bylaws of g s group which was the corporate parent vs co he would be entitled to advancement of legal fees pursuant to section six point four of those via was yes group he wants those legal fees advanced to him so that he can pay his attorneys for defending him in the criminal proceedings that have been brought against him as a result of his stealing valuable computer code from goldman sachs absent is being an officer he has no advancement right that's not in dispute honor i'm not sure that respectfully that's the right question to ask the delaware case law instructs that if a term is not defined in a contract or in a corporate instrument like a by law which is interpreted like a contract the appropriate place to look is the dictionary the appropriate place to look is not just the general public's view of what particular word is and moreover the term vice president is not the contractual t term officer is what's important and under the delaware supreme court decision in lorillard which mr lenny cut cited at page twenty eight of his brief dictionaries are more than just a discretionary interpretive date they're actually a mandatory place  r is really the place we have to look for the relevant contractual language section six point four which is at page one seventeen of the appendix so that advancement will be made to anyone who is a director officer to the g s group the parent company six point four is a separate provision and it sets out the overall scheme for providing advancement to people who are a subsidiary of the company and further down in section six point four we have a description of what officer means in the context of the litany of wars i just went through when is a vice president then in europe and a vice president is a job title at g s co and nothing more nothing less it's a job title was an officer if that person had been elected or appointed to an officer position by the general partner of yes go then the answer would be yes but absent that election or appointment the answer is no and it really the sin qua non of being an officer as as shown in all the dictionary definitions that we've cited and in dictionary definitions that we didn't cite because i made sure there weren't any that were inconsistent in the last couple of days all of them speak to authority in the heat to be an officer having a level of a of commander trust so what makes a vice president an office well nothing we submit but there are processes involved there is a process involved but i think before you get to that process you need to look at the  and the common terms or appointed or elected someone in a position of authority or position of trust at least for purposes of a line of cough wasn't he an officer is made but if you look at the deaf dictionary definition they use the word appointed and i'm hard pressed to find any distinction between appointed and position as vice he was appointed to his position he knew agree with me he was appointed as i will i'm not sure that i would agree with that for purposes of the election or appointment procedure that's really all that there is definitely agree with me he was appointed to the position that he held he was appointed via being hired as a vice president as a vice president so the question then would next be did he have authority and the answer there is clearly no no i was i would that senior that means you're above of the people that you're above other people if you're a vice president absolutely and everyone that's below the vice president position even mr lanny cop admits or not officer is really talking about pay scale you're not talking about respons supervise anyone he bore none of the badges of being an officer and it is it is going back to the plain meaning of what officer is and also i think it's very important for the court to consider the overall scheme of what this byelaw does if the court looks at the g m g decision from the delaware supreme court cited by both sides you need to look at the overall scheme of a contract or buy a lie in order to interpret what it's doing here the overall scheme is informed not just by the use of the word officer but obviously by the language around it and if you look at the second and third subcategory of of officer in section six point four they are someone who is acting in a similar capacity to an officer that subgroup to and then someone who is the manager of the non corporate that in their title in other words well i think with the district court did i'm sorry i'm not sure i understood the question are you apologise the question is did not the lower court go through the same kind of analysis that you collating right now to come up with this decision no it didn't your honor it said plain and simple if you have the title of vice president you're an officer is the first case ever to hold that the c r a case in the second circuit the gold case from the fourth circuit that in  borders and i'm my and public access cases all found that having the title of vice president is not enough in and of itself to be an officer you need to take a deeper undertake a deeper analysis of what the person did and that would guard i would cite the course of the of words corollary the reasonable expectations of investors doctrine to someone who is trying to come within a contract trying to assert that that person has rights under a contract knocking at the door of the building represents the contract in st i belong in there all of those cases the stockmen case and every other case cited by mr lenny is a case where there is no dispute that the person who is ultimately deemed to be entitled to the benefit of the case from the delaware supreme court from two thousand and twelve it says you need to look at the overall scheme and where i was going before was that the overall scheme here is that advancement under section six point four is given only to people who are at the senior most positions look at people who get it other than officers on page one seventeen of the appendix directors trustees members stockholders partners in corporators and then look at those second two provisions of the the eagle industries decision as adopted by this court in the m b i a decision is appropriate to consider are appropriate to consider to decide whether something is unambiguous in the first place here you can look at these are disputed background facts those judge referred to them in their not so doesn't it in the bylaws but to differentiate the first section six point four one which applies to the corporation but to be an officer that you have to go through a process is that mr duffy is now that you have to be that comes to him from the vice president it's a eleven o six in the record and it says we're pleased to welcome you as a vice president and so if i whatever reason lose this job go to work for goldman and i'm told mr joe you are going to be in this ten by ten foot room just you and you are vice president of supplies either and that's why they have whistled up this statutory argument this by laws argument which as i believe your honest questions make clear is simply it is this is no basis for it whatsoever what's troubling them  they go full leave that indemnification and advancement rights ought to apply when an individual is accused of perfidious acts against the corporation that is not the law if they didn't want to pay indemnification and advancement to someone who by reason of his employment was not only accused of wrongdoing but was accused of wrongdoing by that in your honour's example your employer says you stole the paperclips and now you're going to be we're going to go to the f b i if we could was a federal offense out of that and we're going to have you all on the carpet and you say well thank you very much you appointed me a vice president your by laws say officers yet indemnification anybody i've ever spoken to in guaranteed under the bylaws do not go away because you happen to be accused of a perfidious act against the employer lots of times that happens goldman sachs has no problem when people are accused of stealing for in defend they just have a problem if someone is accused of stealing from the problem is they know that's not the law they know and we've cited the cases throughout our briefs they know that even where you are accused of perfidious acts against the company if the bylaws insure your home you have indemnification rights you get so instead of approaching it from the legal religious perspective that your honest questions are approaching a promise this time they simply say look we know we don't want to pay this guy so we're going to say he's not an officer yes well he is an officer he was appointed of vice president that's an officer position that is go back to the point regarding appointment this is six six point four yes or which which refers t term office or wing is with respect to the corporation shall refer i mean from six point four one to three farragher instead of what about the middle of yes that's the term officer when used with respect to just because you're a vice president apparently according to this doesn't make you an officer unless it's pursuant to other provisions i completely agree with your honor and goldman sachs was quite careful when they drafted their bylaws to make sure that when they were talking about someone who would be if i sed president of the parent company that's the cap see corporation that's the language your honor was a verdict we call that six point four subsection one although it's not so designate when used with respect to the caps see corporation the parent the goldman sachs group the defendant the drafter of the bylaws officer shall refer to quote any officer elected by or pointed pursuant to authority granted by the board of directors of the corporation pursuant to clauses one two three and its rights and that's are parent of the second section when used with respect to a subsidiary or other enterprise that is a corporation shall refer officer shall refer to quote any person elected or appointed pursuant to the b of that company is that when they get to section three which is where we are all of a sudden this appointment language that is the entire basis for their claim in this case is gone the whole idea of this is a point only is an appointment as we normally understand i sent you a letter in your point but this is of wanted process we don't tell you anywhere in the bios what the process is how and in section three this section for some reason although it's in the first section and in the second section all you know this question was asked if you were mr duff it was honesty how why why not fix the bylaws and it's unrealistic is this on realistic with respect to aac let's go to section three i'll show him how to fix it if i can used with respect to a subsidiary or other enterprise that is not a corporation that's descended ohman sachs and co is a limited liability company there is organizing for interest action the term officer showing klute in addition to any officer you know how they could fix it shelley clued it in addition to any officer appointed by the special you know it it with hard though is it the way you're you're analyzing the process it's much more stringent for the corporation to become an officer because it requires it's good for the vice president it's a form of compensation right you're a vice president you're not some low level person and it's good for goldman sachs so that when all these vice presidents deal with the counter parties and mr weiner coughs the testimony in this case for m to it does benefit them and yeah if you're going to be a pro you're an officer of the who operate in caps it right with all the sort of these and these are the executive officers they get the big wigs right define the term in a circular way right now this is how they got judge is an order of the district isn't one of the areas in the district courts analysis that it started out trying to analyze what a vice president was oh i don't think so you that for some reason they diverge to this rule i cannot imagine why that rule specifically states definition of office or definition of vice president definition of office or quote the term office or means president vice president secretary treasurer and so forth anyone absolutely not and that's why it's a point that they are careful to say when used with respect to a subsidiary or other enterprise that is not a corporation the term office or showing plute in addition to any officer of such entity any person definitely you have to analyze what an officer s like as it refers to officer that's right so you go back then to the dictionary definitions of officers because it's not the fine and you get these points of appointed  elected authority or trust and if you can i got at least i got your adversary it was tough to get him to do that at least the knowledge that ari maybe mr a lot of coffees a point that he said that there was absolutely no authority what you say i  authority to do a particular act is completely irrelevant i say that goldman sachs and company the goldman sachs group i beg your pardon the parent had within its capacity the right to do whatever it wanted in its bylaws back to your initial question they could have said we will indemnify you if we choose we are not going to indemnify you we reserve the right to withdraw if we don't like what you did if you perform an act that we think is not in our interests we don't happen to fight this is not approach definition we i got a guy who's a vice president is appointed vice president what those that need does that mean he's an officer your honor judge appointed by you said it and if they say argue that's not the question of action is what's an office l say the same point i mean if i were if i were to say to you oh i'm not so sure that you can i'm not so sure that you can so easily say that well as as we're instructed to analyze right questions about what is a by law me and that's really what's before yes what is a by law me right and the way the first clue is the first time they use the word officer is it it's not in section sixty one for its inception one point first time to use the word office or they use it assuming everybody knows that's a kind of office or relate a subsidiary it doesn't but might not and that's not my point same thing for four point one four point one doesn't relate to subsidiaries either but again four point one the board of directors shall take such actions as may be necessary from time to time to ensure that the corporations have such officers as are necessary to do x y z and included in that section three one or more vice presidents and in section four or one or more other offices particular office anybody reading that would think it must be in the memorandum of a why is he telling us in the first sentence that it's governed by a memorandum of agreement and in the second sentence how this appointment process works when you look at the memorandum of agreement it's not there anymore than it is in the body so i look at this pretty simply and try to be as simple as i can if you had to go through the mental gymnastics that you have to go through to and i took trops deposition and i had hair again i'm telling you he walked me through the most byzantine journey it's like a like an acid trip through new york partnership law to try to tell me what a you that there's an ambiguity well i'm not so sure judge if a person just want to i don't mean to interrupt a question but well i think it's either unimpeded mislead the case that he's an officer at best case scenario for them there's an ambiguity so let's assume that's the case clearly and first of all although the judge below who go we claims he misapplied the standard cited facts against him what he said is quote even resolving every material factual issue in favor of goldman i find that the law may be enforced as written so he accepted goldman's claims that it points officers by resolution and pays the legal fees of nearly everybody and that neither that process nor the payment history is published or written anywhere none of that raises a genuine issue of material fact so at the end of the day when we know that first of all before you even get to the question of ambiguity when you realize as judge mcnulty clearly realized at the end of the day as i have a strong public policy in favor of answer i have a provision that sure seems to include a vice president sure doesn't seem to anywhere get specific about not just appointment in the sense of essential letter but hey you have to have this process i officers from non officers that means in the minds of the perceived right it's got to be clear it's not be clear to someone then you find out it's a secret appointment process i say who knows about the ever tell anybody do you have an orientation session when people com you say you know the bylaws these are sloppily about office you're not you have to be appointed by this written consent now we don't do that well do you publish these now we mark i'm confident well how would i know right this is what once i'm successful i get in the face but here ok is that true with regard to this case in the state court now it's we have one so that it's advancement in the state case that we're looking for it's indemnification which judge mcnulty has ruled on because we haven't had  that's not before us that's up for that's that's the issue of we want even their appeal from a denial of their summary judgment motion doesn't bring that part of for us their appeal of the denial of their summary judgment motion what would happen because this case turned on what a definition of an office was i always thought that what would happen is just rebuilding would resolve both issues that we have discovered on whether he was an officer in that we take care of  as well as events instead because discovery was limited to those narrow issues which frankly have as much exactly as much to do with the dems action as advancement but for whatever reason just recalled he said procedurally i whether if you find that there is an ambiguity and that the doctrine of contra preferential does not apply how can you refer and the answer is that you cannot because then there would be dispute in the evidence on both sides  it's in the case and we are entitled as the nonmoving on his motion to have every inference drawn in our favor and only if a reasonable jury cannot possibly find anything other than that he was an officer would he be entitled s argument that because of the fact that delaware general corporation law section one forty five today says that the delaware chancery court has to or at least should or can go about deciding advancement the it was called the summary proceeding therefore judge mcnulty should do the same thing now pages one ninety two one ninety two of the record in the december two thousand and twelve opinion judge mcnulty goes through in some detail why that's wrong because it would be a matter of state procedural law that cannot be applied in a federal court the federal rules of civil procedure apply here the summary judgment does and it's a rule fifty six applied here but now fast forward to december i'm sorry october adjudicated now again pages one hundred to one ninety two of the record the district court made clear that the summary proceeding doesn't apply but again fast forward to october twenty third seen at appendix pages sixteen seventeen this record said that the delaware vance made statute quote almost explicitly prioritizes speed over accuracy unquote that's what happened here you prioritize speed over accuracy and more importantly for purposes of   that the delaware advancement statute quote contemplates a truncated proceeding ordinarily on a paper record that's not the summary judgment rule summary judgment doesn't say that he gets to have his rights adjudicated on a paper record  and ultimately what judge mcnulty found is that that's imbedded in the state's substantive law that's a direct quote you tallis size that so he went completely the other direction without explicitly saying that he did so but i think the comparison strongly favor advancement even in doubtful cases unquote now that beyond being in a misapplication of state procedural standards in a federal district court is actually an improper burden shift that puts that appears to put the burden of proof on us i think the delaware supreme court wants you to look at that though the dictionary definition of officer and i would also cite the courts of the smartmatic decision from delaware chancery court very similar issue they were trying to define the term united states and they were trying to decide whether it included puerto rico  the court went through lots of definitions of the united states in various cases and statutes and said that in response to an argument made by one of the legs that definitions of the word puerto rico the term puerto rico even though they say it is in the united states are part of the united states those are beside the point because the contractor will provision at issue was united states that's where you need to look that's the smartmatic case i also want to make sure the court doesn't lose sight of something that the district court wrote that elucidated court just to by way of example number one as the court to decide if this is there are disputed facts at that point if we find any ambiguity oh without question if you find ambiguity then if you draw inferences if you did only sends this back to the district court for well your honor but the reason that that hypothetical is wrong is that mr when you cough is not a party to the g s group bylaws remember these are bylaws a g s group the parent company you have no role with g s group so he's certainly not a party or if you go back to the district courts october i'm sorry december two thousand and twelve opinion the first opinion denied summary judgment the district court there made clear that this isn't a typical advancement situation where there is a dispute about whether a particular claim falls within  advancement rights so mr moreno got up here and smoke a lot about goldman sachs not wanting to pay for legal defense of claims that were brought by virtue of his client stealing from goldman sachs that may be true but it's not an issue before the court it's not an issue we argue we're not arguing that we are free from advancement because of the nature of his claims we're arguing that we don't have in advance an obligation because he's not an officer and therefore has no rights whatsoever say you did not want vice president elaine to be an officer you should have made it clear in the violence i think it is clear in the bylaws you can always make something clear is an officer or not has to something could have been written more written more clearly than it was does not make it invade us and ambiguity as to be judged in the context of particular circumstances that's the teaching of the new activision case that came out after the district court's order you have and as to the issue of advancement in particular the court must the court must generally have a paper record resolve doubtful cases in favor of the employee that said there is room for disagreement unquote what he said there is that he gets the benefit of the doubt and we