and gentlemen our first case for this morning is pretty against health care service corporation these classes fail to meet the basic requirements of rule twenty three so mr joshie could you just review for me how many of these points you were able to raise for the district court well we we filed the  motion in opposition to the classification motion not understanding general motion to oppose but did you delve into the detail that you have here i'm sure we've refined our points a little bit on appeal but as i as we pointed out in our brief and as you can see from the record there classification motion was very bare bones very conclusory there memorandum of law in support of the motion was two pages long in substance i went through and counted it again you can see appendix page two thirty eight you know there are only three sentences of actual late analysis supporting it and it was all based on the tyson case and so at that point in the district court you know it was fairly early in the proceedings and and you know our only job was to say they haven't met their burden and we did that and we did offer more detail including some of the stuff we we have in our brief now so it so when you were talking about not meeting their burdens is obviously very important point in this case because the burden is on the party who wants class normally it's  plaintiff class of course to meet the criteria of rule twenty three and you've now gone through in great detail and explain to us why you don't think they met their burden on these various everything by numerosity i take it you're conceding sincerity and million people i think i think you're using that point differently but that was actually one of my concerns about this case just to make sure that they got the proper shot of the district what they needed yes your honor i believe they did i mean you know it's the plaintiffs burden it's the it was their motion and their motion was woefully we think an adequate and you know he pointed out to the district court and really if you can you know that one of the one of the things about classification is it's not just about the people in the courtroom it's about the absent class members and because of that it is really incumbent on plaintiffs plaintiffs counsel and the district court to do in this case of the defendant zealously attempting to represent the interests of the unnamed members of the class white whereas the plaintiffs are saying no no everything's fine this case has been pending for quite some time right before the class certification motion was filed it had been i believe most of that delay was in between when the motion to dismiss had been fully briefed which was back in march of two thousand and fifteen i believe and the decision on the motion to dismiss which didn't come till the very end of march twenty sixth so there's over a year delay or a year delay between and i think that was that was most of the way after that they filed their classification motions very shortly after that you know we fought a response in april i think analysis would reveal that it does not meet the twenty three requirements and so all of briefly touched on those requirements and explain why the classes don't don't meet those requirements but but i want to preface that discussion as i said with that overarching point which is you know the lack of analysis is really what would infects the entire the entire certification order so i'll just clarify because actually sometimes when people come before us and they're complaining about a lack of analysis the remedy is to send it back to the district court judge and tell the judge to do a better job with the analysis but i don't take it that that's the relief you want if that's all we can get we'll take it but yes you're right what we want is you know what we firmly believe that these classes are just not certifiable period and that's because as you know classification requires you to look at the merits of the claims and the claims that they've brought are ones that are simply not amenable to classified resolution on a class wide basis with common class white proof so for example if we go to commonality you know as as wal mart this court jamie s is said you know it's not just about raising questions it's about greed it's about common answers that can drive the resolution of the litigation well that was the phrase that the late and wonderful professor richard not to read it used to it was cited by the supreme court in the law mart case just the record contain anything other than that one version of the policy before the court is the sample policy that they attach to their complaint and then we attached i think pretty as policy to our motion to dismiss and i believe those are the only two that are in the record right now although obviously we've been able to find the policies of each of the named plaintiffs at least so you argue quite a bit that there are in fact many types of policies and that's one of your reasons for saying commonalities like there are so but how do we know that is are you just saying you're saying essentially i think our point on that is twofold first of all in most important the district judge dismissed all the policy based claims already so they're not in the case so it actually doesn't really matter  the differences among the policies but the second point to that is is you know again it's the point of the burden to show commonality and so you know if they were in the counterfactual world still bringing a policy based claim they would have to assert and show that in fact all the policies in the class are identical and and they haven't done that and so for both of those reasons you know we think it doesn't really you know that they haven't met their their you know the real claim is a fiduciary claim under both the recently common law and it's about you know the misuse of insurance premiums that we collect them and yet as we point out in the brief three of the four classes include both people who pay premiums to us and people who didn't pay premiums to us and beneficiaries of both of those kinds of people who also don't pay premiums to us and that alone renders that the classes too diverse for certification one of the classes is the fourth one as written it includes every single person in illinois who has health insurance now you know that maybe that's just a little sloppy and we and we can sort of understand that maybe what what they meant was those who are somehow customers of us and that's what that's with regard to the so called receivership claim and you know after super ship is not an independent claim it's just a remedial device and so i think i'm having difficulty with the theory of the case quite frankly to the extent that we haven't been articulated either by the plaintiffs or the district court and those are sort of base lines that need to be touched another to understand a class certification request i just don't see that here do you have any idea what the theory of the case is i have to be honest your honor we really don't and you know i couldn't agree with you more they haven't articulated the theory as best we can tell you know it's what we've got is that we somehow misuse insurance premiums but of course premiums aren't either and so are our point here is really that almost you know because there really is no claims here there's no articulation of what the elements of the claims are then we think there should be a case to begin with but then means that the class members the absent class members don't have a claim either and that's the group that's another ground on which to to reverse the classification order and you know that you agree i take it that the only thing that's properly for us right now is the propriet of the class certification or district court should you prevail here will wrap up whatever the district court wraps up that is correct but as i understand this court practice and you know practice in general it's this court  f the west versus potential securities case where it was a class action the court dismissed it was a class action brought under basic versus levenson fraud on the market but the defendant had actually just given private advice to only his clients and the court said well that's not base it doesn't extend that far to to private advice it's only for public information and so dismissed the class i would have to assume when i went back down the district judge either looked at summary judgment or or she considered i'd like to reserve my time it's certainly  morning honors and alexandra de sac found i represent the plaintiffs in this case i want to touch briefly on the standard of review the standard of review is abuse of discretion that's the most deferential standard of review well it is except that we do have twenty three f which permits us to review class certifications and i have to say just trying to correlate these various theories with the four classes is a real task the supreme court has made it quite clear that not only do classes need to be defined with some precision but we need to see you know what are the elements of the claims are they amenable to class wide proof or not your brief was just chirping to me in that it seemed to misunderstand the notion that until class is certified anything a judge does is exclusively with respect to the individuals before it your honor i do agree with you i think you are correct but your brief didn't seem to operate on that assumption which was at least unhelpful for me i understand i understand that i think as there was an issue raised in the brief about the motion to  and that it it to the defendant didn't take the issue didn't raise the issue of the different states and granted that's that a defendant admits facts in a motion to dismiss where it doesn't on opposing class certification but there is nothing in the district court's rulings dismissing various parts of this case that spoke at all to whether there was a class and i'm mystified that with the time that existed you didn't engage in discovery related to the class certification actually didn't for example try to see if the policies all had the language to which you object you didn't try to distinguish between blue cross blue shield as the actual insurer blue cross blue shield as the administrator you didn't try to distinguish between situations where the employer was offering a benefit plan that would be a recent kinds of plans of benefit plans and situations in which there was just a and a to be market transaction between a person who wanted insurance and blue cross so it was your responsibility to gather all of this information yes your honor it is true and we initially have the burden of proof but an appellant on appeal also has obligations but how did you satisfy your burden to show i mean i'm thinking of not just wal mart but comcast  colors i mean there's so many supreme court decisions at this point that are saying this is a major step in the litigation you can't just rest on your pleadings that is true but it i mean if you look at this court's decisions like for necessary under rule twenty three well we don't know what the it was factual inquiries unless the defendant it least makes an issue of them you know you saw you  parts of twenty three that you have to satisfy right and they're predictably challenging everything except the numbers and you and because this is a base three class you have to show predominantly security are you know that so so you need to make an initial showing other than just we say so well we alleged that the policies had similar language for all class many don't have any claims left that relate to the policies aren't you have no claims left that relate to the insurance policies all that's left are the fiduciary breach claims that is true they are under under the policies but obviously the policy is give rise to a fiduciary duty because otherwise there would be no relationship respect to benefits decisions not anything else problem i remember roper very well but the problem the court was addressing is one that has been completely solved by the addition of rule twenty three after the federal rules of civil procedure well that's true but there still is the issue that i mean the major issues are indeed the class certification he shoots and the class certification issues that have been raised on this  basically concern number one commonality and typicality and you didn't put it was your job to put evidence in the record and i'm not going to tell you what kind of evidence may have been out there whether it was from depositions whether it was from policy language whether it was from documents evidence could be a lot of things but there's no evidence in this record that any of those criteria are met your honor mester and it states that we have the obligation to put in evidence if there are disputes but i don't know that's where you're wrong you are the one who wants a class action so you know word you have the burden of proof on that and so you can't just say we want class action and shift the burden of proof to the defendants to point out the kinds of defenses they're going to raise you've got to make and to use the phrase you know kind of a prima facia showing that you meet these criteria and that's what and you can't just rely on your complaint to do that but as far as i mean with the answer to the complaint the defendant did not raise any objection as far as our allegations they admitted that the language which we said in the complaint that relates to all class two to both illinois and we had representatives from from oklahoma and texas that that and i want to find it because it's all law it really doesn't take into account what the supreme court has been saying about class action in more recent years well i know how many issues were dominate me just sort of says so i mean but i mean there's your was decided by this court in claims remain with regard to a recess that the defendant missed used its premiums to arrogate to itself profits from its affiliates which in administrating those i mean and what kind of legal violation is that that's a violation of the  responsibilities of a person who is managing a plan and plan assets the insurance company here was not managing plan assets the insurance company was providing insurance and administering benefits claims it's not a plan administrator but the district court case we have to show that there was a relationship between the policy holders and the beneficiaries are derivative only but the policy all holders enter into a through their employers most of them through their employers a contractual their purchasing and taking profits of their affiliates unto themselves and declaring in their policies that they could not be shared how is that a file ation of a had millions of different separate employment decisions made by millions of different supervisors that's different or they wouldn't be james vs milwaukee case every individual child was different because of the fact that there had individual education plan it's that's not here you have a common decision maker making in decisions with regard to allocations of its assets and its answer to the complaint they acknowledge that they used these premiums in part to buy these affiliates and to keep those affiliates separate knowledge that in their answer to the complaint so we had no oklahoma claimants wasn't raised with regard to the issue the issue of whether there are conflicts between class members it wasn't race we didn't we do have the burden of proof but we shouldn't be set or and the district court shouldn't have to peruse issues which it doesn't even know knows  case all decided that there was a where there's a common question and i hear there is a common question did the defendant act appropriately or not and that's co and that the beneficiaries their interest derives solely from the policy home owners and with league are to be administrator straight claims yes their damages are in direct ok the duty still arises out of military policy thank you very much and i think further mr joshi can i just ask you one question it's always interesting to me in class actions if this had been a settlement class i imagine that h g h us would have been delighted to have it be a class because you would have had claim preclusion against ten million people instead of against two or six or whatever the number  you know worry about that when you might we might think we're buying our piece but then it turns out that we're actually open to a collateral challenge precisely because of for example the adequacy issues that we raised in our brief you know and of course if you if you win here and there's no class but there's also merits decision all these other people out there could still see you that's true i think we'd still rather not have the sort of course of effect of a ten million person class asking for to put us into receivership hanging over us  n the only point i wanted to make was you know my friend noted that you know in our answer we acknowledged we use premiums to buy affiliates yes we do use premiums and yes we do own a piece of prime there are a few to which was you know a pharmacy benefit manager but that's not a common fact that drives the litigation forward there's nothing untoward about a company buying an affiliate and moreover insurance premiums as we've said repeatedly are not plan assets and in fact in that answer which is paragraph sixty two of the complaint no they answered that stock at twenty seven is on the appendix with it but it is in the record we said specifically in the answer to graph sixty two yes we have insurance premiums that's part of our revenue but we do not