good morning mr rove and your honor may please a court bruce rogo matthew chait and jonathan hart representing northstar document one forty six pages six to seven are critical in this case and they're the district court approved the magistrate's recommendation that between north star and a d t there was no privity they were not intertwined there was no control there was no involvement in the underlying litigation that north star had there is not a question of fact it is a question of fact and the judge made those findings of fact and we would review that from earlier that's correct so yes it seems to me the problem with the de facto merger determination is that there's been no finding by the district court nor any evidence really  nor starr had actual notice of the injunction there is no evidence of that that's correct and more importantly no finding of it and certainly no finding of it and it seems to me that the federal rule of civil procedure sixty five d would require that finding it would sixty five day obviously circumscribes in situations in which a nonparty or in which anybody may be held under an junction  and so the question ultimate question this case is when can a nonparty be bound by an injunction how many deaths if if we were to agree with you about that and vacate the basically to dismiss any action against north star well i wondered about that so it might be that on this record there is not a basis for holding your client bound by the injunction but it does not seem to me self evident that the district court could not entertain new or additional evidence that would comply with rule sixty five in which case based on a different record the district court might be able to make that would if it was air to rule that your client was bound by the end junction under a state law theory of a de facto merger that doesn't necessarily  foreclose binding your party based on a different record at the district court had all of the evidence in front of the tried this case for several days and made  findings based upon the factual record that was developed so going back and having a redo in effect of this hearing seems to me to be in it would be recent much a redo but it might be just  as the rule contemplates that if you're inactive concert then you have actual notice of the injunction that you could be bound by an injunction and let's talk about m harris for first it is not his name that is his name and he's not a party to this in fact i know he said the district court held that he was bound by the injunction well the district court actually held that he wasn't a direct and rejected this is not in this record because not part of it but this is aspen sense than it did happens and so i thought in conjunction with the proceeding that is now up for us the court had held that he was bound by the injunction now perhaps it was held later that he had not violated that he's not in contempt he's not in contempt right so that part is out for him he's bound by the injunction right he was found to be bound by the injunction that hasn't changed that has not changed right and so presumably if he were to do something he who is bound by the injunction if he were to do something later new facts write that in active participation with your client and your client now has notice now of the injunction it might be different well you know it might be different the trouble i'm having judge pryor is that basically what we're talking about is a redo really of the trial that took place with regard to whether no no well i get i'm saying not based on what we already have that we could say this record's not sufficient to say that your client's bound and then you're not to say that there couldn't be different facts involving the same injunction that would mean to your client is bound by it and what i'm struggling with judge prior is having had the hearing in which that was the subject of the hearing and the evidence was related to that to go back and have another hearing basically with the same evidence doesn't that that's why i'm having trouble with understanding why that contemplating it be different evidence and let's leave that for a second yes you know i think the other think if it was remanded that and you can in the just record if they looked at it a different way and maybe if we gave some guidance on that where you don't have a complete cessation that year you're taking the defacto merger doctrine and saying you don't have to have a merger or be an actual or de facto in less we are where you only take a business unit of the in joint company in that it's true or merged with combined with the business unit of another com which i think then goes to the due process arguments that if your door storage you're saying look at you know we saw this even if we knew about this litigation we would have again it's a new twist on it that may or may not be legally valid under the law that's being applied our position is that it was a misuse of the defacto merger doctrine there was no merger there was no defacto merger and one of the essential elements of de facto merger is that the former company would have to be dissolved because you're absolutely right and stuffy in a merger one company is combined with another company that's not the case here but it doesn't mean though that on this even on the same factual record that looking at it in more detail well i know that's doesn't meet the all for criteria that have to be met for a defacto merger but in today's business environment maybe you can have because you have these separate business units are so autonomous or separate from the from the main business or other businesses of the company that you could have a partial the  partial de facto merger would be a new wrinkle on this defacto merger concept but but when you look at the cases in which there has been a situation in which an acquiring company acquiring all of the company  held to whatever the the injunction or the national labor relations act findings were it is it is basically a complete takeover so buying eight thousand sets what they bought eight eight thousand customers does not make them in put them in a situation in which they are therefore a d t s they are liable to a d t for for conduct in the situation in which they are completely separate and we get into the defacto merger doctrine at all when it's a question of state law and the question here  involves first and foremost satisfying federal rule of civil procedure sixty five the question of federal law and that to me it seems is if there's not actual vacated obviously i'm not going to get in the way of that result you could help us mr rogan though i now understand that you would like for your client to win but you could help us and just  doing it the right way right that that's that that's a question a federal law that has to be set to satisfied why should we as a federal court it decides and we don't have to decide when it involves a state law question of murder in order to bring some finality to this proceeding and not have it go on once more there is a trial that said in two weeks on damages and maybe the court might consider staying this trial on damages we had asked for a stay and in two weeks there's a trial set on damages under this order that's on appeal and the contempt finding that has been made so i want to follow a motion first day which i don't see how any of that  responsive to what i just asked but if you want to file one you certainly can get it we get adjudicate that it you're absolutely right judge prior rule sixty five as a starting point this this fails this this decision below fails under rule to decide that you can stop right there with a reversal of this order i think that that the point that i'm trying to make is what happens then and judge pryor you're suggesting it goes back and it could be basically lways move the court for an order to show cause why someone should not be held in contempt of that injunction and make a new record right it may be that your client now has actual notice and does something in conjunction with someone like its president who has been you know to be bound by the injunction that would make for a different case that's not really before so maybe that maybe the best way you may have  convinced me that their answer is not really remained but to just vacate this and leave it at that if there were new conduct and there was a new order to show cause i would agree ok if there was a finding that they please the court my name is sanders because you know i'm here representing the up lee eighty i disagree with the analysis of the fact a merger doctrine and i think it's important for the court to review the record and understand how we ended up arguing about the fact a mergers it was actually the respondent north store that first raised the standard of a defective merger if you look in volume two of the record  its stock you know one of eight dash thirty six at page two in response to our letter notifying the company that there was an issue with violations of the injunction the company's response was  the law as well subtle the corporation that purchases or otherwise acquires the assets of a second corporation does not assume the debts or liabilities but annele versus eastern foods seven fifty eight s second fourteen fifty one although there are tell me this the question of notice i believe is answered by the golden state case court case the i don't see that golden state case there actually was a finding there was a factual determination that fact let's talk about the golden state there was a factual determination that there were testimony that by the manager and the president of golden state that they didn't inform all american of the litigation before the completion of the sale and the board or the trial examiner discredited that testimony and frowned then in fact they were aware of it ok so there's and and then there's a deferential standard of review the supreme court affirms that finding we don't have that kind of finding here well you do have you do have the two persons who are able to address that issue appear at the evidence tree hearing and neither one of them asserts that they make the finding that rule sixty five requires it seems to me wrong where where did that issue quite make that finding you're correct judge but let me i would like to go back to this point of how the decision came to be didn't raise the question of notice they framed it as a de facto merger we answered as a fact a merger we said we don't think the standard is that high but that's their standard under their standard they are liable right so we argue their frame of this and then not have audio and with that is that defacto merger doesn't answer what federal rule of civil procedure sixty five requires judge i believe there is a rule of of  invited error in this court and i believe that the ford garcia case says it is a cardinal rule of appellate review that a party may not challenge as there are a ruling invited by that party i mean air where did northstar invite the district court to hold bound by the injunction if it invited the court to analyze it as a where the defendant asked the district court senates me to sixty five months and then come and then on appeal says the district court sentences them to sixty five months and then we get an argument that that's unreasonable that's invited there this doesn't strike me as that kind of circumstance well judge they chose the frame they chose the defect a merger frame we all argued the defacto birger frame their papers to the manual arguing it for the opposite conclusion weren't they they were arguing it for the for the determination that they were not in fact bound by the injunction they were that's right they were saying that under the defacto merger rule that there wasn't a merger and so  we argued about we bar you to think you know we argue there their frame of the law the judge agrees with us and then they throw the frame out and say well no that's the wrong frame we should have been arguing about something else a question of what are the what has to be found court and as a district court and i know my obligation is that if i make a ruling that i have to understand that if i'm making a ruling under rule sixty five i have to look at all the things that need to be found and if in that's a finding in order for there to be an injunction imposed against somebody that has to be made i think all we're saying is that that wasn't made assume that you would have said by the way they all knew about it let me ask some questions to establish that shouldn't that be established now to see whether or not three tenets and requirements of all sixty five are met i believe that the operation of the de facto a merger doctrine the operation of law and  the finding of the fact a merger is a finding of fact that the of the import of it is a question of law and i have a case for circuit case on that if that if you think that's controversial but i don't think it is the court found that they that they were that they were identical by de facto merger so by operation of law that finding beans that as of the date of the transaction they succeeded to the liabilities the injunction the knowledge the question is not a question of knowledge here because they by operation of law they are now one into t and the sick and the successor who takes is charged with the knowledge of chose for this argument and that the district court and he followed they the court concluded after hearing testimony having a full record that there was a that's a finding of fact that's entitle to deference so and the question of notice is irrelevant in those facts because the because the acquiring company takes all of that because because it's the same company now right under the doctrine now we could talk about the doctrine because i understood there were questions and you know in the opening presentation about whether this could be a defect a merger or not i would suggest to you that the court has decided that and it's a dubious of discretion standard and there's no abuse here and i can address the reasons why that decision makes sense there was a question as to whether or not  a question as to whether or not the fact that the company hadn't formally dissolved makes this something less than a merger well the case law is clear that the one the one requirement of the four requirements that you must have and this is in body until right is continuity of ownership that's present here no one suggested that it isn't the other three factors are not requirements they are guides that are meant to guide the court in its decision but ant but antal follow the case of the third circuit called atlas tool company versus commissioner and that's six fifty six fourteen  second eight sixty and a page eight seventy the third circuit said every factor is not essential for applying the doctrine that is a that is that is not a controversial position to sin fletcher on corporations go to fletcher section seventy one twenty four point twenty it is not necessary that all these factors be found for there to be a de facto merger and it collects a bunch of cases in five for that proposition but there are thousands of cases that say that oh mr make new and i was looking back through these brace where i didn't see where there was any kind of waiver argument and and it don't really see one of the they she did spring raised here i'm really raising you would i think have us ruled that because the parties litigated about the wrong question de facto merger in the district court and we got a determination about that in the district court and now we're here for it with an argument by nor started that they should not be bound by the injunction and the parties again are arguing about de facto murder and i look at the case and i say what kind of ruling are we going to enter when that really is irrelevant when when the when federal law hasn't been complied with we going to issue a ruling that never mind because the parties didn't argue what the right question was we're going to bless that kind of injunction and let district courts in the circuit think that that that would be a proper basis  hold a nonparty to be bound by an injunction that's my problem i don't you know i don't see that so much as invited error or a waiver or anything like that it's really something i'm raising because i don't see how it be how we can possibly bless those kind of injunction the absence of that kind of finding so you don't agree that a merger the successor by merger does not succeed to the knowledge of the predecessor for the purposes of rule sixty five you want to give me the case that that determination that there's been a de facto merger under state law unnecessarily means that the new entity has actual notice that satisfies rule sixty five in the absence of a finding by the district court that actual notice which seems to me to be a question of fact not law i would i would just use not a question of legal precedence met a matter of logic if there is a merger it is an actual notice a question of fact yes or i would i would agree with that ok and that and the determination of a de facto merger is not a determination of actual notice is it no sir but it subsumes within it the knowledge that this summary you know that these proceedings are meant to be summary and executed with spache but you know we're now in the second year of a process you know where the actual notice requirements and the rule right to satisfy the due process clause of the constitution i understand that judge but i come back to my operation by operation of law and logic it makes no sense to talk about actual notice because they are they are legally identified as the same entity now so to me i don't i don't understand how i understand the question i understand the court's concern i don't understand how the don't understand why there is a difference because in this instance it is by by operation of of a court's determination based on the facts rather than a document that actually says merger i don't see there's a dock trial basis for making that distinction here yes you know from from my point of view you know we have the luxury of looking back at people's strategic decisions going into this type of litigation and thinking well might not have been better if they did it this way i mean it seems to me that if you had gone ahead and   i'm looking at your file had a lawsuit against or start one point you know sir that i'm looking at your filing of the other case of another defendant december of last year  where you set out all these witnesses that talk about their interaction with north star and you know it's you make some pretty compelling claims that the conduct nor store you  know what it should have been and probably could have gotten an injunction instead of trying to hold them in contempt under the injunction against vision but like i said we have the luxury of coming in after the fact  thousand customer witnesses sixteen the court credited and found clearing convincing evidence of what has now called the scheme a nationwide scheme all of which is not before us except that it is a you know in a trainee wind that more stars bound by the injunction was at least and a modification of the injunction to make them a party which would satisfy our jurisdiction i take it you agree with that well i fence about it like yourself i mean i think there one could go either way with it i would say to your honor that one solution might be to hold this aside until a case is ripe for final ruling because we already have a ruling on liability well and damages will be in two weeks the whole case could come up as one if your honor believes that the court needs out of the problem though it is at the end of the day if i'm right about that that it has been modified to make them a party then and that they have haven't been given a ctual notice and the due process clause has been titus fired it seems to me and equitable to say the least to allow that to go forward well then the then i believe the remedy would be to vacate and remand so that rocha the seem to agree that a vacation is in order here and so we asked the court to vacate our simple argument always was we were not bound by the injunction the findings of the district court to not comply with rule sixty five the court