what the california court upheld quote at the root of the lawsuit is in essence a consolidation in equity of two suits one by the shareholder against the director conduct well you relied on our court's decision reversing the dismissal of the securities fraud action as somehow adding something to the mix and i guess i'd still don't quite understand the theory behind that because obviously our court could not contribute any new facts to the world all we did was rule in the legal sufficiency of allegations that were presented in a complaint filed years ago that's right i'll contention is that those operative facts relied upon by the panel of this court only gave in korea notice with regard to whether those facts constitute a con that and as a result of what i but it is implicated it is not fair to charge mr koshi and any other show holder with the facts before before the issuance of the july two thousand and seventeen panel the decision before that time no shareholders should be charged snowden's guess i'm not even asking i'm just asserting that our course decision did not change anything in terms of the facts that were available to your client does you agree with that then you're the ones who are relying on the  factual allegations that were already in the world years and years ago that's right but those facts gave rise to this panel of this court how that those facts gave rise to a finding federal securities laws before you knew to file this action at this doesn't make any sense to me not not really but the the point that we're making here is that when the district court it seems to me that what you're trying to get me to do is partially law and so i tried to find out what my law is as it relates to this discovery exception which is the only way you get in here if i look at what by law is it says under the discovery rule this is fox at nine hundred and twenty two suspicion of one or more elements of a cause of action coupled with knowledge of any remaining elements will generally trigger the statute of limitations period then it says under jolly this is at nine hundred and twenty eight dollars we look to whether the plaintiff had reason to at least suspect that a type of wrongdoing has injured her in other words a plaintiff need not be aware of the specific facts necessary once the plaintiff has a suspicion of wrongdoing and therefore an incentive to sue she must decide whether to sue or sit on her rights so long as the suppression exists it is clear the plaintiff must go find the facts she cannot wait for the facts to find her now it seems to me that your answers my good colleagues question which i i mean i had right in here this was the question i was going to ask you what new facts were revealed in our opinions and securities but should that it would put you on notice of these claims that was my question if i hope if i apply this standard his questions pretty straightforward there's not one new thing and if you do your client need not be aware of specific facts but has a suspicion of wrongdoing therefore an incentive to sue she then must go out and get out after it she can't sit and wait for the facts to come back and that's exactly what the district court frown and that's what i'm worried that i have to find because that's my standard we disagree with that exactly because well you can disagree it's joy it's the one i of a statute in patients which is a cruel doctrine that you cannot charge a shareholder in the public with reasonable inquiry notice just because those same facts and as a result my related i'm sorry my related to rich lawsuit what and why because there's no damage so this is exactly the catch twenty two situation that's created by was unreal ised at the moment so on top of that and we disagree with this idea that we have to win on the on the on the discovery war because we also  to to a defendant gathering evidence and then the rd faith and reasonable cons are now the only disagreement here is that whether it is a woman number one whether my fired i mean their argument though is that if this decision to grant him the separation agreement is protected by the business judgment will then none of the directors have any liability so not reason not anyone else so it seems to me your main imperia ripping about close to four million dollars in proceeds under these circumstances but your view is that responsible directors in this situation rather than granting him this favorable agreement would have just fired him for cause yes so what would he have tamed if he had been fired for cause do we know that because i could not find that anywhere in the record well in addition to this fa terminating the child thing for cause we think that the boy should have pursued claims against him rather than well to preserve the right to do that at least with respect to fraudulent and criminal activity i think are hot on part of it though the separation agreement also granted him at least twenty thousand dollars shares of stock in plus something that's what i'm asking what would he have received instead if you had been terminated for cause don't you have to have that as the baseline so that we can do a comparison to see how irresponsible this decision was complaint but you can't get a discovery before you have a legally sufficient complaint that is not correct argument i saw that you made on this is that you could cure any pleading remanding regarding demand futility by inspecting the books and records but when asked about what it is you're going to give nobody knows we do know for example it's typical i mean that was the only thing that you argument you made in the district court we're going to look at the books and records and we'll come up with something it sounds like a good morning michelle johnson for defending police quality systems incorporated and individual defendants on the statute of limitations issue the court obviously found that three of the categories of alleged misconduct were barred by the statute of limitations just based on looking at the complaint these underlying activities occurred in two thousand and twelve latest two thousand and thirteen the complaint was filed in two thousand and seventeen as your owners were asking about nothing in the th circuit order reversing the district court's opinion on the underlying motion to dismiss in the securities case added any facts they couldn't and my the motion to dismiss in the securities case had argued about forward looking statements and the th circuit and the district court found that a number of the statements that were a challenge to about revenue projections etc were forward looking and that others were puff th circuit's opinion said disagreed and said no some of those forward looking statements are mixed and thus didn't have the right cautionary language that was the nature of the th circuit's opinion it added nothing to the facts that existed at the time to live two thousand and twelve as late as january two thousand and thirteen on this indemnification agreement argument the th circuit incidentally didn't even reach those other categories of alleged facts it was just about the challenge statements that were talked about on july th two thousand and twelve and then led to to the stock up that's the only thing the th circuit even addressed these other claims about the the separation agreement the compensation the trading were not even addressed so nothing new could have been added about those claims so when you're on or referenced the fox case and the jolly case on the discovery and then added the plugs key separation agreement well that was it which was later which we can talk about later other than that it was identical and all of the allegations about the directors raised and he talked about the proxy contest in  case in both feet and others who have looked at this rightness question they're different what you need to look at is what was the injury alleged in both the court found the southern district california found that the claims were right because the complaint alleged damage from the costs to prosecute the securities case or outcome of this hearing says it was that there was a link between the alleged injury and the outcome of the securities case if you read the complaint in this action there's no mention of that whatsoever what how with the injury to the corporation depend upon the outcome of the securities fraud charge and i don't understand i agree with you that was alleged and sometimes it endured of cases i would challenge that myself if that were my case but that is what the allegation was and the court said well that sounds like an indemnity if somehow there's in bad outcome and the director should be liable for it you have to have the bad outcome before you compensation you know articulated damages coming from the indemnification agreement those are not the type of claims that were at issue in both feet so there's no inconsistency there although it is an interesting issue and equitable to i think they're under the case of counsel said we didn't cite any case that says that the play the identity of the plaintiff has to be the same every case that both sides cited on the issue of equitable to every case had the identity of the plaintiff be the same there is no case that has said you can lie in wait and see what happens with these other cases that are being prosecuted by someone ok but then those that person that gets the action dismissed and doesn't appeal it just seems unfair that that one shareholder can you know even though they're there now there's someone else who say no no let me and i'm going to prosecute this and so that struck me as a little unfair even if they had been consolidated there would still be two plaintiffs and two cases then they would be consolidated as a shareholder derivative action against this company for purposes of prosecution but that wouldn't have changed the statute of limitations arguments that wouldn't change the equable tolling arguments that wouldn't have made the identity of the plaintiffs become the same but wouldn't if the actions had been consolidated couldn't she have  prosecuted the appeal from the dismissal possibly sure but that doesn't change then we would be here talking about you know if you tell it because that case was just dismissed on demand futility that piece of it there would still be those two pieces and less i guess or your honor is asking whether there would have been a consolidated complaint demanded and there and therefore we can speculate what that would look like she would have avoided the special impatiens bar at least in terms of you know prosecutors appeal that's what's happened now because she was shut out of the timely action and those people for whatever reason decided we're just not going to bother trying to appeal the dismissal she's now left out in the cold potential injury to the corporation goes completely unre depending on what the amended complaint would have looked like i think having her be able to prosecute those claims we would have done we would just be on a different appeal on the demand futility issues because they were consolidated you know we didn't nobody appealed the denial of consolidation which maybe isn't even possible but you know because they weren't consolidated rightly or wrongly we say rightly the identity of the plaintiff is different i would submit the identity of the plane it to me it has anything to do with the statue of limitations on these other claims except the demand futility right the fos case you're correct correct it was timely five old yet was filed back in the day which if if council is position is correct it would change the jurisprudence on every derivative case that exists because all of them are filed fairly close in time to the securities case many of them are filed and this rule would say what none of them can go forward and they all have to wait for years and years and years so the st case was time filed but did not allege demand futility did not allege particularize facts giving rise to a reasonable doubt that these directors could exercise their business judgment and that they were just interested and dependent the reason applies here we can segue to the allegations about this separation agreement there are nine people on the board at the time this case was filed five of them were not on the board when this underlying activity took place so we've been putting aside whether the separation agreement is a visit protected by the business  to you know avoid having an action brought that would expose that they say that a number of these other board members at least are totally totally beholden to him and so they're not independent enough and i would say there's no allegation that raising would bear personal liability for the separation agreement but assuming he would but that's where it just comes back to whether in fact the decision was or was not protected by this is trying to correct all of the allegations about razan supposedly having these directors are beholden to raise and or that he has any power over them or that they would so we should grant leave to him and said you're correct should not currently have to amend the plaintiff has been unable to articulate  pleadings are decided in a demand in a derivative case there are california courts who have allowed it under that section sixty no one shareholder demand but the demand has to be narrowly tailored to the alleged reason for seeking so it's not a fishing expedition that opens up the corporation to any kind of discovery has to be narrowed and example of documents that have been allowed to be produced early are board minutes that's not going to change any of these allegations it's not going to solve them in futility it's not going to show that these directors who are new had any knowledge of things that happened before they were on the board or any knowledge of raisins activities before they're on point and has not alleged that there would be any different compensation or structure or granting of shares or granting of you know health care benefits if you had been fired for cause contractually speaking we don't know based on the pleadings that there's any difference that would have changed his compensation and led to a different separation agreement it is the classic if i can say that exercise of business judgment for a board to decide  compensation of an executive and compensation of a departing executive so there's no allegation that could possibly bring that outside of the business judgment rule and to demand  tony american pie polling just quickly since i skipped over that a little bit that says only if it has been in force only in the class action context and there are no cases that extend it to a derivative case that would be a big change in american jurisprudence and i just want to make sure i addressed that point because he said that it should be extended to derivative plaintiffs but it never has been before ok thank you counsel for your argument two minutes for a bottle