you know good morning your honor it's a moment close right gratian susan alexander on behalf of the automotive industries pension trust fund and the new england teamsters and trucking pension fund i'm hoping to reserve three minutes for about all the claims in this case relate to a massive and admitted fraud involving a six year restatement and two point six billion dollars in earnings the issues before this court are the reasons that those merits were never heard of us in the district court improperly dismissed the us exchange act claims because when morrison is applied it is clear that the us exchange act applies dismissed on comedy and formed on convenience grounds articulating the correct standard but then watering it down and applying a different standard so it's ok with the court i'm going to start with  domestically in fact the district court found that at e r twenty three the american depository transactions and reading from his order are securities transactions that occurred domestically they were both sold and purchased in the united states so there's no reason to amend the district court's error was in believing that morrison didn't really mean it when it said it was doing away with contacts and facts and establishing a clear transactional tast the district court grafted on to that an additional test of some additional conduct and the mistake there at the the air respectfully that the district court made is that's personal jurisdiction so that whole minimum contacts analysis and is was to sheeba involved and what did to do or didn't do that's minimum contacts analysis in a well developed body of law related to personal jurisdiction which was never acted domestically period full stop nothing more you have to look at it also the r r assertion is and we have good support from the f c c and the eleventh circuit and the central district of california that over the counter exchanges are exchanges within the meaning of the first prong of morrison but if the court finds that if the court has concerns about that the second prong is the easy way to go because and that was the goal of morrison that is the language of morrison have another question us assume we find some improprieties in what the district court did what do you what relief are you seeking through this course we would we'd like to go back to the district court and actually have the merits be heard because we've been fully dismissed with the  order on us exchange act claims and then the abuse of discretion on the japanese exchange of claims and what's interesting here is the and the district court was very candid about it the u s exchange the error under the u s exchange act claims the morrison era fully contaminated the japanese exchange act abuses of discretion on comedy and form not convenience if if the court's ready i'll turn to those under comedy so  district had jurisdiction over those claims so the court exercised its exceptional discretion to dismiss under comedy and it it abused its discretion in three ways first the district court never considered most inherent consideration of comedy which is deference to a foreign government to a foreign legislature to a foreign court to something or somebody and as this court knows from the decision that this court recently decided the japanese government knows how to show up in this court and say we want this to be heard in our courts that didn't happen here there is nothing in the record zero in the record of anything to which the district court should be just deferring and yet the district court just glossed over that primary consideration there are two other additional air abuses of discretion with respect to comedy the district court disregarded record evidence about how the japanese courts work so the district court said that it was deferring to other lawsuits and in japan and that japanese courts are developing their interpretation of the relevant part of the japanese exchange act but in fact the record evidence was to the contrary the record evidence is that japan operates on a civil law system where there isn't precedent and there was evidence in the record at the r six thirty contrary of that the third abuse of discretion on comedy was that the district court purported to weigh factors and hold the whole defendants to their severe burden of proof with respect to comedy and yet never considered the fact that what we're talking about in this case is us accounting law to sheeba told its investors that it applied u s gap it toll it reported its results in us dollars so american accounting is what would be being applied here  the district court didn't even mention that it was no part of the so called balancing that was conducted those three considerations made the court's comedy ruling an abuse of discretion the form  dismissal was also an abuse of discretion again for three reasons again the principle consideration under foreman on convenience is deference to the plaintiff's choice of forum where the plaintiff file the district court mentioned it but glossed right over it and instead of deferring to that to what the supreme court called that strong presumption in piper or at this point court has also called presumptively convenient in kano the district court looked at what it thought would be more convenient so rather than starting holding defendants to the burden which they had to which they should have been held the district court sort of did its own balancing test it failed to require so the second abus discretion is that it failed to require defendants to show oppressiveness and vexation out of all proportion to the plaintiff's convenience that burden was never met in fact the great weight of evidence actually supported having the case in the forum where plaintiffs brought it the third abuse of discretion is that again the district court made assumptions about the record which were contrary to what was actually there so the district court made assumptions about witness availability and whether or not evidence or witnesses would be available when there was literally nothing in the record that said that witnesses were unavailable as in car hano the defendants simply put forward a list of people that don't live in the united states and said that that should be enough to carry their strong burden of oppressiveness and vexation out of all proportion to the plane of convenience again and that the actual reasonable balance of factors would include the fact in addition to plane of stress a form would include the fact that the main facts here have already been published and admitted there's an independent investigation report in japan it's been translated into english it contains the facts and to sheeba has admitted them so there is not a big evidentiary issue related to japan the bulk of the remaining discovery is going to be related to the westinghouse business in must the court has further questions i'd like to save the rest of my time for a bottle but i think you may please the court christopher curran for to sheeba it's a sheet of course is a corporation incorporated under the laws of japan as its principal place of business in japan it has issued its stock and listed it only on stock exchanges in japan it is regulated by those stock exchanges and also by the financial services agency of japan and the s c s c the securities exchange and surveillance commission of japan those basic facts that i've just stated are a sufficient basis for this court to affirm the district court's sound ruling both as to the end up ability of the us securities exchange act and as to the claims based on japan law like mr alexander did i'd like to address first the u s securities exchange act claims and beginning with marson marson of course sets the two problems that have already been alluded to the first prong being whether that is a transaction in a security listed on a u s national securities exchange here i submit it's not even a close question there's the the over the counter market is not a national securities exchange it's not even an exchange and securities aren't listed on the o t c market the o t c market is a trading platform set up by broker dealers the companies such as a do not list themselves and they are not subject to exchange rules and regulations and listing requirements i think are brief sets forth the provisions of the securities exchange act and the rules and regulations they're under that establish that point the third circuit in the g or geo decision reached the correct conclusion finding that securities traded on the over the counter market are not traded or listed on a national securities exchange turning to the second prong of the problem as to whether they're it's otherwise a security traded domestically here again the district court was correct in the fact that the eighty yards that certain of the plaintiffs purchased were purchased in the united states and district judge progress and acknowledged that correctly and we acknowledge that there's no question that those transactions took place in the united states but that's not enough under maurice and maurice and core holdings was that the u s securities exchange act does not apply extra territorially the plaintiffs here are seeking to apply the us exchange act extra territorially to to sheeba in a foreign issuer that has never entered the us securities market at all it would be nothing short of a perversion of morrison to suggest that a foreign issuer that hasn't done anything at all isn't alleged to have done anything at all in the united states in the securities market here from europe isn't there some potential error here by the district court because it dismissed with prejudice and didn't allow an amendment to rule fifteen because amendments are supposed to be liberally granted i mean shouldn't just record it had concerns about this permitted the the plaintiff players to a basis upon which they could add allegations that would cure the fact and in fact it's hard to imagine that there could be a cure to this because the first minute complaint alleges all of the facts that i said in my little opening spiel about to shiva being a foreign under those circumstances that they did the defects of the first american plate cannot be cured it's apparent as a matter of law that the u s exchange act does not apply to shiva or do any other foreign issuer that has refrained from transacting in securities in this country in fact morrison says as much marson relies heavily on section thirty of the exchange act which is seventy eight d and specifically section thirty b which which provides that the securities exchange act does not apply to transactions or took to persons who  securities only outside the united states that's what to sheeba does to she hasn't done anything in the united states the a d r s that the plaintiffs purchased were star synthetic secur you look to determine whether ten b is applicable you look to the place cation of the purchase and here we have u s citizen purchasing from sheeba was not a party or had any role in connection with that transaction marson precludes the extraterritorial application of the exchange act to see all of to see his conduct all of its securities conduct has been in japan is appropriate for that foreign issuer to be brought in brought in and subject to the u s securities exchange act when it hasn't done anything in the united states well it's so good some of it shares to the banks that are holding  and the suit was brought against porsha which hadn't participated in the transaction at all and the second circuit said yes that the two prongs of morrison are necessary for there to be a claim under the u s securities exchange act but that's not sufficient you can't use a domestic transaction among strangers to drag into the exchange act a foreign issuer and that the second circuit said that that's prohibited und the exact same argument here the same type of synthetic security and the same complete reform restraint on the part of the foreign issuer about entering the united states marson is is premised on the notion that the application of the exchange act under these circumstances is offensive and intrusive to the foreign regulation and that was that that theme underscored not only morrison but also park central and it's the same circumstance here  any attempt to invoke the exchange act against to shiva a stranger to all transactions in the us necessarily interferes with the securities and application of japan law to japan issuer and then one of the point i mentioned i was going to consider the fairness and reasonableness from both perspectives when a u s person or or someone else buys an a d r in the united states and it's unsponsored they know they're not dealing with the foreign issue or they they should understand that the foreign issue hasn't come to united states and submitted itself to the exchange act under those circumstances it's fair and appropriate that that purchaser of the a d r look to japan and japan law for any remedies they may have and in fact that's presumably what's happening in these lawsuits brought in japan so again on the  they aren't they shares of to to sheba stock you know what are the eighty r s are securities that that are based on a bundle of actual to see the securities so the depositary banks buy the stock buys those shares that are held in the u s banks repository doesn't that mean they're being bought domestically yes ok and why doesn't that qualify under park central's interpretation states or when title was passed within the united states therefore in order in order to adequately allege the existence of a domestic transaction under morrison it is sufficient for plain incurred revokable liability within the united states that is that the purchaser incurred era vocal ability within the united states to take in pay for security or that this seller incurred a revokable liability within the united states to deliver security right and park central went on to dismiss the claims there even though the transaction took place in the united states it's the exact same here as i said before we don't dispute that the a d r transaction was a domestic transaction but that's not transaction he here we concede that the a t r purchase transaction is domestic if the plaintiffs have a beef with their counterparty in that a t r transaction they should go forward and they should extend should rely upon the u s exchange act but they can't bring in a stranger to that transaction to cebu from japan and make them subject to the exchange act based on the initiative of these depositary banks let me just note that what the court ultimately says in park central we therefore from the district course dismissal of the complaints recognising our their decisions here and in absolute activists have elaborated on the standards set forth in morrison in such a way that plaintiffs might conceivably be able to draft a minit complaints that would invoke a domestic application of section ten b we remain and to allow the district court to entertain a motion to amend the complaints right why shouldn't why should we do that here because you should you should look at what happened later in park central after the  it was futile they couldn't do anything else in the case was dismissed the same thing here there's no way to cure this fundamental problem and the plaintiff didn't identify one so that's why district judge praeger son was what he stated in his opinion he wasn't go grant leave to a man because only speculation and futility was that was envisioned in further proceedings i see my time's up but i'm happy to answer any further questions if there are any malone has held that the us exchange act applies to a d r s this court has applied to us exchange act two eighty hours i just heard counsel for to sheeba say that we all agree this was a domestic transaction and that's why the court is exactly right the way we brought these claims are the claim the purchases the transactions that occurred in the united states were brought under the u s exchange act the transactions that occurred in japan were brought under the japanese exchange act that is exactly exactly what morrison requires second i mean it's quest to me if you're allowed to amend will you men and if so what might you say without speculating this is this any different from what law completely irrelevant in our view that has to do with personal jurisdiction and not application of the u s exchange act but it is possible if we were allowed discovery that we could find out that the fact that one bank the bank of mellon bought fifty one i'm terrible at these numbers fifty one thousand fifty one fifty one million shares shares of stock unlikely happened without toshiba's knowledge so it is quite likely  the price of the a d r s i believe it's paragraph two fifty one of the complaint alleges that the price of the eighty r s moved in tandem with the price of sixty five zero two which is the common shares that traded on the japanese exchange and so too she has fraud inflated the stock price of both the common share and in tandem the a d r s so toshiba's fraud the fraudulent behavior is what was in connection with the domestic transaction so one the fact that the transaction was domestic that part has to do with why the us exchange act applies to the a d r s to shiva's conduct which morrison says no longer has to do with the application of the us exchange act but that has to do with us liability which has never been heard because the district court made these errors and also abused its discretion with respect to both comedy and formed on convenience and the only other point that i would like to make infor convenience is that if this courts where is it more convenient ruling for the standard performed on convenience the courts in the circuit would never hear any issue involving for