i'm steven carrick attorney for petition disregard of the law when they found in favor of the claimants in that arbitration in a kassam and awarded damages in in person at the hearing but did not find any liability against any of the other persons who exercise so is it is it your position under the securities laws that the president of the company is not like the naval captain who is responsible for everything that occurs on board the ship even though he may have been sleeping at the the cases in this very circuit in fact is in your control person i guess i'm i'm having a hard time understanding that last statement when everything language of the statutes defining controllers well  what you're not reading is the cases that have applied the statute as recently as february second of this year in this very court the case just came down it was evidently that always gets a laugh in the very last section of that case which was evaluating the propriety of plaintiff's trains under sections fifteen eight thirty test to attach liability to control persons and i would be silly to argue that the president of the broker dealer i activities of the broker in other words the typical ostrich with its head in the sand don't want to know with that she instantly a president of a brokerage firm from liability well it might any interaction in fact he's not even named in any sense except to state that he is the president of the broker dealer and quote a peaceful person they just make that  in sufficient there has to be something more and that's something more is the knowledge of the improper trading activity that something more is perhaps the direction the improper trading activity that something more is perhaps even intentional hiding from that but we don't have any of that in this case we have absolutely no evidence that was presented at the arbitration that suggests mr phillips had anything whatsoever to do with the improper talk about the burden of proof because they say it's the burden of mr phillips to prove that he is not a controlled person and that's not the law or you know you know  fact that he is a control person it's the knowledge element that you're disputing that's correct it's the knowledge of that's correct i would i would think that he is in a position of control but i do dispute if you're using there has to be moral and hollister which was brought to the attention of the arbitrators also with threats that in birth footnote that we've drawn so much attention to which is no twenty four that decision sad if you are the broker dealer if you are merrill lynch if you are into first happened corporation you are a control person and you are the state court of appeals has i guess confirm or affirm the confirmation of the arbitration award right i will do that  first of all i don't think it has any application whatsoever because we are not asking this court to issue any order that would overturn anything the los angeles superior court did or competing i should say motion or petition to vacate that we brought in the federal court they went on parallel tracks here but she won the race to the courthouse she got she got a decision out of the second district court of appeal before you could get a decision from the ninth why doesn't that move the ninth circuit appeal well it doesn't move it for the additional reason that mr phillips is a licensed individual license to sell securities and issue that was decided by the state courts that's correct and now we're right back to record fell well no we're not because we're not asking this court to vacate the state court judge but you're going to use that for just that purpose with any s we're going to do is say you can't engage in any disciplinary proceedings based upon the state court because the federal court found that we didn't do anything wrong you can't use that as any precedent to let you have a different understanding of court authority that's what i understand a record feldman to be telling federal courts we are supposed to be doing we're not supposed to be undermining the efficacy of the judgments of a state court on identical issues of all well that's not if unless you can convince me that i should be looking at the merits and rooker feldman tells me don't look at the merits because to do so my under the basis of the california court determination which confirm view that's that's not my understanding of the essence of the book of feldman and at least the way in which we briefed it on the way in which i understand it nobody agree for filming because the state the state that we filed a petition to vacate an arbitration and ordered that had no other president anywhere else i mean there was a ten day difference i mean if you want to bring in the t and in fact we even cited several cases that said justice should not be determined by who wins the race to the courthouse first especially when the parties are diligent and they have no control over the docketing of the various courts to which they are seeking your response to the motion i think ok filed in our court in september thirteenth there's no index of cases or matters discussed in the brief i've just briefly on the bench page opposition to a motion mr perry in your research did you come across the ninth circuit decision two thousand and three g c and k b investments versus wilson three twenty six and third ten ninety six i don't believe that we did this as i read wilson and it basically says hell that where you are seeking to have the arbitration award vacated on the grounds that the arbitrator exceeded the scope of his or her authority that we can't review the decision because that same argument was made to the state courts and they not familiar with the decisions which i apologize however we are before the we were before the district court on two grounds the exceeding their authority and on the ground that arbitrated acted in manifest disregard of the law we were not before the supreme court on a part of me we were not before the superior court in california on those grounds that all of my recollection serves me not make that argument in the state court i think that's right so the state court grounds the california state rules and statutes for vacating arbitration award are narrower than the federal statutes and in this case the agreement to arbitrate was governed by the federal arbitration word and we tried to get it heard in federal court for that reason we were genine in the first instance and then they moved forward while this appeal was pending and they got the relief they got so it looks like i'm practically ou assisting the parties and courts in determining what section twenty liability acts i think this is a good opportunity who evaluate that but you know  arbitration award even in the face of erroneous interpretation so i'm familiar with that case and i understand it but there is this the standard that is the manifest disregard of the law and in this case when you have an arbitration panel that had the claimants customer the supervisor of the broker the compliance officer of the company and found neither the compliance officer nor the direct supervisor of the branch manager who had the ability to control as did they supervision of this broker when they were found to be not liable then it's our position that a finding of liability against the president who is not much further removed from any actual involvement from any actual knowledge of that brokers activities from the panel the groper he settled out there was no finding of liability by the broker so we don't know what happened with yet the branch manager he was found to be not liable he had day to day supervision over the broke the compliance officer who's responsible to ensure compliance with the firm's procedures and with the law he's found not to be liable it's that we find liability with the only person left standing who for the arbitrator's to have completely absolved everybody in the middle from liability and then tag the president of the company actually not at all and i think there's two respon first we could just as easily argue that the arbitrators were wrong in not tagging the intermediate supervisors that's that would be a question of fact which isn't reviewable and we're not here to do that but secondly and i think more and in the actual words of the statute are quite clear on that so the reason there's no inconsistency in the reason the arbitrators actually got it right before you even get the manifest with regard mr right and mr briggs the two intermediate level supervisors they were that they showed up and they testified so again the arbitrators were potentially wrong and not holding them liable that would be  that's why i think there is no inconsistency there and i think that frankly is the appellant finished without argument because i thought that that's their strongest talk to show anything and i think there is a  very good legal justification for what the arbitrators did before you even get the manifest disregard but if i could back up for one second i would like to address the motion to dismiss i think it's a starting and that is it's not correct to say that worker feldman applies only if this were a federal action specifically to overturn a state court judgment it's that but it's also the federal court to reverse something to do something that's an extra coldly energy flying that is the case language with what the state court has done so that they clearly couldn't  see that from their opposition to the motion to dismiss because they're saying they want to go back and try to get the money back that's been paid on the final state court judge so that's sort of part one of the ho choice if they if they say they want to get the money back then they're showing that worker feldman does apply because they are fact of lee asking you to avoid the state court judge if they're saying they don't want  state court judgement and they don't want to get their money back and this is just some sort of intellectual pursuit well then it's moot as the court noted so i think either way feldman  briefly three points one the argument that that the arbitrator succeeded their authority is completely without merit as the district court found mr phillips answers his attorney it because he didn't testify so there's no basis for that argument and the culpable participation argument is wrong and now really on the reply brief they're arguing for the first time that we didn't show he was a control person because that's their argument i would submit three things in response to that one we did showing this quote six stocks that are cited in the briefs and he was the president of the small brokerage firm and hacked the hacked case which we cited shows that brokerage firms have a duty to impose systems of control and there's no evidence that that was done so that's point one that they raised the argument that mr phillips was not a controlled person before the arbitrator's so if they didn't raise the argument which raises the little legal issue which they say the there's nothing to that mr philips was named in the statement claiming he was subject to the jurisdiction of the n t has d as a member of under their rules he appeared by answering he appeared at the arbitration through an attorney authority culpable participation argument was wrong as a matter of law that it was our burden to show that and there can't be manifest just regard on this issue that we didn't show mr phillips was a control person construed in applied section twenty we find arbitrator's acted in manifest disregard of circuit law if the decision didn't come down until a few days before this oral argument the decision control and that we actually need to exert it that control by having knowledge of the improper trading activities that's when the good faith defense comes in and and if you can show you have good faith you can then get out from that liability and that's the defense burden is always the plaintiff's burden securities law is not some magical other area of law where plaintiffs don't have the burden to prove their they must prove you were a control person as the ninth circuit defined it and how is your went to great pains to say the that only applies to the broker dealer firm it does not apply