good morning may it please the court i'm tom kline i'm here on behalf of rolls royce corporation i'd like to save a couple minutes for rebuttal what i want to do is just talk about two points that are issues raised in the briefs but not repeating what's in the briefs because i know the court's familiar with the arguments already made and in the record the first is rest with respect to the section one hundred five factors and really how the principal place of injury is in texas and that shows why judge mcdonald got it wrong about where the principal place of business is that's also in texas and then second brief comment on the policy issues that are raised in section six of the restatement so on the first point the economic  show me let me stop you and ask you one question seems to me that heard corporation versus friend is the appropriate case would you agree with that absolutely for all the reasons we said primarily in the and in the reply brief we cited a number of cases have said even though friends but the magistrate judge said it and he used the right language nerve center we think if you read the opinion he really is looking at the operations and if you look at where the injury happened so look in that section one forty five fact a place of injury agree that the economic loss occurs where med trans sustained the economic impact of the lost and the record reveals that all of the financial stuff takes place in texas the witness the corporate represent of witness that they produced kept sane corporate takes care of that the financial stuff the acquisitions the decisions about whether the buy a helicopter to go into a new location all of that is done in texas so the economic impact of the loss of this helicopter when it went down in south dakota was felt in texas where the finances are what they do in arizona is they keep track of the paperwork they make sure all the pilots are licensed to make sure that all the aircraft they're running are properly certified houses i've never figured out from the brief to the of a lot of planes in in phoenix is that what is that how arizona gives contacted it is clear to me you know argument that the corporation functions out of texas but they're arguing in the magistrate judge seemed to agree that there's something going on in phoenix which i never understood why as a repeat even people in phoenix unless all your all your helicopters are there well the reason they're somebody in phoenix is bert levesque is actually down in tucson knew the guy at the f a a office in scottsdale and so they've chose to song because of that relationship there's only three aircraft actually operated in arizona by med trans out of a fleet of sixty nine aircraft that are operated in fifty different locations around the country and with us so there's nothing you know there's nothing to do with the function itself that required person that's an office and the f a a would have let them put that office in other places too if you look at the regulations they could have chosen any place to put the f a a office on the f a a would say ok you're going to deal with this field office so all of that c f r stuff that's in the record explains how that process works but it's the let me stop just a little bit because thing we got a little bit ahead of this because seems to me that your opponents suggest that hertz is all right so friend it is how we determine where the principal place of businesses which is one of the factors under restatements section one forty five so even though they consider they say arizona  laws binding here it as an eight have anything to do with federal law you're using hertz to find where the principal place of business is under arizona law exactly the supreme court said look there's lots of tests that have been used to determine center arizona choice of law that's the only one well under arizona choice of law you look at the restatement second factors one of the factors under section one forty five as place of business comment he makes it clear that you look at the principal place of business which makes sense they follow the reste sure and you have an arizona case that says that the nerve center test is what they mean by principal place of business in arizona we don't have an arizona case we cited a number of other cases in the a number of federal court cases from around the country that have done that but you know it just makes sense that as a u s supreme court case that defines how you determine where the principal place of business is but again if you look at that the economic impact of the loss that is the place of injury it's felt in texas at all they felt honors on is now they had one less helicopter to keep track of in terms of the paperwork in texas and that would have been true wherever the helicopter went down absolutely absolutely the proof of loss which is that record one twenty five or one twenty five is prepared in texas was filed in texas was given by the chief financial officer who's in texas to the insurance company star who's based in texas so that's more evidence that the loss was the impact was felt in texas and then that also informs why the principal place of business that is relevant in this case is in texas so now you have two factors overwhelmingly showing and texas is the place so then we look quickly at the policy factors under section six and i think the one that swamps us is the fifth one that looks at the policy underlying this field of law you here have a texas corporation that experienced a loss that they felt in texas were compensated by a texas insurance company which then brings a separate geisha in action in arizona why because the economic los doctrine in arizona might let them recover tort damages so this isn't about getting quote full compensation this is about the insurance company in texas possibly getting a windfall if arizona law is applied so this is smacks of crossing the line into shoes in a forum that will give them a better recovery and that is the policy underline this field of law we should not allow choosing a forum just because it gives them better recovery and determining where he found that we don't disagree with the facts what the facts are is tucson keeps the pilot's certificates make sure that their licenses are valid and that the aircraft are certified but the operations are run in the fifty other areas where the helicopter took off this one took off in aberdeen south dakota the pilot in command of that helicopter had the ultimate authority for that particular flight but the application of this nerve test to the facts do we review that for clear air you review a de novo and how do we know that that's the case that cited in our opening brief it seemed like just a generic case not one that really is about the application of the nerve center test so that if you have any more specific case that tells us that's the standard i don't have one that's directly on point but this is an out question of the application of the law as expressed in hertz and also the fact that the economic loss is felt in texas to the facts and based on the last being felt on taxes and  principal place of business there for being in texas texas law should be the one that applies and i'd like to reserve the rest of my time for  good morning may please the court peter mullan our home the afa star indemnity and liability company i'm also joined with counsel ross cunningham a fact question i do not have a case that says that the factual terminations for a nerve center test is fat quite well i don't think there's any dispute about the underlying facts the issue is when you apply the nerve center test to the set of undisputed facts and come up with an answer is that application of a lot of fact more factual or more legal i do not have a case it says that i also do not have a case in arizona that applies hertz to the restatement  and frankly i'm like my colleague i don't know there were any real factually determinations to be made all they had to do is determine what the facts were and they don't seem to be even even question novo well that that is accurate that as a relates to as to procreate the rules of law that right and that is correct yes your honor ok so then it seems to me then if we're talking about choice of law which we are here we are honored to noble review i agree as far as the facts as they are apply to the law that it would be to know as the rights to the fashion terminations like place of injury what's the importance of the  principle base of operation in tucson arizona to med trans those factual terminations should be subject to clear air well to the extent that there was a factual determination i guess but i am again having a tough time understanding why there was even any conflict he's just waiting facts that were there in the record well you know i believe there's even the factual arguments we've been exposed this morning the principal base of operation is actually it is not a mirror ministry of place in fact the record demonstrates that yes it is there for f a a a ministration but it also is the place where met trans has its operational control for every single flight that exists throughout the united states simply put without the principle base of operation met trance could not launch a single flight and that's because you have one employee who is in charge that in arizona but all the officers of the company are in texas the corporate officers a measure and are in texas but there's two critical things one you have to have a principle base of operations and the record disagrees with the statement that mr  n made that it was only chosen because of mr love relationship first of all mr low whether or not it was because of our relationship do you deny that it could have been placed basically anywhere the f a a doesn't have rules about where you place  company where to put their head of where the their base of operations yes there is a vice research one twenty forty nine which is cited in the brief and this is where the f a a considers the following factors in choosing the appropriate district office the geographic area of the applicants operation or geographic center of its root structure to the locations of the applicants key management personnel and other persons who have authority to make decisions on f a a related matters and three the qualifications of the district office inspectors with respect to the proposed type of operation an aircraft is the f a a who chooses where the principal base of operation is located met trans will apply and so we like to put it here which it did and even at that time the corporate headquarters was in north dakota it wasn't even in texas do you disagree with the nerve center test i disagree that it is binding it may well you're just saying hertz is not binding in arizona is that what you're saying and saying that as a matter of law hertz is not binding on the restatement restatement second section one forty five have you offered an alternative test i have not because the plain language of every statement actually guides us and that says that the court is to make a determination of which state with respect to that issue has the most significant relationship to the occurrence and to the parties then it also says that you add up all these contacts and you determine their relative importance with respect to the particular issue so this is unlike the kind of bright line rule that hertz was looking for for jurisdictional purposes this is more of a balancing test where the court is supposed to place and point the importance of the specific cont and that is what the magic but if i read them and if i read the restatement of the restatement one forty five comment on subsection two it says at least with respect to most issues it corporations principal place of business is more important is a more board contact than the place of incorporation and this particularly true in situations where the corporation does little or no business in the latter place these contacts are of importance in situations issues and situations involving involving multiple state publication so here we have their target about principle stated place of business then i go back to herds and herd says to the nerve center test printed bit company's business activities are visible to the public take place in the new jersey while it's hot top officers direct those activities just across the river in new york the principal place of business is new york it seems to me they're talking about the same principal place of business and therefore arizona's choice of law rules would incorporate hur to a t and i would definitely agree that in those circumstances that would be correct however i think that there restatement does allow flexibility whereas hertz really does not although it does recognize flexibility we're talking about and i have to noble review then i can be just as flexible as i want to be here just as the district court was flexible that's why i had use focus on the on my what my standard or a view was i'm trying to make clear that arizona's choice of law rules which is your argument is not they're not violated by heard's because it seems to me i'm bound by her and it seems to me that hurts makes it what it is and therefore i'm trying to say to you it seems to me on a did noble review you're going to have herds and you're going to lose and i would i would say respectfully first of all you're not bound by earth's because this is not a case interpreting interbreeding they versity east jurisdiction second of all unlike most industries the financial control is not the same as operational control in the aviation industry the principal pace play a principal base of operation in tucson arizona is a place where med transit directs and controls all flight operations which is the core business if you look at what hertz is talking about it's primarily talking about these high level executive decisions of financial control but in the aviation industry that is not where the corporation directs and controls its operations mr levesque is the only person at  arizona falls to every statement which is a flexible standard where that we don't have anything in the restatement that says when it's an aerospace case we look at the f a a when it's a shipping case we look at something else i mean you're adding that right that is i am i am applying the factual terminations made by the district court to this case in the context of the restatement and yes just as there isn't a case that applies the f a a definition of principle base of operation there is also not  arizona case applying hurts to section one forty five you argue in the district court that hurts didn't apply we did not because it came up in the motion for reconsideration was the first time that rolls royce argued that it was binding well but everyone was talking about the hertz test even before that right it was it was part of the analysis you and you never know what it was binding and it was small what difference does it make if everyone is applying that test whether it's binding or just the optional shouldn't you have said wait a second i think the test is something else it's something that could have men could remember but again under the even the analysis of her it's when you look at the nerve center and that's why i was focusing on some of the language of her it's what says you look to the place where the corporate officers control the business of the company here that is the principal base of operation in tucson arizona because that is where all flights are directed and operated and that is where the one and only person in the entire company resides that gets to authorize where not a flight takes off and that is an operational and a ministry to function we've heard your argument you have any further questions you have any questions all right thank you i think you reserved could i start shot on what bothers me about the case and i normally fall of the supreme court and i like justice briareus a good friend so i'm going to have a tendency to follow herds for reasons other than being a judge but the language that bothers me in the practice would normally be the place where the corporate maintains headquarters then it is a provided the provided is always the problem provided that the headquarters is the actual center of direction and control and coordination now you your opposition's is moving right into that is i understand their argument they're going to the provided and they're saying the actual center of direction  control ordination is in tucson because that's where they give direction for all of the flights and all of them was so tell me why you're right and they're wrong so if the aircraft isn't certified or if the pilot's not licensed can't takeoff that's what they make sure of in tucson but it's in texas where they decide to buy the aircraft and if they don't decide to buy an aircraft in texas tucson has nothing to keep track of who so who decides whether the plane is going to take off and whether it's going to be flying at a certain time and those issues to sign make sure the pilot is licensed and the aircraft are certified the pilot is the one who ultimately decides where the aircraft is going to take off because he's there  looking at the weather and other conditions that may or may not affect that flight that's the pilot in command that's the first page in the supplemental xor of the record that's attached to the reply so ultimately it's the pilot who has the authority the pilot in command but it is texas that's deciding whether to buy the equipment they're making all the financial decisions that corporate therefore texas is the nerve center who makes the decision where the planes are going to fly sits up schedules well this is a medical transport company so for example they aberdeen they get a call that they have a rack out on the highway they need a helicopter so they helicopters dispatched by the hospital they go pick up the person bring them to the hospital in south dakota schedules and where is that decision made yes we're going to go fly and take care of that accident that happened on eight well the decisions made in texas to open an operation in aberdeen south dakota and by helicopter to staff that operation then in tucson they make sure that that aircraft are certified by the f a a and the pilot has a license but the ultimate decision the key decision is made in texas to have a location in south dakota and who runs the location well the pilot and the crew who are in aberdeen are going to feel the call from the hospital to go get the people at the wreck but that's on an individual basis with respect to that call i understand your your answer thank all right thank you thank you cases now submitted to our indemnity versus rolls royce sixteen one seven two nine one his method and we'll now move to case one seven one zero one six one united states of america versus nature