rights sections one point warning one point five of newbern a class action as well as the controlling all side and those sections makes clear that it is the trial court's job to make sure that the procedure selected to handle the pellets claims affords process the claims apparatus claims administrator the district court i mean your own team of these things etc by definition the parties hammered this out as a process so the court's going to access some discretion which wants to see so excised this question means some are some aren't you know it cetera so within the scheme of the apparatus that we're familiar with you know it's there it's set or you know you gotta convince us of how in this instance to discretion is abuse i e the just record you know didn't look at and we give we do and i wasn't trying to be political in talking about the numbers but we get a lot of these appeals where the complaint is that it's accorded not exercise discretion to review it it's error but inherent in the setup that the parties agree to they're going to be ones to which the court looks that same judge and does not so how do you get within zone of this is one where the discretion is a b after the agreement was noticed and settled they changed it some five hundred some odd times by issuing certain things they refer to as policies some of these are not controversial others cause really big problems or firm alone represents twenty one appellants in the visceral litigation process who have a claim that was affected by a policy issue some time after it was noticed and settled and the opt out period ran in most of those instances specifically here in two thousand and eight the claimant had a non twelve month period for its own books a thirteen month period the exhibit for a of the settlement agreement requires him to restate  on a month to month basis with contemporaneous documents he did that the compensation analysis yields him a positive result on those profit and loss statements later on a policy called to eighteen was issued that says the the misapplication prong of this is that he got it wrong when he restated the prophet most states he restated all yours not just twenty eight saying and if you look at tab five of the record it serves when you use the profit and loss statements originally submitted over five year period they are within i think like twenty cents of the tax returns if you use the claims you missed rate or one hundred eighteen thousand dollars for the difference there are nonsensical adjustments this is a grocery store was the basis for the adjustments why why did the coins administrator restated we have no idea when this wound its way through the in class appellate process the appeals panel has the right to ask the settlement agreement this claims ministre or why he did this and he wrote over i'm allowed to enter policy to eighteen and that was really the end of it there was no in depth analysis it wasn't like an opinion from this court that may get issued at some point that go step by step to she's a simple blanket i did it because it too  and we think that that what got moved revenue across multiple line items of we think every single month in the six month period with no real rational basis you take beer and wine sales at the grocery store some months they go up some months they go down court case if you're going to adjudicate the rights of absent class members such as this one the procedure selected for that must ensure due process and here you raise due process below or even in your brief both yes it's in the reply brief the hands very badly cases cited as well as a large excerpt from a new version of class action that that's where i was going with this eventually and in fact what we asked the judge to do in our three page letter brief on discretionary view was to warren take a look at all of us and help us understand what he did and to if he couldn't do that let us get out of the agreement a stablished baccy an opt out ri so that we can go somewhere else that affords us due process and after we asked him to do that he said no in this instance but he has subsequently said yes in other instances for other types of cases so we know opt out or opt out and i know at least one of them did because we represent him and i got a notice last night saying we got your opt out you're out also so at the core of the we're asking this court to result stands so as an alternative form of relief we think that you can reverse and render was instructions to let claimants who feel as though their due process rights haven't been taken care of here are to get out and sufficient documentation you meet the procedural requirements of open ninety to present your climb to the responsible party so we think there is a legitimate way to get these things into a the new that would allow resolution of  that protects its due process rights and it's a traditional lawsuit of backing up the right and to the extent there might be an argument that this is just about claimant i d one zero zero whatever again i go back to this in the last ten days this far has noticed one thousand separate appeals to this court re separate policy was an act of two weeks with the overall policy two eighteen wasn't subject to a class council appeal right and i sat on the recent appeal of the other policy of a class council as a whole challenge the new  ninety five of us found i don't i can't speak for why class council didn't do that i do know that we didn't find out that we had a problem with two eighteen in this specific instance until it was done and our only remedy was to ask the court for discretionary view so i think we preserve and pursued every single challenge we possibly could have here although i can't speak for class council on that i don't know if there's five hundred ten policies but if we call it that we know they challenge once or why they didn't know the other five hundred n instances i just don't have an answer for the court on that the court i'm geoff clark from personnel is here on behalf of b p i want to go through in march through all of the arguments that mr aimee's presented but let me just start with the ones that he presented from the podium today and try to rebut those quickly so he started with the due process argument saying that somehow this policy was adopted after things had locked in and you know there was a bait and switch essentially the critical g completely destroys that argument because policy two eighteen which is the only thing we're really here talking about they really only preserve two issues the policy two eighteen versus four sixty four ostensible conflict and then an argument that somehow because the settlement is claim it friendly that principle was violated here i don't think either argument holds water but those are the only two they presented so first as judge cost it was noting they waived any due process argument but beyond that turning to the to the chronology policy to eighteen was adopted in august  and twelve is before the opt out period had run its before final approval had been given to the settlement it's a very clear incredibly concise mathematical formula that a you know a competent high school students actually could comply i'll return to explain why that's true but that's that's the nature of the policy and that's why no one objected to it mr kirk in dollars firm that mr amy is with you know it's they have you know dozens of cases in they have lots of other plaintiffs that they represent they didn't raise any challenges to policy to eighteen and if they thought policy to eighteen which again is very straightforward was somehow unlawful they could have opted out of the settlement because the deadline didn't run i think until november of two thousand and twelve so the policy that they're relying on actually policy for sixty four was adopted in twenty thirteen in september  thirteen i think that that chronology totally turns on its head mr amy's argument because there there was nothing in the settlement that specifically said what happens if you keep your books on a quarterly basis what there is an exhibit for a is a clear instruction to the claims administrator that he has discretion whenever any data is put before him to penetrate into the ability of that data to ask questions about it to you know we crunched the numbers he has a bunch of expert accounting vendors and he uses them and they ask the questions here they apply policy to eighteen a date they converted quarterly financials into monthly financials that's all they did they didn't move revenues around in some kind of willy nilly way all they did was take policy to eighteen and say you know if you have a period that's say thirty you know twenty eight days long or something like that we're going to you know take the bet that period will be january and we'll figure out what coercion is going to be the rest of january is january has thirty one days that's helped policy  to eighteen works so i think the due process argument falls the second reason why i think this case falls that came up when mr amy was at the podium is the question from chief judge stuart about the fact that there is a threshold requirement is the bailey lumber  panel have held that you have to show the judge bar be a by not taking a particular case abused its discretion and this is a you know i'll explain more about it when i could do kind of march through each of the issues but it's very fact  and it only involves a swing of about one hundred seventy nine thousand dollars worth of revenue in two thousand and nine it's just part of that and he's taking a look at this argument that there's a suppose a conflict between policies to eighteen and four sixty four when i count you know mr amy is raising three other issues that are not in the brief so in that sense it's very much like the modus operandi that was the use of the c s s people there were just a grab bag of arguments that were thrown up you know the funnel narrowed  and then you know you get to a point where virtually all of those arguments have been raised by the rate waived i'm sorry going to time the opening brief so there are three things he mentioned that i just want to try to give some context around even though i think they're clearly waived once he started talking about mor torium cases i mean first of all that's a relevant we're not talking about a moratorium situation here but just to tell the court what's going on with that there's a section of the settlement agreement that has to claims that are categorized as moratori claims the parties have to agree on a set of parameters about how to resolve those so it turns out years after the summit was enter into the party still haven't reached a resolution on how to deal with those claims class council tried as to those claims to have judge parties sort of force a resolution as to how to resolve them substantively on the parties but judge barbie resisted that and then not surprisingly you know he denied that that motion from class counsel and that's totally irrelevant to anything in this case but in terms of the opt out issue that mr amy's raising in connection with that what happened there is a judge barbie and seeing the impasse between the parties for so many years essentially said you know look the expectation the time was there be some kind of agreement it's not forthcoming your options are either to continue to wait for that she were her claimant or if you you know think that you don't want to wait for that anymore then you can opt out you know give you a deadline to to opt out but again that that pulls set of issues is just completely irrelevant to to this dispute about policy two eighteen versus four sixty four then mr amos started talking about american pipe tolling but since they have no ability to get out the cell phone at this point and they could've opted out when they saw a policy to eighteen if they thought it was objectionable or unlawful in some form and they didn't i think american pie polling is completely irrelevant as well and also even if it was not you would have been waved and the third thing mr amy referred to was open present the requirement that before you require that you can file an open case in federal court you have to first are presenting the claim to the one who are responsible parties and ask them to pay it and then there's a waiting period of ninety days and you know the whole object of that scheme is to try to resolve claims out of court so that you know there's never even a need for a class action settlement like this again just totally irrelevant not an issue that was raised below and is just waved so i think it's another red herring honor the only thing that occurred was converting quarterly revenues into monthly revenues and that's what i understood but they still he said they re on their own food giant restated into monthly's but then you came up with different monthly methanol he's never been challenges in correct methodology that it was applied incorrectly it's a pile of mathematical you know very simple formula it's about a paragraph long in policy to eighteen how dame reallocated the revenues  trying to convert the revenues on their own that they clearly did it but all you have is their output they never explain what the output is they never explain why the method that they used is superior i think that's that's arguably a waiver in and of itself but certainly if you're going to try to say that you know we get under policy for sixty four the claimant would be the we there to you know put in what we think the conversion should be and then the claims administrator under policy to eighteen can do the same thing if you're going to make an objection about how that's improper you have to explain how it is that it's improper and i think the whole point of policy to eighteen is it's an incredibly mechanical and transparent process right there's no mystery in it it's not like some accountant sitting somewhere and he's like hey i'm going to move the meat revenues or the ice cream revenues it just takes you know a period chunk of revenues and then looks at how many days are in january and how many years are in february and then just kind of you know straight lines  that that happens and i still i don't see anywhere really in the record or in the briefing where it's never explained how the expert accountants in the professionally prepare p n l's that were restated on a monthly basis by food giant here how they were ever compiled and i think if you haven't you know put that in the record you really haven't even gotten to square one and trying to make some kind of argument that policy to eighteen is is improper one of the big things they make a big deal out of in the reply brief is record on appeal sixteen forty so i'd urge you to take a look at that record on appeal eleven thirty nine that's where claimant says that the key benchmark period that they they calculated forty eight point zero six eight seven one seven dollars versus the claim the claims administrator coming to forty thousand forty million i'm sorry two hundred forty seven thousand seven hundred fifty two you do the math on that it's one hundred seventy nine thousand dollars swing so you know that that swing is what at what ultimately led the causation test here to be flunked and it certainly back to the chief judge stewart's point about the importance of the standard of review i mean requiring judge bar b it's a look at all those kinds of calculations and then decide whether he thinks that you know he's going to second guess what the accountants did the claims facility that just he had to take all of the cases and i think the courts repeatedly said that's not the way this discretionary review process is supposed to go then we talked about the waiver of most of the arguments including the due process argument policy for ninety five came up briefly but policy for ninety five isn't relevant here they had made some noise about it below but it's not what is an issue in this appeal and it under this appeal right the a v m methodology oh judge pastor you were on that panel would apply and that's about moving expenses and these guys lost not because of any kind of movement of expenses they lost because of the conversion of quarterly revenue data into monthly road data because it's only the revenue pattern that's relevant for determining whether you need to be tested on it's not it's not a variable process house i'm sorry variable profits test there's no matching of revenues in expenses which is what policy for ninety five is all about is just entirely irrelevant to this case and we think that's why they dropped that argument what they should have done in this was the purpose of the last argument we made at our brief is if they could meet that the tast once the quarterly data was properly restated into monthly for then they should have argued that because they you know they had a decline pattern that they could meet the requirements of the client only revenue test and there's a recent case that came out just last week about that test where claim it lost because there are extra factors one needs to show to meet the decline only revenue pattern causation test and  these folks here from food giant didn't even make any attempt to try to beat that test and we think that's an additional reason why their claim fails so i think let me just try to do this in terms to the only thing that the claimants really arguing other than some smoke that they toss up in these new issues that were either never raised below or just they wait been raised at one point and then were waved by the time we got to the opening brief is an argument that policy to one eight and four sixty four conflict with each other that's really the issue that they brief and i think it's just really self evident if you read those two policies that they're not in conflict with each other first of all policy to one eight was adopted first and it deals highly specifically only with the issue of what happens if you have a claimant since the all the settlement formulas drive off of monthly data who in the regular course of their business kept their profit and loss statements on a quarterly basis and it says we're basically just going to use a mathematical conversion based on the number of calendar days in a month to get to have to do to do that conversion there's there's it's incredibly straightforward no one objected to it again one opted out as far as we know based on on that then you know more than a year later policy for sixty four is adopted a policy for sixty four is a more general policy and it doesn't deal with this specific issue of converting quarterly to monthly data policy for sixty four is about a number of things it's about how you can you know whether whether claimants can restate their financials you know if they used cash can they restate the money an accru basis answer is yes in the policy or if they use accrual basis accounting in the in their ordinary course of business can they restate them into a cash basis the answer is no deals with that issue and primarily in terms of how it overlaps with this case it deals with the issue of what happens if you don't have profit and loss data in the ordinary course right we're probably talking as the as the policy recognizes about a pretty small business right so a small business just decides you know what the heck i kind of know whether i'm making money i'm not going to keep up profit and loss statements so you know obviously there are businesses like that in the intention of the settlement was not to just preclude them entirely and throw them out and say hey if you don't have data that you kept in the ordinary course you're not going to be eligible so what happens in that case is there provisions made for folks to kind of just provide whatever financial data they do have to the claims administrator and then the claims administrator as accountants will take it from there and they'll try to reconstruct monthly profit and loss statement so that they can of apply the formula in the south and i would submit to you that yes there's an indication in there that you know if a claimant has the ability to try to do some of that work for the claims administrator is accountants themselves it says they may submit you know profit and loss statements on a monthly basis if they didn't have them initially sure they may do it but there's nothing in there that carries mr amy's argument that says that if a claimant ups to do that that the claims administrator has no choice but to basically kind of shut his brain off and say oh the claimants given me profit and loss statements on a monthly basis now now i'm just going to use those numbers i'm not going to test those numbers i'm not going to inquire about any more data i'm just going to mechanically take whatever the claimant tells me at face value and obviously claimants have a self serving interest in trying to do those restatements in ways that don't necessarily comport with accuracy or comport with the tasks and so not surprisingly in policy for sixty four there are several reservations of rights to the claims administrator to question data to call for more data you know to make use of you know the brainpower in the expertise is accountants have to figure out what the right real economic and accounting answers are and in any event you know maybe i should actually started at this point neither policy two hundred eighteen nor policy for sixty four a binding in terms of what was agreed to in the solomon agreement exhibit four a in exhibit four a makes clear in several places  and two that the claims administrator has discretion to decide whether to ask for more information so on page one it says the claimant i'm sorry that all statements made and made in an documents submitted with the claim form may be as judged necessary by the claims administrator and on page two of exhibit four a the claims administrator made his discretion requests source documents for profit and loss statements and so if you have quarterly financials which is really what you kept only in the ordinary course and you ask for you know those statements so that you can process the monthly analysis that drives the settlement agreement it's obvious that the claims have been straight or has the power to ask for that it's within his branch of discretion under what the parties agreed to you with respect to their or human that they did not do the accounting role there is one year at issue here is two thousand and eight they kept their books on a thirteenth month basis he said it came mandates we make monthly profit and loss statements to eighteen is an act it says the settlement program and they do it in certain instances and the settlement agreement has more the places that say it's a claimant friendly thing that the settlement agreement will only maximize compensation that all treat everything in the most claimant friendly right so we set down the street when it was at the fairness hearing and those points were touted over and over and over again there was no reason for us to think that they would use to something in consequential as it seemed at the time like two eight seem to totally redo our numbers and doing wrong on the back end of it anyway so he also says something about this decline only pattern and it's a red herring if they would have done the math right we would've been a decline only pack you know pattern we would have met the test so we didn't have to submit all this and just so you know what he's asking about submitting we would have at some point had to have listed the names and addresses and amounts of sales of every transaction in a grocery store so if somebody walked in and bought a pack of gum with a dollar bill we would have no way of knowing where this person ever lived and so it's impossible to test to meet called the customer mixed in a test as part of the decline only causation standard so it's a red herring to bring that up anyway and even if we could provide the evidence it's virtually impossible thing to do so i mean i think they really did get the accounting work wrong here if you have coop quarterly reporting of understand it to convert it to monthly budget same others three months are going to portion it according to how many days in those months basically a portion on a day by day basis what's a reasonable amount that because we had monthly profit and loss statements and quarterly profit loss statements for every year we submitted those two thousand and eight had a thirteen month basis instead of a twelve month bas did it that way they seized upon that small fact to apply twenty eight team to all five years and that's the air if you're going to do it at least do it to twenty eighteen and then in the end you all totals would work because it's just like you said a program at a basis but if you look at the chart and twelve cents over five years on ours so when he says we didn't melt a record below about the factual and consistencies but why our accounting was better than theirs it's in there and it's in a chart for provided by the c f o of the claimant on a year by year basis and