my name is scott and i'm appearing today on behalf of the defendant appellants in this case along with my colleague robert your honour's this appeal presents the question of whether four defendants have lost their right to proceed in federal court under the class contract with one defendant precluded that defendant's right to remove this case however under any one defendant may remove accordingly this court held that if any one of the remaining defendants is not a clause in this case honor so the plaintiffs presented two theories in alter ego doctrine theory and a theory under the sun circuits closely related test plaintiff's evidence however fails to establish either theory and the district court made several legal errors when it came to the opposite conclusion as a result your honor the trial court's decision should be reversed and this matter should proceed into federal court your honors i'd like to explore these points in greater detail but before i did so i thought it would be helpful to direct reports chart it lays out saber holdings which is a holding company that owns either directly or indirectly the remaining defendants it has no involvement in the day to day operations of frank manor there's queen city l l c finally your honor saver group saber group it's an ohio company that provides consulting services to over one hundred dollars companies one of which includes franklin operations your honor i'd like to st start with plaintiff's alter ego preponderance of the evidence and so if i understand your position you say that's incorrect but rather than remain and you propose that we decide this issue now in the st instance as the panel we standard which gave the plaintiffs the benefit of all doubt as a matter of law when you look at the required state law elements under these doctrines they cannot be met even with the point that separates when you draw all all inferences in their favor so you're on our position is there really is no need to remain on the matter because under the evidence the point is how it's presented there is no basis under the wall to apply either well but if the plaintiffs were laboring under to allow them to present whatever additional evidence they might have we got honors in this case the there was discovery that was conducted below and the plaintiff seven s when they presented it was all in the light most favorable to them but your honor i'd like to bring your kitchen into if we're looking at alter ego theory the operative fact here which is not disputed is for example saber healthcare group is an ohio based company and under ohio law which applies to an alter ego analysis company well that brings up an interesting issue you've got a whole mix of companies here some know some in virginia why isn't the proper they'll piercing methodology  pearcey it's one is the traditional bail piercing to get a parent your honor virginia law would apply to that but to get to saber health care group you have to apply ohio law because you do reverse piercing from the parent back down into one of the sister companies and your honor the district court here the plaintiffs don't dispute in their briefing this was all under ohio law the issue on appeal is does a higher law apply in the district court is it your view that the choice of law here matters dollars this is what he says about saber holdings it's an ohio company and it holds the membership interest in either directly or indirectly the other defendants regardless of the choice of wall north carolina chinua ohio a wall on all of those it's clear ownership alone even if complete ownership is insufficient to disregard the corporate form of a subsidiary to reach the now what about this proposition laid it must prove only that it was any of them but then under the alternative theory the closely related test judge boyle devoted two sentences of his order to the closely related test but your honor even if under the closely related test that cannot apply it to find all  signatory and the reason for that is under the closely related test you have to be closely related to the underlying speak it will take for example queen city l l c the defendant queen city l l c a non signatory it operates the crossings that still creek which is a facility in charlotte north carolina two hundred miles away from franklin manor the plaintiffs testified in their own deposition which is in the record below that bartle's and all have never visited never received in the record nor could there be one to didn't present any more your case the question is who receives that when it see this choice of law question is one that i think is complicated but it's we talk about which state law applies alter ego liability and i can understand that debate reasonably well where i have trouble figuring out is why why don't we didn't go to federal law in hew goal which is not our circuit obviously to find a separate doctrine that resembles all three or some sort of liability but that doesn't exactly capture it and to the extent you know it has any clarity it's not apparent on its  face we we're debating about what state law applies and then we come in and say well the state law doesn't apply let's address this federal common law from the th circuit to determine whether it applies or why are we even talking about y honor i think that makes a very valid point i mean under the arthur andersen b carlyle decision which was cited in articles one here as a way to arthur andersen case that if you're going to bind non signatory to a contract you look to traditional staple pri suing the gabriel manor or the crossing's defendants for any breach of their contracts that they had with bear residence your honor if they were before and selection clauses those companies have suffered losses which do not require in you and frankly manner so if we're looking at the care those into the provided to their their residents and their contracts well then they would have had an independent right to remove this case in the st instance but your honor they're suing those in the plaintiff's dispute here it's very clear they say we did not get the care that we contracted for at franklin manor clean city l l c simply has nothing to do with that in your honour's to i think it's important to mention that the seven circuits closely related test is generally not applied even in the circumstance of this case so even if this court were inclined to adopt the seven circuits closely related theory it doesn't need to do so in this case if you look at all of the cases cited by the point you look at all of the cases cited by the defendants and all the briefing that we did below under the none of the cases are being applied in the circumstance the circumstances where it's applied is to prevent signatory to a form selection clause from a vague back clause by simply adding other parties to the ball stick it functions as in the stoppel dr take the facts of a call for an example michael was a member of the society of lloyd's society so that he and his company could underwrite insurance for lloyd's of london in the form selection clause in his contract said you've got to bring all seats in england where he will sued in illinois and then wait all argued he could do so because i've joined my two other companies as party points in your out of the the court there was looking at it and saying ok these are closely related to the dispute these were the companies you were using in underwriting that's properly reported court we should consider if we agree with you that a judge boyle simply misapplied the us this is your position that there was sufficient discovery on this issue as well such that we could decide this issue now or is it more appropriate to send it back and have judge boyle to say if we agree with you that you have to connect it to the actual dispute decide that in the st instance your honor there is no evidence below in the record after discovery and plaintiffs did not present any nor could they your honor to bind for example queen city l l c to the to the dispute frankly i guess what i'm asking is how was this frame to judge boyle was erroneous theory no your honor the it was submitted to the judge that the plaintiffs for the burden to prove that if this closely related test could a plot that it was their burden to come forth with evidence to prove that it would apply he was only considering a one sided view of the plaintiffs up with all of that and with all of the discovery that's been done more than fifteen depositions going there is is no evidence in the record that could support the  c over in charlotte or smith in that basis had anything to do or hats is closely related to the underlying spew in there's one other reason why the closely related test would fail and that's look at saber holdings the holding company there is no dispute that saber holdings is holding up it has no direct involvement at all in ownership is not sufficient to establish th circuit excuse me twelfth circuit in adams the rain tree made judge posner said mirah affiliation or ownership of one is not sufficient to satisfy the only evidence in the record the only evidence that could be in the record is that saber holdings has an ownership interest it's very important for the court to realize from the beginning we were talking about then the appellant seemed to suggest in the st instance that we're dealing with a judge or was conducting a jury trial on the issue of piercing the corporate they'll and the closely related test we're not dealing with that is a standard beyond summary judgment that is a standard that's ordinarily up to a jury to decide whether or not a party has met its burden by the preponderance of the evidence and on the wall is given by the court we're not dealing with summary judgment we're not we're the court was not asked to make a definitive ruling that has race judicata effect on whether or not the defendants are alter egos of one another or another your position is that after the prior appeal all the district court should have done is what it did which is determine whether there's a prima facie case and that that is just i'm sorry stand your your position is that's what the the the burden of proof as it relates to a form selection clause and in atlantic marine the supreme court reversed that because there was a presumption  form selection clauses are out and so what the supreme court did is said that the party opposing a valid and forcible form selection clause has the burden of proving that transfer of jurisdiction selection clause where the transfer record is a state court or a foreign forum then the forum non convenience analysis which that doctrine is unfortunate for  should be applied so we have really two issues this court said in bartle's whine that the plaintiff has that this is an affirmative defense jurisdiction and therefore the court concluded that the burden of proof was on the plaintiff to prove that the defendant had somehow waived jurisdiction but that you know all of this occurred in the context of this being catholic case and the defendant's once they satisfied these basic jurisdictional requirements with respect to cap the cases seem to suggest that the burden then shifts to you all and i get the point that alter ego is also in twine intertwined with the merits but the only reason why we're considering that at this stage is because you have decided that you prefer not to be federal court and that's fine but if you're going to make that claim it seems to me that notwithstanding the usual process if you don't decide alter ego that alter egos or merits based defense in this case it seems appropriate to put the burden on you well i disagree your honor and i disagree because of it lennox marine  atlanta marine the language of atlantic marine supreme court was very clear and we've already in this court has already decided that if our forum selection was trumps calf so i don't really think we're dealing with a half the form selection clause that is a distinct issue if the district court finds that all of the defendants are bound by the form selection clause then under atlant the district corps follows the supreme court's instructions in atlanta bringing in makes a determination as to puts the burden on the defendant then prove it you start that you start your story and i get your step your story by saying if the district court finds and the question that we have is is not your framework like your framework fine you're redefining what finding me you're saying you don't actually have to find it right the to what the judge did below in not actually finding that they aren't all three and that to me seems like the fundamental disagreement it has i suspect that you recognize that if you actually have to make remember we're trying to a step by now is trying to establish that four defendants are bound by a form selection if that occurs then we get to the nd stuff which is the atlantic marine it i'm at the st step we're in there and i agree we're in the st step the unknown question is what burden does the plaintiffs if the plaintiff even bears are per what burden does the plaintiff there are to establish that the or non signatory defendants are bound by the form selection of it's if we can say that trial which is not a finding of fact but that's a finding of a plausible fact and i think that's all he has to do because when i get that but that's not a that's not a finding of fact that's the finding of a plausible those are those are good very different standard agreed your honor and that's the point i'm trying to make is i think at this stage of the litigation when we're talking about then you only that we're not talking about a court making a my finding as a matter of wall that these defendants are or are not on alter egos of one another that's a question for a jury when we get to a jury trial because in fact in this case we've made allegations of alter ego  and those are inherently factual questions i don't think at this stage of the litigation when we're talking about an issue then you that the plaintiff has the burden of proving  dish as a district or properly concluded and i think it's an abuse of discretion as to whether at this stage as to whether or not these four defendants for venue purposes only are bound by the brief and in the record the plaintiff cited to multiple findings by the district or as to the relationship of the parties beginning on page eighteen  please brief going on to page nineteen which summarized all of the findings by the actual findings of the district court i think this court is called upon at this station and i don't know the answer the question whether or not the court must look at the church records actual findings to see if they're clearly coroneos or whether it was an abuse of discretion by the corps to conclude at this stage of the litigation that the defendant controlled and operated all of the three north carolina care centers were in city franklin operations and gabriel manor they do you have evidence and i'll just ask it one more time then i'll assume that there's no one did that queen city had control or involvement with franklin matt i understand you've got theory about holdings and health care saber holdings they were help here understand that i'm asking a more specific question what did queen city have to do with franklin meant when city as a in its form as a legal l l c that's all it was in what we're arguing and and if we're just looking at that in isolation as a company on a piece of paper can i say that that company that company on that piece of paper which we say didn't exist in any form other than a piece of big i can't hide that piece of paper to franklin operation time cloyd's from queen city taking actions that control their affected franklin meant well the underlying question is who did these people work for and so we're our position on the facts alleged that they were all employed by saber healthcare group they were all controlled by saber healthcare group though all the budgets were set by the saber health care group and say we're holding all of the administrators were higher by saber health care group and saber health care holdings the owners of every company were the same the owners there was this consulting agreement that the appellant's refer to well that's that's a piece of paper that is signed as a consulting agreement by the all the owners of all of the companies together so the owner of green city their corporate officer signed a basically a consulting agreement with himself and the evidence that showed all of that as i said all of the budgeting all the employee re hiring of the administrator the the setting of expenditures how much they were allowed to all of that evidence now to this is helpful i mean you might want to go to all of that is helpful for explaining why sab ego whatever the other the rd one is what it doesn't show at all is the sister relationship and that that's the that's what i'm trying to get at or not and i take your position not understand your position is that matter but i as a piece of paper and so that's why i'm having a hard time of making a connection of a piece of paper to another piece of paper franklin operations and that's the very reason that we have the alter ego well not with franklin right well that they all signed the identical sol to your stand but the parties to the consulting agreement were going city and saber health care if you look at the gabriel manor and the same person that signed on the house server it's all the same people so again i'm having difficulty answering your question because you're asking me to amount to pieces of paper which i can't do here to decide what burden the plaintiff had to demonstrate at this stage of the litigation whether or not the parties are down to  forum selection clocks and so the underlying issue relates to what burden of proof does the plaintiffs have at this stage i don't disagree that if we were a summary judgment stage in the court was being asked include as a matter of wall whether or not the parties were alter egos of one another what i think it's a prima facia burden your honor i think at this stage and it's an abuse of discretion stream for other defendants will have every opportunity if they want to to legally challenge whether they're bound by this and this is a breach of contract case so ultimately there's going to be an issue as to whether or not legally the defendants are bound to the contract whether as a signatory or as a non signatory and that's the ultimate issue for jury to decide because it's inherently factual but the question is is are we jumping the gun and putting too heavy a burden on the plaintiff at this stage of out there and i don't know that the district work necessarily the proper guidance but i think what the the appellants are asking is to put a preponderance of evidence burden of proof which would be the same burden a plaintiff would have at a trial on the alter ego and i don't think that we get there on a venue issue didn't we i mean we didn't explicitly state that the burden would be by preponderance of the evidence accepted the plaintiff's allegations is true i get the point that he never we never see explicitly soon preponderance of the evidence but all of that seems to suggest to me that that's what the burden should be  you the benefit of the facts righted it took it as a pleading standard and you know whatever we might think of that it seems like that issue has been resolved which issue the issue of law all the defendants are alter egos of one another and they're all legally liable for the actions of one or all and so that's that's the underlying point that i'm trying to make and so if that works both ways i suppose it does but i don't think but so what would happen is you completely take away from the comments of the jury that decision and so that's why the standard should not be greater than even a summary judgment and the courts taking away all of the jury issues are not issue because in this case we have an alter ego claim so that's the inherent problem with the court doctrine the preservation of a corporate form it's a it's a foundational tenet of american all in all the states under all a political figure under each applicable state law has required elements that must be shown in order to do