is false because it is not in fact been clinically proven in preparing for this argument and of course reviewed the cases cited in the brief there's one in particular i'd like to call the court's attention to supple that was a case involving just like this came this case claims under the california consumer legal remedies act unfair competition law false advertising law on  appeal on june twenty third two thousand and fifteen this court the ninth circuit said something that goes to the heart of the matter and that's it six zero eight federal appendix four eighty two that's not a presidential i know but i think there's a lot that backs it up that will get to the court said quote advertisements that did not declare the beverage to be quote clinically proven effective in treating joint pain unquote are a far cry from advertisements that did this distinction between so called establishment and non establishment claims is well recognized in both federal and california case law can i ask your question about this judge real didn't bases decision on this distinction to your posts on appeal and below argue but i don't was it was the decision below based on the distinction between substantiation and challenge to falsity i don't see the court drew any such distinction the meat you know and that's what i'm asking you know the argument that your opponents raise on appeal was raised below but not considered by the district judge in his order of dismissal right correct that's correct the decision dismissing the claims on that basis is all of two paragraphs long and that's the judges that's the judges dealing with the mispronounced correction bone ferrante correction correct ok so this is an issue never addressed below if i could ask you to switch little bit the district judge dismisses a whole variety of claims for a whole variety of reasons and i'd like you to focus on just a couple of them with respect to the  sole remaining defendant the district judge said you haven't pleaded alter ego with sufficient plausible facts tell me why you think the complaint pleads alter ego with respect to that ego well perhaps not enough for alter ego but we have cited if you see in our reply brief numerous california decisions which will hold the principal of the very closely held corporation at night but if you need it you need to you need to plead a cause of action before discovery and you need to put it with sufficient plausibility that that the district judge can find that it's it so you can see that you didn't plead a plausible case of alter ego i will concede that but i we plus we pled to other bases for liability under california case law a principle of a corporation can be held to rect you know and perhaps you can deal with that when you get back up yes i do believe we allege that he dominated in control of the corporation yeah that's an allegation yes but it's also a basis for liability under california case law outside of alter ego and we've cited those cases in our reply brief if you make an argument of the district judge in response to the motion to dismiss all i see in the motion to dismiss response is that we pleaded alter ego we know we did cite a couple we didn't give you the in the entirety of our briefs i was trying to not put in parts i didn't have to but we did argue below that under a number of cases indeed involving nutritional supplements that presidents of these companies have been held liable where it was shown that they knew that the representations were false and they were thousand and thirteen he and the company got professor jules on redacted report saying in no uncertain terms this is false six months later they're still selling the product as clinically proven when they know it's not how do they know it's not they've got because they've got a report that your expert put together for all they couldn't even refute how do we know they couldn't refute well how does this how does this record establish that that it's so it's alleged you know that you know there was there was no response to it we were not why would you respond to a letter from somebody who says they want to sue you  just we were having outside the records so obviously but you know there was back and forth and we were expecting a response and then we didn't get one let me ask you about your your rico claims are i find disturbing in  cases like this that somebody alleges a criminal enterprise on i could see in the complaint is that they did us yes they did a trial there statistician told them it was the people who conducted it told them it was no well there's no evidence in the records no evidence in the record but there was a trial that they allege was this distinctly significant it may not have been but what's the evidence of a criminal enterprise between gen corps these various distributors and the  retailer is there any evidence that these people got there they're not in criminal businesses when the evidence i understand you've got a fraud claim and i understand you've got a california state law claim but i'm the district judge said i don't see any allegations here of criminality or or predicate offense for rico wasn't he clearly correct about that if six months after you know you're selling something under false pretenses you continue to do so and generate new advertisements you know saying the false pretenses i think at that point you've crossed the line so that that establishes an enterprise between the manufacture  manufacture of the of the of the herb if you will the people who put the product together and the and the retailer that establishes a criminal enterprise because you've put them on notice that you believe that the that it's wrong well look under the consumer legal remedies that you've got thirty days to stop a fraudulent act when you're told you're doing it if in fact you are alleging in fact what you're alleging a federal crime and complaint you're saying that these these people committed a federal crime and i'm trying to find sufficient allegations here that they committed mail fraud and wire fraud which would subject them to fairly long individuals penalty well yeah obviously we pursue this civilly not criminally  but if you're selling something millions of dollars for a product under false pretenses and you know you're selling it under false pretenses what more do you need so that's a question of fact at what point can are they charged with the knowledge you may have a lead sufficient facts to show that junk or was engaged in some sort of fraud that's a separate issue i mean asking what facts do you have to show that there was a criminal enterprise among all these people that they had gotten together and agreed to conduct criminal activity it was the continuation of the business after all you know any of this offense anything else alleged other than a continuation after notice that would show a rico criminal enterprise no ok it is that is the heart of it that once all three part gnc from even before they got it had on their website three levels deep by the way this really isn't clinically proven with respect to the very products issue they knew it all along gen and directed it all were given you know this this report it's math ok this isn't the kind of people don't understand a lot of you understand modern medicine boils down to math if you have p l s and point zero five something's proven if you can't it's not if you go to the f d a and try and get approve or something where you got p less than point six they laugh you out you know you won't even follow the application this is math but let me just tell you i think you probably have stated a claim under state law for i'm focusing now on what i regard as a very serious allegation in your complaint which is that that these defendants and gage in a criminal enterprise which would have subjected them had they been tried in the federal law the penalties for mail fraud and and wire fraud and it's all you've got on that is that you told them that their survey was wrong and they each individually continued to sell the product versus us an enterprise has to have just three requirements i mean assuming they all they all knew what they were doing was wrong at that point the enterprise has to have a purpose what's the purpose to sell these products it has never elation ships among those associated with the enterprise clearly they did you have gen corps furnishing the means if you will which is a classic you know element of fraud you have the manufacture such as directed util formulating the product and you have gnc that knew all along this stuff wasn't clinically proven selling it is clinically proven all for their common financial benefit if it was snake oil you probably would prob the court probably would have a problem with s i would like you to talk about your warranty claims yes your honor the only well judge real dismissed them because he found that we had not sufficiently alleged what is it a cause reliance causation an injury which i think we clearly have and the defendants in all of their briefs don't even try and defend that holding by the district court they don't you know we clearly did in it we've said this force in our brief allege that they bought it based on the reliance of this that it was clinically proven the statement and they were human consumption you don't need privity california case law has carved out that exception clearly these were intended for human  repeat what i did on the last one could you at some point address the warranty claims in your argument is there going to front and center in my mind yes your honor i can address them at the outset first of all they've not alleged a manifestation of the fact which will doom that claim but secondarily and even more importantly all the state law claims including the warranty claims are because of the lack because they've not allege a manifestation of defect which is required from that so they have to prove pretty and they have to prove a manifestation of the fact i don't understand what the what the manifestation of defect is they've alleged that they've they've alleged in effect a warranty of fitness for a particular purpose they've alleged that you sold them something that was supposed to increase testosterone levels when in fact it would not assuming that they've alleged that why doesn't  view they've alleged that the advertising was false they've it their complaint says it's false they've got a report attached to the to the complaint that from a statistician it's as if it's false maybe the worst statistician in the world but for purposes of my question i assume that what they've alleged is that you've engaged in false advertising and so my question is if they have why isn't there a good breach of warranty claim here because it's a question  the weather at that is you have to weather a product allegedly works or not is not a defect in the product if it doesn't work for a particular person they're not only doing that it can't work or can't work for anyone is didn't work for this particular plant that doesn't make any defect in the product so if you go judge well one of the product works but it's not fit for the the purpose for which it's advertised  your clients in the aggregate advertise that it would and they have discovered that not only does it increase theirs but the claim that you made that it would was false because it was based on faulty research now soldier addressed the privity issue certainly there's pretty with respect to the retailers they're not yes but the plaintiff there is pretty with the retailers sure that they bought they bought the  the product from the retailer who made who made it who they allege made representations to them about its quality that is correct but the main issue well i understand you're setting aside the issue of  for a district judge to look at something go to wikipedia and say while this expert report appears to say on its face that this these representations are false i don't think it's a good expert report because i have taken judicial the if you can that you can incorporate the reference websites just like you can incorporate the referenced printed material the complaint references the body for any correction and then judge looking at that with opinion pages judge real then look at the broadway production and determine that just because that is the most conservative method so just because you don't need the bottom for any correction doesn't mean that the study is not clinically proven yes and in doing this i applied to bonferroni correction you did have a district judge acting as a statistician saying well you apply if you apply divine for only correction your conclusion must be wrong because that's the most conservative correction and while i don't know what the other corrections are i would assume they would produce different results that strikes me as silly a district judge can't do that can well the district court certainly can incorporate a reference if it's referenced in the complaint he can look at the information i think corporate by reference and setting aside whether he was within bounds or out of bounds in terms of taking the step as to whether the most conservative method of mere fact that there was a study and the thinks we have a study that says that this increases free testosterone levels and it's been clinically shown it is statistically significant study or something like that and the other side looks it has an expert he looks at it and says this is a bogus study it's not true the representations you're making are not true they're not he's not asking you to substantiate them he's saying i can prove they're false why is that a substantiation he says he's not proving the fa he's questioning and criticizing the statistical methods of that study now he's saying that your representations are false that the complaint plainly says that says the representation is false pledges it includes refashion but when you look at well that report fact they've alleged in the complaint that your report is false they have attached a report by somebody who purports to be an expert for all i know they found them on the street says it's false the district judge at that point can't say they have an alleged falsity can't well there's been a there's been a number of cases that are on point with this case that said the answer is yes it can be dismissed in a motion as ms most recently quite frankly three weeks ago in the district of massachusetts on the identical  california law and she says questioning the validity and sufficiency of research is the very definition of the stanchion claim and therefore plaintiff's claims fail and then judge zobel went on further to state that that lack of substantiation also undermines all the state law claim lengthy opinion and goes into great detail about lack of substantiation and the warranty claims and everything else so i thought i would urge the court to you know look quite frankly look more at the judges are both opinion which talks about california law and the california consumer  and you know if we revert we've if we have to reverse for other reasons why would should we say to judge real this is without prejudiced you considering their lack of substantiation argument that you didn't address in the first place well i mean obviously we're not required to obviously then do that but i think it's a in terms of judicial resources unusual economy the you know obviously i cannot predict how judge reel of the matters reminded will rule but i feel fairly confident given his opinion the first time and now he has support from a from a colleague on and that the two sides that ruled in great detail on the issue he'll he will probably again i don't want to read his mind i would venture to guess that his opinion would be would be the same and quite frankly i think any district court judge puts on a different issue and three studies that are in a completely different ingredients and and and because that is their representation are forgotten in the advertising that that a equivocal study has shown either that you purport says that they have a statistician look at it and say this study does not produce statistically significant results why isn't that a direct allegation of falsity that's what i'm having to for the for the mere fact that the court in for example but there's a horrible their expert let's assume for a second their expert accept all the facts in your they don't need a new study he thinks everything every fact that your that your study proves is correct but the significance of those facts is misstated progress that's false advertising isn't it that's false farce no that would be false advertising we have an f t c context and that's not false advertising in the context of a consumer protection case there's a distinction and you that you can have  good difficulty a lack of substantiation case so i'm going to give you a hypothetical and please don't change it on me because once you change it it becomes useless but let's just let's assume that your study says we gave free testosterone if we gave this this herb funk or be whatever it's called to ten people and then we tested them afterwards and each of them had more testosterone than they did before and therefore we represent that there's a clinical trial that shows statistically significant increases in free testosterone and they hired an expert that said testing ten people could never produced  own study ok but they're saying we'll why would we need to conduct our own study we'll assume that the ten people we gave it to would have exactly the same reactions as these other ten will accept their clinical as true but the conclusion that's being given to the public from that research is false and misleading why can't they allege that the because the mere fact that there is a study i mean look at for example the stanley versus bear case the scientific support for claims should have been stronger and similar to your hypothetical the court found this is insufficient to status by plaintiff's burden that the clinically proven claims are false or misleading that's a similar hypothetical that they're not not i think it's different they're not claiming that you should have had stronger support for your claims they're claiming that your claim that you have a statistically significant survey is false that's i think that's their claim and so my question is can they make that claim it may be that you can you can come up with a statistically significant survey but you made the claim that you have one that is statistically significant and they're saying that claim is false are statistician says so that's that's that's what i'm focusing on here that's wh difficulty with you saying what they really want to substantiation they don't want you to substantiate the claims they think you've they think they're just flat out false and they want to prove it if they wanted to prove it they would have had studies that prove that they don't they prove it through statistical analysis every case they can hire an expert like they didn't this case and to poke holes in the study that's kinda the case going to give you enough time here to finish your argument let me change the hypothetical one more time let's assume that they gave it to ten people and there was no effect whatsoever on their testosterone levels and you had then advertised that you had a study that showed that those ten that if you had a statistically significant study that showed increase and they said we've gotten their study and we've looked at the methodology and this is a false claim because nobody had an increase in testosterone levels do they then have to do their own study into that circumstance you're saying if we had a study that says that that's complete that's completely false and when somebody looks at it they can determine that it's false must they do their own study to show that it's false fact and they get ahold of the study and they allege that the that your advertising is false because your study doesn't support your claim they would still need a study now that they need to go out and conduct their own study to show that your product doesn't work even absolutely even though your own study showed you first addressing the decision in cammy from the district of massachusetts professor the expert report was not in front of the court there were some allegations in the or deal with the distinction that's been the focus of the argument here between a so called establishment claim that something has been proven versus a claim that something is merely effective that's what you're saying  decision is correct don't you lose well as as your honor just noted they would did not have the same record they did not have our she did not have our expert report before her so certainly that would be a grounder distinction also i would say the argument made by the plaintiffs there went to a number of claims and so that where we're just focusing on the claim of clinically proven and so the distinction may have been lost by the court there but but obviously if that court is correct that a claim that something has been clinically proven has to you have to submit your own study basically the same argument that your honor was having with my opposing counsel i guess what i'm suggesting is that maybe the district court there was correct that that you need to do more than nit pick the report five through an expert you need to you need to have a plausible allegation that it's wrong all the year all that your expert says is based on the report they did i'm not sure that i don't think this the results are statistically significant you haven't suggested in this case that you have any evidence at their claims that this increases free testosterone that's not been a part of our case we've just focused on the clinically proven allegation because that boils down to mathematics and as your honor is properly focused on the the question of statistical significance that is mathematics it's not vague and ambiguous claims about something improving your sex life so let me so if if in fact assume the study was mathematically right but there are selling products that increases free testosterone you have a client well how would you know if it's not clinically proven you don't know that you see why not me asking you let's let's assume we went to trial and they came in with evidence that this increases free testosterone you lose don't you i don't know what that evidence would be but clinical proof claim that something has been clinically proven you never know what happened i don't i mean ask i understand your claim your claim is that they they've made a false claim that it's been clinically proven how do they defend against that claim by showing that it has been clinically proven well i showing that their study in fact constitutes clinical proof by showing that it is statistically significant because that is the definition of whether something has been clinically proven there's an entire section i say celery cure it's been clinically proven that celery cures cancer with you know no basis for it whatsoever and unless i've got a study that shows celery does not cure cancer we have no claim i mean there's i products and king bio case national council on health brought first king bio all recognize this distinction your honor is proposing that it be ignored we ask you one other question and it's not briefed in this yes the basis for federal jurisdiction here jurisdiction he didn't do the analysis of the amount of money etc etc because there was a federal rico claim that that is correct but if we were to hold it the judge correctly dismissed the federal rico out of a product category in which she n c recorded i think it's something like seven hundred sixty eight million dollars in sales this was their number one thing you know and it's been sold for years now so i think we will plausibly get over the five million threshold and the number of of class members this is like their number one product in that category that's their number one category and there's nineteen of them at issue in this case so if we have to litigate that issue we'll litigate it but i think we get over ten we make the calf and say no i don't think you know that certainly wasn't wasn't briefed below and i'll call your attention to some of the jurisdiction undercount i'll be honest i hadn't really thought this through until till his honor mention this it's not something that's been raised by anyone and i wouldn't would never i should not presume to tell this court what he can and cannot do what i will say if you look at paragraph one thirty one of our complaint that's it excerpts of the record seventy and paragraph one thirty two they've got seven hundred sixty five million dollars a year district court could have made probably could have made a proper decision you're under calf my question was aimed at if he didn't which in this case you didn't because of rico normally i get a chance to brief our issues before they're decided and briefed them twice before they decided at the appellate level and there was no call for this sort of argument below and so we  haven't but i think it's clear the facts are clear that there's over five million dollars worth of the stuff that that issue and they're certainly class members from other states one of them is a plane if we've got defendants from all over we have the minimal diversity and certainly you know i would like a chance to brief it before it was decided if that was going to be the basis of i'll guarantee you we're not going to dismiss your case for absence of jurisdiction without giving you a chance to brief judge courts question was quite different judge court's question was is that issue in the first instance for us for us or for this record you know i read the guidelines for all arguments says when you don't know something you should say so rather than giving  that which are general orders require that if we were going to decide something on a basis not in the briefs we should let the parties brief so don't worry about a need to be  very eloquent today you know has to to a question that no one's confronted before thank you and let me add to what judge gould said if you asked me that question my answer would be i don't know either  we've given some extra time i'll give you one with one more sentence or say well in terms of what happens if it goes back i mean the this is obviously a very delicate area the court itself has made certain comments about what the judge did well being inappropriate here and the court has said repeatedly that you know this judge may have a problem putting out of mind you know determinations he's made and what did he do he made his own argument that the defendants never made for why they should be dismissed he didn't let me he didn't even confront me with their arguments allow me to respond to it then he said i'm so sure i'm right i'm not giving you leave to amend and i just assume all those are legal  we have here that shows that this judge would be unable to follow instructions that are remained i mean what you're basically saying and i understand it is well look at these other cases where where there are much more egregious facts and therefore this judge order never be allowed to deal with it remained this is a pretty plain vanilla case it's a motion to dismiss he granted it he never yelled at you in oral argument there wasn't an oral argument didn't treat you didn't exhibit hostility to you obviously doesn't like your case as a legal matter but but if we were to take this case away from the judge angry man would we have to take every case we reminded to this judge away from well the  judge had the district judge had a chance to correct course we when we put squarely in front of him the other day to report showing he was absolutely wrong he said you couldn't possibly allege anything else but you saying is that he erred and done nine your motion for reconsideration if you will tell me what in this record demonstrates that this judge can't fairly adjudicate this case other than the fact that he ruled against you i think by opposing counsel when asked said he sure if he gets it back he's just going to dismiss it again and i think he thinks he should have the first and i'm going to be back here in another three years and i've noticed in the decision that sometimes it takes a six year delay before the court reassigns it yes to be reversed twice but i was hoping this wasn't one of those cases i'm asking you a very direct question and i understand this is a sensitive area but you're the one who's making requesting this what do we have here other than the fact that the judge ruled against you and you think and i happen to think in some parts you may have correctly ruled against you in some parts it may not of you admit for example that on on the alter ego you didn't sufficiently pl ego so what do you have beside the fact that the judge ruled against you that would authorize us to take what we call the extraordinary step of reassigning i think he became an advocate for the other side he made an argument they did not make for themselves he acted as an expert in the case as a statistician this transcript will show your honor saying he basically acted as a statistician for the other side and tried the case in his head and he won