appeal but we are here because the district court precluded verizon from pursuing its ordinary common law remedies for a massive fraud scheme that involved literally over twenty thousand misrepresentations that we were able to verify that was told to us by over three dozen of code its own former employees and that diverted for rise in its workers and our telephone lines from serving other hon whose interest is being protected by file tariffs and i have to confess it's not the carrier's interest it's the interest of other customers because when when one customer is able to get for itself a preference in service quality or a rebate in price that's a disadvantage of discrimination against the other customers and the other interest being protected is the interest of the regulators in ensuring that the carrier is offering the statutorily required service or the proper terms and price those two interests the interest of the other customers in the interests of the regulators do not immunized everything in the relationship between a carrier and a customer the supreme court's most recent decision the central office telephone  decision at the end and in the beginning the middle is very careful not to say that everything about the relationship is governed by tariff in fact at the end of the station it points out that the communications act has a savings clause in it the quote preserves rights not customers so that the question is what part of this carrier customer relationship is governed is governed by filed tariffs and the two ways to look at that one is you can look at the contrary i judge iran aren't we and we routinely sue because the state commissions don't enforce the tariffs the state commissions don't hear fraud cases they don't even hear simple collection cases a customer doesn't pay us under the terms we sue in court to collect under the  think it's to our complaint yeah stronger action but not specifically for the relief cold that it at the time we asked for it my understanding is still was submitting massive numbers of false trouble reports causing our people in trucks their failure to form their obligations properly so that there was that but there are two others i'm not sure these were clear from the paper so i'd like to actually mix make sure the court understands these these two very concrete harms they're in a complaint and i think the district court's decision reflect them but i want to make sure this court understands it as well one is cold it achieved for itself a price rebate on the service we offer because if you submit anough trouble reports there was a rebate mechanism that the states and forced off the price of the of the total service so if i don't know what the total billings to cope it were here say it was twenty million we do know that we paid co they had a rebate of about two million other other customers of ours that only submitted real trouble reports from when they occurred and  the testing to isolate where the trouble occurred did not get these rebates got a preference that other customers did in the form of rebates that's one form of harm we paid them rebates the other is for one of the motivations we understand from co its employees for submitting these was that they didn't like the standard of quality that they were entitled to under the agreements is a little bit technical i apologize for that piece of it the agreement say that a loop company there's a mix of quality in the network but that the lines were laid over time they were late test the loops that we delivered in some instances and see that they were within the thirty that was that was the grade of the loop that they were entitled to but they wanted twenty or better because they were putting electronics on either end that added noise and so they wanted a quieter loop and then the agreement provided so they would submit trouble reports repeatedly until verizon eventually said to avoid the trouble reports will change the loop to their former employees told us that this was a practice of code that they didn't like thirty decibels loops they wanted twenty d end as an example of of an illegal preference apparently the train had fast trains and slow trains there was a side contract where the shipper of the race horses wanted only the fast trains and that the court in the earlier case said you can't you can't i think it is in the small number of millions of dollars on on a on a basis of probably billions to combat in the in the tens of millions of service providers they cause our people tens of thousands of times to get into trucks to look for horizon sell their d s l service through intermediaries internet service providers cope it could go to the internet service writers and say we're getting better loops than you can get from economy but we don't think about it you only we had the only discovery we've had in th the other purpose that would be served by by immunizing code as conduct under the file tariff doctrine is is is preserving the field that the regulators need to occupy understand and as i said as i said there's nothing in the statute that requires the regulator to police the customer's conduct and in fact given that given the nature of things that could occur it would be impossible for the regulators to deal with the customer's behavior i mean it is it's if you see if you look justifies where this is going with whether this is up or not i know that it's a standard provision in this agreement and in others that before cogan submits a problem report there has to be a real trouble that's clear and they have to do a test to isolate where the trouble is because if they if they will isolate where the problem is we spend less time looking for it before concluding that there is no problem at the right or the under the ninety six act to go to the state utility commissions to ask for any  i guess i don't want to foreclose my imagination from working better later but unlike the state regulators do not sit too to hear cases like the one that we do that we filed in san jose typical enforcement of the agreements interconnection agreement and arbitrate any dispute isn't that right that's correct they can or they can but that's that's on the making of the agreement right i don't see how this agreement would need to be made any clearer code that has accepted responsibility for troubleshooting and to submit problem the former employees talked told us that began opening hundreds of false trouble tickets in october of one nine hundred ninety nine through approximately march of two thousand in march of two thousand coverts business was deteriorating so fast that it began opening intentionally false trouble tickets in large large volumes and it was sometime after that that we we understood from the road map that the former employees gave us that this was it was not just thirteen states as of today we've provided about seven million loops to various to various customers it really was from the former employees told us they've been directed to make this up in volume that it that it crystallized it was clear and it was nice to have you have to have you today that this is the this is the massachusetts wanted excerpts of record two seventy eight says there has to be a customer trouble and that covert exception responsibility for initial trouble isolation there tests it does the reason it does the full thought so too but then why not why not intentional submission of tens of thousands of reports that give a preference in the quality of line and rebates off the price of the line compared to other customers that my minder standing in the final care doctor has has two ways two ways of controlling one is if the if the conduct is in the tariff and the other is if the statute requires it to be not just could it be but is required to be the supreme court's cases the entire relationship is not in the tariff only only those things that are required to be there's nothing in the statute that says the customers behavior needs to be regulated not commit torts that are outside the state you can compensation compensation and an injunction either either to require them to do the testing and submit only real troubles and the compensate us for for the false the false untested troubles that they did s ultimately affect their rates that are in the in me in a connection agreement of the only only effect on rights that i see as is is that there will not be rebates based on false troubles and therefore quoted will pay the same as other customers under the care this will bring them into equity with the conclusion that they're asking a jury to determine a rain instead of using the final grade or file tariff as the law requires horizon's most recent written statement comes on the twenty j letter that they with the court on december twenty third and here's how they around and constituted fraud that argument doesn't make sense with all due respect it isn't fell afoul of rate doctrine works and it's not close to how the case law works and i might add i'm not going to spend my time and time talking about the facts of this case mr thorne began by attacking my client and assuming that all of these statements about what my client has done is correct that there are twenty three thousand frauds out there we very strongly believe that that is non there be a detailed schedule of itemized charges for everything that the carriers providing that's important seven u s c two fifty two a one that has to be approved by state regulators that's to fifty to one it has to be filed with them that's  can say no you can't do it this way and insist that the deal be done differently and they can also insist the that that everybody be treated equally that's why they're filed so that you can a fixed the rates they can say this is an unreasonable ra now i believe the uniform case law well the supreme the uniform case law is that public utility commissions have the authority to interpret the interconnection agreements and where the debate in the case law currently is whether you can go directly to a federal court without first going to the public utility commissions and actually some of arise from this lawyers when representing bell south are arguing you can't go straight to federal court to bring in this type of claim for one hundred years the filed rate doctrine  basically focus on the impact of the relief involved in the case the every crystal in every crystal clear statement that's been made in the last two years what they've said is anything that effects the other than the rate established by the file terror now what horizon wants to do is say our terror does have a charge if we go out and we don't find trouble it's a calculated down to the penny and while it varies from particular in a connection agreement to your connection agreement there are very specific numbers of common numbers saying ninety nine dollars and sixty one cents now horizon calls this nominal incidentally d s l service as you may know that the times sold for about forty nine ninety five a ice and never charge for these twenty three thousand suppose the false claims they never claimed they were false until they came in and alleged fraud now under the case law you cannot go to a jury and say alright we did do this truck roll but we want you to charge a different rate for this truck or we want to use common law fraud and give us all these other costs that we incurred loss reputation collateral damage and it didn't cost us more to do it this way there is nothing in the file great doctrine that permits it in fact unlike most of the other cases absolutely depends on the terror why because in the real world there isn't an obligation for people before they call the telephone company to do troubleshooting for them i don't you know my phones unplugged and i call them i say it doesn't work they can come out i may have to pay them for the trip but i don't any obligation to tell them i've done troubleshooting your only argument for why there is supposedly a fraud is that by contract had agreed to do trouble actually that's not this case for several reasons first of all it's not true that the rise in conducted no discovery or parties or both citing depositions to horizon in code that have been in antitrust litigation since ninety nine they deposed a bunch of these to clarence in the context of the anti complaint they didn't argue in response to that motion at any instant that oh well of course there would be a contract claim to the contrary they filed a motion dismissed or counterclaim on the theory that that parties need to raise all claims at once right at  the beginning of the case then after judge vocal rule this came up in a bizarre way they filed a motion to quote clarify and what was the motion well judge spoke with yes you've rejected every claim we've presented before us but clarify emotion they didn't make any argument why they couldn't have brought it sooner so when we opposed it we said well what's the reason you couldn't bring it sooner and the interesting thing is in replying on that motion they didn't make the argument they're making now they didn't argue gosh here's why we couldn't do it because if we're going to bring a contract plane he'd have to look at the interconnection agreements and think you're out how much they charged in each of these states and that would have taken us a lot of time it's no joke that was what he did not to of you know allow them to test out their tort claims first and bring their contract playing because he should have appreciated the argument he's now making on appeal as to the reason why they did it because they didn't make that argument  point for this court is does judge vocal have the right to say no you can't look at this insist on doing it there are all kinds of reasons why they wanted to bring this is a tort claim for one thing they wanted to use this to send it to regulators and saying you  twenty three thousand contract violations is not nearly as interesting for another thing if you're opposing a great doctor intact argument tactically you do a lot better not appending a contract claim to it because it kind of concedes that that it's all under the filed great and undermines your argument they could have brought this plane from day one they waited until the end of this entire proceeding after they got in summary judgement and said well let's start this all over again we've got a new theory now no court has ever held that that's an part of its nature of the code that exercised pressure by going to the mediator and regulators and in fact talked about going to congress that performance assistance plan what what what mr thorne is referring to is the quote rebate clo quote in this discussion that mr thorne's theory for that is that code that went to regulators presented them with these supposedly false trouble tickets and got the regulators to say to say oh verizon you're not doing as well as you should on we said you did fraud against the regulators we didn't mean to say that that was part of the fraudulent activity under you you see all claim now as a matter of fact they specifically incorporated there is nothing in the complaint that said when we see conjunctive or leak we we want to injunction saying that you don't you shouldn't lie to regulators because we've said it's wrong there is no limitation on that either all of their claims incorporated all of the allegations now what judge vocal did which was i think entirely  ust that ok i'm going to allow you to give a we don't mean it depends yes we have all these allegations yes they are incorporated but we really didn't mean to to to to to attack you well we formulate our claim in a way that it doesn't deal with this contest conduct we pick one of the people people to go after and we ask them to pay much more than just our service roles we ask them pay our consequential damages and everything else that's not discrimination the discrimination is somehow only a preference just requiring them to send notice might not violate that injunction but we don't have to reach that because they're automatically on notice what the tariff says may can't claim reliance to have her light on anything different from the terror so we don't have to reach that issue whether marcus is actually correct is unclear because later that year the supreme court decide the central office telephone and it's all the services that involve all the subject is this courts and brown have to be put in the terror so whether you can now come back and say well through a fr law exactly fits the contours of this agreement and therefore under california's fraud law where the jury will be allowed to do is implement the agreement if they wanted to make that argument the argument is you violated the agreement when they chose not to argue that it was a violation of the agreement when they put off that issue and consciously chose not to do it they chose not to make the argument well we would straighten forced the terms of the deal i mean to say a tort theory will allow you get your contract which you  contract is kind of a bizarre idea the normal rule is you can't make torts out of contracts if there aren't any further questions i see i'm out of touch thank you district courts of jurisdiction here her face like this and just one other case to the point out in the seventh circuit the harker plastics decision is exactly like this it was a case where there was an antitrust claim and state law claims