or good morning your honour's may it please the court i am brian cannon for the plaintiff total recall technologies i would like to serve two minutes for a bottle but i'll keep track of my own time for anything very much away here because iran has total recall should have its day in court to hold pommel aki and oculus and facebook to account for breaching a contract and taking the technology that belong to total recall the first issue i would like to address and really the issue i want to focus my argument on today is the standing issue  defendants do not have standing to insert themselves into the management internal management authority of the plaintiff partnership in this action the plaintiff as you know is a hawaii partnership that was originally form two inventors in hawaii who had a great idea about commercializing a virtual reality headset they had a partnership agreement they filed for a patent they obtained and they worked on their technology they invested their own money and time and they entered in a continent to a contract with palm a lucky now when this lawsuit began the defendants took the partnership agreement the internal partnership agreement of the two partners in hawaii and said hey those guys didn't agree amongst themselves they didn't exactly agree how to pursue this lawsuit therefore the partnership black to authority and therefore the case should be dismissed the district court agreed with that argument and that was improper the defendants have no standing to take sides into a legit intra partner dispute between two partners who have an ongoing business and have an ongoing relationship and the district court was actually quite open about how there is no case law and no rule that actually supports its decision well what case alone rule is there that supports what you're asking the court to do we do have a case sure and it's from the eastern district judge called the sacrament not a binding case not a binding case shauna but there is one case and that is the case that is closest on the facts to here and that case in fact cited a treatise the bromberg and treatise to which says a third party like defendants oculus and palm same claim and that interchange in an eastern district as i understand it there was some assurance against there was a release that was provided by the allegedly disagreeing partners so in the eastern district there were two parties just like we and didn't follow through the internal procedures to get that case going it's been and can't say this was an unauthorized case by facebook the defendant can't get into what a corporation an internal process and so then if it turns out that the court not to be subjected to all that well i think in that situation that's a very different set of facts than we have here and there are defend might fairly say hey i'm being subjected to multiple suits on the same claim and therefore recall it's suing in its own name it's not suing on behalf of anybody else this is not a representative authority case this is the plaintiff suing in its own name you know we've we have if we get into your theory we're going to have to examine the powers of the partnership and it's appealing argument i'm not just discarding it all but the partnership was would have to be decided the rights of the partnership would have been just cited under what law well this was a whole y partnership between two partners based in hawaii and the rights that would have to be worked out and under my theory your honor i don't think the court has to delve into who has what rights within the partnership that's for the partners to work out and in fact they did that in hawaii well that's that's true i understand that but we have to look some place to what how partnerships are to be dealt with in your position is is the hawaii law that we will look to for that correct your honor and in fact the the partnership then when they had your theory as i understand it is that the district judge was off on the wrong foot at the beginning because he was treating the cases coming from two people instead of a partnership exactly you know if we accept your position  you still are going to have and we'd send it back for four that you would still have to deal with the statue limitations issue that's not correct this case was filed in may  fifteen and under black letter law the filing of the complaint tolls the statute of limitations so the you would have a relation back that the partnership was w the moving party at that time yes in fact and what's your best case for that well under hawaiian law and well the statue limitations we would apply california law in this case the internal workings of the of the partnership is hawaii law we're looking at california statute limitations law because we filed in california where defendants are located and you run i think we cited the california civil code that cases commenced  on the filing of the complaint and the initial point of was always told recall this was never an individual person filing a complaint this was always the partnership filing its complaint now the district court didn't take up that issue  that was if we agreed with you that it would have to go back for that would have put exactly on it would have to go to the district court in the first instance because the district court was never presented with a motion on such limitations the defendants never pled statute limitations as an affirmative defen and the district court never ruled that my understanding of the district court's ruling was that only the second ruling was that i told you what you have to do to get rid of this other problem summed up what the district court did all of the district court did not address the statute of limitations issue what's where the district court made no rulings on the statute limitations so if there's any discussion of the statue limitation but in fact there wasn't an attempt to refile the for it to  itself it doesn't solve the problem so why isn't that the end of the story no one tried to do anything else i mean you're suggesting that you now can go back and file essentially refile the case as of thought either with all the time told or not something like that right well your honor i actually disagree that we would have to refile the case this case was when filed in may of two thousand and fifteen well that goes to the point one but i judge all subs he'll it wasn't proper when filed in may of two thousand  was she crafted a new corporate structure is quite elegant as a matter of fact she she oversaw a mediation over two or three days between the two partners and the end result was one partner with drew from the partnership he kept a financial interest the other partner stayed in the partnership so the partnership as a legal entity under hawaii law continued on one partner withdrew the moment he withdrew from the partnership he no longer no longer had any power with respect firm was retained to represent these people i didn't understand that but he said one to have specifically these two people indicate that they favor the suit and you can't do that but your position is i take it that he is making a wrong request because he's dealing with individuals rather than the partnership group exactly so what do we deal with how do we deal with that when the district court says you have to do a but if we accept your position you really don't have to do to tell the district judge that he was wrong in making this request and to go ahead is that your view yes  district court may or may not have been wrong when he made the request because after he made the request the corporate structure changed the partnership on the judge the crupper structure well the partnership one partner on the judge lou settlement with know that left only one partner that had power over the partnership and one thing you said i wanted to call the court's attention to actually that the words in the settlement agreement because before the one partner w drew he signed on to the settlement agreement judgments settlement agreement and the words in the record at page fifty are this settlement agreement is intended to and authorizes and allows eager to control and pursue the california lawsuit so before the withdrawing partner withdrew he did make clear that he was giving all of the power all of the authorization to total recall and the remaining partner once he withdrew he could no longer ratify anything because he was not a partner in the seventeen and reserve some time ago and find that and get that for you thank you very much and we're in the record is that right in that you just referred to that you said occurred before the hawaii court that the settlement good morning at least the court lauren goldman of mayor brown for applebee's ronnie right unilaterally brought this suit into his name in order to get rich from palmer luckey invention of the rift the partnership agreement which departed from underlying hawaii law t r t his partnership agreement clearly provided that both partners had to agree on any action undertaken by the partnership now where we find  honor go ahead if you can see our one fifty five is the portion thank you so the turkey to your t partnership agreement departed from the underlying why alliance said both partners had to agree on any action undertaken by the partnership and a law allows a partnership to agree from the background law that way the last word from side all to before this lawsuit was filed on this subject was the following email again do not take any legal action against palmer either then went ahead and filed the suit unilaterally and he put t r t s name in the caption this is not an issue of standing if either a had sued the defendants in his own name the defense would have come in and they would have said look who are you we don't have a contract with you we didn't deal with you you can't sue us so instead it grow without the consent of his partner went ahead and filed a lawsuit and put his name in the caption that is a fraudulent suit and defendant certainly have the right to come in and say look you're not t r t you can't speak for t r t because you didn't get your partner's consent and that's required under the terms of the partnership agreement this is not a question of a standing defendants always have the right under both federal procedure and california substantive law to question the capacity or the authority to the of the plaintiff to bring the lawsuit that's true but it can always that it's not something  automatically lose you can always take care of the modification make a modification to meet the objection i'm sorry on you can always amend or make modification in order to meet the objection well are you sir are you saying that there is no way to cure the no you are not at all to that but there are two problems with what happened here first of all you can only cure until the statute of limitations runs we say that a half a dozen we don't think it's a valid appeal there were several problems here what happened was this so the lawsuit was filed in may of twenty fifteen the to the plants conceded below that they knew about the basis of the claims they said th lawyers i agreed that this suit should go forward maybe that would have been sufficient we could have had litigation over whether everything you just want to put sufficient at least one no we got the special limitations on the contract claims didn't run until three months later after that frankly by the time they entered into the settlement agreement which purported to ratify which didn't get to that and then it why it was not sufficient but by the time they got to the settlement agreement they reached an agreement in principle in october of twenty sixteen the statue of limitations on all the claims had run a month earlier there is no case no case where a court has told the statute of limitations for a complaint that was filed without authority at that point it was too late to cure it that would destroy what the district judge said no the district court said it didn't to or for other reasons because there are two problems with that settlement as a means of cure and the charge is also one with one and not the other come back nick has to just be good specifically made a ruling on statute of limitations he will that some of the statue of limitations had run on some of the claims and that he was willing to consider allowing them to move forward if they could cure it and proton that's what and that's what we have before us is still open the issue is no no your honor it was not i thought it i thought you just told me that he was by the time he issued his summary judgment only he is he you should he said that in his final order dismissing the case in january of last year by which time the statute of limitations had run on all the claims he said by way of explaining why it was important for sidle to go back and bless the lawsuit from the very beginning which side he said steadfastly refused to do just to be specific and clear he was there for consistently with your position because he thought if sigal had court can also hear from on the very grounds that judge alsop adopted which i'd like to speak to him and this didn't gratify anything it did not sidle consistently refused to bless the suit from the beginning he was the was show me both of these people in writing that they agree and apparently if that happened he was going to let this suit go forward but that the that it seems to me  is brings a question that counsel was racy that he was wrong in looking at these people as individuals he should have looked at the partnership benedetti and that's where he want to stray no he didn't go straight all your honor because the partnership agreements the cif suit that the suit was illegal because there was a veto against either at the time that prevented him from bringing this suit sidled defended himself in the hallway action that brought to try to force settle to agree to the suit the suit was on this district courts trial california law district courts under under the procedure of this court have the a the power to consider whether whether ratification of a defect in a complaint like this one a defect of authority a defect of capacity can be ratified and under what conditions that's the c l case that we cited in our brief why wasn't the statement that counsel referred to from the settlement agreement that he said it was a year fifty page to th had indicated that he did authorize the california suit to continue why is that not sufficient to be going forward and going backward ratification for several reasons your honor one reason is that the settlement agreement didn't i'm sorry the settlement agreement only runs to page right this is the quit claim that's attached and i somewhat agree but in any event there's another problem here which is and this is why defendants do have the right to challenge says no i made that agreement on my own behalf it's my right to sue defendants in order to get these damages that's why they specifically gives an opposing party a right to come in and make a specific of raiment and say that the opposing party doesn't have authority to sue in the name of another that that eager did not have the authority to sue and here at his name or that ther thought that your main defense here would be that there was no agreement with t r change but that that was one of the many arguments that the defendants made on the merits of the district court never had occasion to reach that issue because it found that there was no authority the court said look sidle has followed one point in a lot easier to simply look at that agreement and say that agreement is not with t r jane well but that's not the route that the district court took your honor the kill this was adjudicated you present that yes we absolutely did that the district court said in one of its opinions that i'm assuming without deciding that this agreement was made on behalf of t r t so this is not like the dell bond case this settlement agreement between and sidle that's exactly the finding that the district court majorana and this is why under that c l d case that was cited in our briefs the district court correctly invoked its discretion not to approve this ratification in addition to being after the statue of limitations that this this agreement ratified nothing what the district court said was it was a smoke and mirrors workaround that was designed to let sidle ovoid ratifying anything and sit back and then get thirty percent of the ta judgment proof shell and get thirty percent of the taken any lawsuit and he was not permitted to communicate with or cooperate with defense counsel he was prevented from talking to us he was the one who had dealt with lucky and we weren't allowed to talk to him this did not adequately or fairly ratified this lawsuit he said cite all this it is undisputed the following things are totally undisputed ok why a law governs the construction of the partnership bring this lawsuit it's undisputed that the statute of limitations had run by the time that they entered into the settlement agreement and it's undisputed that the district court found in his discretion that as a matter of equity and justice the settlement agreement didn't accomplish traffic ation so eager never had the authority to bring this lawsuit and pretty archie's name in the caption the district court found that he did not is a matter of form this is not one person suing on behalf of one person suing it's the partnership suing that's what it says nick but here's the point out there's nothing to stop me from filing a lawsuit that says united states versus well i'm a taxpayer but that doesn't mean i get to speak for the united states i do say and i understand your position but but from a position of just procedure it is the partnership that is the plaintiff in the case right nominally yes but ok ok you have ways of attacking that but the position that the true opposition is going to say yes but we have a right to cure any problems and they will say we cured the problem by the partnership among the partners making a decision which no meets the partnership a valid party back that's what they're going to argue and that's it and why would you say that's wrong for and mirrors smoke and mirrors this is a smoke and mirrors work around societal never did the district went in and the district court knew all along that something very funny was going on here he said steadily has followed one fix start to refuse to give any perfectly proper in holding that not only did this not satisfy his conditions it didn't satisfy any reasonable meaning of any reasonable why at the point at which side of the partnership and eager is the only person in the partnership can act on behalf of the partnership including ratification back to the at beginning because it was too late to honor because it was october of one i understand that but that's not the reason judge as you told me so therefore we in order to affirm you we have to get to limitations question well not necessarily your honor yes you can affirm on any grounds and the facts and the like but presumably thought the following and they presumably thought to follow that once there is only one partner that partner can act on behalf of a lawsuit i understand it's not what you told originally proposed but what is wrong with it in terms of a way of ratifying the lawsuit if the lawsuit is ratify a bill or what did what judge also found was two things one that it didn't cure the prejudice from defend to defendants for having to litigate on the instant an authorized lawsuit for several years but it's now to authorize a lawsuit if it is ok and the other was that the agreement was collusive and problematic and therefore didn't accomplish what c l d says the california case one of the california cases that w dismiss an action if the defect is not fixed within reasonable time and that such a defect is remediable only where it can readily and easily be cured without prejudice to either its opponents or the court that sealed the construction one twenty fourth at eleven fifty t they have not cited one we have not found one that permits ratification of an unauthorized lawsuit after the statue of limitations had run has run the facts here underlying the statue of limitations defense which we raised at the earliest appropriate time after they tried to ratif you allow this one corporate lapse cases you know absolutely not your honor we stated six cases in our briefs they all have different facts the doctrine has been applied in the corporate tax context where a corporation loses its powers for failure the trust the defendant said you didn't have the authority to bring this suit without the consent of your code trustee and the court said that it was proper for the defendant to make this challenge at the time when it did under rule nine a which squarely that's incorrect for a variety of other reasons your honor that that's incorrect that you run the united center will not and does say that it that it that a party can challenge the opposing parties authority to bring suit in a representative capacity our argument of course is that did bring this suit in representative a and of capacity that he brought it with outside also consent i thought it was a partnership with who was listed as the put plaintiff there's your honor there is nothing in the world to stop anybody from filing a suit in the name of somebody else what we're  paragraph eight this is the declaration of ronnie us that he executed after the hawaii settlement agreement by judge lew in hawaii and paragraph eight he states i quote further ratify all actions taken here in so far on behalf of total recall and consent to the continued prosecution of the civil action by the law firm of quinn emanuel which is the condition that the judge judge also passed for so the exact condition was satisfied agreement when judge lew crafted the settlement as judge will simply judge what was already pointed out he was out of the partnership he had no power to ratify and in fact the only entity that should be asked to ratify is the partnership because that is the only party on the on the left hand side of the v the plaintiff is total recall there is no individual part of the representation that there were other the problem is that the with they're still have problems hanging on with regard to his ability to come back again because he has there are some attachment which i can't find in which he preserves his right to pursue right action property rights so your i would like to address that because that is a pretty silly premise mr rection i would say by counsel what this settlement is is the lawsuit which is an asset of the partnership remains with the partnership with t r t and and then as i quoted earlier on page fifty the settlement agreement is intended to and authorizes and allows through t r t to pursue the california lawsuit t r t had additional assets the primary one being which he can if he want to assert that is a very different that is not the same claim as the breach of contract claim that would be a patent claim so there may be other claims against facebook and oculus and palmer luckey but they are not the giant in house legal department like facebook and oculus do so maybe he could have written the contract differently but there's testimony that came out during discovery that this contract was for total recall misty put up the money for total recall as in was smoke and mirrors if he makes if if that was a finding of fact then doesn't that indicate that whatever was done in the settlement cannot be considered because the judge is fining something close to fraud did he ever make a ruling that there's to be certain absolutely not you know and i would strongly disagree that he made any findings in that regard what his finding was and he can't make fact findings because it's summary judgment this is all the summary judgment stage he ruled that the conditions that he set to proceed with the case were not met he did not rule that the settlement w fraud he did not say the judge lou had overseen a fraudulent settlement or anything like that there was no finding no concession that issue was not addressed by the judge the judge simply ruled i guess i asked for two declarations from these two partners they didn't give it to me case dismissed and i no response to that would be that as a matter of law that's incorrect that's correct as a matter of except for the following yes sensually just missed the case the first time with can the conditions conditions where you do x and y you can do x and y could be there for a just dismiss it for that reason no your honor one i feel he went beyond the powers of a court to say you have to do these things not to continue with the case but putting that aside the plaintiff could not do what he asked because of the settlement agreement which changed the nature of the partnership to some degree we have given judge also and judge lou has given judge also more than he asked because there are no longer two gran i understand you're contesting it but in terms of if he had not put this condition in well you know i think that goes to my very first point that defendants do lack standing to insert themselves into this contract but i mess with that's not true and you have the authority to decide when he decided the first time i don't believe you have the authority to do to decide they decided to censor think that correct if he did did he have the authority to do it without giving the opportunity for any kind ratification no he did not because the other side didn't move for ratification ratification was something the judge came up with that's correct by him so he could have not come up with an a but i think then we would have it if the judge thought that defendants are allowed to step into the shoes of one partner and if the judge here over time but ok ok quickly there was a little confusion by statute limitations i want to be absolutely clear judge also did not address that explicitly or implicitly in the order that issue was never before him and he never ruled on it it's not