that will be fun before i move to the legal issues in this case i'd like to briefly start by just explaining why what happened here was so severely prejudicial to my clients the union members so this scheme did not just involve some low level people occasionally putting a dinner on the corporate card although it involved that too the two key movers in this were alphonse yakob alley who was in charge of all of employee relations including the relationship with chrysler and then on the u a w side it was two straight vice presidents in charge of the chrysler docket so it was general holyfield and then norwood jewel so these are not low level people d s are the decision makers these are the prime movers these are the people who have the ability to influence directly influence the whole relationship between the two companies this went on for eight years from two thousand and nine to two thousand and sixteen and in the words of the united states these aren't our words or are allegations in the words of the united states quote the whole point of this scheme was to buy labor peace for fee out and to obtain quote company friendly policies and by keeping the u a w quote fat dumb and happy so i think i think it's important to view the case through this lens of we have an extensive record from the criminal proceedings that make clear just how bad this misconduct was so turning to the legal issues the union i think the best way to think about the cause of action issues the union i think to this day has not disputed that it engaged in agree just breaches of the duty of fair representation it had a duty to my clients to represent them as their exclusive bargaining agreement as their exclusive bargaining agent which it sold out in exchange for bribes and so once we have that we have sort of two pads if those breaches by the union also implicated breaches of the collective bargaining agreement then we do the hybrid the thirty one but if those don't implicate a collective bargaining agreement then we can proceed directly against the union just to remedy those breaches and so to start with the hybrid as we explain in our brief i think we have certainly enough to get past the pleading stage on the hybrid because what did here is the definition of a violation of the covenant of good faith and fair dealing the other side wants to say we can't point to any breach of a term any specific term but that's the whole point of the covenant it's it is an implicit term in every single contract and the gist of it is you can't take actions that while not expressly prohibited by the contract will none the less undermine the other party's rights and so what what's interesting here too is i think my friends on either side can speak for themselves but i don't think they actually dispute that there is a covenant of good faith and fair dealing they just claim that it's unforeseeable under three hundred and one and i think that's just a misreading of the law when you look at the th circuit local nine hundred and twelve case which we say it describes the covenant as the very life blood of collective bargaining agreements and the the court later for the proposition that the parties may not do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract so what you had is fee the union is supposed to be our watchdog it's supposed to be an a daily basis monitoring compliance looking out for grievances making sure that it is living up to its obligations under the c b a but instead feel co opted that and is sending them money to remain again in the government's words fat dumb and happy and so suppose we agree with you can you how was this right before the district court this argument you're making now yes so mr baker who argued that it trial so i think and if you look at page six of fiat's brief they give a long block where they claim we waived this or didn't raise it the next literally the next two sentences after their blockquote is where mr baker says no this is we don't have an express term we have common law this is federal common law and so when when you look at cases such as alice chambers in the supreme court the court is very clear that collective bargaining agreements are governed by federal common law which is exactly where the covenant of good faith and fair dealing comes from so i think i think this one actually your counsel didn't actually argue this good faith and fair dealing didn't use the language it was just a reference to common law specifically pled well i think it's i think this looks more like a theory rather than a claim we absolutely played a hybrid claim and so i think that i would view this as an argument in defend itself and we can talk in a minute about you know the harm arguments of the exhaust areas but i think both the union and fia were perfectly capable of raising defensive arguments based on what we were alleging in the complaint in the district court and so think there's no question i mean again given that they each had people go to jail for this i don't think there's any dispute over the nucleus of facts that's it's giving rise to this dispute and before opening reply brief but those cases are crystal clear that if you have a hybrid claim that ends up with out with the c b a piece falling away you can still proceed directly against the union because there's no difference the claim against the union in connection with the hybrid is the same as the claim against the union as a standalone and so so so we think at the very least if we convince you on exhaustion and harm we think we should be able to proceed against both but at the very least we think again given that the union has never disputed that it violated the duty of fair representation required amendment you're i don't think so but if that's but if  right ok what there was a really below the ocean you know so i think the the key thing about the stand alone against the union if you look at count two of our complaint is that part of the hybrid of course it is but everything in count two of our complaint could also stand by itself against you and i mean could i mean is that part of the case now that's all yes so our view is we don't believe we would need to amend to do that but we think if there is just some technical pleading detail we would respectfully request the ability to do that rather than have look at count two of our complaint every single thing in there could stand alone against the union and so just a couple minutes left i'd like to very briefly address the harm and exhaustion points so on harm of course there's harm i said at the very start that you know this scheme went on for eight years involve the senior most executives and involved more than a one million dollars in bribes we think the only thing that would be implausible is that this didn't result in some sort of harm and so it's not our burden at the pleading stage to get down to the nickel of exactly how it might have harmed all the union members but but we think our complaint easily shows a reasonable inference that that the union members could have been harmed and especially when you add restitution because the restatement and general principles of  that when your fiduciary betrays you at the very least you can seek restitution and so we think we'd be able to establish economic harm but at the very least we could try to get restitution finally one quick word on exhaustion so there's two types of exhaustion one under the collective bargaining agreement one under the unions internal procedures the collective bargaining agreement is easy because the parker case is is very clear that when there's allegations of collusion we don't have to go to the union to say will you represent us in arguing that the union in the company are our colluding or are or are breaking the law and so i think with respect to the collective bargaining agreement the unions the fact that we're alleging union misconduct gets us out of that and then an exhaustion of union procedures i think the court's on bond decision and chapman resolves that for us chapman is a summary judgment case it talks about three potential reasons to excuse exhaustion all of which we've alleged here and we think it's just way too early for the district court to be making findings about are the procedures adequate can we get class relief is the union hostile to us and even chapman i just again and again it talks about the record or talks about what you have to prove or what you have to show and so we we would just respectfully request the ability on exhaustion to build a proper record and to make or not make the showing in chapman but we don't think it's something preliminary remarks just underscore that the allegations in this action are really about an alleged violation of section three hundred and two which this court has recently held an old indoor there's no private cause of action under that statute as this court found there there's no private cost of action but that does not mean that the plaintiffs are left with no recourse as this court has held the plaintiffs have the option of filing a complaint with the which these particular plaintiffs have in fact done and they're in for spin actions by the prosecutors oh now term my attention to plaintiff's newly invented theory of a section three a one preacher of contract which as this court has noted are suggested was raised for the st time on appeal as judge drain found the complaint here does not allege a preach a violation of any provision of the contract they didn't attach the contract to their complaint they didn't mention a single provision of the contract instead the complaint restfully alleges a breach of contract theory based  section three hundred and two judge drains finding was not just based on the express terms of the complaint but plaintiffs expressed acknowledgment below that quote unquote they were pleading a breach of contract  quote unquote a violation of the federal labor law and not the expressed terms of the collective bargaining agreement by the p l o in apparent recognition of the legal insufficien submit the argument has been forfeited and any event plaintiff's new theory fails as a matter of law it fails because this doctrine applies to bad faith enforcement of contractual obligation it does not apply to bad faith negotiations and plaintiffs have not alleged any specific contractual obligation that was violated by of ca plaintiff's new theory also fails because it is well established part of federal labor law that bad faith negotiations is an unfair labor practice that is subject to the exclusive jurisdiction of the end of r p that was the finding of this court in  b jurisdiction the federal court only has concurrent jurisdiction when the claimant makes a bona fide breach of contract claim to hold otherwise would circumvent the primary jurisdiction of the n l r b over unfair labor practices by simply recasting statutory claims into contractual ones that is precisely what plaintiffs are attempting to do here they case the plaintiffs have cited where the court has helped an unfair labor practice standing alone without reference to any single provision of the contract constitutes a breach of contract claim specifically in the ten circuit case that you cited your honor it involve a specific clause in the collective bargaining agreement specifically a successor clause which required the successor to assume the collective bargaining agreement if the initial employer transferred operations to a new employer and the issue was whether they preached that suggests or say the collective bargaining agreements may include implied terms that doesn't go that far in your view i'm not saying that there's not an implied covenant fair and fair dealing in connection with collective bargaining agreements i'm saying it has to go hand in hand with a provision of the collective bargaining agreement nothing that's there's nothing in any of these collective bargaining agreements where the company the yacht agreed that they would not bribe turning back to the nd seven circuits decision and copeland which is from two thousand and twelve there they held the contention against in superficial bargaining in violation of their collective bargaining unit and again the court found it was subject to the exclusive bargained away from the plaintiffs most recently judge sue hari into shelter action rejected the precise claim that is now being belatedly made by plaintiffs here there the decelerator plain just made the same allegations but actually in the complaint versus on appeal and they said that the alleged collusion violated the breach of the company of good faith and fair dealing and in rejecting that theory judge sue her he said no under section thr complaint has to have non conclusory allegations establishing each element of a claim for most types of claims these include a wrong injury and some evidence establishing causation as this court held in wood and brown and the other circuits have a confirmed when unions to win union members to sue their union for breach of the duty of fair representation this means they must establish not just a breach but also an injury and some causation linking the breach to the injury there is no per se liability for breach of the duty of fair representation because the plaintiff's theory below was that they were injured by a complex stock sale the complaint only made passing references to concessions in other agreements that were simply background allegations to the stock sale having abandoned the stock sale on appeal as a theory of injury the plaintiffs are back to relying exclusively on these passing references to concessions or advantages that they allege were given in other unspecified agreements it's important to note that notwithstanding their rhetoric they're careful and they're careful on this there are actually no facts establishing that there was actually a concession ever made undoubtably that plea agreement established f c officials who themselves had taken money for personal gain said that their goal one of their purposes was to get a concession now standing years of a government investigation there's no evidence that a concession was actually made so all plaintiffs have are conclusory allegation in their complaint that that there were certainly edged in the complaint no undoubtedly the plea agreements probably say something about how much individual union members truck certainly the chrysler official himself took much more for personal gain passed on to the union but there's nothing about that in the complaint i don't think you could infer from an allegation if there is one of the of a large amount of money being paid in bribes that there was some effect from  that you're saying you can't there's just not enough in the complaint at this point to show that there was any kind of a fact of concession yes your honor there's not enough in the complaint trombley require more it's not crazy because although the government undoubtedly has been investigating with many more tools available than civil discovery they haven't come up with anything but even more than that if even if the court was willing to confer infer that someone somewhere made a concession the plaintiffs still need to establish that that concession injured then the complaint assumes there's nothing that says why you should believe and infer that these three plaintiffs were injured and how they were injured offensively the plaintiffs are asking you to st infer a concession and then on top of that infer an injury but it's unspecified as to what that injury is the complaint makes no allegations about how representative these plaintiffs are there were hundreds of agreements between chrysler and the u a w in this time period four major national agreements that were agreements that affected one person the recruitment that affected thousands of people their agreement that affected ten thousands of people we don't know what those agreements are we don't know which ones are affected plaintiffs the plaintiffs have been alleged wouldn't even  agreements they they were bound by if even the three plaintiffs themselves were subject to the same agreements there's nothing in the complaint about that and based on that even if this court was inclined to infer that federal confession was made there is nothing from which you can infer that a confession was made that harmed geese three individual people it's a kin to an individual bringing a tort claim based on a manufacturing defect where it didn't actually hurt them or there's no evidence that it hurt that just because there's a wrong in this case a breach a wrong by a manufacturer doesn't mean that you can just automatically infer that it an individual person was injured and less there's an actual injury the plaintiffs are asking this court to excuse them  requirements because the collusion was so offensive and it was offensive but that doesn't make it impossible for them to identify an injury and it doesn't mean that the standard that this court is the th in cases like new albany tractor and that the supreme part of sept th suddenly magically no longer apply to them as ms jordan indicated there is currently another case pending before the th circuit in which former employees of f d a filed a lawsuit alleging an injury in a very specific injury and injury about a two thousand and twelve agreement involving their plant in toledo ohio an injury that caused some of them to lose a job and others to lose seniority rights and those individuals were able to identify an injury o of job or seniority rights a breach of the duty which was the bribery scheme that the plaintiffs have alluded to here and elements of causation they walked through here's the two thousand and twelve agreement here's how it was here the union officials who are involved in it and here's why it's reasonable for us to believe that confessions were made that hurt us there is nothing like that in this case even the cases that the plaintiffs rely on like cox out of the th circuit which was another bribery scheme case the court in that case didn't simply say bribes concession end of story you've pled no there was an very specific injury people lost jobs there was very specific evidence of confession and the court walks through the evidence the evidence establishing that chain given these admissions in the complaint the plaintiffs are not entitled to discovery in the hopes that with enough c v a's and enough e mails and enough documents they're going to uncover confession somewhere that unbeknownst to them injured that the six circuit in new albany tractor made clear that they have to allege specific facts even if those facts are within the hands and the head of the defendant and their agents doesn't satisfy it ball and wobbly as to the remaining two issues very briefly i would say as to the standalone d s r claim it's certainly our position that they never told the district court that they wanted an adjudication on the stand alone claim they said the opposite when asked it was entirely pleaded as a standalone as a hybrid case as to failure to exhaust very briefly i will say that having admitted that they did not exhaust the internal union rabbit is this court spice decision requires them to allege facts sufficient to establish one of the exceptions there is nothing but noncommittal except conclusory allegations about hostility and timing in their complaint and the truth is the last step of the u a w process and is an internal process by an outside body the p r b which this court has multiple times reaffirmed its neutrality and its broadly media authorities accordingly at a minimum we believe that they failed to exhaust and having alleged that rebuttal st this argument that it's just a that our claims are just a disguised thirty dollars to claim proves way too much i mean of course there are situations in which criminal and civil law overlap and so you know to take judge bush is hypothetical if if the c shalt not bribe the other side under their theory you couldn't even enforce that because it would be it would be you know enforcing a bribery prohibitions i think is there a statement in the record that your sole claim for breach of the collective bargaining agreement is a three hundred and two violation is that accurate or not the complaint does refer to three o two but i think it refers to it and i'm not defending that as a standalone but i think there are references to three hundred and two but i think when you look at the jurisdiction al section it clearly refers to three hundred and one and there are certainly references to or there was a representation made today that you represented to the court to judge drene i guess at the at the are at the at the hearing that he asked well what is the breach of contract statement that they quote it was a breach of contract is this real to violation is that accurate or not i believe that what the reference was was i think the reference was it was quote a violation of labor law or something that to that effect which again i i wasn't there but i think it that could certainly fairly be a concern as you don't know what the record says on the i mean i'll look it up and you never know it's a reference to labor law and i think they're saying that labor law reference was ok the breach of the collective bargaining agreement is the breach of the law and that's that's the sole basis of the breach of collective bargaining agreement so there was some discussion before the district court which i'm not standing here defending about whether an offender and i don't you don't have to defend it i just want to know what the concession was both i mean we were so if if what they said is not references which i'm not defending to the notion that violation unfair labor practices sort of a purse a contract a violation mr baker also said we have federal common law we don't just need an explicit contract term in this is you can look at page six of the brief in the next two sentences after that is where he says matter and again i view these as i get i think both the union fee at knew from the start the factual allegations i view that as the legal theory which is not so much a pleading issue we have to put them on factual notice we have to under trouble you've got to get more than just factual you've got to be more specific to be more precise right and so to go to something like harm so you know the union continues to argue that this this this was a sort of no harm no foul situation well let's let's go to mr yucca valley concessions in advantages for f c a in the negotiation implementation in administration of the c b s quote that is exactly why they were made so i don't know how that's not a plausible allegation under it all when you have the leading conspirator for feet expressly rejecting the notion that this was just you know some money changing hands with no effect on anything in the same point goes to figure out also says feel it says correctly that we can't bring this implied to the covenant of good faith claim about the negotiations because that's not the contract that's negotiations over the contract except again we have lots of allegations the folks involved in this it wasn't just the bargaining it was also the day to day oversight they're supposed to be the front line defender they're supposed to be watching out for the union members interest and george bush to go to your question is there a is there a term in the contract that forbids bribery inclusion there isn't but of course the whole agreement is premised on no bribery and collusion the whole thing breaks down it presumes an adversarial arm's length you know vigorous adversarial process and when that doesn't happen the whole thing breaks down so i think if there's ever a search if there's ever sort of a term or an obligation that would be implicit this would be yet so the last thing i'll say is  counsel remind me there was a motion to amend which was rejected as futile so we certainly think that there is a live issue and again we appealed i don't remember see i mean we appealed the final judgment and that would be an order i think going into that in you it in your state of issues that the court abused its discretion by denying your motion to in they want to be clear it is an alternative argument me i take the position unless you put your statement of issues you have not preserve the issue you know it's there number three  and the very last thing i'll say is if you look at supreme court cases like baka the reason that in forcing the duty of representation is so important is because my clients the employees have no choice but to have the union as their exclusive bargaining representative and the duty of fair representation exists because they're in the spot where they have no choice but to have the union with all this power and so we respectfully ask that the court allow this proceed to allow them to get relief for the breaches of the duty ok thank you counsel we thank all counsel for their arguments