let's wait just a minute while the courtroom clears all right our second case for this morning is gary jet center against a f c e o av ports management mr harold thank you out of a please the court to the district court erred  state court to determine whether it had a room for about so mr harold i have to ask you i am baffled that this complaint did not include under the supplemental jurisdiction or in any other way and account that there was in fact a breach of this contract without a breach so i guess that's my first point i don't see why that's not there secondly you know you're relying on a lot of these contract clause cases and the notion that the regulating authority actually makes it impossible to bring a suit but essentially your argument is just that after twenty fourteen you were left  car so the price ballooned up four fold and it was you know much more or at least a much worse financial deal for you people make bad financial contracts all the time doesn't mean they are contracts means that they were a bad deal gary jet still has access to the airport and still a title to perform services so so both of those things confuse me about this fee at that time the the the authority had taken away this gross revenue fee for all time and it had taken off the table had waived for the minimum standards and what was going to happen and this is the settlement of the previous case was that this century there was going to be a rule making process for new minimum standards there the authority was going to develop these new minimum standards which were not going to include entered into this lease meant was entered into it and the idea was now that there's two competing f b o those at the airport there had to be rules that applied across the board and carry just her feet to that which is why they we agreed to subject our lease to these new minimum standards which were going to be developed through this rule making process that the parties had agreed to act in good faith to develop and what happened was late in that process merely objected to that and the response to that we got was well now that your lease is subjects to our rules and you're you're you're bound by this gross revenue feat regardless of whether you've actually greed to it or not and that's why there is a contract clause violation if you're just there doesn't feel like we're talking if we're talking about contract we're talking about what the parties contemplated what they agreed to but given i think given  had anticipated here that the gross revenue fee would now be a part of the new minimum standards and if that was foreseen use of the language a that's a fact question and as we've alleged that we obviously this gross revenue fee was a big deal which is why in two thousand and seven it was specifically negotiated away that's also why in twenty fourteen to specifically waived in the settlement agreement they did it in a very strange way and i just want to throw into additional thoughts one is if you just an ordinary contract or an a and b you know a is going to still be a thousand units of something and b is going to pay some money and then all of a sudden be sends a message to a saying i'm adding one more cause to the contract all disputes are going to be arbitrated well they may say you know that's you can't do that you know that it's not part of our grima and it would breach the agreement if you insisted on arbitration or what have you so the law of contract accommodates pretty easily the addition of the new provisions it's all sorts of stuff in the u c c about that among other places zero seven so that doesn't bother me too much and i feel so you're inverting the contract clause but the supreme court said in such cases as united states trust against new jersey is that you need more than just a simple breach of contract before you're going to see an impairment of a contract for purposes of the clause but it doesn't mean that you don't at least need a breach i mean how could you have a substantial impairment a change in law that is impaired that the relationship in the impairment is substantial you're always going to have that so it's like a breach plus it's not just free standing you know we've done something you don't like yes you're a i think with what the issue in the way that we read those cases in the contract clause is is the idea that ne halling reference is that contemporary music group case but it doesn't mean that when they do that the first thing that has to happen is that what they do diminishes your rights under the contract to the point where there's been a substantial impair and you know that's just a different way of saying breaches your contract any other diminishment of rights under a contract like an arbitration clause or whatever you would just say that's a breach of contract but it's got to be more that you agree you got rid of that clause that said the contract prevailed over the f b o rules twenty fourteen it changes it there's what like a year and a half or so where you're protected and then that crux of it you know it why isn't it in our view not a cut breach of contract case is really for the same reason articulated by the city of santa ana in the ninth circuit that it's not the that again taking which is the pleading stage was not specifically contemplated by the parties in their contract including at the time that twenty fourteen lisa met if that's the case then then the basis that the authority has to rely on is not that this gross revenue space and that's why i mean really a thing actually happened yet with respect to this is this all just sort of this preliminary hypothetical debate to say if you've been paid the extra money your honor we have not the the authority to try and collect the chorus revenue fees if if the court determined that that and then in two thousand and fourteen didn't subject carry check to the gross revenue for the profession you know by its contractual language well your honor that was the whole point of that concession argument that i should have conceded at the district court level that i would never raise the minimum standards as being valid in authoritative as to be able to run an airport and the reason we didn't do that is a they didn't bring a kind of breach of contract action for the two thousand and seven lea was is a blanket waiver of the liberty and the forty of these minimum standards would have been i don't know what a state court would have done with that as a trial lawyer making a blanket waiver  court relating to the validity of those standards presented to me potential problems down the road that have nothing to do with the but to answer other question about whether or not we could rely on the contract this standards and the leases go hand in hand and they're mentioned within each other so everything the council has argued relating to whether there was an agreement what the agreement was this role contract construction issue but here's what worries me about this it does seem that the parties had a course of conduct i'll say which involved the particular negotiation about this one point five percent fee on gross revenues and you have it in all the way back to you know the early ninety's you got it in two thousand and seven and it's it's going forward and indeed there comes a time when in lieu of that  gary jed is told no you know we're not going to pay in that form that we have this other supplemental rent form that we're going to have you pay and now as far as i can tell they're still having to pay the supplemental and then on top of that they're paying the one point five and so it seems to me it changes this course of dealing between the parties in which there is going to be an expressed negotiation about the price of the contract and there's hardly any term of a contract that's more important than the price so i can see where gary jet is saying wait a minute you know when we said you could have these f b o rules you know maybe that's how many hours you're open or how many gas you know lines you're going to have real whatever or there are all sorts of things that you regulate in an airport but a fundamental provision such as the price of the contract where you're happily collecting the alternative price as far as i can tell  is quite troublesome well for first responder that it's nothing new the the minimum standards that always contain a gross revenue fee and while the city's parties though that is correct your honor but in two thousand and fourteen there's a settlement agreement and in that settlement agreement specifically says until the new minimum standards are in effect if the word agrees to waive the requirements and sections and the most important one is seven a seven amendment so your holiness on this word until because i mean what gary jed is saying is you know maybe at best that means there's a renegotiation or something you know we get rid of the supplemental obligations and you're you're in a have your cake and eat it too situation it seems the the also the two thousand and fourteen amendment the only change to the contract the only amendment is to do exactly what you are said before which was to yes and it's one of the main ways that an airport can even operate something as important as an airport do you think that i don't know how well do you think that  however i was there the whole time and he did have some trouble getting around that issue and he did i believe that is correct without prejudice meant that if we go back to state court and we raise this defense to a claim it hasn't even been brought on a breach of contract if if we do that then perhaps the believe in the possibility they were in appropriately inactive and some new legislations coming out from the outside to affect the party's contractual lation ships in such a way that we wipe out the remedy i think that may have been his concern yeah i mean i've been trying to figure out in a contract sense who breached what you know or like you raise the price you say with justification they say no so so there has really been no impairment of any sort of their activities there what is the bottom line in your few oh i'm sorry i don't know that exact a well actually one reason we don't know that is because one of the other things in the minimum standards than human services would like to get an idea as to how much gross revenue gary jet center is actually making off of their activities at our airport and they refused to give us those numbers and no discovery easy cases all of you agree this is difficult so i came back i just the original argument they have really haven't been left without a remedy they could easily go to state court and one thing i would like to point out is the two thousand and seven lease and maybe this is they said that one of the reasons that they didn't want to bring that case in the case they should have brought it in the breach of the two thousand and seven actual agreement the lease that exempts them from first re supply one of the main reasons why that breach of that lease wasn't brought in this case with the district court is that was a choice of venue provision to go to the state court in the event of a breach of that lease they're saying that well we didn't do it because we anticipated that you would argue that a minimum standards somehow trump or whatever the lease but in effect they just didn't bring that case in my view because there was a choice of venue provision now of course just to state the obvious if there were litigation in the state courts whichever party thought this would be helpful could raise a federal contracts clause argument exactly they could s i agree right if you have no further questions apparently not so thank you very much thank you so much thank you mr harold you said some time under this court's decision in any of hauling and i'm i'm quoting a claim one of the contract clause need not originate in a state court and further quote the plaintiffs need not first discover in a state court action but the law prevents a remedy for damages so here just a doesn't think it had to start this case in state court and come here in really the reason why is is the ninth circuit's decision in the city of santa ana which there just are believes controls the case as the facts are alleged by gary we understand that the authority has a different view and there provide a different view of the facts in their brief but we believe on the facts alleged in the complaint gary justin are never a creed to a gross revenue fee that was going to quadruple the and that this was inserted later and that the justification similar to the justification the city of santa was there was a provision subjecting your lease to our regulation we put in a new regulation so tough you're stuck to it whether you agree to it o