may proceed may it please the court my name is greg cook and i represent nevada power your honor i would like to spend most of my time addressing the issues that the court and the parties raised earlier first of all let me just english who we are we are an electorate electric utility and trust conspiracy for among other things killing a plant a pipeline that would have brought a whole new source of natural gas from canada to nevada your honor we claim for and boiling is down very simply the false representations to the indexes on sales by the defendants and also false representations about the market conditions and the reasons for those market conditions we were dismissed on a twelve b six whereas allo was should also say that i do not believe we are claiming for any wash sale transactions as well which i believe is the difference between us and gollum otherwise our climbing is very similar i will go back to the question that you asked your honor the federal power act has not been amended the other difference is there is a structural difference in the market places the gas market is structured whereas in electricity market you have in california you had a p s x everybody who was buying into p buying for resale there wasn't a mixture of retail and resale retailing resale transactions going on at the same place and same time but that's what's going on here when he says mr fogelman says that there is exclusive jurisdiction of the whole sale markets he is using a word that doesn't actually appear natural gas attacked the word wholesale appears in the federal power act the difference is that the natural gas  structure of the markets have radically changed in gas and therefore we use the word wholesale it's an nvidia was term now because we're buying in large bulk purchases at the same time at the same placed off the same pipeline as all our other people who are buying it to resell at the same prices no well sometimes you're on the market is in a paper market it's not do it based upon what they perceive the market is what the price they perceive is they also in a two term contract your honor which sometimes incorporate directly by reference the index price and again that index price is something that private corporations formulate your honor with a formula and they take reports from lots of people of all kinds of sales they take reports of retail sales they take reports of first sales and they take reports of sales for packed and what i would assert is that merely participating in the same market or using the same index that might have a jurisdictional price in it does not transform our transactions into jurisdictional transactions if you reduce their argument to its most basic your honor they're saying that if you put if you have one jurisdictional transaction it gets put into the average anybody who uses that average is then contaminated a subject to first jurisdiction how can you talk about how you can show your damages without asking a court to shut down on a result of the jurisdictional sale assuming that  a pretty dark shadow on an indexed price will make it a very simple example to have a pig price index price that is likely being used in other transactions even as you speak other jurisdiction transactions to be a quote for a price and it seems to be in this capable that if you are allowed to calculate damages under any way i can think of then you are and this doesn't say that that leads to a result you don't like but you are at least on some level saying there's something amiss with this prize which is a for royce your honor we're not asking that any further transaction be undone or altered in any way the people who sold the gas in jurisdictional transaction get to keep the money from their sales judge and the people who bought the gas get to keep the gas we're complaining about what we paid in our unregulated transactions there is a do use a very simple analogy this case in the traditional cases the fall right doctrine is apply in a vertical context either you as a plaintiff are directly attacking the transaction you bought at which was a jurisdictional transaction and therefore has a file right and therefore is barred by the far right or in the end to hail a case you're attacking a lukewarm endorsement and cost management refused to extend the doctrine prices in the transactions in the marketplace were too high and first said we're sorry we don't have jurisdiction over first sales we can't set a market wide price because we don't have jurisdiction over some of sales in the market and refused to do that that we didn't bring a case because we thought that would be the result but the energy you see did it first half folk and someone did go for a can ask their permission and said no we can't do that has jurisdiction over transactions not markets the statute says transactions over sales it doesn't say over markets there's no penumbra effect for the fall right doctrine  complaint they had was about the earlier sales upstream vertical and that transaction and so those were regulated jurisdictional transactions they were complaining about just like in the end to hello there would have been a trapping of the cost so the jurisdiction of the seller would have lost his benefit and therefore the course of no you can't go up the chain and attack a transaction this jurisdictional we're not attacking a transaction this jurisdictional we're attacking the transaction we bought  you that that's the case electricity nevada power sold and bought electricity into california and therefore further cast determine the appropriate cost figures just as it does for employee salaries for paperclips for tree cutting for anything else to run our generators and run our plants to determine what the cost should then for our electricity that is what he's talking about judge and to the we can see that in our brief here are that there if there is any cost damage honor from an increased cost factor in the electricity docket that that would not be something that we'd be claiming for thank you on our reserve the rest of my time here honors welcome back very please the court time here on behalf of the pallies in this day's temporary cynical gas and electric and southern calvary gas company and speaking also on behalf of other start with the premise why we're here doesn't take a lot of attention to the new snow how important the nation's energy policy is and the and the nation's energy markets are essentially through these pipelines throughout the united states and the electricity and electricity transmission gives a grids are says it a life blood flowing through our country just like the veins flowing through our body are our own life blood and congress drew upon its commerce clause power to to transportation of natural gas or sales for resale but anything in connection with the transportation or sale gas for resale which is quite broad and the bright line that you've heard about this morning is not a bright cases but the state commission charged with setting the rates was trying to do was to assume but something happening upstream something in first the main was done wrong they were actually going into the wholesale markets and physical sales in those water markets but over any electronic trading platform sales which relate to those markets so it's pretty much everything and i'd also like to point out the court's decision the supreme court decision schneider went another one which blurs this line that judge fletcher's talked about in that case the state of michigan was asking the yes companies to register and seek approval with the state of michigan to issue securities no one was questioning whether first was the right organization to regulate securities but what they were questioning is why was the state of michigan involved in asking gas companies to come to it to ask about securities and the answer was by doing so even though  securities were within the state's registry power you were interfering with ability to regulate this interesting network of gas transportation prices and if you look at the forty one cases that have already been filed in gas in this case due and more importantly the rates in the wholesale market and assume for purposes of selling damages that something was done wrong that a different price structure should have been found if you will as each and every jury decided how the gas should have been transported and what the just and reasonable rate would be and the supreme court said an article in one thousand any one justice marshall you can see in awarding damages assume a rate not filed with or approved by now it didn't win it it's just it's a holding to the particular transaction in that case it's a broad and sweeping holding this been relied upon by other supreme court cases and by the ninth circuit and i would note that in question in this case a sale because the supreme court has said that we're not even limiting the rate doctrine to rates per se language that's been echoed by the ninth circuit in the tech case but we're talking about conduct that is needed by for and that if you allow a jury to interfere with first regulatory authority over the conduct you either directly or indirectly interfere with books of the o t to regulate the rates that's we're talking about in each of these cases and just to talk about some of the charging allegations in this case the very similar to the gallop case that talk about the border market at top park and interstate transportation capacity getting it to top out whether a pipeline should have been built from canada to california that sounds an awful like the pipeline constraint theory and the kind is fast law same thing where the court was asked to assume that a pipeline would have been built in canada were not built but it would be in new pipelines to come online and relieve some colombia steel will fall great traction was not applied by the ninth circuit because there was no hypothetical rate setting involved but it's an interesting point to raise in that case in the city of portland there were two electric companies let's call the plaintiff was required to buy power from ebay be much cheaper the complaint was this is the vision of the market we want to buy from the and the court that i circuit said well you can bring this claim because it's only a question of whether the market was divided and if you were right there is no hypothetical right setting being charged never charged a charge whatever charge so if you're right the difference is a that's why i said that's not this case in this case you're asking the court to engage in hypothetical rate speculation that's what the develop our people are doing here the gallup people are doing the gal case and the county and the attac they're not able to differentiate themselves whether it comes from canada or mexico or on a ship from south america once it enters the interest rate system in the united states it's just gas it's molecules and you can't separate where it came from or what have you  the other thing is that the prices that they're asking are we said this is the second answer your question in their damage model as you can see in the complaint they don't say we're asking for some retail analysis they say that the prices at the border market would have been different but for the allegedly had a competitive conduct and their damages are the difference difference between what they paid and what they would have paid have there been this just a reasonable price so by definition in their complaint they're dismiss you can't really have these cases going forward to decide whether it was a you know there's some molecule of gas out there which might be subject to a state or federal court if you do that just the threat of these multi billion dollar claim thats it you can't let these things go to discovery and figure out whether there's a first and i want to talk about first just briefly if i can because it's been raised both by gallo and again here this isn't a question about first sales and then i even alleged by gallo and they're not properly alleged the complaint in this case this is about the whole still who are markets and the speculative nature of the d m just by assuming a different rate in those markets but i don't want this court to come away with the impression that fork doesn't have any jurisdiction over that they have no jurisdiction so they don't have to restrict an ovary first sale so only because it's a first sale and that means when congress was was going towards this national market based regulatory environment as the supreme court outlines and s of the things that it can do is require that first sale contracts be filed with for another thing it can do is they can investigate whether a first sale with the result of fraud and if it was result of fraud it can prevent the person from recovering its cost in the first sale now if congress expected the first would have no jurisdiction over first sales why did leave for that power and that's after that first sales are defined by congress to be just and reasonable as a matter of law that was a getting back to the first sales one interpretation that we received was that you need to read the section about any amount paid in any first sale natural gas shall be deemed to be just reasonable with the guarantee passed ok so i don't think the first sales are the issue here and i don't think that there's a material difference between the gas and electricity standards and i think if we look through the litany of cases and there is truly a litany of cases on these issues for gas is that as the judge clifton was asking about there is a remedy for you don't have to be a wholesale customer to file a complaint and it doesn't matter that the supreme court has said repeatedly this is just a question of making sure that any national market uniformly regulated by fur and not have clots in the artery all along the way thank you for your time transactions where as that would not be the case here your honor this case is not about transportation cost we are not made a claim for transportation costs and of course the plaintiff is the master of their complaint to the extent that they think they can prove some component of our prices that we paid our transportation costs should be disregarded that's a factual issue your honor as far as the conduct we are complaining about we are not complaining about their jurisdictional sales your honor we're complaining about the lying that they did after their sales and by the way they're trying some of their sales were not jurisdictional as well because they made retail sales and of course that activity would not be jurisdictional the two thousand comes jurisdictional when  are jurisdictional wind of being based on this thing and next you're complaining about this except except the allegation the complaint ever pointed excessive prices index comes out at eight three rules on market manipulation were prospected if expressly by their terms your honor they were not in effect at the time and i would add that in two thousand and five congress passed the energy policy act and for committed those rules regulations so even after congress broadened the law to include any person who in connection with the jurisdictional sale committed fraud it would not apply here your honor they have said th need to emphasize that because like the chart i drew my brief your honor and i explained earlier there's a producer there's a marketer and then there's us there's no wholesale step in between honor the northwest central pipeline case from the u s supreme court held that there were tensions inevitable because they were in a locking jurisdictions between state and federal court but that if you every time there was some sort of tension rule if there was preemption that you would render meaningless the power that congress had given to the states your request for an eighty nine us for ninety three thank you your honor thank