french law has to say about recovery in port under the circumstances of this case so having having said that the third issue fortunately is not one i need to deal with and i understand the plaintiffs appellants and as the court just noted for purposes of my argument we have two straightforward issues of california law one weather the e l are the up into the air and related investigation cost and secondly whether the e l r prevents asked as a matter of law from asserting a negligent misrepresentation claim just as a base point there is agreement among all the parties that asterism has adequately stated fraud and negligent misrepresentation claims it's very detail forty seven page second amended complaint so the issue is really a matter of law let me turn first to the fraud claim is your honor requested until little more than three years ago there was not even an intimation in the california appell quite that the economic loss rule on the one hand and fraud on the other had anything to do with one another hence when the district court issued its september twenty third two thousand and two order it had a relatively easy process of dispatching the defendants motion to dismiss our fraud claim it was only because of the intermediate court's decision and robinson that this issue has even a resonance and that was obviously what led to the order which is now on appeal in reversing robinson the the california supreme court held that yellow bar does not boil our court recovery for intentional misrepresentation or fraud in the performance duty which is independent arises independently under tort law and what does that exactly mean in this case it means the fraud claim is independent if the fraud causes a harm that would not have a result that would have resulted independently from the mere provision of the non conforming goods i may not have stated that correctly but i think the court understands what i'm saying if there is a form independent of the mere provision of nonconforming goods that flows from the fraud and all of the elements of fraud are presented of personal damages on account of basically injury to a person or property that limit it both times with and i don't i don't think that is fair your honor i think the court was using first of all they did not use and all the time it used in addition on several occasions it listed iran or four different examples we're by the harm flowed independently of the breach of which one of those four and i i can see this was personal injury but there were three others as well which did not relate to personally injury the problem with the position that defendants of cert is that if they were right then the california supreme i disagree your honor respectfully with your reading of the california supreme court ruling plus i think it's the fear reading of the rule of law is set forth independent that that the rule of law which was set forth is the one i described is there are eight is there a claim an independent tort claim and did harm flow from that claim it minutely one of those harms was personal injury but there were three others but you don't with that but the california supreme court got to its independent tort claim by saying an independent mind and that's that is exactly the point in which i respectfully disagree all i understand you do but how can you when you've got that paragraph constructed that way  carlton what matters is what the california courts horrible but that if that were the case your honor there's also the mention of the three other forms of harm there were four forms of harm which were listed in the california supreme court's decision that listed wouldn't have accepted and used the cloches they wouldn't have incurred the investigative costs they talk about the f if if the court were correct why did the court go into all of these other forms of harm and why respectfully did they talk in terms of the in addition the the harm from contract liability but but it's not an independent look let me even concede for purposes of argument the point it's steps that are still written against a premise which we do not accept which is that in any case that does not fall within the square holding of robinson that yellower does apply there is not  of evidence in california law that e l are has ever ever applied other than to negligence and strict liability and there are two california supreme court cases forget about robinson there are two recent california supreme court cases which show that the law and that the line is is it more than negligence you have the decision you have the decision in vs menzies which says more than mere negligence that's where we draw the line you have the same point in office is it more than your negligence even accepting everything that this court says this court thence has to determine as a matter of law of what the california supreme court would have done in a case there is no fraud case in which the l r applies and even if concede that the court says and just we are facts we are demanding if it doesn't answer the question that the court has to decide you do you then have to deal with that void in which there is no case law and you have to acting essentially as the california supreme court have to determine what they would have done given os given erlich versus menzies given the informations in robinson and we would submit that in that gap in the gap that goes beyond mere negligence the rule that the california supreme court would adopt is not to apply l r and we based where that snow they wouldn't have had to well that sounds like what they said if i'm prepared to concede that given the dissent they were looking at the particular facts of this case and sa d we can answer the distinct by saying there was a we ask mind you that's a critical point there was a risk of personal injury but there was an actual injury so so much of the same problem your honor just identified is is present even with that rule but it still does not get this court does not answer what this court needs to deal with because you know that i mean i  what i'm trying to put the question i mean other than rewriting their opinion how the the explicitly say our holding today is narrow in scope and limited to a defendant's affirmative decision a few thousand to one thousand nine hundred ninety nine where would they draw the line would they demand personal injury and we would submit your honor that i mean i don't i don't hear any contradiction of the proposition that there is nothing in the california case law that has ever apply e l o are to fraud or for that matter to negligent misrepresentation of the line drawn in a decision that was rendered is had nineteen ninety nine in two thousand was is it more than your negligence i think that the court if if the california supreme court had to consider this case it would look at robinson it would look at all cost it would look at her like and determined that if there is injury that flows independently of the mere provision of of of of nonconforming goods that that would state a claim under california law there is simply i respectfully suggest that obviously the majority was trying to deal with the dissent they were obviously trying to say look we don't need to reach that issue on the facts of this case because we always have an allegation of a risk of injury but the next court which faces the issue without the risk of injury has ever been mentioned in the same sentence and therefore we submit that that is really where the line is plus i would point out just as an aside that the court didn't go into a number of policy arguments as to why they drew the rule to where it was and suffice it to say i don't need to go through those policy arguments equally apply on the facts of this case so the facts in the robinson case they don't turn on the existence of the equally apply to any kind of e it is it's a different fact pattern but by only holds that negligent misrepresentation which california is a form of deceit and it was a case in which it founded an it which the california supreme court draws the line between some negligence and and strict liability on the one hand and something more than negligence and i have i would like to make three points to the court first of all with respect to ast reams fraud claim focusing on robinson the first point which has been alluded to by the court holdings yeah well there's another building that says if you've got an independent claim that's not i'm sorry you said it well that's one of its holdings it also that the alleged tortious conduct must be independent of the contract that analysis that threshold would have no meaning if all fraud was by definition independent contract and so the holding of the court and the court's intention believe has to be read in because in that context and in the context of the not only the language that was quoted but doctrine alone it's fine the way it is it handles fraud claims adequately the way it is and the court in response to that said no it doesn't because there are different policies which are involved when you're dealing with acts of affirmative misrepresentation and then went on in response to that dissent to explain what that policy was and three times allude to here in a moment three times in that explanation the court emphasized personal injury something that went beyond damage use it went beyond benefit of the bargain that went beyond disappointed commercial expectations when it said robinson's claims are based on dangerous intentional and affirmative misrepresentations that risked physical harm to person it i think it talks more about the basic point that just as werder was making because of those cases she said that those cases are adequate and they are the rulings are adequate to deal with a addition yet had here quite a few review board meetings at which it is alleged that several of the parties went out of their way to assure a that everything was copacetic never mind this problem or that problem use the stuff as yet it's ok it's not going to be a difficulty despite knowledge that wasn't true now basically your position has to be there's simply no recovery for those extra reassurances that turn out to be fraudulent that's correct  clear for whatever reason that to get that one last get outside of disappointed commercial expectations one must get outside of the benefits of the bargain damages and the only way that that is done according to robinson is if the nature of the damages or outside of that umbrella well and stop you there on the first part the point made in robinson is that nonsensical point maybe or line for the not for robinson to sound but they've sounded that point and so it seems to me participation in the review board under robinson is separate qualifies as a separate process in the same way that providing the certificates to robinson was a separate process that that may be the case your honor so we're down to the second which is the which is the physical injury the and and i have to say i don't understand why that should make a difference in the context of the vendor of robinson robins was not the person who's getting killed or hurt that person surely will have claim some place but as far as robinson's concerned it's not expose anything one had to actually show physical injury in terms of property damage in terms of personal injury robinson recognized and maintained the underpinnings of the economic loss rule as set forth me and robinson is different least one respect because there was an actual physical injury there it was the potential exposure to liability you're exactly right that's is the point i would use of us made that there was an increment that robinson added to the economic loss evolution and that was in a fraud case if you can show the potential for damages the go outside the benefit of the bargain then and you you show intentional fraudulent conduct then you may exempt yourself from the economic loss rule that is a new step a small step but a new one and one that the court would not go any further than in terms of saying well we're going to say any time you allege fraud you are ok they did not say that in robinson and argued our suggestion to the court is the reason they did not say that was to create a a an increment that they thought was conservative that they thought was rational in terms of going the on disappointed commercial expectations but was a little bit further terms of a step than showing actual physical injury actual property damage and that's why we say this personal damage aspect of the opinion is so important to robinson if you don't have it then you are in a position where any fraud alleging anything in terms of damages disappointing commercial example of the danger of that is what has occurred as shown in the record here with astra s kareem started out its case with a negligence claim that negligence claim was knocked out by our summary judgment motion the result was the pleading of a negligent misrepresentation and fraud klein if you look at the negative misrepresentation claim it is exactly the same terms of damages alleged it was a response to being disappointed with a negligent claim to didn't work that's not in our view what the robinson court wanted to on that more because i think robinson is saying and the policy discussion says you don't anticipate you don't anticipate the need to contract against all you don't think you have to put in your contract a guarantee that someone will respond honestly and mastery makes the same argument here ridiculous regard to the follow up investigation and their effort to find out what had gone astray if you really wouldn't expect a contract to say and we will answer honestly when we're asked later so as to back element which robinson appears to describe as separate at least perhaps not up to independent whatever that is but seems to it clearly says should contact that's separate that's a little different from saying any breach or contract can be called a fraud i don't i don't know that it is because here you had a contractual requirement prove to provide certificates to conform so that's what the court was focusing on it's not an extra contractual requirement and it's my observation before i'm not really sure why certification is enough to make it separate but robinson says it's enough to make a separate and treats it as something separate from the contract because presumably the f a a requires certification well and i think i think what robinson does in connection with the nature of the conduct quotation that indicates that where the conduct is intentional focusing on intentional conduct gives substance to the proposition that a breach of contract is tortious only when some independent duty rising from tort was violated so certainly the intentional nature of the conduct is an important element but it's only one element on that i mean it seems to me if you look at the facts of the cases i don't think robinson's case was a good has true the allegation here by my plaintiffs is that when we tried to find out what had gone astray we got intentionally untruthful answers that's something you need it seems pretty significant to make at least separate from the breach of contract but i'm not disagreeing with you your honor i think and i but again i think it's is as far as teachers guidelines are obscene uses it is one but only one element certainly the conduct me not that we disregard the second element but it takes that away from what i hear you saying which is that if we don't draw the line here any breach of contract case becomes a fraud case and i don't think that's true i think we have something more alleged here than a reacher contract we have investigation stage alleged misconduct that that is separate from from simply performance or nonperformance or non delivery of conforming goods so if we get to th becomes is that subset narrowed even further by the physical injury or property damage requirement and our answer would be is that it is and it does have it and i'm that's what i've had trouble with is trying to figure out how as an entity is any different from robinson's as an entity in two respects and one they're both corporations they're actually going to suffer the physical injury themselves and it's as set up there it's not their product it's going to be destroyed limbs situation different why we're really saying i see what the robinson court says but it's it also could be saying we don't have to rule on that case today why should so much weight be put on the risk of liability to somebody else for physical injury as opposed to very disappointed economic expectations not not the plaintiffs here but this third party who can claim against the plaintiffs robinson points to the liability to a third for the the requirement that the damages you allege have got to be outside of this benefit of the bargain disappointed expectation umbrella and in robinson's view it was sufficient t petitio a potential for something that went outside of that that was not under that umbrella in order for for the fraud claim to be allowed without destroying the underpinnings of the  that were the basis of the court's opinion was it's a different because because robinson surely expects to manufacture helicopters that work and understands the manufacture helicopters the don't work they're at risk of this exposure so it's the same nonmoving party improperly and threw them in favor of the moving party fucker but i i think i'm your guy i'm french lawyer so i've got to address that very quickly first of all i would say that the whole subject was not considered by the court below at all the court contract at all there were dueling expert opinions french french experts the bottom line is this the the are our expert that is  are two separate experts basically say that there is nothing in french law even in the contractual context that precludes the tort claim fucker's expert says that is not so he disagrees however he says in you that despite the fact that there is a contract there is a cause of action in short under french law for what he called willful misconduct or at least that's the english translation willful misconduct or gross negligence i would argue however that it's really when properly viewed moves in this sense i thought i would argue that if we do stand in the shoes that is if pilkington and ofc do stand in the shoes of  in prosecuting our third party claim we would and could exercise as reasons rights to terminate the contract for default there would be no contract there would be a clear open field for any tort claims and then in that case  fucker i really have only one comment to say in response to the french law issue that has just been put forth by mr hunt that their expert in fact did not state that there was a tort like i said action their expert said there was no the california statutory law of fraud remember california civil code by law provides for fraud damages for economic injury if if subsumes essentially all economic injury for fraud the statute seventeen zero nine fifteen seventy two is even sarabjit in our view secondly building upon the point that judge clifton made i think others there were there was fraud independent of actions required by the agreement there was there were investigations that took place in which we have alleged that fraud we were given consciously false information that there was negligent misrepresentation and fraud that took place plus again a point that was made by the california to the eighteen states that have the opposite rule there only for those states that have a rule which provides that l r applies to fraud at least eighteen states take the opposite position we understand we're not asking you to assaye but the fact of the matter is that the reason the rule is in place is as a practical business matter businessmen cannot conduct business especially sophisticated businesses of this tied in which they are having a fraud throughout the process where c e o s seas are fraudulent where when they investigate there are is fraud taking place that is the regime that we can tolerate and we would submit that properly presented to the california supreme court on these facts they won't tolerate either we submit that fraud is so adverse to the public policy of the state of california that there is no question that the l r rule would apply to what the california supreme court would not tolerate it nor would the business climate of the state tolerate it thank you