you what my problem is with your theory so that you can educate me out of it it looks to me is though what you're complaining about is it's really hard to compete with these people because what they  sell it is a deal where you get your coffee machine plus you get service and suppliers for several years and that means for several years you won't be a customer for anyone else  back rico theory is that there's talking that rises to the level of fraud in encouraging people to take this deal i think and the antitrust theory is that it interferes with competition and i'm having trouble seeing that because it looks to me just like anybody else's warranty or extended service and how warranty like you get it seers and they also try to talk you into getting a warranty and all your sears products every but every march and does that you go and buy a twenty dollar item brookstone and they try to talk you into an extended warranty you buy a good car and it has a warranty on it which means you don't go to the independent garages and and i'm having trouble seeing where anything goes you know on the ordinary puffing of how great the service this with due respect judge kleinfeld that's not even  new tire on the car one day before the five years expire that's an entirely different deal what they do is and i'll give you a perfect example of this the california nurses association has ten or fifteen copiers they coming toward the end of the five years they say we'll give you a three fax machine just sign this one little form and it has sixteen months and they're trained to say that sixteen months means your fax machine is for sixty months you can have it for sixteen months when it really means all of your copiers have just been rolled over and you going to pay for them twice for another sixteen months that's an entirely different deal than a warranty then it's take great writing there but you existing copiers are covered as as well as your facts exactly wrong that used to be in the language they took it out and when salesmen complained that customers were being deceived they said we're not going to put that back in because our manual wants the customer to understand that they're not being changed that it's not being extended because if we can get this extension we can hold them over a barrel at the end of the five year period and we can play off this huge payment which is a double payment for the equipment and all the unused service they want to cancel that time we're going to go in for all of the gross revenues of the unused service and when we got them over that barrel they can't go to the competitor unless the competitor wants to make a big payoff to get into that so you have no problem with them selling your copier below where you pay so much good pay age and for five years and they take your copy no problem whatsoever you're on your problems just for the renewal it just isn't renewable and that's that's what the defendants have tried to do confuse the issue of the primary market where i'm buying new copiers and i don't have a problem that's a free and competitive market you can negotiate your deals upfront what i have a problem with is the renewables when they deceptively they wrote a manual that says here's how you do it you tell the customer if he asked what the sixteen months means it means that's the period the new machine or that's the period of the new under the section that says unfair business practices it's one problem you have with a record like this if you're a judge is are just too much of the first amended complaint is your one ninety six years or several years tacked on to their contract and the actual pay for them you know a lump sum and what happens to them there is you're in a position where they have to pay fifty to one hundred percent more  order to get editors equipment than they do to renew with icahn or g e i've got to sort some things out here yes if they're being unfair to their customers that's not something that a competitor has the standing to challenge i don't believe and when you when you say fraud as you do it page two of two you say two things market imperfection not and has to be cleared with particularity yes big and i'm having trouble figuring out exactly what the fraud is supposed to be there are several elements of fraud your your honor i mean i don't mean just discurs we i mean where i can read it in the amended complaint ok the first one is icon represented that it's contract the lab flexibility to me it just seemed like a topic like saying this is a good car and i couldn't see work could be a false statement the next one said that it would last for sixteen months and and your own explanation does not seem to say that that was false that seems to say that a lot of the contracts or most of them were renewed and then the next one says that the contract was designed to meet the customer's needs and that's like saying it's a great car and then the next one says customer would fully amortized that except for a little bit of market research will value over sixteen months seemed like the same thing and that because it had a captive leasing company there'd be no arguments as when you get an independent third company's extended warranty and i'm having trouble seeing again and for the service for i can certainly be not telling material facts that are relevant and i'm looking for the false statement the false statement is that the flexibility won't hurt you this we're not and in fact every time they do that they are signing you up for another five months on this the moment i see that you're talking here about the training or icon training so that sales representatives but i don't see where anyone has that's not considered a lie but i believe they give me an extended warranty for free i mean i got an extended warranty on my sears refrigerator and freezer and all that stuff and it would cost me well that's what they're telling people ok it gets worse than that so when they design this form on which you sign up for another sixty months every time you make a small change which is the icon amendment form described in e r to twenty one they took the language ou of the described to the customer that if you sign this form you are going to sign up for all of the equipment you have with us for another sixteen months and the customers didn't understand this and the salesman said you know we have customers that are in for a big surprise they have no idea icahn left the explanatory language out it gets worse than that because they have a training manual your honor that says don't tell the three for example that they were trying to ask what the term sixteen months meant when it was filled out with a sixty icon three l's person were trained to say state that it was the term of the original agreement isn't the term of the original agreement it's your new amended term that you have to pay you have a customer here who says they lied to me they said this in the truth was that yes all i mean i spoke with four hundred around the country your honor who had said i had no idea they told me that this was a free to california this was a reason that it seems like what you're doing here is telling me they created their salespeople to either  that's the one we're just talking about the original extension here yes it comes to the end of the period there are several other things that i would consider a fraud the contracts with their originally sign or the amendments on the more months on your home mortgage when you thought it was over or on your car lease actually on my car warranty if instead of being a five year warranty or whatever it is it was a five year eight month warranty and be delighted but here's the problem you're talking warranty which is something they give you i'm talking payments you have to make and if you don't make enough sense for free it's like when you go in with store and they say buy one the second want to three well you could look at it it's free if you want to you could look at it as two for the price you want each is half price well this is not a warranty your honor this is an obligation by a customer to pay for equipment and services that are bundled service parts and supplies except for paper and what a customer ends up with and i have seen this again and again it is at the end of the fifteen month period they are left with machines that are outdated and worn and breaking down a great deal mostly good i'm going to go out into the primary market and i'm going to get competitive bids and i call on g e come in and say we're sorry you're with another sixteen months of pains and they say well wait a minute where did that happen well it's this is this  see that sixty there when we adjusted it a little bit when we were flexible you will with another sixteen months of payments for all this equipment that's useless you owe us another sixteen months of payments for services now we're getting out of the meat we're sent the amended you have examples of the specific representations that were made to one two three four five six seven eight pay money i thought you didn't represent any of the people that came when i thought you were presented a competitor the competitors paid money we have specific allegations in here we have listed and i'll give you the paragraph in the first amended complaint we have listed specific payments made by the plaintiffs in this case cash out of pocket paid by play it is in this case for these extended demands based upon the frauds they are addition to what competitive at least they have to pay this at the end does it say that that's what you mean here that the plaintiff voluntarily paid these people's bills in order to induce these people to switch over  to i can in g e on flexed contracts by plaintiffs i mean i'm sorry i didn't list each claim that it's not there you're right what you want to expand on thank you counsel although your time is exhausted planning on taking a minute or two for rebuttal ok thank you very primary markets which are essentially drawing a circle around this customer installed base and calling that a market that is as a matter of law an inadequate market definition and there are multiple cases that we  power because of the control that kodak had over those products that's nothing like what's alleged here here all you have is somebody drawing a circle around it installed customer base when you don't have any allegations at all about the icon having any kind of this so none of that works the whole unique quality of products simply isn't present here and there's absolutely nothing in that case to toss about kodak's deriving any kind of market power from the contract themselves and insofar like to drop your car off in the morning on the way to work at a convenient garage if b m w won't sell the garage an oil filter or an airplane or then it's looking for trouble under  that stuff and you just choose to go to b m w because basically you've already paid for your air filters and all cleaners in the hours of time that it takes to install them then there's no codec problem because enterprise and lack of specificity and the d a s case raises another potential attack which is the failure to adequately allege injury to the plaintiff's business and property we don't think you have to get to that because any of the other four things that we've argued below and on appeal work and work that i'm happy to talk to you about why if we had brought that is another claim we think it would have failed as well dearest case the dealers case talks about the fact that if there's a conceptual property right that exists under the state law then there is the fact that we adequately allege injury to business or property or diaz didn't do and we think if we however what isn't in the complaint and can't be played in the complaint is very specific requirements to state such a claim under california state law and so because there isn't adequate allegations to state that claim even though there's a conceptual right that if it had been properly credit plug satisfy that element of the rico clean because it's not properly planned you can't say you need rico by meeting the state claim if you don't actually meet the state claim from a pleading standard so supreme court held that a plaintiff and filled the state or rico claim under this very same premises that these plaintiffs try even though the plaintiffs claim the defendant's actions of failing to charge customers tax  plainest injuries and then they talk about the fact and they looted the state of new york not the plaintiff was the quote direct victim of the alleged rico tax fraud that plaintiff claims injured claims injury from defendants not charging the customer's taxes and therefore making it cheaper to go with them was to attenuate and so in that that's exactly our situation here that the predicate rico fraud that's alleged kleinfeld if it's the intervening act of the plaintiffs coming to the harm they chose to voluntarily pay these buyouts that's that's not there there's two different causes of their their claim that cautioning language from the supreme court tells you that this is not a proper rico claim under a proximate cause standard but i also want to remind you your honor it's because they're frankly was no response to it  expanded it to all of one in america has a much higher part requirements for pleading than that and ultimately what they came up with in terms of the five statements that i can purportedly to be false if you don't need the ninety five percent of the the other the other concern here you look in the allegations is that many of these statements that later on along with that but i also gathered that part of his allegations are the g e actually engaged in some of the contract hurdles is that is that you understand completely well there was what we administer the least we can take payment when you collect the money yeah we collect the money and when customers call with questions about the terms such as how much is remaining how many months are remaining what is my if i want to buy it out how much is that i think a good i think what you're saying is we don't so anybody the copiers we don't why did anyone or tell anyone the truth when they're buying the deals we just buy the paper from newcastle or from icon and then we collect the money from the customers and we had we sometimes answer their questions and that that goes to the allegation our collection of the allegations against the team and they were drafted in this way he is alleged to have sent by wire and mail or telephone quote unquote fraudulent documents to customers why are they fraudulent documents they don't say what the documents that they don't read what the documents say why they were fragile on why even had any basis to know they were fraudulent they just say these were fraudulent because they were based on the fraudulent icon flacks so what does that mean is it means that she is telling the correct information to customers under the terms of the contract but it is false because it was induced by fraud in the first place and that could be one theory or is steve's opposed to be making any independently for that one statement what we don't know that i mean this as drafted this rico claim clearly fails to nine i would i would argue that it no because whether it's a contractual power is based on the amendment renewing the contract or in a new original contract it doesn't it doesn't change the analysis i mean there was there was alleged fraud in doing in the extension but this court has already stated that alleged fraud in the to nocca case alleged fraud doesn't transform an improper market into a relevant market here the the moment that customers sign up for the original contract they have a restriction they have an impediment to switching providers because you know they have to pay the contractual damages same thing occurs after they've extended the term during extended to extended term they have the exact same problem please have a word just three quick points your honor one answer clearly is not a political decision because of the fraud there was a fraud on the state of new york they were not collecting or taxes and reporting false taxes and thereby taking money and the claim by a competitor was they had to be using that money somehow to make lower prices here we have a situation if you look at our two fourteen paragraph forty five where icons own internal document called engine management plus flex program field training manuals says we want to extend the contracts make a big buyout and we want to do that because it will cost our competitors a lot of money and keep them away from this flexing and making false demands which g e did this idea that they didn't make false demands they took these extended cut it wasn't about targeting it was about their work versus indirect harm i'm sorry i thought that the supreme court case was not about our prices were going to put them out of business for going to different cases but there's nothing like that in the record and there's a discontinue there's nothing to connect the two we have in writing connecting of the harm done to the customers and keeping the competitor out of the market now on the antitrust issue which is my second point very quickly substitutability means what products can i go to on renewable as an icon customer i want to substitute  what we have here are three facts that are alleged very specifically have been carefully calculated that that customer if he wants to go somewhere besides icahn has to pay fifty to one hundred percent more for the same equipment that that customer eighty percent of those is that correct your honor now under any standard the department of justice guidelines where they say you have to take a group of customers and see what their reasonable alternatives are given price suitability and why would eighty percent of the customers facing that steady market power the price discrimination if they're discriminating between two grief groups it means one group can be isolated discriminating between the new purchasers and