judgment should be reversed for multiple reasons at bottom the judgment rests on a fundamental mismatch between the damages that him and i sought and it's theory of liability the jury awarded him in ma the profits it lost from the terminations of its exclusive distributorship with new faces but it's undisputed that new base of had the right to terminate the distributorship and in my has no claim with respect to that terminations but isn't there evidence in the record that that terminations would not have occurred to the distributorship had a new base of not been able to obtain services of the m r i representatives that's what they claim the judge chen but even accepting that as true that can't be the legal but for cause of the term a nation which undisputedly occurred before it that happens before we don't so with respect if i understand the record correctly the allegation is that apparently that's what the jury found was that the movie had a scheme or it basically infiltrated all of the sales people set them up to immediately come over in effect they gutted the organization they took its its assets if you will these people that have been highly trained took the right over and so if that's true that occurred before the termination of the contract so if that's right then your argument that the images could have been right is not necessarily induced but the fourth element of intentional and do see meant is is actual or disruption of the actual contract and that element and if that elements not satisfied the tort has not occurred and there are cases in california where  and m and i the agreements that in my alleges were breached are in the employment agreements which are perversions five point four and five point five which is that you are for twenty but i would like to s gist of close the loop on that point which is our third argument that there is no cause of no causal connection between the alleged inducement which didn't occur until after the yes are was terminated the e s r termination cost the profits that they sought cause the loss of the profits that they jury gave them that harm would have occurred even if the employees had not agreed if they'd had the meetings after the terminations the poison said no actually we don't we're not going to join there would have been no to tort hadn't occurred yet and the same harm would have already occurred as a matter of california law even agreement does say that the employees shall not induce or attempt to induced or assist any other person to induce or return to induce so why can't the predicate act of inducing be deemed a violation of the employment agreement because they didn't rely on that provision your honor no evidence to the record sports that's that that's what the employees them in my employees are not to do but they disagree judge dropped a footnote saying acknowledging that all the acts of of of actual breach occurred after the terminations but suggested a theory whereby new vase is induced the employees to induce new face of the terminate the s r but they don't defend that and for good reason that that doesn't make any sense so that they're in there is if i recall correctly there is evidence that that in fact occurred with respect if you employed in the correct where were you had  i contacted some employees before the contract was terminated told him what was going to happen offered them opportunities they in turn contacted additional  employees told them what was going to happen and a whole bunch of people that were talking and had it all set up now that's very different than just her medically sealed there's a terminations and there would be no damage just a laugh that occurred this is this is if you will a conspiracy beforehand and inducement to make certain they had was already because at least if i understand that evidence new basically would have never terminated this if they'd lost all the salespeople they couldn't function without them it was as soon ikhwan known of doing it in the first place so i'm having difficulty seeing that you can say well whatever happened before it doesn't matter because we wouldn't terminate the contract anyway and yet the evidence if i recall correctly it was that he would have never terminated it before without having set this up because he would have immediately failed he would have had no people is not right even even if there was evidence of the plan to to do after the e s r was terminated it's undisputed that the e s r terminations occurred first before the tort for all there was a tornado maybe i misread the evidence but as i just said to you i thought there was evidence that a number of these people were contacted before the terminations they were induced but the area in effect had deals they had jobs to immediately go to and some of them were actually celebrating before the contract was terminated isn't that correct even if you assume that to be true your honor that does not complete the tort of intentional interference with because they had to actually disrupt the contract relation or breach and the you can read the read brief in vain in this section of the brief and they are talking about a plan for actions that occur after and they are trying to defend the judgement on the grounds that even though it occurred after that can be about for cause and out poison or any employees and that shift their loyalty before it ever happens how is that not creating damages how is it not undermining him and them i am in my before the termination of the contract because what they were alleged were allegedly induced to do your honor is to compete against him and my and that didn't occur until after the tourney but if i could step back because the are larger point here is that the contract that movies have had with him and i allowed it to pay for the right to hire these employees and have them continue working in the same areas they stated that if in them i was in poor standing as no one disputes that they were if you base it had the right to terminate as nobody disputes that they did and upon payment it could choose to pay the so called stated percentage which here added up to one point one point seven five million dollars and for that payment they got the transfer of the compliance agreements that him i had with its employees and those in compliance agreements encompassed the employment agreements that in my had with its employees in order to ensure that the services of those employees could continue uninterrupted on behalf of new base if that's the does mean everything that's in there stuff in an employment agreement that have may have nothing to do with it your honor i think defines the limited itself within six point thirteen the term compliance agreement words define in quotes talks about inform seven sufficient to contractually obligate such person to comply with the restrictions contained in six this makes six thirteen it does your honor and then but it makes clear one two other things one is it's not just those restrictions which is what the district court believe because if you go down further like the third to last line of that paragraph it also has to compliance agreements also require sales represented to comply with the terms of section six point one zero and six point one two and it makes clear four lines or five lines above that that the representing shall provide new base of a copy of each complaint of a copy the compliance agreement is not an amorphous bundle of rights if the if the employment agreement that him i had with its employee and that's the only reading that makes sense of the contract as a whole if you think about it as judge smith was pointing out these are highly trained i don't see you i see that's the only way to interpret this because this is all about non competition with new bases this is a paragraph that i think defines you base of as having third party beneficiary status correct it is your honor but what the why would new face of being intended thirty party beneficiary of a deal between him a mind its representative not to compete against m m i it would be the third party beneficiary of any covenant not to compete with new face of the i don't see it all fits together to seems to me no your honor so what two points one the third party beneficiaries a separate argument this is our interpretation of the contract that but that's because it's referred to in six thirteen so it's all within the confines of six thirteen second of all it's clear that this the the beneficiary of this compliance agreement is new face of and there and this is about competition anti competition to protect  is the only way to read six one three which he talks about a copy of the agreement which is a freestanding agreement and i think when you step back and look at the agreement as a whole especially in context of chan it can't mean what you're saying because it makes no sense and makes eleven point seven and eleven point five basically neither of them perform the function that they're intended to perform let me ask you this the the if i recall record correctly the contracts were prepared by new base and right this was their base if you will form contracts the e when you read it and context the meaning of eleven point five and eleven point seven makes clear that the compliance agreements must be the employment agreements or at least they must in compas a release of any obligations to memorize employees have to of and if i could try to explain why that's it for you that i want to follow up on that point the you seem to be cross purposes here on the one hand you say there's only one way to read this that says point out the district court and read it that way i ask you if there's ambiguity how we construe that you say it's not ambiguous or very kind of going round and round obviously somebody read it differently than you did specifically the district court so we're stuck with this issue you know as a long term business lawyer i can tell you it seemed a little ambiguous to me so if it is that big of us in certain points don't we have to look at that construction this is this is the bases contract they know the contract they know how they want to work it don't we construe it against them or are you going to say though you have really good lawyers it doesn't matter no your honor i'll grant you that it could have been more simply stated than it is here but if you read it in context it's not ambiguous and the reason you can't read it the way the district court did and you in the can that you apply before you get to the can in your honour's talking about is that it must be read to make sense and if you read eleven point five and eleven point seven to not release the employees from their obligations to my then neither of those provisions will do what they're clearly intended to do which is to allow in one case in a material breach by an m r i in the other case when in my is imports standing and the stated percentage is paid to allow the employees to continue to work in the same sales territory and if i could walk  had claimed that we could hire them under that provision they would agree that we could both hire and have the employees work in the same territories but there is no sentence in eleven point five other than the transfer of the compliance agreements that release is them from their obligations to him and i the right to hire a loan is not what's in dispute the right to hire and the in the record there's an example where am i hired someone from medtronic and hired them they had the right to hire them they had to sit out for a year and not compete the right to hire is not the right to be released from your non competing it's the transfer of the compliance agreements in eleven point five that allows that and similarly in eleven point seven it's the transfer the compliance agreements that allows the fulfilling of the purpose that if new face a pays the stated percentage which again is one point seven mt five million dollars here it's a significant sum of money what they obtain is the release of the employees from their obligat so that they can ensure that the services of all represented affiliates which are included salespeople are continued uninterrupted on behalf of new faces if you don't read the compliance agreements to transfer the obligations the not complete obligations the employees had  then they couldn't work continue working for an invasive in eleven point seven they couldn't continue working for new faces in a material breach under eleven point five and in fact higher up an eleven point seven they could continue working for the acquiring company in the change of control situation and that your honor doesn't using these couldn't stay with them i am having the compliance agreement transferred which means they can't do anything against you basis are you saying that they could not work for m o mine do some other kind of work  not competitive with you basis if if the way that i read this agreement your honor the payment of the stated percentage transfers the employment obligations the employee has to my two new faces of the seven on four for one further new case of me at any time representative is important danding upon payment of the state a percentage elect to terminate this agreement and have all compliance agreements assigned to it and require that other reason otherwise judge chen you've paid eleven or you paid one point seven million dollars for nothing because you already have the right under the agreement itself as you noted as a third party beneficiary to enforce it if you if the employee stays within my if they choose not to if after new base it terminates the s our employees didn't all come say if they stay with them in my new base it already has the right to keep that employee from competing against it without paying any money it paid the money in order to have the employment agreements transfer and have them released from their obligations not to compete with them i that's why you don't get to the ambiguity can your honor because to read it any other way would make these provisions ineffective for their  minute you want to save any of your time yet commits a song about damages actually than whatever you ok because it if you are going to reverse the liability judgement then the damages judgement the punitive damages here can stand there isn't sufficient evidence under california law to support a clear and convincing evidence that would assure the reasonable assent of every person which is the standard in california of the types of behavior that punitive damages especially in a twenty million dollar word would be a violation of due process here because it grossly outstrips anything that would be warranted there for there's no reprehensi heard two weeks of evidence that new faces had formed and executed a plan to steal miss mat when that happened new vase of sued miss madsen was only after their claims fell apart if they were left with only mismatches counter claims which the jury ultimately found in her favor let me take the arguments in the order that miss maynard addressed them and start with causation number one were insufficiency of the evidence review so could any reasonable juror have found a substantial factor here the answer to that is yes it is two fundamental problems with the argument the new face it is making number one the resulting harm here just to be clear the harm is the last profits which start after the termination and twenty third twenty twelfth and go on out into the future that's number one number two what is the test what is the substantial factor test and i would i would urge you to look at the south coast framing decision from the california supreme court which is cited in the reply brief of new faces because it lays it out pretty clearly it has this antecedent word that they like and they talk about but then it goes on and it says if the injury would have happened anyway whether the defendant was in talk about negligence whether the defendant was negligence or not then the negligence can't be a cause in fact would it have happened anyway well the evidence here is more than sufficient to they were meeting with the raps continues in august the day that this all happens new base of has a whole team in las vegas with pre draft did agreements with an h r rep they  send on the on the e mail sending a termination letter and then everyone signs the contract the fact that you're a little clever and you hit send on one thing before doing the other that that doesn't get you out does your client assert the theory that all the conduct prior all the prepared for conduct the plan the conspiracy center was in fact the tortious breached breach so we or do you agree that the breach itself was the actual as you know terminations of employment as you know you're posing counsel take the position that the various documents and ball up here actually permit new to hire the employees of  my and if they decide not to go with them then they could compete by continuing on with the base even so on it was all part of a preset plan it was all understood that what you're alleging here is no more than carrying out what the contract allows i know you disagree with that but what's your best argument that they're wrong on that point so i've got a whole lot of argument to me the simplest one is they didn't even know rive it their theory eleven seven till they got to trial when they put their discovery responses in they said eleven point five is what we need to be able to do this that was the only provision they said justified their conduct that they abandoned that a trial they had a new provision that to me is indicative as anything else of why they're wrong but i've let's talk about the agreement itself and why it is that their agreement that their interpretation of it doesn't make sense and clearly it is not an  that's just not that's just not so so first off this pybus final sense of eleven seven on their hang their hat on now is it is embedded within the change of control provisions and we laid out in the brief why it makes a whole lot more sense to read it as a change of control provision only even if they're right even if it applies outside change of control it doesn't mean they get the higher the employees and have all of the employment agreements signed over it's not what it says it says you pay it state percentage you get two things number one you get the compliance agreements what are they where you go to six thirteen they're there to find their particular thing they're in non compete with new face of a right to be a third party beneficiary so they get that that non compete that protects them what's the benefit of getting an assignment as opposed to continuing stances of third party men for sheri so i think the most obvious one is asking you step into the shoes you become the contracting party it removes am i from the picture in the scenario where you've now terminated them it makes sense to say look you don't want to remove the distributor from the picture you now own these compliance agreement i think that's the most obvious reason why you'd want to do that the other the other thing here i think that when they say what has to be the whole agreement it's got to be because then it's not otherwise it's not much i mean think of a sort of simple hypothetical there's no here the compliance team it happens to be embedded in the employment agreement if they had drafted differently and they'd put the compliance agreement as a denim a or something i don't think there be any dispute all you get you rip that page off separately sign you hand it over but there's no there's absolutely nothing in this contract that says you must put the compliance room embedded in a larger employment agreement it's just a happenstance here so their argument that sort of the only possible thing that can make sense is the entire employment agreement gets assigned over doesn't it does not because that's nothing new that says it and by the way if that's true of the whole employment agreement signed over why are they signing new employment agreements on august thirty first if you have plenty of room is assigned over there now the employee of new base of obviously that can't be the case they sign new agreements it would be contrary to nevada law to assign that consent to sign of the plane agreement so what you get is this particular defined bundle of rights they got them and then you get that the second right you get is the reasonable reasonable steps in we talk better before reasonable steps means reasonable steps you might have to make them i might have some obligations and might have to make customer lists available it may have to make reps available to cover a surgery that's happening the next week i mean there's lots of things that would be perfectly reasonable and it would fall on m r i but what you don't have to do is turn over your entire business this is a human capital business and they took all of her human capital seven of her nine sales reps are trained employees who could have been out selling other things not competing with the base of the could without selling other things and doing all sorts of business that all disappeared in my having anything that they could put these folks to who to start selling at the pushed as much here that well that's too much to pay but i think the district judge was very clear that it's not for the court to sort of tease out whether that one point seven is the right amount of money to pay for that that's up to him by the new face of wrote the greenman but that's up to the  what the parties intended i mean the bigger the amount paid the more you would have thought they'd gotten for your honor i actually i don't think so i think because i think this is completely apt at the  discretion of new face of the other the other thing that i think it's instructive here to look at is what they're saying is that this contract effectively gave them a call right on mismatches business because remember they unilaterally control the quota system so they can raise the quota they basically can force her into poor standing and what they're saying is then we went to check for one point seven million dollars and we basically buy your business because we buy all your reference and human capital because it's not  you know that's that's it that's a very very strange way to write a call option so if we just don't think it's a reasonable idea that the the poor stand you something that is within the total power unilateral power of its movies have to set it exactly or honor it the other thing that i would say your honor about this is you have to look when you're looking eleven seven you have to go back and look at eleven five which says if they want to hire eleven five gives him the right to hire the reps if there's a material breach rate so they've set it up that right exists the problem is they got to trial and they gave it up they didn't have any evidence of a material breach so they they they switch gears and went to eleven seven but it's not that there's not a scenario where you get the raf's it's just that there wasn't evidence here to support that scenario drawing every reason why prince in favor of the verdict could a reasonable juror have found clear and convincing evidence the answer to that is yes i mean what was going on here you had a secret plot that went on for  months leading up to this you had a new face of being blind copied on sensitive financial information in stand up and say hey by the way your employees are acting totally inappropriate we know they were happy to get it you have the meeting with the employees you have everyone in the room you have frankly you have them being sent objectionable and insulting e mails that they never stand up and say a thing about and then they all show up and they of hires away all the employees this was not just an ordinary business tort this was not interference in one employee this was stealing the business wouldn't when the jury have found by clear and convincing evidence the new piece of new that they didn't have defense of good faith in the jury was entirely justified and on sufficiency review i think the court is obligated to reject the testimony that they heard that went to good faith and frankly that was almost not remember he cite in their brief was mr hannan who was the general counsel and let me say a couple things about his testimony number one he testified at length on direct exam about changes in the contracts from two thousand eleven and he said i explained those fully to the facts and went on and on about how explain these made a lot of explanations and he said what one of those changes we added that last sentence to eleven seven so that was going to be evidence you know that they should have been on notice of the problem was on cross he you're obligated to draw that inference against him that's one i gather that your position is that they couldn't have just been relying on the contract because if they were that would demand all these pretty meetings all the new employment contracts all the other things that were done before because if they were right none of that would have been necessary that is absolutely true and they don't even see it really i mean why on earth in discovery of their saying oh we're relying on eleven five which which gives us that hiring right they don't get to eleven seven until they can tell they can't defend eleven five anymore so the idea that they that they were there just in good faith you know they got this automatic right then you send the termination the employees and say hey now you work for us that is not what happened the jury was entitled to find what happened here instead was was a plot was a plan and was reprehensible and met the standard for punitive damages the the evidence really could only lead to that result but that's not the question here what retrying the case i think isn't necessarily inconsistent to do work about secretly the kind of recruit these folks thinking you actually have the right but you don't want to tip  evidence that was going on they didn't put anyone on the stand who said that was what was going on it is just it's not even a question of in the jury gets to draw you know the inferences we truck here the inference of the favor of the verdict but there's just nothing there's nothing that would suggest that what was going on here was in any event there's there's just nothing here that would say a reasonable juror was held to find good faith which is really the test it was a result you're compelled to find your faith absolutely not i've got just a couple minutes all briefly address the multiplier issue under state farm two point seven to one is in the heartland of state farm there is no reason to upset that frankly they did not make this argument a district judge but even if you're going to entertain it here it is it is well within the standard given the reprehensible it here given that this was a this is a classic case of a big business bullying a small business degree was entitled to find malice and reprehensible of the there and two point seven to one is perfectly reasonable under state farm where we've seen lots of examples of even greater multiples minimizing to fall and that gives him the right to hire employees that is true but then the letter goes on and says nevertheless as we have repeatedly discussed in an effort to effectuate a true smooth transition and so that the services of him and my sales representatives on behalf of since the day have terminated and judge smith it is perfectly reasonable business behavior to plan accordingly there and there is evidence in the record that there were other alternative plans they offered miss madsen to stay on as a consultant there were they were exploring options it's what any reasonable business would do faced with what we're faced let me just say i practice been us law for thirty seven years i have rarely seen evidence of a more extensive  pre planned attempt to take over business and i read in this case so i i'm not sure i feel the same as you do about the innocence of the whole thing what can you tell me that suggests that i'm just totally off base on that first your honor it's undisputed that you base it had the right to terminate the e s r that would have caused all of the harm that the jury has awarded full stop if that had been all that had happened there would be no different relief and it's undisputed that the agreement gave new face he was in him i was in poor standing and have been for multiple quarters the the nasty texts and emails are