secondly they weighed in there or stop them sorting their claim for waste of ballast for the very simple reason that they willingly knowingly supply everything we asked for them without any complaint without any claim that there was a br until after the project was over after we were off the job and after it was too late for us to make them sort of correctable preventative measures and third they used under preexisting damages miles in which they assume that issue of the reasonable mass if we were to conclude that texas law is less than fully illuminating on the on the question would it make sense for us to certify the question of the supreme court and why or why not i don't think so your hon because i think texas law is very clear on the issue of reason and so i think the texas make texas case make clear that when ever a plaintive seeks to be reimbursed for the out of pocket expenses of any sort and they need to prove that those expenses are reasonable and that's true what would that testimony have entailed here what they did what should they have done that they did not do just say is this reasonable one question or do they need to do more i think it's more objects counseling just the magic words was it reasonable for in particular because it is discounted to take all those not even competent often that kind of testimony but it would be testimony from someone involved in procuring the ballots by way of example somebody from the procurement department or somebody from the subpoena somebody who's familiar with supplying that type of product so it's not good enough that this is the price and the people they've always bought it from in the price they've always paid for when it was going to be entirely out of their pocket not in a lawsuit being able to put it on someone else's ledger that's not good enough people pay i mean i think so i think they would have to call somebody well there are two different ways to do it you would call somebody from another rarer would say what are you paid to say this is what we customarily pay for the bal materials for the for the crew for the labor for the locomotive saying they said as the court of appeals noted there was evidence that the contract entered into someone was substantially higher than what they initially bid and so this shows that there's some some indication that the prices are being somewhat inflated there was evidence that the wind conditions had improved and so maybe the cost was should have been less and so i mean there there was some evidence in mustang that the price paid was perhaps higher and here the evidence is really to the contrary that they paid the ordinary rate that they'd always paid why isn't that at least not that what you pay is the evidence of the reasonableness but that what you paid at the moment before there was a controversy is some evidence why is it that some evidence of reason well for two reasons one is because they didn't prove that what they paid before was reasonable there's no evidence of that either so couldn't the judge infer that this was commodity let's say it wasn't ballast but it was always in the their side had to overpay for the oil because of your client's wrong doing and you know i can look in the paper each day at that the market price for oil what would you still say they had to do all this proving up you're talking about will i do it in particular they say we have we have a rush to supply as much ballast as we could as quickly as we could some of the testimony was that they got it from arkansas where it was much more expensive both  anyway well not necessarily we don't know them because you count was asked a question have you made a comparison of what was paid before may one which is kind of their cutoff date to what you paid after me when she said no but even part of what they got from arkansas it wasn't like they twenty happened and all of a sudden that was the excess ballast that you were that your client was going to be on the hook for they were going along building we doing the track and what the judge found is along that whole process you were your client was requiring them to use extra ballast so it's not like there's some clear point which all of a sudden it all became on you that the theory is that throughout the time when they were paying previously and then from arkansas some of this ballast ends up well there's yes there's a lot of different features that you've got the wrong what isn't the railroad i mean if i get in some lawsuit i have to see why this is what it cost for me to fly to south on southwest to new orleans i have to prove that's reasonable i mean railroads i think are even more airline that's got a no safety rating or something like that that might charge less but southwest american and delta all have the same fare or slightly different by five or ten dollars and we have to say that's reasonable maybe we think it's totally unreasonable but it's only way we had isn't the mustang requirement isn't some you know just running on a treadmill kind of exercise it is intended to address the situation we were kind of alluding to earlier oh you breach of contract so i must stick it to you i'm to go start buying stuff at the most expensive store i'm going to go get my you know macaroni and cheese it some real posh special garden store instead of that you know some local grocery store and stick you with all of that that's the implication here and what the mustang case is intending to avoid which cox just pointing out is these particular expenses just don't fall in that there isn't a high end ballast store and a low end balance store and ten million different trains that could run on it these are all fairly standard expenses and given that does that in any way change the analysis well i think two answers one is  at the testimony was that ballast coming up from mexico is a lot cheaper than the ballots coming down from arkansas they said we were scrambling to get as much ballast as we could as quickly as we could they got a bunch of the from arkansas but there was no testimony the well and again i don't think the case law turns on you know is somebody sticking it to somebody else you see this reason most requirement even in attorneys these cases take the gibson jump case for example where they said you know the guy testified to a raid and the courts if that's no critical element of the case with reason as in fact it would be the same result that the district court itself did on the on the additional contractor claim which i really don't see any difference those were contractors who had been on the job they hired them to do this work this additional work the court held correctly that there was no evidence the cost paid for those additional contractors is reasonable same thing here with the waste balance that's that's the way i see  trains and they were trying to they were trying to get every last dollar from b b r i there including overhead and profit and everything without any testimony that any of that was reasonable they were trying to stick this for the crew c to they're trying to stick you for everything you're trying to get stuck for nothing and what i'm saying is there may be a distinction among these different categories overhead i can see how that could be inflated needs to be shown to be reasonable the closer we get to something that's kind of a defined commodity that everybody's paying that price the more i say and i'm not sure that you really can say wow they just lack evidence by having shown that they got what they normally ordinary course of business and that's the problem junctions that they they had a single figure thirty one dollars and sixty nine cents i think by which they multiplied every differential at every turn differential and that's insisted of components like the ballast materials but also the union pacific costs no testimony and reasonable stay also included the crew cost a look a motive cause to the ballast lease car comes out answer i want to go back to judge cost as point which is you know what if we were to agree with you is that the end of the matter and you said yes and i know the ordinary rule you've got a burden of proof and you don't need it that's the end of it you don't get another shot but there are cases where because the judge is trying it under a misapprehension of the law or we clarify the law in some significant way we kind of say well wait a minute that everybody was kind of under this misapprehension we ought to give them another chance with that kind of rule apply here i certainly have not seen any cases to that on the quest by the question of how we treat insufficiency the evidence isn't that a federal question even in a state law case what is sufficient would be a state law question but what do you do with insufficiency isn't that a procedural question well i think so on the question is is there more than a scintilla of evidence from which a reasonable jury could find reason as in this case because we know that's an element of the answer assume it is no and traditionally and without exception rendition i've got a couple minutes i want to talk about stoppel and waiver if i may the court recognized these are affirmative defenses that we pleaded but the court didn't deal with them at all other than to sort of conclusion really at the very end say  the the key event whether specter waiver in the stoffel occurred on february tenth two thousand and nine that's a date that they don't really knowledge in their brief but on that date maybe aren't requested more balanced significantly more about list it went from like twenty six hundred tons a day to forty six hundred tons a day at that point time they knew they had the right under the contract to say that we were wasting ballast they warned us about wasting ballast and they were keeping track of how much ballast they were they were supplying and how much ballast it there would be at the end of the day and by doing the numbers based on their own documents about five fifty one they could very much see that they were way in excess based on our request of what they would have had to supply  they please the court but it's paul wix on behalf of the kansas city southern we tried this case for into the eight or nine days with judge lindsay and he was very thorough and detailed in going through everything and there was a lot of  question was a reasonable and necessary even if it's magic words or whatever this just didn't come up i mean it just seems really strange to me in such a long trial that no one thought to ask about that such a basic point and you're right i we i think we all agree even mr ludden and her would concede it's not the word it's the evidence that you need to worry reasonable in have to be used so if we were to conclude you did have to prove reasonless he said you glom together a bunch of you and said this is the number answer that and show us how you didn't glom it and how in fact you did show it to be reasonable even if you don't use the word here first off the first component is the actual purchasing of ballast prior to this project beginning k c s had arm's l negotiations with ballast suppliers with mines to acquire a huge amount of ballast in great quantities this was the largest new construction of rail in probably thirty years in the u s of seventy nine miles of brand new rail so this was a big deal so k c s his expectation going into the contract was we have to pay for the ballast so they had to pay for more of their expectation changed in their cost increased so that was an arm's length transaction there's four hundred plus thousand tons of ballast purchased for the entire project only seventy thousand of that is what we did was wasted it's the same price or the same a arkansas ok what they're saying that arkansas was more than mexico and you know went to arkansas and and i don't recall that testimony there wasn't different prices arkansas head that's the granite mountain where you had to use the t ransportation for a portion of it when you go to mexico you had to have some customs fees and things of that nature what k c s did was get the ballast from whatever sources were available close and was the as macaroni and cheese that you can probably pay a dollar per box or right if the dollars were box it's rock it's rock now there was a case we cited where there was evidence that farmers would have paid something to do something it wasn't done it was a case we cited in our lead in our letter brief and the court said well that's evidence that somebody else would have paid that amount so that's sufficient to support a verdict here we have this evidence that k c s would have paid the same amount and they did it in ordinary business context not in a we're going to go stick it to them because there's there's a breach and they think that's a distinction nothing's making and i will be posting lies here but if it does is that the distinction  the big distinction with mustang is that there was evidence that the other contractor was significantly higher than what had been done before also that's a new party coming into complete work this is this is nothing changes k c ballast before during and after the entire project part of the time that ballast is coming in the p r i is wasting it but the cost to k c s is the same throughout so it's kind of like you say what's the benefit of the bargain well what the benefit of the bargain expectation interest for k c s is that balfour was going to build the track according to the specs which means without waste to the extent they didn't meet that expectation the expected costs go up so their actual incurred cost is what has increased what has changed so to bring k c s back to their how would we frame if we assume that mustang applies here and i know you disagree but we understand that there can be different circumstances such as you know in ordinary course kind of limited availability sort of item how would you phrase that rule if we were to explain the texas rule in this opinion in a way that sure that you are advocating how would you write that so that i can understand why it is if if the the question is we need to provide evidence of reasonableness then i think that you go to a variety of matters  iraq than it needs to and also you've got to realize this is a logistical nightmare when you've got trains coming in they've got to get unloaded in the moved out and then get to a mind that then is ready to provide them with rock so they've got to go to the right amount it's all that's telling where they go in that the costs are generally the same that there may be more transportation on one or maybe more customs on another but that's not the real issue the issue was this q e number that he said this thirty one fifty seven where you just put everything together how do you answer that yes and that's not good at all it's roughly half of it is the cost of the ballast the other half is transportation costs where you don't have ever had any you don't have all the things you say you know he said that we had overhead and profit i don't recall that testimony what she said is these are what are actual costs are these are the numbers that for instance if there is a the rail moment and we need to charge you pay for that the real need for this power being down this can charge you pay for that power and in these the same kind of calculations that we do when you're building the government the calculations for the ballast cars the crew cost and the locomotives these are the same gap approved  costs that we built to other people so there's evidence that other people are paying this not just balfour beatty none of this was let's create something for this lawsuit and go and stick it to bell for bait this was things that's been done in many other contexts throughout the course of the railroads business so you know there's not a lot of good in the normal course of business everybody is paying ten dollars for mac and cheese than you can charge ten dollars for making right so your argument is we really just did not say the magic word but we otherwise did everything you do do you support the magic or absolutely lynn carnes testimony goes into great detail about how she looked at the cost and she looked at the actual ballast leas for her car as the train crews you know look i mean to meet mr levin your standard we would have to have someone who's an expert on employee benefits someone who's an expert on collective bargain and agreements with engineers and particular time and can say oh that was closed or not how could she do that is an accountant she's doing is dealing with the numbers given or will because she's seeing those numbers in another another context is not just saying in this context she saying it throughout her career and you're done no no read well obviously i think there's a ton more than a scintilla of evidence i think that the court should provide reasonable inferences from the facts to support a district court's in child and i get that but what add a fair amount of trouble between that and we should have the opportunity to provide that proof on the waiver issue touched on that that when i think it's just a misunderstanding of the fact again this is this is a it there's also evidence that leap he complained at the beginning of the project that they were wasting too much ballast the punch list i think is misunderstood the punch list on a project like this is not something in your normal construction contract that gets done when everything's finished as certain rail gets built they hire really with trucks and they go over it and they continually update the punch list throughout the project on that punch list they would write wasted excess excess ballast and so they were going to give notice the other issue is what if they want to do are we supposed to say get off our project because you're wasting ballast we had a duty to mitigate if if this thing were to get delayed any more the cost to k c s would have been of a great much greater magnitude than the two million dollars we paid in but in the ballast let me ask you back to the reasonableness i'll be honest with you that's the only issue that i see has any i can't speak for my colleagues at all but that ha say if you don't agree with me i'd say yes i think that that the inferences they can be drawn are not that hard no one's taking a leap of logic i mean basically you'd have to say that you know pilgrim's pride doesn't know how to buy chicken  and for doesn't know how to buy sheet metal and that their cost that they pay for in the ordinary course of business are are unreasonable i mean these are publicly traded companies subject to audit gap accounting and everything else ordinary course of business and it when you were saying that it kind of hit me like i wonder if i am real about this and they do talk about now it again this isn't a u c c case but it might provide some guidance but that but the c c does talk about arm's length transactions we are talk about cost of goods and part of it didn't touch on this to have a little bit of time is the undifferentiated damages i think that's just a misunderstanding of what leap he calculated just to be clear there were it would leap he did as he said it should be one foot shoulder might have been wasted or might have been too much that was not included in the needed ballast so there is no undifferentiated ballasts thank you the questions all have your argument  and what was charged and not only that terrifying time when maybe it was more expensive what mr wix is arguing is if i'm always paying two dollars for mac and cheese and then i charge it then now we have  problem and i'm still paying two dollars for mac and cheese and that's what i'm charging you then that is some evidence because that's what i paid sort of in the last peaceable possession kind of argument the last before there was any controversy when i had every incentive to pay the least amount for the quality mac and cheese that i wanted i pay the two dollars and that's what i've you know i've been paying all along why isn't that at least some evidence well any cases that go through this kind of before and after rejected it just seems to me common sense i mean there's the mac and cheese and i'll just go back to my stock i fire ten times a year i'm pretty much paid the same price every single time and let's say the eleventh time i fly here it's some because of some lawsuit and i can pass that cost along to a tortfeasor you're saying it's not reasonable at a trial for the fact finder to say well because he paid that same amount ten times what was coming out of his pocket  that's not enough to say that the eleventh time it's reasonable it seems to me common sense as doesn't it's to mean something in the law how can that i mean it just seems to me you want you're saying i have to bring in an expert in the airline industry to say yes the cost the judge cost is paid ever since he flew to new orleans is a reasonable one and that's just it's those those formalities in meeting experts i mean that's why would a geisha is getting so expensive it's why cases don't go to trial and i just  a compelling rational reason in my hypothetical why i should have to have extra evidence that my airfare is reasonable well your hypothetical is is much simpler than that than what they're seeking in this case because what they're seeking in this case  not evidence on say the transit cost then what will we do with that when we send that back for that that could be a barometer type situation where you modify the judgment to correspond you do or judge lindsey either way i think this court could depending on what you wasn't i do want to respond to the comment about the un differentiated damages model which i think is a huge problem here in the the problem is that they assume that every tonne of ballast in excess of the amount expected was a wasted and be the result of the breach neither of which was true the waste as defined by their people was the amount that went outside the track structure and provided no support to the track that was their definition of waste and yet as the court noted this on page three seven one seven they made no effort to quantify the ballast that went outside the truck structure and provided no support their definition of waste in fact the court said he didn't think they could even want and that's a problem the other problem is they assume that everything was the result of a breach again not true for the undisputed evidence showed them that we laid one eleven point eight six inches of bal under the track across the entire sixty five models and i may say what's significant about that but significant about it is that the spec that contractual speculates specs called for ten inches plus or minus to eleven point is within the contractual specs but it's at the very top end nearly twelve and in clear air and climbing that you didn't follow spec well he he didn't really say that with respect to the depth  he he made it another comment about there was a deviation of one inch per thousand feet there's no evidence of that the all the they admitted we did one half inch per thousand feet variation which is within the sides arguments the case is under submission and we're going to take a ten minute break