monetary award here was actually a penalty which is not equitable relief under section thirteen and if you try to imply such an available remedy under section thirteen really what we're talking about then is a violation of concepts of separation of powers though we have f t c versus commerce planet and doesn't that foreclose that argument no sir i don't believe so and the reason for that is that under cash if you look carefully and look at the factors that  cocaine went into in terms of deciding what is a penalty there the same type of factors that ink in the commercial planet case had said why they justify that and if you look carefully at what they talking about there even if we agreed that coke cash which was a securities issue we're well argued that insufficient isn't it to allow us to overrule our own precedent so your honor i expected that you might ask that question here with respect to that but there are nine circuit opinions you've held under the circumstances where there's an intervening u s supreme court decision that is applicable it allows versus gamming which which we have applied from time to time that you're going to have to persuade is that coke cast over rules statute of limitations and as your honor knows the supreme court pretty religiously adheres to the issue that they granted search henri on and that was the sole issue there but if you look at the opinion itself in terms of what they spent probably seventy eighty percent of the discussion in there is where discordant no circumstances was in fact a penalty and this is where the congress plan a case comes into play here that even the ninth circuit has recognized that under section thirteen you can't imply you know a format to test a series of tests which can be done and if you put those side by side with the commerce planet case the kinds of factors that they looked at there it would lead you to the conclusion that the kind of relief that's being done granted here by the trial court and that actually the nice circuit is applied the past are in fact a penalty and let me explain to you why that's the case so really in this search more than any other in the country and is they've conflated this idea about restitution and disgorgement and put them together and what they've also said here if you look carefully at the cash they describe what the roots are of discordant they describe it as a form of restitution and what they also say there and they were afraid to the restatement of of remedies and restitution like that if you look carefully at what is in there that contemplates that they alleged wrongdoing or would be able to reduce their their damages the monetary relief which is being sought against them by expenses that were associated with that now the court disagreed with us the first time we were here on that and then a good example that would be here would be there would be a direct variable cost and that's what the restatement talks about which is the magazines my clients paid for those that had things of value the consumers here picked those specific magazines and there was a value that was associated with us if the ninth circuit test of how you calculate restitution or discordant is here it is a penalty because it does two things it doesn't allow for any offsets whatsoever other than for sort of give backs charge backs on something like that doesn't allow any other deductions for that and if you think about it as well here our regional judgment was for one hundred ninety three thousand dollars my clients paid that it went up to one hundred twenty five times that up to twenty four million dollars and it was imposed jointly and severally on people who were making fifty or sixty thousand dollars a year and so with respect to those individuals one can't with a straight face say that that's not in the nature of a penalty which would prove the first time around use the net gain analysis you see that is the equivalent of disco up with a measure of discord meant and one of those was a bit of what you're looking at your earnings before interest tax and if and depreciation on something like that and we maintained that that was the appropriate measure damage that we argue that again we went back down on remand that that an appropriate measure because in this circumstance it's not like they're just cannon was involved in long ago in the figure case and you had the you gave the analogy in there the difference between if somebody had thought their buying a diamond and they were getting another kind of false stone you're not getting the same thing these these these consumers knew exactly what they were getting there were given a pan a plea a list of magazines that they could pick from and they were told they could even choose to change those over time and they knew exactly what they're getting and most importantly here and this goes to the other issue we're going to be talking about is proximate cause ation was really important issue and that comes into the bank of america case and here you go through the chronology of events that actually happened here you had a series of telephone calls which itself you know at the end judge pro who wrote the summary judgment opinion admitted that consumers knew what they were getting at that point the knew the terms that they were getting and then there's a lapse between that event and those communications by phone the rendition of the bill and then the first invoice that goes out it's partly forty seven days so it's not like a situation like fig where people work door to door salesman they're coming into the house and they're making rep mara presentations or misrepresentations in their inducing people to make a decision they're on the spot these consumers had every chance they they wanted to go ahead and back out of the deal in fact the statistics that we put in front of the trial judge demonstrate that the majority of the people didn't follow through on what their decision was and ever paid in fact judge pro focused in on that which is that there were people here who suppose we were supposed to be protected that were in rich by what went alleged section five violations the new judge judge gordon who actually ignored the defendant's request for an evidentiary hearing on remand and even the f t c requested a hearing we asked one for an evidentiary hearing  disregarded the proximate cause requirement on the monetary award and then most importantly one of things that he did here which is a violation of my client's due process rights was that he then considered in making his decision affidavits declarations which were submitted in support of the motion for summary judgment when we went in front of judge pro we have ject into those coming into evidence judge pro sustain that objection so they were not in evidence like this when they went back the judge apparently without any notice to anybody was going to consider that now that was his private of but he had an obligation if he's going to consider evidence which was the law of the case that was inadmissible he had to tell the parties that that was the case he never did so we never had a chance to rebut that and to demonstrate to him why he shouldn't be relying on those things and why because there was testimony that was elicited a demonstrated and casts doubt on the credibility of some of those clarence on that so our last argument that we also are making in why this ought to be reversed is that there is a three year statute of limitations which we believe is the law of the case now i understand that there might be some confusion about that but judge went back down to the trial court and asked for about a figure which is calculated on about four and a half years like this we would have taken that up with with judge the new judge on something like this we'd ask this one of the reasons hearing we never got it and never had a chance to rebut that and if you look carefully at our papers on that when we submitted in opposition to their effort to get a motion granted on this we specifically said that there are many problems with these analyses and we want an opportunity to go ahead and elucidate on those things at a hearing itself if if we were to agree with you on the three years that's limitations but nothing else what would the impact be on the judgment we believe that that would cut  number probably close to half of have to pull the schedules out on that and the other element that went into it which we have a number with specificity is that this  practically ten million dollars of amounts were people or customers who had actually had it reorder or had upgraded in terms of ordering more magazines however we made the argument which is like look those people had ordered initially six point six million dollars of that that was their first order and that ought to be taken off the table as well and the argument there was that he made was like now this thing was infected from the beginning and so even though i'm going to set aside the ten million dollars i'm not going to set aside the six point six million dollars because he it made the assumption without any evidentiary predicate whatsoever that those people were low old into this and that there was some kind of infection in the process from the beginning  good morning your honour's leslie mehlman for the federal trade commission and was with me is faten barr now trial counsel from the commission's western region commission sees this case at this juncture quite differently in our view the only issue properly before the court is the narrow question whether and remain and the district court properly applied the two step burden shifting framework for calculating monetary acquittal relief that the court adopted in its prior decisions most recently commerce planet have inquired about the impact of the supreme court's recent decision in cocoa beach so before i go to the issue that's actually before the court i would like to say a few words coke h has nothing to do with this case it's a it's about a statute of limitation and there are counsel has look to the future and look for implications in co cash but the court supreme court in footnote three specifically noted that it did not intend to say anything about the availability of equitable relief it's strictly about a statute of limitations i should also point out that the way monetary acquittal relief and the way the f c c handled that in that particular case is quite different from how the f t c approaches its obligation to consumers and for section thirteen b of the federal trade commission that cocaine case itself the f c c had already assessed penalties under a different provision and then for the same conduct went back and asked for discord from and under a different provision in that context the court viewed that as a penalty for purposes of the statute of limitations that's very very different from how the f t c approaches its obligation to consumers various labels have been used by litigants and the courts but i think it's easiest to see what the f t c does as the monetary equivalent of decision it's simply undoing a transaction that has been tainted by fraud and because it's been tainted by fraud consumers are entitled to get their money back in this particular case consumers were were sucked in i should say by a lie that was disseminated to them while they were busy at work by phone that they were going to be getting a prize and that was false and all the other information that was that was disclosed to them over the course of three separate conversations well they were busy at work first they were turned over to a supervisor then  verifier those calls were only partially recorded so consumers really really were not did not know what they were getting into and in correct that there should be at least some credit for those who chose not to rescind the transaction were perfectly happy with what they got and in fact kept it doesn't recession require some affirmative act on the part of the party that windfall for consumers and it's not they're not practically able to send back many years of old dusty magazines so it's not a case  where consumers have to return what they received and this court has has recognized that in in figgy and in state function and in other cases if somebody is is trapped into something it shouldn't then impose an obligation for them to pay for it so the consumers got some value here they got publications that they had subscribed to they did they didn't receive well they didn't know what they were getting from the beginning they didn't they thought they were getting a free prize and to assign value to it would be very unjust if someone gets a present they don't do we have to do we have to ignore the magazines a planet that is binding circuit precedent if somebody is tricked tricked into paying for something they shouldn't be required to then come up with come up with the money for it that that would be a very i'm just it's a factual matter i understood those in council to say that after a period of time he said forty seven days the consumer actually chose the magazine so if you got a magazine that you never specified you wanted i mean just of i suddenly had national geographic in my mailbox and never asked for it isn't here the consumer actually given a selection of magazines and choosing the one that he or she wants well many consumers didn't get any magazines at all there were some consumers who were tricked into signing up for additional magazines however those consumers the commission on remand took off that entire group of consumers that was ten million dollars it did not take off though the initial sales for the consumers who signed up because there's nothing about the what happened when they when they signed up again that suggests that they it's not what we bargained for but so i may just default to something that's already set up that's that's a something that consumers do and that we've seen and under of the two step burden shifting framework appellants would have to actually look in a sound using a sound methodology and this is also discussed in commerce planet and look at those customers do a survey of those particular customers instead they they looked to consumers in general not to the consumers who were exposed to the particular series of misrepresentations we also have to take into account that consumers were threatened  throughout this period they were threatened with with threats that that their accounts would be turned over to collection they receive letters from  suppose it in house lawyer who actually did not exist and that that threatening abusive conduct definitely had an impact on consumers and their conduct whether or not they call to complain whether or not they called to cancel because they were getting letters they were getting calls at their place of work i would like to appeal that in applying the first step of the framework whether p b s is misrepresentation for widely disseminated that this no longer  spirit about whether the commission has has satisfied the first step there's no dispute that what resulted from the the gross sales was thirty four million dollars once refunds and returns were deducted the f t c voluntarily in light of the panel's concern in the first appear brought that down to twenty three point seven million so the panel on the first appeal did not call into question whether the initial orders of those who laid a renewed were free from the taint of the practices  to the contrary this court stayed and that appellant violated section five by quote the misrepresentations that launched the process the thus there was no basis in the panel's opinion for excluding the first time first time orders for all customers so then the question really for the scor making any further reductions so what the opportunity for for p b s on remand was to show whether there was some subset of consumers whose transactions were atypical who were not misled and therefore they should be removed from the presumptive amount the district court  found that p b s did not make such a showing the p b s pointed to a few customers who stated that they were satisfied but even their testimony did not understand the terms and more importantly their testimony cannot be extrapolated to all the consumers as a whole nor was it proper as a matter of methodology and commerce plan it emphasizes  in its opinion how important it is to have a sound methodology the the economists look to transactions as a whole not to these transactions  and not to transactions that were tainted by fraud to make some arbitrary and unexplained assumptions about how many consumers were were not  well no there's not a proximate cause issue here at all what counsel was referring to was private cases for example the bank of america chase where which involved an action under the fair housing act where there were practices a practices was redlining and the question was whether that contributed to whether it was the proximate cause of of a neighborhood decline here of this no question that we have direct cause when we're not concerned about the could have been many different factors that cause neighborhood decline in that case here there's no doubt but that the representation cause the purchase of of the magazines i see my me move through this quickly i'm serious about there being a separation of powers issue here that the court has to take into consideration here what these what these agencies have done is they've come and asked the courts and and i one thing which you should look at is and i would you to read it read professor ward's article where he traces this and cited in our brief and he goes through any traces the roots of section thirteen and where this restitution type of remedy comes from and if you look at the chronology here what you'll see it doesn't what the f t c assange they came to this court back in one thousand nine hundred two in the heater case and said we should be able get restitution under section five and the court said nope can't do that will do that like that they went back to congress two separate times to try to get additional relief they first got section one thousand which is gives them a right to redress and some other things and then they said we need to come back and get a gap filler section thirteen b which gives them the right to seek injunctive relief there's nothing in the legislative history that suggest that they have the power to come in and get these implied remedies and why i think this is a violation separation of powers is you've got an agency who doesn't come to congress and get the relief that they want and believe me they've done it if you go look at to see if d c is an example they specifically went to congress and got a right to seek restitution if she's never done that to my knowledge and they haven't ever gotten that kind of power specifically and so what they then do is they come and invite the courts all over the country like this to say well let's imply that and then what they do is they come up with a formulation which requires the courts not to give any consideration to the value which is given and if you look at the restatement of restitution on this it specifically says in there and the supreme court cites  cash which is you're allowed to get offsets for those kinds of things so in this instance you would give an equivalent of variable cost and value that's associated with it if you don't some mention the ten million you're focusing now on the remaining six is that where we are alternative remedies and we and when we came back on remained we also gave three alternative remedies by different economist and i think the high number there was around seven hundred thousand dollars on something like that and they were in there but and we believe that those are established and under the under the burden shifting that they're talking about here it's not our obligation to prove a perfect methodology it's to come up with a reasonable methodology and the economists did come up with three reasonable methodology  unfortunately what the trial judge did went back didn't tell us that he was going to be looking and relying on affidavits and decorations that were inadmissible and were the law of the case and came up with these formulas and basically give the back of the hand  career we did at the trial itself and judge pro said those were not coming into evidence and it's in the record itself in the first trial and what the judge then the second judge gordon went back and actually considered those things and he might have had the program to do that all the law seems to be that when a first judge makes an evidentiary ruling and it goes up and it comes back it's law the case a second judge can't revisit it but the problem was he didn't tell us that and we did ask for an evidentiary hearing and so we never got that so that's one of the reasons is there's a due process problem that's associated with this let's not also talk quickly about this idea that they've got here that oh this is so well accepted by everywhere take a look at the supreme court's decision in the central bank case the issues that there were confronting there was every circuit in the country had recognized aiding and abetting securities law violations and to tenby and supreme court put the rest of that and said look we can't of of would that the statute doesn't say this and we're not going to start  implying these remedies particularly we're talking about implying an aiding and abetting type of remedy on top of an implied ten b five action so there shouldn't be any hesitancy here by the courts to sit back and understand that the supreme court is holding the courts