the deferred action is mere context in the terms that, even if this court were to today allow for the reinstatement to be present, he does have deferred action, which would by definition give him a forbearance from removal. Well, that would be off in the immigration service, though, not in this case. That's correct, Your Honor. Okay, thank you. That helps me. And I see I'm out of time. Thank you. Mr. LaForte? May I proceed? Good morning. May it please the Court. Dietz LaForte on behalf of the respondent. There are three issues in this case, jurisdiction, exhaustion, and the merits. The court can elect to forego addressing the merits and simply dismiss the case on exhaustion grounds. Looking at that, on page 1 of AR1 is the notice to reinstate the final removal order. On there, there is a box that petitioner did not check. Petitioner refused to sign, did not check the box, and in doing so, did not contest reinstatement of the final removal order. That, in fact, is a failure to exhaust. That's a contested interpretation of the effect of that, refusing to sign. There is a box on there, Your Honor, on page 1. I saw the box. That is petitioner's opportunity, Judge Loken, to contest the reinstatement order. Simply checking it is contesting it. Now, fleshing out those claims can be supplemented later. But by refusing to sign, to check the box, he's failed to exhaust that contestation of the reinstatement order. So based on that... I understand the argument, and let's assume it's not persuasive. Yes, Judge. Mendez-Gomez is this court's binding precedential roadmap to the disposition of this case. Mendez-Gomez provides three criteria to assess the validity of the reinstatement order. Number one, prior removal order. That's not contested. There is a prior removal order back in 2013. Number two, petitioner's identity. You've got ten minutes. You're talking about, well, that's not contested. And, you know, it took a minute. It'll take you a minute to state the two that aren't contested. Judge Loken, we'll skip to the third component, illegal entry. Here, illegal entry was galvanized by four things in the record. First is the affidavit. That's on page AR1. That's on AR1 page 19, where the petitioner signed and gave a fingerprint saying, quote, I last entered the U.S. on March 6th, 2009. That's not contested. That goes right to... The illegal entry is the issue. That is the illegal entry. It's an admission. I understand the government's position, technical position. But we're here to, I'm here to listen about probation and direct, I mean, about direct action and what's... On deferred action, Your Honor? No, well, the parole. And parole doesn't bother me. Direct action darn well bothers me. Yes, Your Honor. Because I don't understand it. Well, I do understand it, but I didn't understand it from the briefs. And I didn't understand it until I looked pretty hard at the Supreme Court's opinions with its history. Regarding parole? No, regarding direct action and the effect of direct... Its origin. And nobody talks about the effect of direct action. In what context? I'm a law school... This context. Well, are you talking about the direct action? So here what we have is we just have enforcement of... We have reinstatement of a final removal order here. So that... What we're effectively doing is the agency has a final order. It served it and the petitioner was removed back in 2013. It then... That final order is in a drawer, let's say, in effect. He illegally reenters back in 2019. And in 2025, that final order is reinstated. And all it does, it attacks back to the original. The reinstated order just attacks back to the final order. This petitioner, there's no factual support at all in the record that he was paroled. He was, in fact, not. Petitioner is confusing the order of supervision with parole. There are two distinctions between the two. The order of supervision was just a tool whereby the government offered a petitioner, an alien-like petitioner who was subject to a prior removal order and was, in fact, removed to be released from detention. That is not parole. That was a tool to keep families together like petitioner and his minor son. Parole, by comparison, allows... Let's talk about direct action. Have you read footnote 8 in Reno in the last half century? I'm not familiar with footnote 8 in Reno, Your Honor. Well, it tells it prior to 1997, deferred action decisions were governed by internal INS guidelines which considered... After in the text saying called deferred action. Well, deferred action has no impact on this case. This case is about the validity of the reinstated removal order. Deferred action, all deferred action... Petitioner is arguing direct action. Right, but direct action, all it does is forebears removal. It doesn't apply to this case, Your Honor. That removal, if I'm understanding correctly here, the impact on removal itself is not impacted by direct action. Direct action forebears removal. It doesn't impact the validity of the removal. The removal stays in effect. What we have here is... No, we're talking about the reinstatement. We're not talking about the original order of removal. Correct. Reinstatement doesn't affect the rationale of... It doesn't add new rationale or new inadmissibility grounds in this particular case. All it does, it revives that prior or final removal order. Here, what's at stake is just an approved 212. An approved 212 does two things. One, it waives the reentry bar that's applicable in this case. Two, it gives petitioner permission to reapply for admission. The other inadmissibility grounds remain. After the 212 application is granted, petitioner then has to apply for a visa through the Department of State, apply for a waiver, have the waiver granted, and then present that visa at an official point of entry. Then at that point, Border Patrol... 212 is the U visa, right? 212 is an application to waive the bar of reentry. It's different than the U visa. They're two totally separate things. The 212 is what's at issue here. 212 doesn't grant permission to enter. It does not terminate the reinstated order. It does not permit petitioner to illegally walk across the border. It's not a border crossing... The argument, as I understand it, from the petitioner, is that plaintiff got a direct action in connection with the BFD from the U visa approval. That's factually incorrect. That's not correct. That's the issue. It is, but it's factually incorrect. All right, well, I don't understand the cases. You understand it. Right. And you won't listen. Courts have held that direct action makes executing a removal order unlawful, citing Western District of Washington. This is not a direct... No direct action is your response. The BFD says he may be placed in direct action, but it only begins upon employment authorization. All the employment authorization did was defer execution. He's not in direct action. Counsel conceded that that doesn't govern. I understand the court's point, Judge Loken, but this petitioner was not... If the issue is whether or not petitioner was served with a notice to appear on a direct action, that's factually incorrect. Petitioner was not served. Petitioner was given a notice of reinstatement. I'm looking at Justice Scalia and Reno saying direct action is administrative grace and discretion. The key word is discretion. So we're talking about 1252G and its scope. The key word is discretion. It's discretion whether or not to enforce removal. It has zero impact on this case, Your Honor. It does not. This individual is not in a direct action pursuant to an NTA. This is an issue of whether or not the reinstatement of a prior final order is valid. And here, again, Mendez-Gomez is the court's guidance. If the petitioner satisfies all three criteria, then that's it. There is no case. And that issue is galvanized, and the reinstatement is valid, which it is here. As Judge Loken said, he entered illegally, and that was the third criteria. We satisfied all three criteria. We have a valid reinstatement of the final removal order, and that's the case in a nutshell. Any kind of deferred action on the execution of removal, Your Honor, is not at issue and irrelevant to the disposition of this case. Thank you. Thank you. Is the time up again? Yeah, she's up. Pardon? She used it all. I gave you 30 seconds. Hold on. Thank you, Your Honor. I would like to address the court's question directly, which is that deferred action, reinstatement is a process. It means we're going to reinstate the old order and execute it. But deferred action says you cannot execute that order because, as the court has already determined, that it is an act of grace that allows for forbearance of deportation. So in essence, the reinstatement process, and again, that's why the regulations are so important, Your Honor, because these are all factors that the government should have considered and did not, and that is our position. Thank you, Your Honor. Thank you, counsel. The case, at least for me, is complicated, and we'll take it under advisement. Thank you."
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"stt_transcript": "Case 26-1086 Logan Riffenburg v. Mark Rice Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Logan Riffenburg v. Appellant Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell Hamilton Mitchell was that the dissent opposed dismissal and wanted the case to be heard on appeal on the merits. But the majority dismissing the appeal did not consider the merits of the appeal itself. remedy at this point? Or is the case moot? Or does the record not? There's some indication, I forget, I think maybe in the BAP opinion, that talks about the status of the property in question. Is there any update that's appropriate for us to consider here? When you say can the bankruptcy offer a remedy, do you mean to the petitioner? Right. I don't think that the petitioner filed this appeal to bar the sale of the property. And the sale has been completed. Then I don't think that there's any relief that can be granted. And so far, the sale's completed. It can't be barred at this point. Why can't it be unraveled at this point? Well, I mean, the sale is concluded. The conveyance has been made. Now, I mean, I don't know a statutory mechanism by which the sale could be set aside under this circumstance. I know 363N, as in Nancy of the Bankruptcy Code, that's 11 U.S.C. 363N, provides for the avoidance of a sale order that was obtained by fraud or collusion or something of that nature. But that's a motion that would be brought by a trustee in bankruptcy or a debtor in possession. And so I don't know of a mechanism by which the co-owner of a property would have a remedy. When was the first time that the good faith of the buyer was raised as an argument by the parties? As Judge Kelly pointed out, there was evidence at trial about the buyer. But when was the first time the argument was made that it matters? In exactly those words, I would say the first time the appellant raised it was on appeal. As far as— On what part of the appeal? Was it on the motion to stay? I think it was in response to the motion to dismiss that was filed before that. So not in the motion to stay. Or in the—yeah, in the motion to stay. To my knowledge, it was not raised in the motion to stay. And if I'm missing something, I apologize, but that's my— Thank you. And so far as the evidence at trial, I think there was sufficient evidence to establish good faith purchaser status. Looking at the trustee's testimony, again, with respect to what is a good faith purchaser, as the back dissent noted, it's somewhat muddled in this circuit, and it reads kind of like you know it when you see it. But on one hand, one standard is, you know, a good faith purchaser is one who purchases for value in good faith, which is kind of redundant and circular, but—and without notice of adverse claims. Lack of good faith may be shown by misconduct surrounding the sale process, including fraud, collusion, or attempt to take advantage of other bidders. Kind of something in the nature of cartelling to drive a price down, something of that nature. And looking at the court—the bankruptcy court's findings, the bankruptcy court did specifically find that the sale transaction was for value and in good faith. As far as notice of an adverse claim, I don't think there's an adverse claim to have notice of in this case. The trustee sold only the estate's undivided interest in the underlying 80 acres, and mobile home, that was the property that was the subject of the sale. The bankruptcy court had already determined by way of adversary proceeding that that is property of the estate. It was property of the estate at the time that the sale hearing was heard by the—came before the bankruptcy court. That had been decided in an adversary proceeding filed before the bankruptcy court, and the bankruptcy court had wiped out any claim that the petitioner might have as to the undivided interest that was being sold. So with all of that being the case, I don't think—the petitioner does not have an adverse claim to the property that was sold, that the issue's already been decided against him, and he did not take an appeal from that. And so I don't see that there would be an adverse claim for the purchaser to have taken about the property with notice of. And likewise, the trustee provided testimony that the asset was marketed to third-party buyers, including Blue Sun Capital, the buyer in this case, who the trustee knew to be a buyer of distressed assets. So the identity of the buyer was sufficiently and fully disclosed. It was just a disinterested third-party buyer. Is it undisputed, though, that there were no—it's undisputed there were no specific findings, is that correct, at trial? Of? Of good faith for the buyer. Well, you know, again, the court in several instances referred to good faith. It did not specify good faith on whose part. And so that would be something that I would submit that this court could infer could mean good faith of the buyer. Do you think if we were to adopt the BAP majority position that we would create a split with the Third Circuit? Yeah, I don't know. I mean, I see that it sounds like— It's pretty close to one, isn't it? It'd be close, but I think that's already the law of this circuit. So to the extent there—I mean, I would say there is already— There is already a split? A split. And I see that my time is up. Thank you. Thank you, Mr. Mitchell. Mr. Keech, your rebuttal. Thank you. Briefly, Humphrey, good faith was, in my reading of the case, was not necessarily at issue, so I don't find it a posit in this particular situation. The court asked Mr. Mitchell about what remedy would be appropriate. The appellant's preferred remedy would be to reverse the BAP and have the BAP hear the appeal on the merits and allow it to take up the issue of the stay. The other issue that I think was very important to understand is Judge Cubbs, I believe, asked what remedy is still available. Can you unwind the sale? I think it's important to note this is a consumer debtor who had a homestead, a mobile home, got divorced, very sort of tragic circumstances. But having said that, we're dealing with the buyer is a third party out of state who appears to be sophisticated in the contract itself, which is part of the record. It indicates that if the sale doesn't close for whatever reason, the trustee can return the money back to the buyer, and that's it. So there appears to be potentially a remedy of unwinding the sale, as Judge Norton mentioned below. But you said you were asking us to send it back to the BAP to consider the stay? To consider the merits of the appeal, and then I believe it also could hear again the stay issue. Now, I don't know if that's the case or not, but I know that at the moment the BAP both dismissed the appeal. What would the BAP stay? The partition action, the buyer exercising its rights of ownership, which it hasn't done as of this time. Would the BAP then determine whether it was a good face sale? Judge Greger, I noticed my time's out. Is it okay if I respond? I wouldn't ask the question if I didn't. Certainly. And your question again was can the BAP determine whether it's a good face purchase? I mean, is that what you would put before them? They're not a fact finder, I don't think. No. I think the more important issue is the record's devoid of that. Therefore, the appellee is not entitled to rely on it as a safe harbor, meaning that the court, the BAP, can hear it as a substantive appeal. So you want us to close the door on the mootness argument and send the merits back. Am I understanding this? Yes, that is correct. Okay. Thank you. Thanks to both counsel for your appearance and argument. It's been helpful. We've lost our lights. We will consider the case and issue an opinion in due course."
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"stt_transcript": "Mr. Tobin, you may proceed when you're ready. And you have, let's see, you've divided your time? That's correct. Ten minutes and five minutes. Okay. Please pay attention to your time as you go through your argument. I will. May it please the Court. Rule 37e permits an adverse inference to be imposed for the spoliation of evidence only upon the finding that the party acted with the intent to deprive another party of the information to use in the litigation. And this Court's precedent only affirms and strengthens that required finding. However, the Court below here did not properly find intent according to this Court's precedent and instead imputed MDOC's failure to follow its retention policy to the individual officer defendants. But it's also clear that no such intent finding could be made because the Court did not at first properly establish that the officer defendants had any authority or ability to access or tamper the footage at issue or any authority over the retention policy or the ability to retain footage. This case is a little weird in the sense that you don't have any Monell claims or anything against the Department of Corrections. And so I just wonder if the case is different. Like, I understand that these particular defendants, how do you draw an adverse inference if they had no control over it? That makes sense to me. But what happens if there's the usual Monell claims and supervisory claims where some of them did have the ability to preserve the evidence? Well, I suppose I don't necessarily know how it would operate under Monell. But certainly there was no particular defendant here who was regarded as a supervisor who might have ability to, even a supervisor over the use of force, someone who might have the ability to preserve the footage. Really, they're beholden to the policy at issue. I believe the Court misread the policy in determining that these defendants had the ability to obtain and retain the footage. She determined. Counsel, I'm not familiar with the Eighth Circuit precedent. Are you familiar with Comas v. Schaeffer from the Western District of Missouri? The case rings a bell. The court said the federal courts have consistently held that documents are deemed to be within the possession, custody, or control for purposes of Rule 34 if the party has the legal right to obtain the documents on demand. These are all employees of the same entity. Why wouldn't they have had authority to demand those documents? Well, I don't think there was anything in the record to suggest that they could demand the documents, actually. I think the record only supported that there was a shift commander. The use of force policy supports that there's a shift commander who, I suppose, oversees the process for the footage to be preserved. But it doesn't support that these officer defendants – there's no one who is a shift commander, at least in the record, among these defendants. So there was no one there. In fact, the use of force policy, and it's found at Appendix 145 to 147, at least the relevant portions, supported that the shift commander would then deliver it to the investigator. So it would be presumed that the investigator would have custody of the footage here. What happens if there was – and I kind of want to go back to the earlier question. But what happens if there was a supervisor here? We had a supervisor that controlled the film or the video, and then we had a bunch of normal employees like we do here. I think that you would need testimony adduced to support that this supervisor actually was involved, actually had that respective role in the use of force policy. Could you do an adverse inference against some of the defendants but not others? Like the supervisory defendants but not – I'm just trying to figure out how this works under your view. Right. It's sort of skipping ahead in the argument, but if you could make some sort of imputation argument, I think the Southern District of New York case, Stanborough, did this sort of case-by-case adverse inference looking at the relative responsibilities of the officer defendants. So in that case, the court determined that even on a case-by-case basis, it could not impute an adverse inference to all the officer defendants, none of whom had any responsibility to preserve the footage. But it could impute it to the sergeant supervisor who signed off on the use of force policy. Could they have – back to Judge Grouse's question. Could they have requested it? And if they could have requested it, does that support the adverse inference enough by itself? So I don't believe there's anything in the record that suggests that they could have actually requested it. In fact, the affidavit that we provided, which is Appendix 61 through Appendix 63, supported that essentially none of the officers or similarly situated individuals within their duties would have the ability to or authorization to access these tapes or these footage. There was no – certainly nothing in the record to suggest that they could actually request it. Doesn't that just create a perverse incentive for institutions to create procedures separating the officers from the management so that they can hide evidence? I think there's certainly an issue where you have to pick your poison. In Burris, this court determined that it would frustrate Rule 37 to impose it on any party or any individual who did not have a role in the actual spoliation. In Burris, there was no employer-employee relationship, and that's a very different situation. Right. And Burris did rely upon Adkins v. Wolever from the Sixth Circuit, which is a much more analogous case where we're dealing with officer defendants and a prospective Department of Corrections. In that case, the court determined that there had to be a culpable state of mind to actually destroy the evidence. And in that case, that's the only way in which you could have an adverse inference on that basis. And, in fact, if you were to rule otherwise, that you would then be incentivizing and essentially all officer defendants to constantly be checking with their employing facility that they're following the retention policy that they would presumably – well, that they would presume was in operation anyway. So when you have a situation where you have officers who are dealing with situations that may arise with inmates just to speculate every day or multiple times a week, you'd be asking them to essentially request their employing facility to make sure that this footage is preserved in every single case. Would it be different? So you raise an interesting point. Why should employees have to request something that should already be kept? But suppose we had a different policy, right? Suppose the policy said that employees had to request it. It's not done as a matter of course, even if there's been a use of force or some other incident, that the employees have to affirmatively request it, and these employees did not. Would that create a different answer then? I think it might create a different answer. It would be kind of a difficult and probably slightly unadministerable policy, but I think that might change the responsibility on that basis if they have a duty to request it and then they just did not perform that duty. But that, of course, was not the case here. In fact, the court had imputed the exfoliation from MDOC. In fact, it was imputed MDOC's failure to follow its retention policy to MDOC, which presumably kicks in precedent such as Morris v. Union Pacific or Auer v. City of Minot here where there has to be circumstantial evidence to support a conscious permitting of failure to follow retention policy. Here, circumstantial evidence is simply not there. In fact, almost the entire incident was preserved. Just 45 seconds in the middle of the incident was gone. There was 30 minutes after, 30 minutes before that were also gone. That was the— Was there any explanation? There was no explanation provided, and the court brings that up multiple times within the record. In fact, there was a factual finding that there was no sufficient explanation, I believe. There was no sufficient explanation. That's right. Exhibit B to plaintiff's trial brief adverse inference was our RFPs on search of Stephen Clark where basically he said, although surveillance footage of incidents involving uses of force are automatically retained, other footage is generally not retained as institutions do not have infinite amounts of storage space. So this was the furnished explanation. What about the fact that the state is providing or funding the defense and will pay any judgment? Should those bear on this issue? No, I don't believe that actually speaks to culpability in this context. So we're talking about either a conscious permitting of a failure to follow a retention policy or actually tampering or, in any number of ways, you might be able to destroy evidence. But the mere fact that there is this connection that created by virtue of 105.711, I don't think establishes the requisite culpability here. Suppose, though, that just a crazy case, but Minnesota or, excuse me, I don't know, Missouri DOC keeps calling. This is a Missouri case, correct? It is. So Missouri DOC calls and says, hey, get rid of that, 30 minutes. I don't want to have to pay this huge judgment. If you get rid of it, we're all good. And they get rid of it. And then would you have an adverse inference? I could see where who's paying could play a big role in the motivation for destroying the evidence. Yeah, absolutely. I think you would have an adverse inference in that context if they're specifically requesting it and someone is following through. I think you could show a culpable state of mind under that rule. So why not impute it here? So if you can impute it there to the individual guards, why not impute it here? Right. Well, I don't think that you can make such an imputation under the court's precedent that stands currently where we've talked about if you're not involved in it, it makes no sense to impute it. And there was just no evidence of involvement with the actual saving of footage. So that looks like it's all my time. I appreciate it. Thank you. Thank you. Mr. Sedlak? Yes. Thank you, Judge. You may proceed. May it please the court. Affirming the district court's fees decision would make this court the extreme outlier among the federal circuits and would require ignoring the plain text of the PLRA. First, the district court awarded fees as if this were a generic civil rights case under Section 1983. Indeed, the district court stated explicitly that the same prevailing party standard applies, but the PLRA has its own standard for closing fees for unsuccessful claims. Second, every other court of appeals that has confronted this question has recognized and applied the statute's distinct standard. This court should not create a split in derogation of statutory text. Instead, within the context of this record with intertwined claims against multiple defendants, the court should follow the approach of the Fourth and Ninth Circuits and order a percentage reduction based on the plaintiff's average success against all the defendants. The court should therefore vacate and remand the fees decision. The district court ignored the governing standard. The court below expressly believed that the, quote, same standard applies under the PLRA, end quote, as Section 1983 claims. That's plainly incorrect. The statute itself provides that unless, quote, the fee was directly and reasonably incurred in proving an actual violation of the plaintiff's rights, end quote, then the fee shall not be awarded. And the Supreme Court recently recognized in Murphy v. Smith that if the PLRA had simply, Congress had simply meant for prisoner litigation claims to be governed by Section 1983, then it wouldn't have bothered to write a new statute. Counsel, if we were to remand on this issue, would the district court have adequate guidance from other circuits or would we need to, is there differences between the circuits on this, how they would reduce fees? Yes, I would recommend that this court go ahead and enter the 45.1% reduction based on how other circuits have treated similar circumstances. I'd refer your honor both to the Ninth Circuit's case as well as the Fourth Circuit's case that we cite in our brief where the court did either implement the percentage reduction or bless the district courts doing so. As the Ninth Circuit explained, the PLRA excludes unsuccessful claims even if they are based on related legal theories or share a common core of facts with the successful claim. And that's the Ninth Circuit's Edmo case. The Fourth Circuit case that I mentioned too is Montcalm Publishing Corp. v. Commonwealth of Virginia. As was the case here, the Ninth Circuit in Edmo held that the PLRA plainly bars recovery of fees for litigating claims brought against several individual defendants who were dismissed from the action. Plaintiff, real quick, plaintiff is wrong in saying that there can be no fee reduction because it's impossible to parse out the work done on unsuccessful versus successful claims. But again, as the Ninth Circuit said in Edmo, the PLRA excludes unsuccessful claims even if they're based on related legal theories. Unless the court has any further questions, then we would ask for the court to vacate. Is this the first time our court has been called upon to weigh in on this issue? In this specific context and certainly in the context of a published decision, the plaintiff does cite to an unpublished judgment from this court previously. But as this court has explained, in circumstances like this where the other circuits have, in this court's word, had the better of the issue, then the advisable thing to do is to follow the other circuits. The unpublished case went the other way, right? It simply affirmed a judgment, an unpublished judgment of the District Court of Iowa, which made the same mistake as the District Court below here in assuming that the same standard under Section 1988 applies to the PLRA. So is the idea here, as you advocate, that if you have three defendants and you prevail, only prevail against one? Then yes, you would get one third. You get one third, no matter how intertwined the evidentiary case against the three may have been. And the same amount of work would have been required to pursue one as opposed to the three. Right, yes, yes. So just a mathematical, just a straight mathematical analysis here. At least in a context like this where the District Court explicitly did make the finding that all of the claims against the defendants were intertwined, then yes, doing the mathematical reduction based on the intertwined nature is when you would do that. Obviously, if there's another, if it's a different case where you can parse out the fees based on claims, then you wouldn't just do the percentage reduction. Unless the court has any further questions, I thank the court for its time. Thank you. Mr. Hormuth. Good morning. May it please the court. The District Court did not abuse its discretion in giving an adverse inference instruction. First, the District Court applied the proper adverse inference instruction standard of whether, one, there was intent indicating a desire to suppress the truth, and two, prejudice. As this court recognized in Morris v. Union Pacific, intent is rarely proved by direct evidence, and a District Court has substantial leeway to determine intent through consideration of circumstantial evidence, witness credibility, motives, and other factors. Defendants wholly failed to address this intent standard in their briefs, and they asked this court to simply accept that the missing video must have been the product of mere negligence. This was a remarkable position to take on appeal when defendants offered to the District Court no credible explanation for the missing video, and every excuse they offered was either demonstrably false or recanted by the defendants. Well, maybe they didn't know. I mean, that's one of the challenges, and maybe that's not this case. But one of the challenges, if you hold it against, say, an employee and the employer or supervisor is the one that controls it, well, you may not know what the reason for why the supervisor or the employer deleted the videotape. And so maybe they didn't know. They tried to proffer an affidavit, which isn't evidence trying to explain it. They tried to say what it was, and then they attributed it to a timestamp. So they did look into this, but they ended up conceding it wasn't a technological timestamp issue. And at the end of the day, after they went through their litany of excuses, ultimately they did not know. There was no answer to that question. But you see the concern here, the concern being the adverse inference instruction is based on the person who actually controls the evidence or has some element of control. And so if you don't have that element of control, and it's a very powerful tool, you're actually punishing people who had no idea. Now, I'm not saying this is this case. Maybe there's some indication that they knew what was going on here, but that's the danger, is that you're essentially creating a situation where they're being blamed for something they did not do. The other side of that danger is the policy behind why we impute this to individual corrections officers. And you touched on it earlier in your question. It leads to, in all the cases that discuss imputation in this context, say that if we didn't do it this way, it would lead to the absurd result where states could destroy evidence with zero risk when they are identifying the individual as employees. So it would create, you know, there is that opposite and I think much stronger policy consideration that is universally applied in these imputation cases. Although that is somewhat lessened by the fact that if you bring a Monell claim, if you bring a supervisory claim, if you bring a direct claim or an official capacity claim, all of those different things are actually claims against the Missouri Department of Corrections. And presumably you could get the adverse inference if the party who lost the evidence is right in front of you. Correct, that just wasn't the case here and it doesn't diminish the significant amount of authority we cited on the policy reasons behind imputation in these just cases against individual corrections officers in 1983 cases. So, but turning back to having really no explanation for the missing video, the district court then applied Stevenson, which said that bad faith can be inferred where a party preserves some but not all evidence and where bad faith can be inferred if the defendants knew of the importance of the evidence. And that's the case here. Some but not all the evidence was preserved. The defendants clearly knew about the importance of this video. There was a policy to preserve, not destroy the evidence in all cases of use of force. And I will remind the court if you look at the use of force policy, it is directed to all of the officers, not just certain people in the institution. And it goes through the whole policy of what has to be done in a use of force case. The defendants knew this video was important. In fact, they reviewed the video in connection with preparing the use of force reports. They relied on it in preparing the use of force reports. So it's not like they didn't have access to this video. The warden also testified the importance of the video because he testified that he reviewed the entire video to determine discrepancies between the video and the defendants' use of force reports and making his own finding that use of force was not warranted in this case. We didn't have that same opportunity. Did they have the ability – did the policy say whether they had the ability to request it and say you must preserve it? I mean is there any – or did the district court make findings that the individual defendants had some ability to do that? Yes, Your Honor. Before we get to the imputation, I think separate and apart from the imputation, the district court did find that the video was within the defendants' possession, custody, and control because it was conceded that they had access to and reviewed the video in connection with preparing their use of force reports, which is standard practice. It was conceded that they had the ability to request the video upon demand. And the possession, custody, and control was further evidenced by the fact that defendants produced all other documents and video in this case without asserting an objection to lack of possession, custody, and control. It didn't come up. That objection didn't come up until the adverse inference was raised. Everything else these defendants produced didn't object to lack of possession, custody, and control. They had access to the video to review it for the use of force reports. And as you recognize, Judge Grass, under Comas, and this is what the district court said to the defendants in arguing this issue, you're reading the rule too narrowly because if you have the ability to request upon demand, it is within your possession, custody, and control under Comas. So I hope that answers your question on the record with possession, custody, and control. Just one last question. I hate to do this to you, but is this a situation where they – because sometimes we have that where we have to view it under particular circumstances because it's politically sensitive or it's something we're not supposed to be viewing and we can't take it, for example, on a USB drive with us. Was there any sort of evidence as to whether or not they actually had it physically in their possession or on their computer devices? There was no evidence of that, Your Honor. There were questions of the defendants on cross because there were inconsistencies among their use of force reports about, did you guys do this together? Did you view it together? Some said yes, then they recanted that and said no. And one person testified no, and his use of force report was verbatim to somebody else's use of force report. And I asked them, I said, did you guys get together on this stuff? And they said no, they separately did their use of force report. So there is that evidence, but it's not like they went and retrieved it and you guys have a half hour in this room with a video to do your report, to do it and give it back. There's no evidence of that. Back to Stevenson for a moment on the importance of the video and the credibility and the motives here. The record here is replete with credibility and motive concerns. The record shows that the gap in video just so happened to coincide with a critical segment of this prolonged excessive use of force event. It was not mere coincidence that the gap in video related to a specific location Mr. Salinas identified in his pro se complaint before I was ever appointed by the court to represent him and before knowing that the missing video would become an issue in this case. We also know that the video here was used to impeach defendants who attempted to testify that plaintiff was throwing his elbows, swinging his arms, attempting to headbutt officers and had to be put in leg restraints. None of that was true and it was proven not to be true because we had the video that was produced and we didn't have the benefit of the missing gap for this critical segment. We also didn't have the 30 minutes prior and the 30 minutes after to both support plaintiff's testimony and to impeach the defendants in the manner we did with the video that we did have. Stevenson found that as the only contemporaneous recording of the incident, standing alone, that's prejudicial. I'd submit in this case there are many other facts and circumstances that show the credibility, the motives and the prejudice. I've already touched on the possession, custody and control and it's our position that this video was in the custody and control of the defendants. There's sufficient facts to support that. If that's the case, the imputation analysis is not necessary but the defendants also failed on the imputation. The district court here carefully analyzed other district court opinions within the circuit, Taylor v. Null and Vote v. Correctional Care, where the missing video footage was imputed to the corrections officers under far less extreme circumstances. And as I mentioned earlier, the policy underlying all of these cases and other cases that we cited in our brief is that if you didn't impute this evidence, it would lead to the absurd result that a state-run correctional facility could wrongly destroy any piece of evidence in its control with near zero risk of consequences in prisoner suits. The only case that defendants cite to counter all of our imputation authority that we've presented is the Sixth Circuit case of Atkins v. Woliver. In that case, however, the Sixth Circuit did not reject the concept of imputation. Rather, in applying the abuse of discretion standard to a decision not to impute, the court made it a point to state that the district court could have gone either way because that culpability is within the sound discretion of the district court. Before turning to the next issue, I'd also like to address the Stanborough case that was mentioned in connection with this notion that an individualized analysis on imputation had to be done for each defendant. Such an individualized assessment was not required here because all defendants were similarly situated in terms of the applicable policies and procedures, employment at the Southeast Correction Center, possession, custody, and control, culpability, their motives, and credibility related to their involvement in a single prolonged use of force event. The Stanborough case, which is just a district court case out of New York, is the only case cited by defendants for the proposition that an individualized assessment had to be made. Stanborough is completely distinguishable from the facts of this case. Stanborough was a consolidated action involving different events, different locations, different facilities, and different corrections officers employed by different facilities, necessitating some analysis of whether the missing video from one of the events at one of the locations could be imputed to certain of the individual officers. Stanborough has no resemblance to the similarly situated defendants in this case, and in Stanborough it happened to be that there was imputation against a sergeant, but it wasn't for the reason that he held the title sergeant. He was the one that was responsible at that location for that particular event in terms of the video evidence. I'd also note that the defendants did not object to any of the jury instructions, didn't raise this issue with the district court, didn't object to the instructions that were directed to all of the similarly situated defendants. Next, quickly, I want to turn to the issue of the stipulation of the medical bills. In U.S. v. Hawkins, this court held that a stipulation is an agreement between the parties as to a fact of the case, and as such, it's evidence introduced by both parties. Federal courts recognize that a stipulation by its very nature signals the intentional relinquishment of any and all rights to challenge the admissibility of the stipulated evidence, and federal courts have noted that the vital feature of a stipulation is universally conceded to be its conclusiveness upon the party making it, i.e., the prohibition of any further dispute of the fact by him and of any use of evidence to disprove or contradict it. In U.S. v. Robinson, this court concluded that where a defendant is aware of a stipulation and does not object to the stipulation in court, the defendant is acquiesced and waived its rights. And this court held in Reiner that such waiver applies if the objecting party becomes the proponent of the evidence, even after filing a motion to eliminate, and even if the trial court definitively previously ruled on that objection. Counsel, in the absence of waiver, would Overton require a different result? Yes, because Overton, as the district court properly recognized, is not a 1983 action. Defendants rely on three cases for their position that the collateral source rule should not apply. None of them analyzed the federal common law collateral source rule into Section 1983, including Overton. It wasn't a 1983 case. They also cite Williams, which applied South Dakota state law in a diversity case, and they cited the state court case of Fisher, which is a Delaware state court case that applied the Delaware collateral source rule. The defendants here have not cited a single case where the federal common law collateral source rule did not apply to a Section 1983 action, and that makes sense. This circuit in Gill v. Massachusetts directly held that the collateral source rule applies to Section 1983 actions, and the district court here noted other cases it found applying the collateral source rule in Section 1983 cases, including cases where the state routinely identifies the individual defendants. We've cited those in our brief. We have cited other cases, district court cases, mind you, where Section 1983, the collateral source rule, is applied to prisoner Section 1983 cases, and that all makes sense because the individual correction officers are persons under Section 1983. A state, this decades-old law, is not a person. Officials sued in their individual capacities are persons. They come to court as individuals, whereas states are not persons and enjoy sovereign immunity. Moreover, this court has found state statutes that identify individuals from consequences of carrying out their duties does not make the state the real party in interest. In my little bit of time, I do want to hit on the attorney's fees. It's not correct that the court did not apply the PLRA, look to the fee award. She goes to the PLRA. She goes to every one of the limitations in the PLRA. The Edmo case, defendants just, I see I'm out of time. If I could finish my thought. You may. Okay, thank you. The Edmo case, they cite to say that the district court has to reduce the fee if there's not success against all defendants, and you're right. There's nothing in the Eighth Circuit about this, except CPX v. Garcia, which you were on that panel, Judge Strauss, where you affirmed where the district court, even under the PLRA, did have the ability and the common sense to say, you can have theories and defendants that are so inextricably intertwined that the work performed on the unsuccessful claims was the same as the successful claims. And here the district court made that exact finding. She says, even if some officers were ultimately dismissed by stipulation or found not liable, discovery against all in their capacity as fact witnesses was necessary in proving the successful claims. Johnson v. Breeden, an Eleventh Circuit case that they curiously cite, said that there's nothing in the record about that inquiry about unsuccessful fees, but the Eleventh Circuit, unlike the Ninth Circuit, in remanding the case back to the district court, said, hey, we specifically said, we don't foreclose the possibility that some of the same time spent and incurred in connection with defendants and claims on which Johnson was not successful also may have been directly and reasonably spent and incurred in proving the claims against defendants for which he was successful. The district court did not abuse her. All right, counsel. Thank you. That's enough. Thank you. Thank you. All right. Rebuttal. Yeah, so opposing counsel went over, so take two minutes to wrap up if you'd like to. I'd first like to just address the issue of the indicia that would be required to assume a conscious permitting of a failure to follow a retention policy. Plaintiff contends that there was such evidence in the record of this. The court said that because the defendants had the ability to put the video on a disc and take it somewhere else, that they then had the ability to preserve this footage. The policy itself reads, the contents of the incident video will be retrieved from the digital monitoring equipment and copied onto a blank CD slash DVD and put somewhere else. It does not ascribe this responsibility to the particular individual defendants here. As to the ability to produce it in discovery, they could only produce this video upon entry of counsel who are then able to request it from MDOC. But before such point, before litigation has even begun, they wouldn't actually have that ability and the policy doesn't support that they have the ability. Counsel, with regard to the collateral source rule, did the stipulation constitute a waiver of your ability to raise that argument? No, absolutely not. On that particular issue, the court had already determined that the medical bills were coming in and asked that we stipulate to an amount at that point. In fact, earlier on, basically the attorney said, it would be over my objection, I would prefer that we just enter the bills. We ended up going for an amount, but it was over an objection. She said they were going to come in upon her own evaluation. But no, it does not support that it was actually waived on that basis. The actual rule for the collateral source rule, as cited under Gill v. Mashevsky, is that essentially the liability will not be reduced from the payment of others. Here, I think there's a brief support. It's the Missouri coffers that will be taxed twice from both the paying of the medical bills and from indemnifying the judgment here. Those sources are not collateral to each other, and you could not say that these are payments coming from another. Can I ask one more question? On the video, the fact that they could be put on CD and the policy says that, that makes it a little different than the case we were talking about earlier where you just really don't have access to it or anything. Why do you think that that alone doesn't at least support the district court's findings as to the failure to retain and having the intent? I don't think it supports the district court's finding because we have two essentially named individuals in this use of force policy. It's the shift commander and the investigator. It says the investigator will take custody of that CD or take custody of the footage. If the investigator is not available, it will go to the investigator's office. One would assume they are the ones who have the custody of that. So an individual can't have it, just to be clear. You cannot walk out with a CD of your own. The use of force policy does not support that. It supports that it's in the custody of the investigator's office. Got it. Thank you again for your time. All right. Thank you, counsel. Appreciate your arguments today. The case is submitted and the court will issue a decision as soon as possible."
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"stt_transcript": "Case 26-1902, Rhonda Moore v. Trinity Health et al. Ms. Wilson, when you're ready. May I please the court, counsel? My name is Emily Wilson, and I represent the plaintiff appellant, Dr. Rhonda Moore. The number one reason this court should reverse the district court's granting of summary judgment for Mercy and Trinity is because no decision makers in this case testified that Dr. Moore was terminated solely because of her admitted statement she made on May 6, 2024. It was her statements plus threats and violence in the workplace policy of zero tolerance. It was her statements plus what happened with PT, a white doctor who was similarly situated. It was her statements plus the addendum that they had added to the investigation into the May 6 incident. And it was her statements plus they had concerns about Dr. Moore's credibility and the veracity of her reports as it relates to that incident on May 6. But at summary judgment, Mercy and Trinity argued that the termination had to do solely with the statements that she admitted. And this is the argument that the district court then used to grant summary judgment. The district court held an error that no reasonable jury could conclude that the defendant's decision to terminate Dr. Moore was based on anything other than the incident in which she threatened to kick Rogers. But if this only had to do with Dr. Moore's admitted statements on May 6, every other reason provided by the myriad of decision makers involved for both Mercy and Trinity wasn't necessary, but clearly the decision makers felt it was. And the question is why? And I think when viewing the facts in favor of Dr. Moore, a reasonable jury could answer that with race. And that's because the policy at issue isn't zero tolerance. PT, the white doctor's conduct, was arguably more serious, especially when viewing the facts in light most favorable to Dr. Moore. Why isn't it zero tolerance and then it's just what the consequences might be different, but they're just not going to tolerate it in the workplace? Because that's not what they testified the decision was based on. The reason that that explanation is material is because they could have simply stated she violated the policy. We've decided to jump to termination, but they didn't. Instead, it was. I guess my point is you could jump to suspension or you could you could jump to another consequence. But how does that reflect on whether there's a zero that we're just not going to tolerate that kind of conduct? And I apologize, Judge Kelly, I don't know I'm understanding your question. But the within the policy, it says, you know, we have zero tolerance for it threatens violence in the workplace. Later on in the policy, it articulates that you can suspend or you can decide what punishment based on that conduct. And here, though, the decision makers said. Given that she had violate the policy and because it's zero tolerance, we had we needed to terminate her. The decision was to terminate. Therefore, we had to terminate some of the ways in which they testified about it. It's relying on the policy in a way that the policy is not written. Correct. And it's the fact that the decision makers felt compelled to continue on with their statements and make it seem as if they had no choice. That, well, she violated it and it's zero tolerance. Therefore, it had to be termination. And that, to me, is what a reasonable jury could look at and say, well, why did they feel the need? Where's the evidence of race, though? Two places. So I think either one as it relates to the summary judgment decision. I think when we rely on both Fernco and Reeves in combination, both Supreme Court cases that indicate that, especially in Fernco, that one of the inferences that can be given to a plaintiff like Dr. Rhonda Moore is that when you kind of breaking down these reasons, like the policy is zero tolerance when it's not, that we will make the inference or any of the other three reasons they gave that we will make the inference then that, you know, it could be something else like an illegal motive like race. Because especially businesses don't do things for arbitrary reasons or no reasons at all. So I think that is enough to get us past summary judgment. There's no indication here it's arbitrary for no reason at all. Is there? I believe once we break down the additional reasons that were provided that go beyond her admitted statements that there is nothing left. And so then the second reason that I would provide you, Judge Coates, is that Dr. Weiner, the expert that we had presented in which Judge Locher at the district court had provided her framework and his factual statement of his decision or his findings of fact, she points then to these areas and provides this conduct context as to where things like jumping straight to and calling it zero tolerance is based on race. This idea of secure punishment for black people. This idea that because Dr. Moore was black, that it only took one incident for them to view her negatively, despite the fact that weeks prior, they had all in written communications said incredible things about her leadership and the changes that they were excited she was going to make to this unit. This idea of credibility and the stereotype that I believe is within the investigation that black people are just not as trustworthy to relate to the questioning. Help me understand a little bit more this testimony from your expert. Is it getting at the credibility of the reasons that the decision makers are giving? Is it getting at implicit biases? How is this fitting in to your case and in the steps that you have to prove to establish a discrimination case? Yes. So the testimony is that Helen Smith, the investigator, is the one who then presented her findings and her report to certain individuals. But ultimately, she is the one that provided the summary. And within her investigation, which is rather thorough, Dr. Moore gives her no reason to believe anything reports. In fact, I think defense counsel points out even in their briefing at summary judgment. And now that she repeatedly says the same thing over and over consistently. And so your client concedes that when asked if that was a threat, she said, yes, it's a threat. So we've got that baseline. We all kind of agree with the parties agree on what she said. And she agrees. And so where it takes us further is that Helen Smith then does question Dr. Moore throughout for on various items, like why she even went to go retain this nursing supervisor. And then in one important part where in her conclusion that she's kind of describing how she's come to where she's where she got. She talks about that. What happened isn't really contested. Rhonda Moore admitted to saying what she said. But it's the intentions of both parties that are kind of up in the air. And throughout Helen Smith's investigation, she questions Dr. Moore's intentions, not why she did, in fact, say it. Because, yes, in the moment she said, yes, it's a threat. But then she was given this opportunity to kind of explain herself. And so to me, it seems that Helen Smith is notating that her intentions did matter. And so ultimately, the decision maker is saying, well, or decision maker, apologies, the expert witness is saying, so then why didn't you believe her when she said she wasn't trying to threaten her? And clearly, the intentions matter to their decision. So is the expert saying this is not intentional discrimination, but it's so stereotypical and so embedded in our culture that that's what came out? Is that what your expert is saying? Or is it saying that, no, this is active discrimination, sort of the implicit bias? Or is it explicit? Is it something in between? And maybe one of the problems, I'm sorry, I'm going to now multiply my questions here. But we don't have, the district court didn't analyze this expert witness. And so I'm really not, we don't have anything from the ground on methodology. Was it a proper witness? What was it for? And so I know that's a compound question. But I guess my first question is the explicit versus implicit. And then secondly, what do we do with that when the district court really didn't address the expert witness in any substantive way? Apologies to interrupt. On the first one, I would say that she's providing the framework and saying, here's where we see those stereotypes in the decision. I don't know that she is saying explicit versus implicit. What I would argue, though, is that we do have to show intentional discrimination. And it is explicit in the evidence combined with Dr. Weiner's stereotyping framework. Plus then it's explicit in the fact that they felt the need to come up with additional excuses as to why they had to fire Dr. Moore. So it seems to me that they were like, well, we don't trust her. Or certain things were at play there that were intentional and were explicit in their mind, not some implicit bias that they're relying on. And so they chose then to come up with these other excuses to cover it up. On your second question, it's part of the reason that we're asking the decision to be reversed and remanded for a jury trial, because the district court did include the expert witnesses' stereotyping framework and facts within their findings of fact. And so I think it is an error that they then didn't consider that argument, even though it seems to me and I would read that they found that at least the stereotyping framework would be admissible. And I see my time is up, and so unless there's other questions you'd like to answer, I'll take a seat. Very well. Thank you. Good morning. May it please the court, counsel. The fundamental problem here is that the plaintiff, Dr. Rhonda Moore, does not have evidence that race motivated Mercy One and Trinity's decision to terminate her employment. That is the reason that the district court granted summary judgment, and that decision should be affirmed. This is the somewhat rare employment case where the underlying material facts are not in dispute. On May 6th of 2024, Dr. Moore was in a conflict with a subordinate employee as she was escorting that employee out of the workplace. During that interaction, she said to that employee, if you kick me, I will kick you back. That employee said, was that a threat? And Dr. Moore responded in her own words, written in an email shortly after that incident, yes, if you kick me, I will absolutely kick you back. The district court applied well-established legal principles in this circuit, two of which are most critical. One, the employer has discretion in conducting an investigation, and it is not sufficient to critique that investigation or say that investigation should have been conducted differently. If that investigation was conducted in good faith, then that employer has that discretion. What if the investigation reflected contradictory positions? In other words, it's zero tolerance, we need to terminate her, and parallel to that is, well, let's see what else is going on. Is there anything else that she's engaged in that we're uncomfortable with, or what have other people done? Absolutely. I think the Alvarez decision addresses this well. In Alvarez, the court recognized that in conducting an investigation, an employer is going to have to weigh conflicting pieces of evidence, evaluate what is an appropriate scope, and choose among competing inferences, much like a judicial proceeding. And as long as they do so in good faith, that is something within the employer's discretion. Isn't inference is different than sort of relying on other investigative facts? I think not necessarily, right? I think that looking at potential credibility determinations, deciding who to interview, what facts to look at, when to probe further, when you don't need to probe further, all of that is within the reasonable discretion of the employer in investigating. I think specifically on this zero tolerance question, the find later decision is probably the most on point from this circuit. There you have an employer applying a zero tolerance policy in a workplace violence situation. It is described in that case too, just like here, a zero tolerance policy that gives the discretion to impose discipline up to and including termination. And in that case, you have an employer who, based on the facts as they investigate them and understand them, treats two employees differently. And this court recognizes that that falls within the business judgment, both the judgment of how to interpret and apply policies and the judgment of how to investigate, evaluate credibility, and decide what happens. The employer does not need to be perfect. The employer has two fundamentally established principles at issue here. One is the business judgment, and that's going to apply to how to investigate and how to apply the employer's principles. And the second is the honest belief rule. And that's really what the district court applied here, and I think both of those rules were applied correctly by the district court. The honest belief does raise the question of the expert opinion, though, doesn't it? Sort of, all right, well, you believe this, and this is how you reacted, but this expert is going to say, I think, that those beliefs are based on stereotypes that are really race or color based. That's sort of kind of a point where I wondered if the district court needed to acknowledge the, or maybe the court would have to acknowledge the expert. So there are a couple of things there. First of all, the district court did acknowledge the expert, and the district court's opinion fully summarizes everything that the plaintiff, at that point, presented in the statement of disputed facts from their expert. So what you see in the district court's opinion, the summary that the district court includes about the expert in page five of the district court's opinion, there's an entire paragraph saying, this is what Dr. Moore has presented from the expert. That's everything that Dr. Moore presented in the statement of disputed facts from her expert. So the district court took all of that information and then determined that what Dr. Moore presented did not meet the standard for purposes of summary judgment. And that decision is really right for a couple of reasons. First of all, what Dr. Moore presented on summary judgment from her expert and what is contained in the expert report is really just a statement of existing biases in the world, for lack of a better description. And so that there are racial biases that exist. It does not say, and Dr. Moore did not present evidence that those biases were at issue here. It will always be true if there is a potential bias out there that someone could say, maybe that bias existed here. But Dr. Moore was required to present some sort of evidence that it did exist here. And that's really what she didn't do. Well, at least that the circumstances are suggest. Like she couldn't testify that this particular decision maker was acting on. Correct. She would need to present some sort of evidence beyond speculation that there was some sort of bias at play here. There are no race-based statements. There are no indications that anybody who was involved in the decision-making process. And there are about 10 different people involved in the decision-making process were acting out of race-based animus. So in order for this kind of expert testimony to come in, is it your position that you'd already have to have some indicator of racism or color bias? In other words, this can't be the freestanding? It can't stand alone. Yes, Judge Kelly, that is what I would say. And when you look at the cases where courts do admit sort of background evidence, expert testimony, where they are allowing some sort of background bias testimony, it is coupled with other evidence to suggest that there is some sort of discrimination afoot. Do you have cases like that? Those are the cases that are cited in even plaintiff's brief where expert testimony is admitted. And even where it's excluded, if it is allowed to proceed past summary judgment, it is because there is other evidence of discrimination. Otherwise, it really eviscerates the rules that this court and other courts have established. For example, this court has established the rule that the employer is allowed to exercise its business judgment in evaluating credibility of witnesses. If it was sufficient to merely offer an expert to say, well, sometimes bias influences credibility decisions, without any specific evidence that it did in this case, that would mean that every case would move past summary judgment and that an employer could never evaluate credibility decisions. Even if their decisions were in good faith and reasonable, an employer's hands would be completely tied and courts would be sitting as super personnel departments. Juries would be evaluating, hey, there's no evidence that an investigator did anything wrong here. There's no statements. There's no indication of bias. They've implied these rules completely consistently. But because a plaintiff has presented an expert that says sometimes credibility decisions are impacted by bias, we can no longer defer or give them any business judgment discretion. We must let this go to a jury. Similarly, this court has repeatedly found that an employer gets to determine the appropriate level of discipline. And absent some evidence that an employer is taking into account inappropriate considerations on the discipline, we will not sit as a super personnel department and question that business judgment. Here you have an expert that says, well, sometimes race is an impermissible consideration and it leads to higher discipline. If that in and of itself were sufficient alone, then all cases would proceed to a trial and courts would be sitting as super personnel departments. Because what you have here is a case where two people have been terminated. Those were the only two that could be identified under the threats and violence in a workplace policy. One was a white male and one was a black female. The employer applied the policy consistently. Dr. Moore argues that perhaps the other circumstance was actually more serious. One could argue that Dr. Moore's circumstance was more serious. She was in direct physical proximity to carry out the alleged threat. The physician in the other circumstance made a threat to use a voodoo doll over a chat board. So no physical proximity. The employer is the one who has the business judgment and discretion to decide the appropriate discipline. So mere expert testimony should not remove that business judgment. We believe the district judge appropriately complied the business judgment and honest belief rule and that decision should be affirmed. Thank you for your time. Thank you, Ms. Knowles. Ms. Wilson, I'll allow you a minute if there's something you'd like to rub up. Thank you, Your Honor. There is. I believe the reason that the district court did not apply the facts provided by Dr. Weiner's report is because of this sole question issue. So the district court said that the sole question was whether Dr. Moore had presented sufficient evidence to cast doubt on the sincerity of defendants belief that she violated the policy. So again, this honest belief doctrine. But this is operating from a conclusion that could only be made when viewing the facts in mercy and Trinity's favor. That the sole reason for termination was defendants believing she violated the policy. But it was not. It was these other excuses that they piled on top. And the defendants have not conceded that I believe in their appeal brief that yes, there was these other things we considered. And so for all of these reasons, we'd ask that this court reverse the district court's grant of summary judgment and remand for a jury trial. Thank you, counsel. Thank you both for your appearance and argument. Case is submitted and we will issue an opinion in due course."
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"stt_transcript": "Case 26-1719, Eastern District of Missouri, Royal Waterbeds, et al. v. Union Insurance Company May it please the Court, I'm Matt Darrow. I represent Appellants, Royal Waterbeds, and Boyd St. Louis. This is an insurance dispute decided on summary judgment by the District Court in favor of the Appley Union Insurance Company. Just so you know, I'm not sure if it was explained in the record, both Royal Waterbeds and Boyd St. Louis are insured, so there's no dispute on the policy. Royal Waterbeds owned the stock which was destroyed by the water. There's no dispute with water involved. Boyd St. Louis owned the real property, so both are insured. There's no dispute about a lot of the issues in this case. There's no dispute here that it's a de novo review of a summary judgment. The Court knows the summary judgment standards very well. I won't repeat them. I think we agree on the rules of policy construction. I'll point out three of them that are pertinent material here. You construe the policy as a whole to give meaning to all the provisions in the policy. Exclusions are construed strictly, narrowly in favor of coverage. If there's an ambiguity in the policy because there are two reasonable interpretations, the ambiguity is construed in favor of coverage. I think we also agree that Missouri law controls and Missouri law, like most states, says that the burden to show coverage in the first instance, meaning a triggering of the policy satisfaction of the insuring agreement, is on the insured. The burden to show the application of exclusionary provisions or limitations is on the insured. Just to explain briefly, the property policies, there's basically two types. There's some in between as far as sort of the insuring agreement and what needs to be satisfied. A specified peril policy is one that only insures specific perils, maybe like fire, lightning, wind, something like that. I'm sorry. We've got the coverage form, we've got the exclusion, and we've got the endorsement, right? It's confusing to me. Will you walk me through where the magistrate judge went wrong here, specifically given those three provisions of the contract? You have the three parts that are pertinent are the base form, which is the building and personal property form. That form just sets out the types of properties that are covered. I don't think there's a dispute that you've properly invoked the policy under that section. Is that correct? That part references, it cross-references the causes of loss special form, which is the second form part I was going to talk about. That one is the one, the special form is the type of policy that's an all-risk policy. It's a bit of a misnomer, but they call it that. It covers all risks that are otherwise excluded. That cause of loss form says exactly that, and then it has a bunch of exclusions in it. Then you have a part of the policy that I will call the enhancement. The enhancement is intended to enhance the policy for the insurer, to improve it, to make it better, to broaden definitions, to expand coverage, to add additional insurance, to limit exclusions. It does all those things. Within the enhancement, you've got the exclusion and the cause of loss form. There's a bunch of exclusions. Let's talk about that real quick. The exclusion, one of the big ones, is water. It is water. Boy, it sure seems to me to cover every possible way water could be a cause of loss. Therefore, don't we start with it being excluded, and then we look to the enhancement. The enhancement allows it to be covered if it's from sewer or sump pumps with a limit of $10,000, and they paid you $10,000. In fact, probably it's less than crystal clear that it came from a sump pump, but you still got the $10,000. Judge Grunder, I understand. It looks open and close to me. Tell me what I'm missing. I understand what you're saying here. There is a water exclusion. That exclusion defines and enumerates certain types of water. I understand what you're saying when you look at it. There are all kinds of issues with all those different types, and there needs to be an issue of where it came from, and then we can fight about those other types. That exclusion was not put at issue in either the defenses, in the case. That's because Union thought and continues to think that the endorsement or the enhancement provided coverage, so they didn't have to assert the exclusion, right? Well, I still think that they couldn't do that, and they did in their counterclaim and their affirmative defenses. But if they're going to rely on other parts of the exclusion, they need to be asserted. They were not put at issue in the summary judgment. We didn't argue about those other parts. We didn't brief those other parts. We didn't discuss those other parts. How might it not fall under the exclusion? How might the water damage in this case not fall under it? You would have to go through each of the enumerated exclusion provisions. You have to know what they are saying, how the water is caused, and then we would have to apply and argue those provisions. It is not an exclusion that says all water is excluded. That is simple to write if that was the reason. It states enumerated reasons. I understand what you're saying, that they seem broad and they encompass a lot, but you have to deal with each one, and I'd have to go through if it was asserted, if it was raised, if it was at issue in the case, if the discovery related to it because it was at issue, then we have to go through each of the ones, how they say it was happened, and whether those enumerated parts that define the water exclusion applies. None of that happens. I would bet in preparing this case you've given that a fair amount of thought. Give me a plausible situation where water causes the loss that's not covered by this exclusion. One situation would be, and I'm not saying there's evidence of this, but if there is something within the building, a pipe breaks and water pours down the conveyor belt that goes from the top floor into the basement and floods the basement, that is not excluded in the enumerated exceptions. There could be other hypothetical situations that are covered. That would not fall within any of the enumerated parts of the water exclusion. And where the court went wrong here is it was not focused on those other parts because it was not at issue in the summary judgment. It was looking at what the defendant, the appellee said, which is the way that this is dealt with on summary judgment is within what we declare is within the 10,000 because it is a discharge from the sumps. So explain to me why that's wrong because is there a factual dispute about the discharge? Is that what the fight is? There's no proof that there was a discharge from the pumps. There's nothing in the record that proves there was a discharge of water from the sumps. That's the language in the enhancement. So the adjuster found that the sump pump enclosure filled with water. Yes. Isn't that then flooded the basement? Why isn't that a discharge from the sump? Because water, the sumps have pits with pumps in them. Water can come from the outside of the building into those pits and is extricated by the pumps pumping it out. Water can flood the basement in the interior through other means. It goes into the pumps. Then the pumps extricate that water as well. I think there's a slant down to where those pumps are. So the water can come from both sides. So the fact that the pumps weren't working is true. They weren't. They went out because of an electrical outlet fail. But just because the pumps weren't working doesn't mean there was a discharge from the pumps. Well, there was a discharge from the sump, right? No. So the sump is only the pump? No, no. The sump would be, I believe, the pit. But there's no discharge from it. Well, I mean the adjuster maybe disagrees with you here, right? I mean the sump pump filled with water then flooded the basement. Isn't that coming up out of the pump? And why isn't that a discharge? No, I don't agree with that, Your Honor. With what? What don't you agree with? The adjuster? I don't agree that that language means that there was a discharge from the pump. I didn't say the pump. I said the sump. I'm sorry. From the sump. You're correct. No disrespect, Your Honor, but I think if there's a pit or area and the pumps aren't working and the water is coming from the inside and it fills up to there and then there's nowhere else for the rest of the water to go so the basement is flooded, that doesn't mean the water that damaged the property discharged from the sump. So when the district court said, as I understand it, that there was no dispute, water caused this damage, and so even if your burden-shifting sort of argument, I was going to say carry water. That didn't seem quite right. Even if that was true, it was just an undisputed fact in the record. You disagree with that conclusion that the district court made? That water caused the damage? Yeah, that everybody agreed that water caused the damage and therefore it's undisputed that the exclusion applies. No, I agree with the first part, that water caused the damage. I do not agree, and I know that the district court said that in my response to the motion for reconsideration. At the end, I don't know that they exactly said that in the original decision on summary judgment because the exclusion was not something raised and argued. It wasn't raised in the case, it wasn't raised on summary judgment. The other parts of the exclusion, other than the backup, which is discharge from water. At the end of the day, it is really about burdens and who has the burden to show how the water came in. This defendant admitted in 30B-6 that it didn't know where the water came from. All we have is the little note about that the pump stopped. That was stated in the note that was based on, we know they weren't working and that's part of it that he said they weren't working when he got there. But the other part as to how he thought it happened came from a Rapid Dry employee who was down there who gave him information. That's hearsay that's inadmissible. There's really nothing in the record to show how the union admitted in the 30B-6 they didn't know how the water got there, they didn't know any of the specifics. So just under your understanding, if there had been rainwater that flooded through a window or so, filled the sump pump and then the sump pump failed, that would not trigger the exclusion. But had it been groundwater that rose up as a result of the rain and the sump pump failed, that arguably would have triggered the exclusion. Is that a distinction you're making? The discharge from sewer sumps, exclusion and the enhancement has to require the water to come in and then come out of the sump. It has to be discharged from the sump, water discharged from the sump. So it had to be water coming in from the outside of the sump and up through the sump. Your Honor, if there's no further questions now, I'm going to reserve the last couple of minutes. Very well, thank you. May it please the Court, John Cooney for Union Insurance Company. The district court was correct in granting summary judgment in this case. Plaintiff at the trial court stage provided no evidence or argument that they were entitled to additional coverage beyond the $10,000 that was paid by my client. First, I'd like to address the burden shifting argument that was made and heavily relied upon. Plaintiffs are misapplying the burden. The plaintiffs filed this lawsuit for breach of contract. It was their burden to prove that they were entitled to additional coverage beyond the $10,000 that they received. Plaintiffs presented absolutely no evidence of breach whatsoever by my client. It's important to note that the claim was not denied, as the court referenced. My client found coverage, paid the $10,000, and it was then their burden to prove that there was or present evidence that they were entitled to additional coverage. A claim is either covered or it's not. Frankly, the burden shifting argument was somewhat difficult to follow, but the key piece is the policy must be construed as a whole, and the plaintiffs are not doing that. The endorsement changes the policy. He refers to it as enhances the policy, and the name of the endorsement is Premier Choice Enhancement. But it changes the policy. You can't just look at the insuring agreement and ignore the enhancement. You can't just look at the insuring agreement and ignore the exclusions. In any insurance coverage dispute, the plaintiff's burden is to present evidence that the claim falls within, is covered by the policy. The exclusion references that are made with respect to the water exclusion, my client is not relying on an exclusion, and the district court didn't grant summary judgment on the basis of an exclusion because that's not what was invoked. What was invoked is covered, and it was the plaintiff's burden to somehow show additional coverage, and they haven't done it. Every case relied upon by the plaintiffs in their briefs is a case in which the claim was denied. Everyone. And that's not the case here. The claim was paid under the endorsement. Even in these cases cited by the plaintiff in which the claim was denied, it was still the plaintiff's burden if they filed suit, if they were the plaintiff, to present a case that the claim was covered. Generally speaking, though, isn't it the insurer's burden to show an exclusion applies? Well, yes, if that's what they're relying on as an affirmative defense. Oftentimes, the insurer is the plaintiff, as well as in the cases cited by the plaintiffs, filing declaratory judgment action. If they're seeking to disclaim coverage on the basis of an exclusion, then it would be their burden. Yes, Your Honor. One thing that's very important to note here, and I think it's almost an elephant in the room, is that nowhere in the record, or today, the plaintiffs have never made even an argument that their claim is covered in any way under this policy. Yeah, what they want to do is say it's your burden and you haven't carried it. That's what they want to do. That's right. They want to file a lawsuit, and they truly did not present any evidence on either side of the coin, either that they're entitled to additional coverage, or even if their burden-shifting argument were correct, to rebut the evidence that we put forth as to the applicability of the $10,000. That's the thing about this that's interesting. Well, a big part of the reason, I mean, I think you are, in fact, relying on the exclusion, because a big part of the reason you didn't pay more than $10,000 is the exclusion, right? Well, no, Your Honor, I would say that, and that is interesting. Had there been no endorsement, then that very well may have been the result. But the policy must be construed as a whole, and so there is an endorsement, and we can't pretend like there's not, saying the court is doing that, but that's it. So, no, I wouldn't say that that's right. I mean, you have to look at the policy as a whole. I think what the plaintiffs are doing is perhaps conflating how a policyholder might read the policy to ultimately determine what the coverage is, as opposed to what the plaintiff's burden of proof is in filing a breach of contract lawsuit. Well, the initial, the covered property covers everything, and then there's the exclusion. So when you say you have to look at the policy as a whole, the endorsement, the exclusion, you have to look at the general policy, so I think that kind of cuts both ways, doesn't it? They're saying, look, it's covered property. And you say, well, wait a minute, it's excluded, and that's your burden, right, to prove the exclusion. Well, again, I understand what the court is saying. I would say that that is how, logically, you would read the policy to reach the ultimate conclusion, what the court is saying. When you say everything is covered and then the exclusion, I mean, that's all contained within one policy form. But the fact of the matter is once the endorsement is added, it's as if that policy form, if it changes the policy, then it's as if that policy form doesn't exist. It changes the policy. And so that's, again, you have to read it as a whole. So, no, Your Honor, I would not say that my client is relying on an exclusion here. It's relying on the endorsement to afford the maximum coverage that the policy can, which is $10,000. But wouldn't the endorsement only kick in if the exclusion applies? Well, I suppose when you say the exclusion applies, that's the part that I'm struggling with, only because the exclusion either excludes coverage or it doesn't. The endorsement modifies the policy. Let's pause there because I think that there's a disagreement on whether you've proven that the exclusion applies here, right, that they're saying, well, there could be some other cause of the water loss that wouldn't be excluded. So that's still in dispute. And if that's the case, if there were another source or, I guess, source or reason that the water came in that's not excluded, then the endorsement never pops up, does it? If it was something other than discharged from sewers, drains, or sumps, I suppose. Well, I guess I'm thinking even more broadly. You've got an exclusion for water. His argument is there might be a source of water that isn't excluded, okay, so it would be covered, right? Then is the endorsement even relevant anymore? The endorsement in this, well, there's all sorts of things in the endorsement, but the portion on which my client afforded coverage, the discharge from sewers, drains, or sumps, if the plaintiff had presented evidence of water that was not that, such that they're entitled to more coverage than what they got, then we wouldn't be here right now. But that's the point. I'm sorry. Yeah, I guess what I'm trying to say, if water damage is not, you're almost saying like the endorsement narrows it again. I'm saying if he's right that there's some other source of the water that wouldn't be excluded, that the loss from that source of water would not be excluded, then it's covered. There may have been a world, a set of facts that could have been presented. And then in that world of facts, even if you don't agree that that world of facts exists, then would the endorsement even be relevant? The endorsement modifies those sections of the policy or changes those sections of the policy that it says that it does. So would the endorsement be relevant? I would say the endorsement's always relevant because it's part of the policy. So then it's factual. But in this case, again, I don't know. My client is entitled to summary judgment on both sides because I don't think we get to the issue of where the water came from because the plaintiffs filed the lawsuit, and they had the burden to prove that they're entitled to additional coverage, and they put on no evidence whatsoever, no expert testimony, no even argument that they're entitled to more coverage. Then if you want to do it the other way, because we did have a counterclaim, Your Honor, and our counterclaim was that we paid out the maximum coverage of this policy because the water came from the sewer discharge from the sump. My client presented evidence that's in the record from the adjuster. There's evidence that the sumps had failed. There's evidence that the plaintiff put forth no evidence to controvert that whatsoever. I heard from Mr. Plaintiff's counsel hypothesizing things that could have happened. There is no evidence on the record of any of that. The facts that we did put forth as to why the $10,000 was appropriate were undisputed. Again, the adjuster's testimony, the report, my client's corporate rep deposition, the fact that the sumps were deemed or found to be inoperable. Was your evidence sufficient to show a discharge, though? Counsel and I had a conversation about what discharge means. I take it his view is that the evidence in the record is insufficient to show discharge. I heard that today, and my response would be exactly what the court said, which is that the adjuster specifically said the sumps filled with water and flooded the basement, a discharge. So, yes, there is evidence of a discharge. There was also evidence from the plaintiff's employee of her belief that that's what occurred. There was nothing presented in response to dispute, either of those facts. So, again, I don't know that, in my opinion, the burden is on the plaintiff, but even if you adopt their burden-shifting argument, it was incumbent on them, once we filed summary judgment and set forth undisputed facts, to dispute those facts. You can't just sit on your hands and say, well, maybe this could have happened, maybe that. The time was then to have presented it. Discovery was closed, and they didn't do it. And so that was, I think, addressed more in the denial of the reconsideration order. And then the initial summary judgment order focused on what I'm saying, which is that it was the plaintiff's burden to provide evidence of breach, and that simply didn't happen. The most analogous case, and I said I won't go through plaintiff's cases one by one, but they all stem from a denial, and this is not what we had in this case, or a situation where the insurer did have the burden to prove an exclusion, and that's not what we have here. The district court order, or district court case that I cited in our brief, tolling is pretty well right on point with what we're talking about. The plaintiffs raised that, well, facts were not disputed in that case, and I would argue that facts were not disputed in this case either, but it was the same where the court found that the undisputed facts held that the discharge from sewers, drains, and sumps endorsement applied, such that the $10,000 was the maximum coverage available. So, again, I think the key here, and as Mr. Darrow said, the cause of the loss is undisputed. Plaintiffs, in the sense that it was water, the policy must be construed as a whole, and doing that must give effect to the endorsement, which is the claim was not denied. Coverage was afforded of $10,000, and to date, the plaintiffs have the burden, as we've cited, to present evidence that their claim falls within the purview of the policy and is covered, and they've never done it, still today, have not. So if there's no further questions from the court, I'd ask the court, district court, I'm sorry, I'd ask this court to affirm the summary judgment in favor of my client, Union, and I'll proceed the rest of my time. Thank you. Hearing none, thank you, Mr. Cooney. Thank you, Your Honor. Mr. Darrow. Yes. How do you respond toward the end of the argument, essentially, even if they had the burden to show the exclusion, they presented evidence, I think their adjuster said that it was a discharge from the sump, which clearly fits the exclusion, and you presented no evidence to the contrary. Isn't that ballgame? Your Honor, first of all, they did not present any evidence from an adjuster that said it was a discharge from the sump. They presented the evidence as just what the judge read, that the sump pumps failed, the sumps filled up, and then the basement flooded. As I explained, that can happen from the front without a discharge of all that water that causes the damage coming from the sump. So they did not provide sufficient evidence. Wait a minute, wait, wait, wait, wait. The exclusion says water that backs up or overflows or is otherwise discharged from a sewer drain sump pump. Isn't it backing up and overflowing? Isn't that the evidence that was presented? Your Honor, I was mistaken because you were looking at the exclusion, and I'm looking at the language in the enhancement, which was the issue that was presented. But you're arguing that they have the burden to prove that the exclusion applies, and I think what he was arguing is we carried it. And you didn't present anything contrary. I don't think that is backing up, overflowing, or discharging from the sump. And I've tried a case in this district court on this exact issue where the insurer made the argument. But once the union has evidence in the record, they arguably have met their prima facie case. You have no evidence in the record supporting your theory. Is that correct? I have evidence in the record from their corporate representative, who's a 30B6 deponent, who says they have no idea how the water got in the basement. They don't know if it came up from the sump or it came from the top. That is evidence that is contrary to this concept that it all came out of the sump. Well, no, he just says he doesn't know, and the adjuster says I do know, right? No, the corporate representative on behalf of union says that union does not know. An independent adjuster just said only what is in the note, and the corporate representative knows anything else of how they came to those decisions other than what's in the note that Grant Effer from Rapid Dry told him that the sumps failed and they filled up. And so that's what he put. And as I said, it could fill up from the top. It can fill up from the bottom. If it fills up from the top, it's not overflowing out of the sump, backing up or discharging out of the sump, out of the drain. Very well. Thank you, Mr. Durham. Thanks to both counsel for your appearance and argument. It was helpful. We will submit the case and issue an opinion in due course."
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"stt_transcript": "Good morning, and may it please the court. This court should reverse because the district court's analysis is flawed across the board. The district court wrongly concluded that original plaintiffs had standing based on mere speculation that a sufficient quantity of displays would be donated, that one would be posted in plaintiff's classroom at some point in the future, and that a future display would offend or coerce plaintiffs in some way, despite not knowing the content of the display or the surrounding context. What's more, the district court erred on the merits. Act 573's requirement that schools put a historical Ten Commandments poster on classroom walls does not constitute a religious establishment or burden-free exercise rights. Regarding the merits of the Establishment Clause claim, the first disputed question is what test applies. Kennedy answers this question. The Supreme Court said, in place of Lemon and the endorsement test, the Establishment Clause must be interpreted by reference to historical practices and understandings. That's on page 535. The court then went on to reiterate, at page 536, that an analysis focused on original meaning and history is the rule, rather than some exception within the court's Establishment Clause jurisprudence. Kennedy thus abrogated Lemon and its progeny. That means the district court erred by applying Stone, because Stone is Lemon's test. Stone expressly applied Lemon, and nothing but Lemon, as the Fifth Circuit recognized in the en banc Nathan decision. The normal rule is that the Supreme Court gets to overrule its own precedent, and absent that and its progeny and its offspring in Kennedy, would we be singing a different tune? Or do you rely pretty much exclusively on the fact that it's broader than a normal overruling? It is broader than a normal overruling, Your Honor, and I think Kennedy itself is also constructive. In that case, the Supreme Court expressly criticized the district court and the Ninth Circuit for not recognizing that it had already abandoned Lemon, and for not heeding its guidance in cases like Town of Greece versus Galway and American Legion, even though those cases involved legislative prayer and a monument, so not prayer on a high school football field. It still said, you kind of missed. This is the new rule. This is the new test. I think that also shows that Lemon and its progeny has been completely abandoned. Do you have any idea if Stone has been cited favorably by the Supreme Court elsewhere? Because that would give me some pause, even with the broad language of Kennedy. I'm unaware of it being cited favorably since Kennedy, for sure, and even after Stone, when it talked about, when the Supreme Court mentioned Stone, it described how its holding was that it had a purely secular purpose, and so acknowledging that it was applying the Lemon test, and indeed, even if Stone somehow was binding in identical circumstances, these aren't identical circumstances here. The law is different, and so to apply Stone would be to extend Lemon's test, and you see that in the district court's analysis here. In trying to assess whether Stone applied or not, it was assessing what it perceived to be the purpose of Arkansas' law, and that shows that Stone is Lemon, and it erred by applying Lemon's test rather than the binding historical test. And under that test, plaintiffs needed to prove that Act 573 resembles the hallmarks of a religious establishment, and they failed to do so, requiring schools to post a historical representation of the Ten Commandments on a classroom wall, if donated, doesn't resemble a single hallmark of a religious establishment. And the Fifth Circuit recognized this when it rejected an establishment clause challenge to a similar law. It explained in Nathan that requiring historical posters on a wall that have some religious significance, quote, looks nothing like a historical religious establishment. That's because it doesn't exert control over a church's doctrine or personnel, punish religious dissenters for their exercise, or do any of those things that the Supreme Court has recognized would be a hallmark of religious establishment. Counsel, the district court, in addition to relying on Stone, also focused on whether the posting of the Ten Commandments was a historical practice in public schools. Is that the proper historical analysis? It's not, Your Honor. As both the Supreme Court recognized and this court recognized in New Doe Child, it can't, you know a practice or an act does not violate the Constitution. If there is an identical historical analog, that kind of ends the test. How, if there isn't, then the court looks to the other relevant historical practices and those historical hallmarks to see whether it resembles an establishment. And so here, they can't show that it looks anything like a religious establishment. And indeed, there's a lot in the history and tradition that shows Ten Commandments and the Bible were used throughout schools, including after there were public schools, both in textbooks and things of that nature. Moreover, as several scholars and Justice Gorsuch noted in his short-lived concurrence, a close look at the hallmarks and our history reveals that no one at the time of the founding is recorded as arguing that the use of religious symbols in public context was a form of religious establishment. And so having a poster on a wall looks nothing like what would be considered a religious establishment. And plaintiffs don't point to any other historical hallmark or something that it would resemble. So even assuming the six historical hallmarks are not an exhaustive test, they still would have the burden to show that there's another historical hallmark that it resembles as the Third Circuit recognized in Hills and Wrath, and they have not carried that burden. That's why plaintiffs fall back to arguing that the posters are coercive. But coercion isn't a free-floating test. It's tethered to the historical hallmarks. The historical hallmarks are how you assess whether there is that sort of legal coercion that would make it a religious establishment, and that doesn't exist here. As the Fifth Circuit noted in Nathan, the displays impose neither penalty nor sanction, formal or informal, on students. Students are free to ignore the Ten Commandments or laugh at them. So there's not coercion. Are there any other requirements in state law that require a particular poster or board to be put up in classrooms, say a map of Arkansas or something like that? So there is a requirement that the national motto be posted. And so I'm aware of that. I'm unaware of other things of that nature. It is also... What about a flag? I think that might also... Is there a requirement that either the flag of the United States or the Arkansas flag be displayed? Not that I'm aware of. But as I said, at Arkansas Code Annotated 1-4-133, it also does require the national motto. And on the coercion point... Is that the same act that contains the Ten Commandments requirement? It's the same code provision, Your Honor. However, the act is what amended that code provision. So it wasn't in the same Act 573. But it is the same. The Ten Commandments portion amended the pre-existing act that contained the national motto requirement? Yes, Your Honor. To follow up, you know, there are a lot of translations, versions of the Old Testament and the New Testament, for that matter. Does the record contain any statement or indication as to what... If the language here in this act is a particular translation of the Old Testament? So the expert report does provide testimony looking at different versions, such as the and it resembles a lot of those versions. So he was unable to determine where it derived from. What we do know, however, is that the text is nearly identical to the text that was used on the monument on Texas State Capitol grounds in Van Orden. The only difference is that some of the capitalization is different. It's identical to that version and the version in this court's opinion in the city of Platt Smith. And in both those cases, the courts recognized that it was a non-sectarian version. And so I think that demonstrates, if this court were to apply the Stone-Lemon Test for some reason, which it should not, that the purpose was to acknowledge the Ten Commandments' historical significance, not to proselytize or advance any version that is closely aligned with a specific faith tradition. Counsel, if we were still under the Lemon Test, I think the location in a public school might differ from a courthouse lawn, for example. It is a different location, Your Honor. However, it still is not coercive in any way. The students are still free to ignore it or disregard it. Indeed, the plaintiffs admit at R. Dock 179 at 6 that the act does not require the Ten Commandments to be incorporated into the public school curriculum at all and that there's no requirement for teachers, school officials, or students to interact with, bring attention to, or even acknowledge the posters in any way. So there's still that not, it's not coercive. And really what plaintiffs are trying to do is repackage Lemon's endorsement offshoot or the advancement prong as an offshoot of coercion, but that's just not supported by the Supreme Court's precedent. And it's nothing like the school prayer cases that the Supreme Court was careful to limit. In Lee, it said that its holding was cabined and limited to the fact that it was pressure to participate in a formal religious exercise. And Santa Fe makes the same point. And several circuits have also acknowledged that Lee and Santa Fe are narrowly circumscribed to the school prayer context when assessing challenges to the Pledge of Allegiance. In the First Circuit's Freedom from Religion Foundation case, as well as the Fourth Circuit's Myers opinion and the Ninth Circuit Newdow opinion, they all recognize that Lee is limited to that application of formal religious exercise and that the recitation of the pledge in front of students every day is not coercive because it's not a religious activity and it's not coercing them to participate. Students can sit quietly during the pledge and there'll be no inference that they are participating or agreeing, whereas in the prayers, their silence could potentially be interpreted as their agreement. And sitting in a classroom with a poster on the wall doesn't indicate any sort of agreement or acquiescence to that. That line of argument, I believe, goes both to your free exercise and establishment clause arguments, doesn't it? It does, Your Honor, to the extent that they also argue coercion as to their free exercise claim. I wanted to have you address the free exercise clause briefly, if you could. Your argument seems to rely fairly heavily on Employment Division versus Smith, and I was wondering if that case were to be overturned, does your argument falter? It doesn't, Your Honor, for two reasons. One is that plaintiffs don't even really dispute that it's neutral and generally applicable, so they forfeited that argument. And this court's opinion in New Doe Child also indicates that it is that sort of neutral and generally applicable. And also, we present arguments why it doesn't fail, even assuming the Mahmoud or Yoder test under the Mahmoud or Yoder test, and that's because there is no burden on them. The Act 573 doesn't compel plaintiffs to do anything or refrain from doing anything that would violate their beliefs. Just like having, in God we trust, emblazoned on money did not burden plaintiffs' free exercise rights in New Doe Child, having a Ten Commandments poster on the wall doesn't burden plaintiffs' free exercise rights here. How does neutral work here? This is one thing that I think is very, very difficult, which is most of the time it's limiting religious activity with free exercise. But here you actually have religious activity coming into a classroom. So I'm really struggling. I couldn't find a lot of cases where we have that scenario. And I'm trying to figure out how neutral works here. Yes, Your Honor. So I think New Doe Child is the most helpful because there was also a free exercise challenge and plaintiffs argued it wasn't neutral because it was referred to monotheism and that they were continually confronted with this religious language. But this court said that it was neutral and generally applicable because it applied to everyone in the same way. And so I think the same would be true here and even more so because it's not, again, it is a passive poster on the wall that's not coercing or requiring the students to do anything. Whereas in that case, the plaintiffs argued they were continually confronted with that language that they found offensive and that they were being compelled to advance that religious message and proselytize with every transaction they engaged in. And this court still found that there wasn't a burden there or under the free exercise clause or a substantial burden under ERIFRA. Well, I just want to press you because when you're talking about neutrality, you're using the generally applicable language that applies to everybody. But I'm not so sure that I still have a good understanding of what your definition of neutral is. Here you have a particular version of the Ten Commandments that the state picked. And maybe we conclude it's nonsectarian and all of that. But I'm just trying to figure out how that's neutral as opposed to some other law-giving poster that you put up on the wall. So now it seems like it's conflating a little bit of free exercise with the Establishment Clause and particularly the Larson and Catholic Charity line of cases. However, those cases don't apply in this context. As if the circuit recognized in Nathan prohibitions on preferring one religious denomination or religion over non-religion has no application to the government use of religious language or symbolism. And that's also true in the Supreme Court's decision in Lynch. They reject that argument because obviously a nativity scene could be perceived as favoring Christianity over other religions. And they said that that test doesn't apply in that context. And this court found the same in Udo, Talbot, and City of Plattsmouth. Because if all religious displays had to be completely nonsectarian or non-denominational, then there could be no government acknowledgment of religion in public squares. And we know that's not the law. We know that it doesn't have to be purged. I see I'm running out of time. So I'll reserve the rest of the time for... Just one follow-up. Did everyone agree below the parties, the court, that what the Act mandates here is a paraphrase of what we would refer to as the Ten Commandments? It must be said the record indicated no particular recognized version of the Old Testament. So is this a paraphrase, for lack of a better word? I believe it was understated by both sides that it's not identical to what you would in any version of the Scripture. However, plaintiffs' experts believed that it was taken from the New King James Version, whereas our expert explained it wasn't. So there is that dispute there. But as Plaintiff's Brief acknowledges, they would even say that perhaps it was an attempt to come up with a nonsectarian version, but that it failed. Again, our point is, at the end of the day, it doesn't matter. Because when it comes to religious displays, there's not that requirement that they be non-denominational or have no preference at all. To the extent it matters, it is only to show that the intent of the Act was not to proselytize, but to acknowledge the historical significance. So you think that, do I understand you to say that if the Act had just lifted, and there's no dispute, it just lifted Exodus 20 verses 3 through 17 from the King James Version or some other recognized version, it doesn't really make a difference? No, Your Honor. It wouldn't. And indeed, Ohio's motto, with God all things are possible, is expressly lifted from Matthew, and that didn't change the analysis. There's, I believe, Lincoln's memorial has a passage of Scripture taken from the New King James Version. That doesn't change the analysis. And I believe the Fifth Circuit's opinion discusses this as well, as does the oral argument where there's a colloquy about some of this. If there are no further questions, I'll reserve the rest of my time for rebuttal. Thank you. Thank you. All right, Mr. Youngwood, you may proceed when you're ready. Thank you, Your Honors. And may it please the Court, Jonathan Youngwood, standing before you on behalf of 10 families living in six districts, families from various traditions, Jewish, Unitarian, Humanist, Catholic, Methodist, non-religious, agnostic, atheist. Under this Act, under Act 573, from kindergarten to senior year, from math to Spanish to biology, a student entering an Arkansas public school will face one unavoidable constant, government-mandated religious instruction in every single classroom and library. Schools use their limited classroom walls to teach. This is instruction. These are, after all, commandments. And they are directly religious. Okay, let me stop you there and ask for some clarification. And I'm just curious, what exactly is objected to here? And I say that because if you take the last, I guess, five lines from this mandated text, they are, thou shalt not kill, thou shalt not commit adultery, thou shalt not steal, thou shalt not bear false witness, thou shalt not covet. Are those, are those objected to by the appellees? Your Honor, what's the heart of both the Free Exercise and the Establishment Clause claim, among other things, is the coercive nature of imposing religious instruction on these children. And while some of what you've listed there, maybe most of what you just read, Your Honor, do not directly cite God or point or instruct the children that there is only one God. They come in the context of a biblical verse. As Judge Beery, who heard the Nathan case, the first Texas case, noted, there are other ways. There are ways to teach children rules. But what if you just took those lines and you, and you stated them in a little different, a different way, and they just said, you should not kill, you should not commit adultery, you should not steal, et cetera. Surely the appellees have no objections to those, to those statements. Your Honor, if you, if you disembody parts of this Bible verse and took it away from being a Bible verse and didn't say it was from the Bible and call it the Ten Commandments, it would definitely be a different statute and a different case. I can agree with that. Well, that's kind of getting, getting to what I'm wondering here. What is, what is really objected to? Is it, is it that there's this, the three words, the Ten Commandments followed by text? And so it really doesn't make any difference what the text is. You just see, you just see it on the wall and you see the word Ten Commandments. And so, oh, that's, that's, that's religious. Is that the, is that the idea? Or is it that, is it the content here of this mandated text? I think, Your Honor, it's both. It's putting Exodus 20 or certain verses of Exodus 20 in a certain version. It is the King James Version. Judge Brooks found that as a fact. And there was really unrebutted expert testimony on that. But whether it was the King James Version or a Jewish version, it's, it's our plaintiffs have testified. It is not what they recognize. Counsel, this court will have to apply whatever analysis we use in this case in other contexts. Could a public school be required to post a copy of the Pledge of Allegiance on the wall? It says we are one nation under God. Yes, Your Honor. And I think that would be a very different case. There's a whole line of cases under God. This court has cases about In God We Trust. As counsel pointed out, In God We Trust is on Arkansas school walls. To my knowledge, that part of the statute, which is older, has not been challenged. You told us earlier that this was instruction. And so if the Ten Commandments are instruction, wouldn't the Pledge of Allegiance also be No, Your Honor. I think the Pledge of Allegiance is different from something listed as Ten Commandments that have specific dictates that you must follow. I also think that if you were to see the Pledge of Allegiance as instructive, the text of it isn't telling them what to do like this is. If you were, other than the under God, there are no religious aspects of it. So I don't know that it would be a First Amendment challenge. And the courts, this court and others, have treated Under God and In God We Trust as ceremonial deism or motto in a whole different line of cases. And it makes sense. It's a far cry because you asked how it would apply to other cases. It's a far cry from posting a very prescriptive, normative, and direct Bible verse. Do we have to agree with you on the instruction point for you to win? And the reason why I ask this is because I remember in my high school and elementary school years, a lot of things were posted on the wall. Go to the chess club meeting at 4 p.m. And I never viewed that as instruction. I get it. This will be there the whole time. But my point is, my understanding of this is there's no requirement, nothing said about whether there's any instruction. And in fact, it just assumes that the poster is going to be put on the wall. So how can we say that that's instruction? And do you need that to win? I don't think I need it to win. So why don't I start with that? And then if you allow me, I'll go back to why it clearly is instruction, which makes it easier or different for me to win. If you look at, and I don't raise this as a purpose or an endorsement part, I'm not arguing Lemon. But if you look at the legislative statements that the state put into the record here, the full version of it, you can see that the legislators wanted to, they use different words. They use exposure. They use see it visually. And they say the reasons are because our children need more, need more religion. And mostly they refer to Christianity in their lives and the world will be a better place if they can have more Christianity in their lives. The purpose they are saying, and I don't use it as a Lemon purpose. I use it as an educational purpose, is to expose these children to this word of God and to these dictates and to these commandments. And whether you call that instruction or exposure, it is there so that it is read and that it is absorbed and that because of the nature of what it says. And so it's different, Your Honor, than a flag that might be required to be put up in the Arkansas schools. This is giving a lesson. And it's just as much a lesson if you go under free exercise as the lesson, in fact, I'd say more because it's ubiquitous and throughout and not just once a year, than the lesson that the parents in Mahmoud succeeded on saying their children shouldn't have to be part of. It is telling them what to do. Wouldn't it be entirely appropriate for there be instruction that one should not kill? Yes, instruction that one should not kill is a decent instruction, Your Honor. And you could say that about half of this text, couldn't you? I think some of our clients might, it depends which ones we could go to. I think we can all agree that, and actually, Your Honor, not to knit, but murder and kill are different. And that's one of the differences between the Jewish version that, according to our clients in this version, killing is generally not good. Murder is never good. I agree with you on that. I think some of these, and particularly the ones that are telling people who God is, that there shall be only one God, they're telling them not to take the Lord's name in vain. Those are only religious. They are only monotheistic. They are, we submit in our expert, they are Protestant. They are King James Bible. But disagree with me on that. I don't, I think the record's clear. They are not Muslim. They are not atheist. They are not Taoist. I can go through the whole world religions that exist in Arkansas. Let me ask you about another historical example. There are other historical texts, some of which have historical meaning in terms of the development of the law. On the Nebraska State Capitol, for example, there is a depiction of the Ten Commandments and also the Code of Hammurabi. Could a public school be required to post a copy of the Code of Hammurabi? Your Honor, I don't know enough about the Code of Hammurabi and know that if it has a religious aspect and so forth would be subject. There are numerous references to Babylonian gods in the Code of Hammurabi. Um, I think it might have the same problem if it was put ubiquitously in the schools, just like the Lord's Prayer would or other well-recognized and, and don't get me wrong, worthy of, of devotion, worthy of respect for some, the center of their lives. The concern here, the concern here is that it's being put ubiquitously in a public school with children in every classroom. Disregarding stones dictate, which has nothing to do with lemon, that if it's going to be there, it needs to be part of the curriculum in an appropriate way. Our plaintiffs, one testified that, um, their concern for their child is not that they learn what the Ten Commandments are, but if they learn it has to be tied as stone requires, properly to curriculum. So are you saying that stone is distinguishable from lemon in some way? Well, um, stone and your honor, thank you. Cause I would like to specifically, um, discuss stone and whether or not stone is, is good law. Um, stone does cite lemon, I think two times, maybe three. It also cites Shem six times and Engel once. And your honor asked her the Supreme Court cases that talk about this. Well, the Van Orden for judge majority written by judge Rehnquist is very explicit in interpreting stone and distinguishing it from the facts of that monument case. And it notes in describing what is stone because, um, Van Orden is not a, is not a lemon case. It says stone is a Shemp Engel case. And it is when you read it and it follows. Isn't it, isn't it really prong one of lemon? I agree that it cites other things, but in the end, the conclusion is that it fails prong one of lemon. At least that's how I read it. That's the last sentence of the, of the decision, your honor. But it comes after extensive analysis, all being the short decisions. I don't want to go too far on the extensive of Shemp and reference to Engel. And then when you have the Supreme Court itself through his chief justice at the time, describing what years have passed, what was stone, no reference to lemon. And it goes back to your honor, whether you agree with stone or not. And I'm prepared to go through the history analysis as well. It's very well-versed in our brief. It's complicated, but I think it's clear. And we're clearly right under Kennedy too. But with all respect, your honor, it's not for this court. It's it, you have Van Orden telling you, it's not a lemon case. It says it's a Shemp Engel case. And then you go to the whole line of when Kennedy wrote about the history or re-articulated the history, because you can see that going back through other cases too, that are almost parallel with lemon, right? There's these multiple streams of cases. Kennedy itself cites Santa Fe, which is a lemon case. And it cites Lee, which expressly said it wasn't going to address whether lemon was good law. So you've got those two cases. And then more recent, you have Mahmoud itself, which cites Edwards, which is a lemon case. But Kennedy does say, I mean, this is different from just about any overruling I can remember, where it talks about, I think it was the Ninth Circuit applies lemon in its progeny, and then it overrules lemon and its offshoots. I think I'm phrasing that right. And so that to me suggests that anything that relied exclusively on lemon is no longer good law. But Your Honor, I guess I disagree respectfully with that reading. And why do I? I think the offshoot they're referring to is endorsement, which isn't one of the original three prongs. I think that's the primary offshoot. And they are certainly telling courts, and we're not asking you before you here to apply any of the three lemon prongs or the offshoots endorsement. But it's a much different question to say, does that mean every case that the Supreme Court or an appellate court previously used lemon or referenced lemon is now completely gone without the Supreme Court's guidance? First of all, there's a long line of cases, including this court's case in Brown, and they're all cited in the briefs that say, no, that's not your problem. But I don't think it's nearly as broad of a category as you suggested it is. Why can't we just say, we're the holding, right? You said the last line of Stone, the holding is prong one. We're the holding is a lemon holding. It's no longer a good law. Not where lemon's been cited, but where the holding relies on lemon. And I would submit to your honor that Van Orden says that's not the basis for the decision. And so if the only thing cited in the case was lemon, this might be a hard argument. I'd make the same argument. I'd say it's for the Supreme Court. But Edwards relies on lemon. It's a lemon case. We know those must still be good law because the Supreme Court in Kennedy itself cites one, and in Mahmoud cites the other. They don't cite Stone, but there have been circuit courts. They're on pages 22 and 23 of our brief that have relied on, have recited Stone, or looked at other lemon cases post-Kennedy, and not simply said, oh, we have to redo this. There's a whole world of cases out there, your honor, that rely on lemon. And until the Supreme Court says so, they're still good law. But this is probably the easiest one and the most direct one, because you have Van Orden itself telling you years after Stone that Stone is an Engle-Shemp case. And I don't hear anyone to say Engle or Shemp or bad law or Santa Fe or Edwards. But that was a plurality, right? I think you said majority earlier when there's only four justices. There were four justices, and then Justice Breyer wrote a separate decision to make the fifth. That is correct. But we had the four justices signing on to Justice Rehnquist's plurality decision. That is absolutely correct, your honor. Counsel, I'd like to discuss your free exercise argument briefly, if we could. I do agree that subtle pressure can sometimes be coercive, and I think that gets to your argument. And so we need to find where that line is. I'm wondering where your argument leads, though, because heretofore the federal courts have not found that the teaching of evolution in the public schools was a violation of the Constitution. But if we were to adopt your position, it seems to me that it would be a violation of the parents' free exercise rights because it violates the tenets of Islam, Judaism, and Your honor, I don't think that's the logical consequence of our argument. If it were, and I don't think it is, it would actually be the logical consequence of Mahmoud itself. So posting a poster on the wall is coercive, but teaching a theory that's contrary to Islam, Judaism, and Christianity as to the origin of man is not coercive? I think teaching evolution in a science class is not unconstitutional, and following Mahmoud would not make it so. So how would posting a poster on the wall be a violation then? Because it is a more significant imposition on the rights of parents to instill religious beliefs in their children. So their children can be taught that they descended from non-human life forms, but they can't have the Ten Commandments on the wall? Yes, Your Honor, and I suppose you could get into certain opt-out issues on the evolution because I think the primary one of the differences between this and Mahmoud is the ability to opt out. The state would have it that because there is no opt-out right from a statute that is as de maximis as this, that therefore you cannot object. That is not the law. There is no de maximis exception to the free exercise clause. But, Your Honor, if I could compare Mahmoud's facts to these facts, I think there are two differences. One is Mahmoud, there are probably others, but two differences. Mahmoud was not about religious exercise or religious teaching. It was about normative teaching that parents testified and the testimony was accepted. Unlike here, without deposition, on plenary injunction, without any discovery, it was simply accepted as an interference with their free exercise rights and their family and for their children. And the other difference is it's on the wall. And there we get back to the question Your Honor asked me about how important is it? What is it? And is it instruction? I submit to you, it absolutely is instruction. The legislators tell us that they envision it being instruction. Respectfully, it's common sense given how they are and where they are. We have testimony from two of the plaintiffs who actually had the posters up. These are the later added plaintiffs, later added districts, as to the 13 days or so their children were exposed to it and the effect on it. So they're reading it. They're asking it. They're coming home and saying, Mom, what does it mean to covet? What is a Sabbath? What is one God? Those were the questions asked only in like a 10-day period. And that is just as much, if not more, of an imposition on the plaintiffs' free exercise rights, the parent plaintiffs and the children as well, as Mahmoud, which was not on its face religious instruction, notwithstanding the conclusion that it was inconsistent with certain deeply held and genuine beliefs of the parent plaintiffs there. Can I ask you about neutrality? I asked opposing counsel. I think Smith is extraordinarily difficult to apply. The Supreme Court disagrees. But how does neutrality apply here? Well, first, Your Honor, I think Mahmoud held that Smith didn't need to apply because of the clear burden that it placed. I think the exact words from Mahmoud were, where a statute requires them, being the parents, to submit their children to instruction that poses a very real threat of undermining religious beliefs and practices. Just to short-circuit it, suppose we disagree for the reasons stated by Judge Graz. How do you apply neutrality here? You get to incidental burden. Well, there's nothing neutral about it, Your Honor. It is, again, we submit King James Version. Skip that. I don't need that to win. It is definitely a Judeo-Christian version and inconsistent with, just take, I am the Lord thy God. Thou shalt have no other gods before me. That is completely inconsistent to an atheist family. It is inconsistent to any tradition that has multiple gods. There's nothing neutral about it. We haven't gotten to denominational preference, which I think applies under the Establishment Clause, but there's almost a parallel here under the free exercise. Your Honor, I see my time has expired. I'm happy to answer more questions, but I see it's expired. You can complete your answer if you like. What I would complete it with is, once we get under Mahmoud to strict scrutiny, I don't think there's any actual arguments here that this would satisfy it. It is, we do not know what the compelling state interest is, and even if there was one, there's no effort here on narrow tailoring. If you want the students of the state of Arkansas to learn about the Ten Commandments, you teach it in world religions or history or other classes where it is taught as something that's there, but not as a dictate in every classroom that you must believe and you must follow. Thank you, Your Honors. Ms. Patterson, I think I asked a question that required you to use up some of the time that you had allotted for rebuttal, so let's set the clock at four minutes. Thank you, Your Honor. I'll start kind of where he left off, with Mahmoud and Mirabelli. Both of these cases involved active instruction contrary to parents' beliefs, which is why the court found that there was that substantial interference with the parents' ability to direct the religious upbringing of their children. That doesn't exist here. As plaintiffs admitted at RDoC 179 at 6, the act does not require the Ten Commandments to be incorporated into the curriculum and have that active instruction, and there's no requirement for teachers or other school officials or students to interact with, bring attention to, or even acknowledge the posters in any way. And the later added plaintiffs in those classrooms where posters had been put up had no evidence that any teachers instructed their children about Act 573 displays. So there isn't that sort of active instruction that the beliefs are wrong or anything of that nature. All you have is a historical representation of the Ten Commandments with enormous secular historical significance posted on the walls. And it's also telling that what they're seeking here is different than what the parents sought there. The Mahmoud parents weren't seeking to micromanage the curriculum and agreed that the books could remain on the shelf. They simply wanted their students to be let out, be able to opt out of that active instruction. As Judge Gross indicated, if they're right on the free exercise claim, then that means that parents would be able to dictate what's on classroom walls. They could demand evolution posters be removed from walls, flags that interfered with some religious belief, everything of that nature. Is that really true, though? Couldn't they set up an opt-out system like in Mahmoud? It'd be clunky. But you could say, well, if you don't want your kid in a room with the Ten Commandments, we'll put you in another room and you'll get so-and-so teacher. I mean, I'm just throwing out that it's not completely inconsistent with Mahmoud. That's not what courts have required in other situations such as the Pledge of Allegiance. Students still sit in that classroom as the pledge is being recited, and the courts have found uniformly that that does not violate the free exercise right. And so the same would be true here. I also want to briefly discuss Van Orden since they mentioned that and its description. Van Orden, even the plurality, as your Honor noted, it is a plurality, so it cannot overrule or change what Stone said, but it never says that Stone isn't a lemon test. It never even uses the word coercion or says it's a coercion test. At page 690, it describes Kentucky's law in Stone and that Stone recognized it had a, quote, plainly religious purpose. In the footnote, it also noted that it was about that law lacking a plainly religious preeminent purpose. And in regards to Santa Fe and Lee, notably, they didn't rely exclusively on lemon, as your Honor's questions somewhat hinted at. For example, at page 312 of Santa Fe, the Supreme Court applied the coercion test from Lee and found that the challenge practice was unconstitutional and that that religious activity, there was a coercion to participate in that religious activity. And so that is clearly different from Stone that relied and applied exclusively on lemon. So as Justice Scalia noted in his Van Orden concurrence, there's nothing unconstitutional and it's about a state in a non-proselytizing manner better than the Ten Commandments. And there's no hallmark of religious establishment here and no free exercise problem as the Fifth Amendment or a similar law in Nathan. I see my time has expired, so I ask that the Court reverse. Thank you. Thank you, Counsel. We appreciate your arguments today. The case is submitted and we will render a decision as soon as possible. You may stand aside."
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"stt_transcript": "My name is Dan Goldberg and I represent Mr. Treisman in this appeal. This court should reverse and remand because the Magistrate Court did not have authority to hold the evidence you are hearing in this matter and this matter pertaining to one significant to Mr. Treisman's involuntary commitment and his rights. I think to understand the error here, we have to start at the most basic level of the law and that's that Magistrate Courts are courts of limited authority, they only have authority to operate under Magistrates Act which is 28 U.S.C. section 636 and when you turn to that statute, it only provides three sources of authority. The first source of authority are things that are enumerated in the statute where Congress specifically said to Magistrate Courts, you can do those things. I think that's important here, the government concedes this hearing was not enumerated and that's page 8 of the brief. The second source of authority is consent, the parties can agree to the Magistrate Court holding a hearing. Here the parties did not agree in a clear and vigorous way and the government doesn't push back on that in its brief. I think this entire case comes down to the Magistrate's authority under the quote additional duties under the catch-all provision of the act and that's section 636B3. Here we contend it does not and we know that it does not because I think the Gomez case says that there's a carefully defined grant of authority by Congress which is an implicit withholding in other contexts and so it would be easy for Magistrate Courts to be on the same footing as Article III judges, district court judges and they could just kind of interchange roles but this court, the Supreme Court, has repeatedly held that's not the case because that's not what Congress wanted. The Gomez case I think is a powerful case for us and it traces the history of the Magistrate's Act and I've learned by reading that case that before the act in the 1960s and prior to that you would have judges deciding cases that weren't lawyers. Obviously that's a problem I think and we need to have minimum standards and here those minimum standards were not met. Why doesn't that provision you just read about assigning such additional duties as they're not inconsistent with the Constitution and laws, why isn't that game over for you? That's a grant of authority and as long as you don't conflict with another statute, another rule or the Constitution, a magistrate judge can do it if referred by a district judge. That's the key language in there. I think the problem is Perez holds, the Supreme Court case holds that it must be comparable in purportance and only things that magistrate courts get to do are subsidiary matters and that's pretrial motions. This is the trial. This is where cross-examination is occurring. This is where expert witnesses are being called. This is everything to Mr. Treisman and his liberty rights and this is important because it's also the time for the judge to actually observe the defendant and see is he incompetent and all these intangibles that you can't get in the transcript and I think that's important because in GONA… I don't think so because I don't think that's where he has the jury trial right and I don't think it's significant as in this context where you need… and this is what the GOMAS case speaks to, that quote, the court must further scrutinize not only the spoken words but also gestures and attitudes of all participants to ensure the jury's impartiality but only words can be preserved for review, no transcript can recapture the atmosphere of the board hour which may persist throughout the trial. So I think that same logic pertains here. Is there a jury trial right here for involuntary commitment? No, I don't think so but I think there's cases like Bean that hold that because an adverse outcome in a commitment hearing results in containment of a person's liberty, procedural due process guarantees certain… you know, guaranteed process. Well the reason why I ask that is because then I think Judge Shepard's question really, really is powerful here which is if you're not holding a jury trial and you're having pretrial motions, it could be dispositive. Are the drugs being suppressed, right? That's ballgame. Magistrate judges can do that and what's different about this case where you don't have a jury trial and the magistrate did do a report and recommendation? I think the difference is that pretrial motions are enumerated and that Congress actually said you can do that and so it falls within that framework. And here it's not disputed by the government. This hearing does not fall in that framework. But doesn't that then require us to read that really broad grant in the magistrate judge's statute narrowly? Right. And I think that's what that holds is that this court's case law says that consent is the key, Torres, because otherwise all magistrate courts are going to be on par with district court judges and it's a slippery slope of where you stop and you don't stop. Now, that's a little, somewhat of an overstatement, don't you think? Is this case really going to divest district judges if it comes out in a way that's not favorable to your side? Is it going to . . . sounds like you're warning against a divestiture of Article III judges of their powers and authority. And I don't want to overstate it. I understand it sounds like maybe a little overstatement here. I don't want to overstate it. I'm just reading, you know, cases like the Torres case where this court said, you know, that consent's the key. And I think the reason . . . and I think in most cases the parties will consent. Well, let me ask you about that, Mr. Goldberg. Was it the responsibility of Mr. Treisman to object to the magistrate judge holding the evidentiary hearing or was it the responsibility of the court to obtain consent of the parties? And how does that impact the standard of review, whether it's plain error review or not? I think it's a good question. I think Mr. Treisman does not have a burden of consent. And I think it's from cases like Gomez that the error can, quote, never be treated as harmless and that I don't need to have a special claim of prejudice. And this court's other case law that has raised this issue sui sponte on appeal. But is it . . . is this plain error review? I don't think so, Your Honor. I think this court's case law . . . again, Harris and Lothridge, we cite those cases in our brief where I don't think it's a waivable issue. And so I don't think normal plain error applies and I don't think we have to meet those special hurdles in this type of case. Even if that was an error, well, in that hypothetical at least, did the magistrate judge really exercise Article III power here? Because I thought the district judge ultimately made the decision. I think there was de novo review. I concede that. But again, it goes back to the thing . . . the quote I just wrote for Gomez is that I don't think that just reading the transcript gets the judge there. To what they need to do is see Mr. Treisman. See how . . . if he testifies, weigh that testimony. And I think there's a lot of case law where this court says we need to defer to findings of fact and . . . Counsel, magistrate judges do that kind of thing all the time, as Judge Strass has indicated. I was a magistrate judge for 13 years. I did that . . . made those kinds of recommended findings all the time to the district judge. And in the practices in the Western District of Arkansas, that was very common. And I gather from the record that also in the Western District of Missouri, this is a way that magistrate judges have been used regularly there. Absolutely, Your Honor. Doesn't that . . . how do you respond to that? Well, I think if the parties consent, it's . . . you know, magistrate courts are great. If there's enumerated things they're doing, like ruling on pre-trial motions, again, that's in their bailiwick. That's what Congress wants magistrate courts to do. But when you start carving out new areas of the law . . . So what would you say the rule is then? Yes, I think the rule . . . What would your preferred rule be? The preferred rule would be that if it's a substantive matter that's not in the statute and the parties haven't consented, don't have jurisdiction. Unless there's other questions, I'd like to reserve the remainder of my time for rebuttal. Thank you. Mr. Nelson, you may proceed when you're ready. Thank you, Your Honor. The sure fact that the appellant does not even allege prejudice is grounds for the court to affirm. The appellant asks the court to send this case back to the district court with no guidance merely to redo what the district court has already done, which is make an independent determination of the record in this matter and state it so explicitly in the order. But if it's jurisdictional, you don't need prejudice? Regarding the structural error, Dr. Ingram? Well, it's not even structural error. If you send something . . . the Supreme Court has held this multiple times. If you send something to a court that's not supposed to have it, right, it's sort of void ab initio. And so you don't need prejudice at that point. You don't have to say, well, but that guy was really good who tried my civil commitment or not good. Sorry for interrupting, Your Honor. I don't think that's the case here. Appellant cites to . . . it was the Henson case where the appellate court said, we don't have jurisdiction here because the magistrate never . . . because the district court never conducted a review of the order. The magistrate judge was the judge that issued a final order. And the magistrate judge didn't have authority in that circumstance. Now, that's not what happened here. Here the magistrate judge issued a report and recommendation, no final order, and then went to the district court. So Appellant is not asking for this court to dismiss for lack of jurisdiction. He's asking for a . . . for a remand. I will say our case law on that is not altogether clear. In some of our cases, we seem to say that exceeding the authority of the magistrate judge by sending something is jurisdictional. In other cases, we apply plein air. So I can't . . . I haven't completely figured it out, but there's at least some threat in our case law that suggests it's jurisdictional. And I think perhaps, Your Honor, it does go . . . a lot of this is tied up . . . the structural error piece and the . . . and the merits are somewhat tied up together because the issue is whether or not the magistrate judge . . . well, whether or not the magistrate judge had the authority in this circumstance, Appellant does not cite to any case where the process that was followed here, which is a magistrate court conducting an evidentiary hearing, issuing a report and recommendation, and then the district court reviewing it and adopting or not adopting, that that was structural error or error at all. And . . . Suppose they conducted a jury trial, and then the jury said guilty, and then they wrote a report and recommendation saying, well, the jury found him guilty. I suggest you go ahead and enter a judgment of guilt and sentence him. So that would be too far, but that's under Peretz. And so Peretz draws this distinction between . . . you might call them like super special Article III . . . Article III core functions, and notes that there are certain issues that are . . . the language is that they're of far greater importance than the specific duties that are assigned to magistrates. And in Peretz, it was a felony voir dire. Torres was felony plea. These are all criminal trial rights. That doesn't apply here. This is a civil case to begin with. We've got a much lower standard of proof. As the court has already pointed out, there's no right to a jury in this circumstance. And that also goes to what Section 4245 is at its heart, which is largely a housing statute. These are individuals who have already been adjudicated guilty. They're already in BOP custody, and the determination is only whether or not the Bureau of Prisons can house them, instead of housing them in a general population elsewhere in the country, if we can bring them to a suitable facility for their mental care treatment. And so there's much lower stakes here. Likewise, the Bureau of Prisons has a duty to send a person back to general population if they've recovered. Persons get yearly reviews to determine whether or not they should be sent back. So this is very much an ancillary matter. It falls very appropriately within the purpose of the magistrate judge's statute, which allows for these additional duties, really to reduce the workload of the district court judges. Mr. Nelson, I'd like to revisit my standard of review question. So if consent was needed for the magistrate judge to conduct this evidentiary hearing, was it the responsibility of Mr. Treisman to object, or was it the responsibility of the court to obtain consent? And how does that impact the standard of review? Well, the responsibility of the... Normally, if there's no objection, we're under plain error review. Absolutely, and I agree with that, Your Honor. Here, the district court... I'm not entirely sure how to answer that, because the district court did not... The magistrate judge's statute has a specific... I think it's B1AB, or something like that, that specifically refers to the consent, the allowance for things to be sent to the magistrate judge if the parties consent. And the district court didn't cite that statute here. It cited purely to the additional duties statute, so I'm not sure... The U.S.'s position is that the... Is that appellant had the duty to object if he did not... To object in the first place, and so we're under plain error. So it's a little bit of chicken-or-the-egg question. Absolutely, yes. And one brief point as well. This court has been discussing suppression motions, and the suppression motion is specifically enumerated to the district court, or to the magistrate court. The court in Raddatz, which was not cited to in the U.S.'s brief, but is referred to in Per Raddatz, specifically held that there is no issues for a credibility determination for a magistrate judge to make credibility determinations in a suppression motion, so long as the district court then later on adopts or denies the report and recommendation and issues the final decision. And I think one of the cases that appellant cites to, which is Harris v. Folk, really summarizes the law well here, states that duties that require a final and independent determination of fact by the magistrate judge can't be delegated under 636B6. Now, that's crucial because that's not what happened here. The next line in Harris v. Folk, quote directly, where a magistrate judge serves as a mere intermediary in the performance of adjudicatory functions and is under the constant and direct supervision of an Article III judge, such functions are freely assignable as additional duties. That's what happened here, and for that reason, the United States requests that the court affirm the district court blow. Thank you. All right. All right, Mr. Goldberg, you have just under a minute. Thank you, Your Honor. Three points to make, and I think, Judge, your point about matched courts being very capable courts, I couldn't agree with more. And I think if this court were to rule in Mr. Treason's favor, I don't think it would have a broad impact on the law because I think most parties would consent that if the judge got up at the beginning of the hearing and said, hey, do you consent to my authority, I think routinely they would say yes. And I think the second point I would make is to Judge Strauss' point, and I do think that the lack of authority renders the hearing a nullity. And so I think the court's case law, you know, my opposing counsel talked about the Harris case, and I just think that case is pretty clear, that the failure to reject does not constitute waiver of the right to appeal this issue. There's other cases, Lothridge, the error's not waivable. So I direct this court to those cases during my brief. And then I think the final point I'd make is that this really is a significant liberty interest that my client has here. And what is the wheels in motion right now is my client is involuntarily committed in a hospital against his will. He may be there for the rest of his life. He may be forcibly medicated. All those wheels are in motion right now, and a lot of people would argue that that's a worse fate than being in prison for the rest of your life. And so I don't think this is the type of hearing where we can just say, hey, this is, you know, a minor infringement. It's a civil case. I don't think this court's case law stands for that. Unless there's other questions, I thank you for your time. All right. I think that will stand aside counsel and cases submitted. We appreciate your argument. The court will render a decision as soon as possible."
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