noon i don't know if the court has been brought up to date yet on the development as of yesterday afternoon the fifth circuit court of appeals issued a published decision in a case that's been pending that tracks all the same issues as this case we supplied to the court i think eight o'clock this morning so the court would have it but i want to alert the court to the fact that all the issues relating to arista and the acquittal remedy claim or claims have been resolved understandably not by the sixth circuit but by the fifth circuit it's exactly the same case the plaintiff is central states the defendant in the case  excess athletic skill lastic insured just like michael circuit have this rule which we've had for a while that when you have a conflict theorists a plan basically gets this benefit well the fifth  have a comparable rule the thorn apple valley case in the circuit though predates both the news and case in the sarah buff case as well as other cases from the us supreme court so when thorn apple valley was decided by this court in the early ninety's there was not this  bar that exists now regarding the collection of money quote unquote restitution or some other type of remedy that's not truly an equitable remedy on top of that there is root legal remedy that we have here i'm sorry that this record allowed legal or money remedy that we haven't dismissed the case completely and every court that has resolve this in the last couple years and everyone is involved central states every single court all the district courts plus now the fifth circuit have ruled against central states on identical facts in every case central states had prepaid claims and then sought to get what they called equitable lean slash constructive trust slash restitution from different ensure who had exactly the same type of policy as we have and every one of those courts rejected the claims because under the u s supreme court decisions but just this is a little i mean i'm not sure it's a great idea i don't know about my colleagues i don't know about this case i was in there day and i was driving watching soccer games and i thought i was ready for this case this afternoon in the home  so if i were you at least if you're trying to make any headway with me i would not talk about the circuit case except to say in the course of your normal argument this point was reiterated by them because you're going to be just going to be very unproductive and it comes still entitle to a declaratory judgment right there is an issue yes as to prospective relief and let me address your honor and i was i don't if i was clear this decision came out at four in the afternoon yesterday from the fifth circuit so you didn't listen  well no but as far as as far as the declaratory relief yes count one of this complaint is for declaratory relief and certainly there is an issue and there could be issues on a going forward basis conceding they're right right the district was right on that first point states and and want to submit for claims and they haven't paid them yet and they want to go to court and say as to the relationship between central states and my client who should go first that would be theoretically a proper claim to be brought under rissa in the western district of michigan so that to the extent any of the thirteen plaintiff not play of the claimants in this case have either present or future ongoing claims i believe it would be appropriate for the western district to coordinate the policies figure out what they say and issue a declaratory judgment for future coordination of but that's still it's a fee issue right yes as far as the fees judge enough in abuse of discretion land where you well judge nuff in my mind ran counter to every precedent every decision that this court has issued on the fee shifting element of a risk with the understanding that this court has made very clear that fee shifting under risk is the exception and not the rule and we have essentially a garden variety contractual interpretation dispute between two insurance companies we don't have the typical fee shifting where a beneficiary has to sue his or her own plan gets stiffed for some reason has to file a case in district court and succeeds and the fee shifting is intended in those cases to deter the wrongful denial of a claim by a plan that is the prototypical fee shifting on the other hand we have cases including cases where this court has upheld the denial of attorneys fees that are garden variety contractual disputes between two insurers there's no reason to fish shift when what you've got is a centrally a business dispute between two insurance companies who go to the court for guidance and say how should we interpret our policies so this court has pretty aggressively i want to say it's your client that i guess i'm not following this point i mean i get the equities as between a big insurance company and individual how difficult it is for the individual not to get the coverage in the interim i mean you can have misbehaving insurance companies i'm not saying that happened here but surely that can happen absolutely and that's why the first element in the king five factors is bad faith and culpability judge now found there was no bad faith and no culpability as we've addressed in the briefs that is a gatekeeper function of the district court we believe that the cases if you look through them will show that only when there is some bad faith or culpability does a district court then look at the other factors to see if any of the militate against the award of fees but it be that the district court of perhaps even this court would be concerned that guarantee trust not do what it's done stiff central state so in that conceivable let me address that head up first of all with the background the judge and nuff found no bad faith no bad culpability it was strictly a business dispute and if you read her decision she even said there's very little evidence in the record of any problem it's just two companies trying to interpret a contract the deterrent element of the king factors is intended to prevent a future ensure basically a plan or an insurance company from doing something that the district court wants to send out a signal don't do this we're deterring you let's talk about whether that should even apply shouldn't a company in a position of guarantee trust properly be entitled to show up in court and say there's a conflicting coordination of benefits we've got this one thousand nine hundred four six circuit case that not even thought up a valley is directly on point that deals with a no fault carrier arguing with in orissa plant so there is not even any guidance directly in the thorn apple valley decision would we want to deter a company like guarantee trust from using the court system to enforce its rights i don't think the courts are designed to deter that i don't think if anything it it brings the question to a panel like this for some type of a decision a risk a deterrence works when you have plans that say hey you hurt your back sorry it's not the right disk and so we're not going to we're not going to word you benefits and they keep doing it keep doing this case because it's still an abuse of discretion standard five factors knowledged some respects the district court deserves credit for you know acknowledging there's no bad faith but still decides to exercise her discretion this way what's the best case i mean because you obviously agree or understand that abuse discussions yes tougher standard than say so what's the best case that shows she was looking this way and the law required to look this way there's not a single case that this court has did it i couldn't find a judge trial judges aren't doing the first instance your point that i couldn't find a trial judge who would ever made a finding of no bad faith no culpability but yes attorney's fees so that's an outlier and i think that's an abuse of discretion to vs madison of attorney case apparently it is and we searched we searched but but but the rules are set up so that you're intending this court's guidance is not  shift that's the rule is to not feed shift and only when you find some type of action that would allow or demand that you switched over to fish shifting should you fish shift and judge now that it doesn't have to be bad faith that that will have to be a founding a bad faith it doesn't have to be but we haven't found and we found certainly discord affirming the denial of attorneys fees where a lower court says there's no bad faith in this court says that's right there's no b recent case where there was no finding of bad faith or culpability so i don't think there so your point is that what what takes this out of the heartland of civil cases where fees are typically not awarded and they so you suggest that here there doesn't appear to be any deterrent kind of feature that would prompt treating this case as outside the the norm absolutely or civil a civil damages absolutely and in this is a contract case absolutely and judge nuffin her decision did not identify a single plausible deterrent effect that her decision could have i don't recall the achieving the knowledge that she needed to though she said she i think she put the word deterrent in there that was that ok so that but there's no there's no substance to the point so to turn a big deal here i mean look what happens in this case if you're right on the legal versus equitable money damages i mean they don't even get the money well right and the fifth circuit and every district court has addressed i don't want to reward that head on because mr  had argued exactly that point in the fifth circuit which is if you don't give us this remedy where will we go for a remedy in the fifth circuit essentially we are interpret not our problem if i don't know i'm i'm making a i'm combining the two points that realize she was on weak grounds and the hundred twelve thousand she thought well at a minimum these guys are going to fees and that's that's why it's determined the deterrent point is not just you're being super as as the as the exception and not the rule and there's no evidence the judge enough went through the process that you've just described which is that were determined yes and but she didn't identify how in a in a straightforward business fight between two insurance companies there could be any deterrent effect walk in other words what would she be trying to deter except a company like my client in the future arguing in favor of it's contractual rights why should that be deterred that that's an element that the legal system should be promoting not deterring as opposed to some plan that is in the business of denying people with back pain and the judges have to send out a message if you're going to do that you're going to get stuck for some attorney's fees as well as ies issue but judge nuff stated something in the record on the attorney's fees issue which i think it's a lead in to my main argument and when judge never look at the attorneys fees issue it's true she did not find cool bad faith on the part guarantee trust but what she said did say she said i think that it's true that insurance companies shouldn't routinely in arbitrarily deny coverage and i think be a liability for attorneys fees goes a long way to discouraging nick kind of internal corporate policy which may have been an issue here and then she goes on in the attorney's fees confers a common benefit on all plan participants right he just said it's very unusual to find these cases is he wrong about that i think judge d to tell you i think he's wrong to test for attorney's fees i think since the supreme court in the heart decision said is there some degree of success on the merit central states achieve some degree of success on the merit then there was an analysis of the king factors and the judge found that the factors of deterrence and of stopping the corporate policy were relevant to award fees for benefits issues if was to insurance companies to go into court determine the order benefits in this case in all the thirteen instance where central states paid the bills of these covered individuals there was a refusal on the part of the defendants in the case to to look at the bills to pay the bills they just sent letters and letters are in the record there attached to the complaint they just sent letters out saying no we're not going to pay anything which  the main point of this case i mean that both sides had a contractual reason for not paying thanks think that's fair i mean that's the seems like a fair statement i think your honor in light for napa valley in light of the jurisprudence in this circuit there when you have a nonprofit rissa plan like central states they're not the idea behind torn apple valley looking at federal commonlaw insane we're going to protect the welfare benefit plans we're going to look at the plans and see what plans provide but don't have a valid the importance of torn up valley was that we use in this case isn't well i would suggest to your honor that there is a gap if it's a position of the insurance companies and central states goes ahead in page bills of its participants  beneficiary so that they're going to be left with the debt you need trysting thing there's no participants or beneficiaries in this case there's no participants suing central states and suing guaranty trust the reason they're not doing it is because central states paid their bills central states protected them from having the credit people chasing after them so indeed there is a gap if you take the argument where we might simply state simple states pay bills companies and their collective bargaining agreement said give them coverage and they expect that when their children have the accidental injuries that they are going to get paid that's that's my point you paid the bill because you felt legally obligated to do so what about they should've known it i guess that's your point what do you say about one hundred twelve thousand which are you know it sounds like the cases are going very well for you on that front well a judge to court if you don't want to talk about that's fine but i thought that  the issue that i wanted to let you gets at some of it that's the issue judge that i wanted to get into when you look the reason that these other cases and i'm familiar with these other cases have  ruled that there is no right to equitable relief again leaving central speech without a remedy leaving central states worse off because it's a risk to plan than it was a private insurance company and just go in and get this type of determination about who's primary under these policies the main reason that they reached that conclusion is because they said that central states didn't pay any money to these insurance companies i'm sure mr frank would make the point is made in the briefs it central states didn't pay any money to guaranty trust trust life of course we didn't pay any money to him all the cases cited by mr freeh all the decisions by the circuit courts the recent decision of yesterday afternoon by the fifth circuit court of appeals all involved subrogation reimbursement type cases not a single case involve coordination of benefits coordination of benefits is a different situation where the insurance company were several states doesn't pay money to harder to call that group of relief i think it's your judge and i think the money or i think judge never made the right decision because once central states paid the money it paid paid an obligation that under the law it was the obligation of the defendants to pay they at sets up at that point a pool of money identified by the amount of money that central states paid on behalf of the participants it sets up a constructive trust because central states pay bills which under its plan it has a right beneficiaries not trying to say that's a construct of trust and that money well to the extent that the insurance companies don't pay the money their assets are saved it's kind of like a roach in case it was argued last week in front of this court that they're saving their assets they're in possession of money that they don't have to spend and reason they don't have to spend it is they refused in every situation where central states files a notice of lien with them were central states and we'd like reimbursement for this money we pay the interesting thing your honor and when you think about it in the ass mr frank when you get up here again if central states refused to pay that money do you think the private insurance companies would pay it no they wouldn't pay it they would say that their excess carriers central states the city not there they should pay the money and there's a case i cited in the briefs that so winslet say but i mean their wrists and not paying i mean there are some serious risks if it turns out you were when he reversed the district court the district court didn't fight jurisdiction for central states declaratory action although i think counsel kind of concedes to some extent the declaratory action when the eighth he said that when judge posner reversed the district court they didn't for central states to court torrie action he says wait a minute he says unless there's jurisdiction for the rest of plan either under five o two a three or under federal question jurisdiction that what would happen injure postur predicted that that central state would only be left holding the bag in the case and it's a quote from that case because the private insurance companies wouldn't pay it be putting the participants in benefit to happen next i mean so tomorrow to say hypothetically you win on the declaratory judgment issue what happens next so you have these exact same policies i take it at that point you don't pay right if we hear if we have had a circuit decision on hand it's not appealed it's the law of the six circuit it tells you how to deal with the corner according to your benefits and for sake of argument you win so it's like a thorn apple just the way you want it now you have a similarly situated athlete child of a teamsters comes forward tell me how it plays out i assume you're not going to pay that you're going to say talk to guarantee trust right well judge if we if we don't pay there are enough guaranteed trust doesn't pay then those people be left without coverage and mormon but i'm sorry i didn't think i was asking a very difficult auditing you're telling me you honestly would not say guarantee trust has to pay under six circuit law what course they have to pay and we do it would tell guarant trust to pay if guaranty trust these people well we're not going to pay your bills you're going to central states if we don't pay bills prop because central states is a large as your is you know it's a large rissa play and we get you know and just get a plumber injunction well if you if your honor is positing the situation were central states we're going to respond to your judge posner point which is a good point but i'm just trying to figure out if that's just a backward looking point or if it's a point that gets would wrong person they didn't have any money but if the six the the money was paid to a special needs trust as you know in the case but if the sixth circuit establishes the rule then central states can get a debt collector tory judge in the face day with their rule  them because they're holding their whole being a assets in a constructive trust for money that they should have paid that they didn't pay which is one way of saying going forward if you get the relief you want in the car toward judgment from th fees and god knows what else you could do you could do this judge but i think that this case shows if there were thirteen thirteen individual cases judge nuff said that there was an internal corporate policy of not pain yes your honor we could do what your honor sounds but in that situation you'd be going into court every day unless we trust the insurance companies pay and then i'm going to pick because you're going to see that their excess they will never pay and then in that case by waiting to go in and get the this case is about the private insurance companies not wanting to pay the dime on these things they're primarily libel or they're covering these people they want to collect on the student policies never pay a dime put it on the wrist a plan you didn't even involve this type of a situation got to red light on the other question thank you very much for your time ok thank you frank i think you have three minutes thank you let me talk about the declaratory relief aspect of this one of the elements of the fifth circuit recognized in this decision yesterday is that as to the claimants who had those claims identified in that case those were all past claimants where there was no claim that those people would come in the future and therefore it really wasn't even appropriate to be seeking declaratory relief so when you asked me originally hypothetically yes judge nuff if there were present or future claimants before her she could issue declaratory relief but the thirteen people that are listed here unless there is some additional showing there isn't a future issue there's no rightness as to any of those thirteen people that's what the fifth circuit found yesterday so in the future if the suggestion plan it's not an issue that that is before the courts and we're just trying to figure out practically if you win on the hundred twelve thousand what's going to happen in the future and that seems like a pretty fair question it's and i assume the answer is of course they can bring in a federal court of course then get a permit junction if they happen to win on this construction of the plans that's right and i'm what i'm saying today is that's not before the court and i don't know exactly what issues there may or may not be except i can add this judge now if the only question is judge left here is a a claymore about to pay who should pay it hasn't happened yet would you please declare the rights of the parties so now we we have a ripe actual controversy if she is applying for an apple valley to bat she's applying old outdated law that was based on an element that doesn't exist anymore which is the requirement that a company might have to step up and pay after the fact someone else's payment so we have to open it up and it seems strange that there an apples been overruled in your view based on the twelve year old supreme court decision and i see lots of a recent cases have been seems like you've just come up with this insight that everybody's missed well interestingly knutson and the sarah both cases because they were decided in the early two thousand track totally separately from what this court has done and there isn't a six circuit decision after either knutson or sarah baf that involves an application of the thorn apple valley principle two in a risk of plan and a no fault plan that's the paradigm and there's not anything that involves in a risk of plan and a private plan so this is the first panel to consider whether thorn apple valley even survives after the knutson and the decisions my suggested i guess when i put my argument would be that if the question is how do these plans coordinate that could be determinant of clarity or relief action without the baggage let's say of the old earth or an apple valley decision but that's not the case that central state spiled it's not just the case they filed in any of the courts and they've lost every single decision on all the same issues you want us to to in them in addition to other things to declare doma blown up valve in the long  babble i don't think you need to because i don't think when push comes to shove there is any actual controversy as to thirteen people because those thirteen people identified in the complaint already had their money paid out so that you don't have properly in a procedural way one controversy is whether you have to pay that money but that's life actually the fifth circuit decision yesterday suggest it's not live because all the thirteen people in our case are our old people but that's happened already i want you to  bomb one point is that hey the hundred twelve thousand they say it's you owe it to them so just forget the fifth circuit for a second you're saying there's no article three dispute case or controversy if i that all they can get is equitable relief under the under the new it's in the cerebellum decisions and i believe the fifth circuit tracks at one hundred percent so if the argument is they can only get prospect of equitable relief then bringing a claim up for thirteen people where they've already paid money is not a live claim because there is no remedy that the court could grant them that's consistent with newton or center both newton and sara both very specifically say you can't take money out of my client's pocket to reimburse central states for the money they already paid to the thirteen people if they had thirteen new people who hadn't yet received money it would be a different case but we don't have that and in this case we have to go with the contours of the case which is thirteen people who had their money already paid out by central states and central states wants it back from us so in the context of this case although to answer your first hypothetical yes she could have granted declaratory relief in theory there aren't actually any people before her that required declaratory relief those people already got their money i didn't see in your brief us don't happen to be overruled it was looking every we're not asking that it be overruled we're simply saying that to the extent the extension of thorn apple valley would be a restitution area or equitable lien or constructive top trust type of a claim against us to reimburse central states that knutson and sarah bof and all the cases after say you can't impose that remedy on us that's ok thanks to both of you for your helpful oral arguments in greece we appreciate it the case will be submitted and the