your honors i'd like to begin addressing the two questions that the court is issued on may rd concerning some of the issues on this appeal in the st question has to do with hampton and its effect on the procedural posture of this case and i would make three points with regard to hampton the st is hampton confirms that sluice is a subject matter barring jurisdiction l motion and so what that means is the court should it confirms that the court should look at claim by claim to determine whether or not that particular claim is barred under s the nd circuit in keene gave a footnote nine as has won the holding that has sort as indicated that sluice as a matter of subject matter jurisdiction does not bar claims that are not barred by slaves and that's important here because we do have two independent claims we have the tax returns the preparation claim and we also have the investment claim our position is looser doesn't apply to either coin but when you analyze claim by claim in the district court did not analyze a tax return preparation feet claim he just focused on the investment claim but in his dismissal with prejudice he swept up both claims and if you look at the tax return claim i don't think even northern trust would dispute that if we were to file only that claim salusa would not apply it doesn't involve securities it does much less involved in connection with and the deception in the fraud prong so that's really important because each of these claims has independent subject matter jurisdiction under katha and only a sluice a claim w be barred under hampton's and that's consistent with proctor and proctor this court said you only dismiss claims you don't dismiss nonce looser claims and so this sort of puts the subject matter jurisdiction teeth into proctors hold and you would agree counsel though that in terms of how we analyze the legal questions in this case whether it's through twelve we want it will be six the know will review the legal analysis is this a correct and my nd point would be having to  the standard of review there's two actual ways to file a twelve b one the ocean one is a facial attack and that's attacking the pleadings and the other is a factual attack where you're presenting evidence and even having a hearing and here it can only be construed as a facial attack there there was no evidence there certainly was no hearing and under official attack this court has said that you apply a really similar if not identical standard to a rule motion and that's important because that means all the factual allegations in the complaint are taken it's true all inferences are construed in the complaints favor plaintiff favor and the complaint should be liberally construed the last point i would make with hampton is the dismissal should have been without prejudice the dismissal here was with prejudice and all claims were dismissed and hampton consistent with the other courts who of called the twelve b one it's not it it's not a dismissal on the merits it's a procedural dismissal but i think the important point is though on the standard of review because we are here on a pleading change a challenge and this gets to the nd question the court has asked about and that has to do with whether or not there's any kind of agency relationship between a trustee and  beneficiary and the answer is clearly no particularly when you look at the complaints allegations in this case the complaint never alleges there was any agency relationship in fact the complaint alleges the exact opposite paragraph i'll just give some examples but there are many pair paragraphs three hundred and sixty the trust beneficiaries in the investment class had no control over the investments paragraph sixteen all investment discretion lies exclusively with the trustee northern trust paragraph forty one northern trust has sole discretion with regard to any investments and actually not just and there are others paragraph forty two paragraph forty five to forty seven paragraph thirty paragraph two hundred and eighty two i could go on and on but the allegations in this complaint have nothing to do with agency and everything to do with the iraq iraq iraq a bill trust with captive beneficiaries in the case law the court cited two cases in its in its order  and asked if we would come in address additional authority and i have and i've divided it into sort of two categories the st category is the restatement the restatement of agency and the restatement of trusts and in the nd category are cases from this circuit primarily that have adopted them and so i would i would direct the course attention to the restatement of agency  nd section fourteen b and that has to do with the distinction between a trust and an agency and it goes through many of the factors but the critical factor is control an agency must have control if there is no control there is no agency the trustee holds legal title the agent at operates at the direction and had under the direction and under the control of the principle this principle is also set forth in the restatement of trust section eight and in the restatement of agency section one  many cases but i will i will just point to three particular cases and the pension trust and the union was found to have discriminated against an employee the employee sued and the mystery of logic judge said union you're liable and by the way trust you're liable to as an agent the trust appealed and said i'm not an agent i'm a trust and this court went through the differences citing the restatement of trust section eight citing the restatement of agency section fourteen b in looking at the relationship between the trust and the union there's no agency relationship and so it reversed the award against the trust another case from this court nelson versus or walled six  and seventy eight in this case the defendant bought shares under a pooling arrangement that he so he bought he bought the shares but he was actually only the owner of thirty percent of the shares and the plaintiff was trying he there was fraud in the plaintiff's suit and tried to get him to disgorge the profits from all the shares he bought claiming he's an agent and the court said no we're looking at this arrangement a trust and an agent are completely different under the law and when looking at this relationship this was not an agency relationship this was a trust relationship he had just he held those shares as a beneficial for the others but the others were not able the others did not have any control over his directions and so in that case agency was not found the last case i would point to from this court is the it's an agency relationship and an agency is not a trust and the court analyzed the trust the trust actually gave some powers to the trust that the settler the trust or and the corset even with those powers that did not create an agency and so those are three cases from this court there are court there are cases from across the country and also from this court discuss this difference between agency and trustee and the key factor from these is control who has control the henderson case we talked about the henderson case a lot in our briefing from the chief judge seris from the district of massachusetts she dealt with this too she dealt with a case that is identical claims as ours regarding the investment class and she said look the trust in this case is an era vocal trust the beneficiaries have no discretion at all they have no control no discretion they they just are the trustee gets to do what he wants to do because he the trustee has legal title so i think henderson is also very relevant on that point and if i could reserve the balance of my time certainly have please the court my name is craig martin i represent northern trust i'm going to go through some of the points that counsel just made and in your order to begin with just to get things cleared up with regard to our position with regard to the court's question order on twelve b one versus twelve the sex northern trust basic position is this twelve b one is the appropriate way to dismiss this case and in light of the recent case law the and let me explain that a little bit we think that it should be a twelve  dismissal with prejudice which would mean in this case that you cannot bring a state law class action arising out of same transaction occurrence we think that that's the right result after taking a look at the case law with regard to the trust agency issues where the court also in its order identified a couple of cases and we have a a few things to say about that but i we wanted to fill the court in terms of additional authority st of all the taylor versus mayo case from eight hundred and eighty four its key holding we think is that is essential a that a trustee could be personally liable california probate could code section eight hundred through section one thousand eight hundred and five changes that nine hundred and ninety with regard to the key holding so the court should be aware that the nd thing here is with respect to the difference between an agency and a in a trust i will overview we think that that's a distinction without a difference under salusa but let me give you a little bit of trust law and some citations as the koreans for trustees and agents in many ways have similar and indistinguishable duties particular case full discretion to the agent to trade stocks and the agent trade stocks with that full discretion and the agent and that is found to be a violation with regard to if you then that so the control point with regard to whether a beneficiary actually controls the trades or whether a principal actually controls the trades those are always going to depend on the terms and conditions of the trust and the terms and is no control test the that appropriate test your honor to get to the issue that is sort of backwardly briefed if you will that what they're really talking about in their going to have one of the core issues in the case is this choice case right and a couple of magistrate judges opinion and they just record opinion in the bank of in these bank of new york cases that are outliers and just to go through the basic legal analysis in the dab at case decided by the supreme court the legal standard when you look at what in connection with means the debit case says that it means coincides with the activity coincides with the trading coincides with whatever the deceptive conduct is or the misrepresentations and omissions troy's then the choice decision then goes through its language and its holding and in the choice decision they are explicit that they do not change the holding or the coincides with standard of debit and in fact the choice decision only deals with a of the statute which is misrepresentation or omission of material fact in connection with the trading of covered such securities and does not deal with b of the statute which is deceptive device manipulation contrivance in connection with the trading of covered securities this court's decision the th circuit's court court's decision and fleming makes it clear at footnote five that they reject the notion that choice changes da so then what the what the what our colleagues on the other side of this case do is they try to shoehorn this case into a try situation as opposed to a situation that's much like f c c versus a under or the trustee cases decided by the force are going to get the language of twice and it says the someone making that decision referred to decision to buy and sell has to be a party other than the fraudster and the majority opinion goes on to say that if the for the benefit of the beneficiaries of the trust for the trust in the benefit of beneficiary of the trust those benefits sure is of the trust had it have an equitable interest in the in the in the in the stock and that to give you a case really who has the beneficial owner ownership of the of that stock in choice in choice the fraudster ensure trace right was allegedly going to buy uncovered securities for or sorry was allegedly going to buy covered securities for for the fraudster itself so in trice the fact pattern your honor is is simply this the victims in choice if you will purchase uncovered securities that's undisputed there is no purchase of covered securities with interests the alleged deceptive conduct or that i should say actually more specifically the misrepresentation and choice is that the fraudster essentially tells the folks buying uncovered securities that they are going to go back up those uncovered securities by the fraudst buying covered securities for itself so there's no interest there's no factual issue with regard to the fraudster as the victim there's no  issue in which the victim is actually buying any covered securities so in terms of troy's it really explores the contours of how far salusa can go and how far salusa can't go so choice doesn't even meet the if you look at the elements of salusa it doesn't even meet the th element of solution which says you can you need to buy or buy covered securities and certainly trace goes through its analysis and says this is just too remote but it doesn't change the fact pattern in cases like zander in which there is a broker who essentially goes out and buys and sells stock on behalf of an agent who gives him full and why sluice it was passed in the ninety's there were all these lawsuits where a c e o will come out and say i think we're going have a great year with this new product and it didn't work out and then you have a plan to lawyer saying well of the stock dropped twenty percent i'm going to sue you for twenty percent of the market cap you know twenty billion dollars losses and so solicit was passed to stop those type of lawsuits in help me out here because in this case you can imagine a situation where the plaintiff is a minor or an invalid or someone who can not enter into a contract so there's no way they could have any say at all in terms of what the trust does how would sluices purposes be served if you didn't allow a minor invalid to sue saying that the funds are being mismanaged so with regard to the funds being mismanaged right that's a different claim than we have here with regard to the core claim that we have here and look but with regard to the core claim that we here have here the real test if you strip that away is the core claim is that northern trust and gauged in a deceptive practice contrivance and so forth in order to put people into trusts into northern trust proprietary funds right so classic ten b type of claim type of stuff under ten b sluices basic purpose with respect to that hypothetical that your honor talks about looking slips that does not preclude or prevent somebody from bringing a case on their on their own behalf right it's talking about class actions for fifty or more under state law where those state law claims when you shred it all are away and look at the grab them in of the complaint where it's really attend the claimer ten b five i know i know and i appreciate that fine a distinction on it but again the i'm using the  likely right that this is all advice that the victim in this case did not have a say the victim did not make a decision based on a misrepresentation where in the what i think the typical salusa case is the victims were they bought or sold stock based on what the company said wow how so i was why i'm wrong about that so when i think it you're thinking about a typical ten b five case yes but in terms of if you look at s c c versus zander and if you look at the statute and you look at b b talks about deceptive practice that is a so actually coinciding with the actual trading so there's no misrepresentation being made to the victim to trick them into buying something instead there is a deceptive practice that coincides with the with the trading that is being done in a whole some way if you will so prong a is about misrepresentation omission prong b is about deceptive practices in contrivances and it's very broad language and it actually doesn't even have a materiality qualification in b so of that the fact pattern here is slightly different than the typical fact pattern that you might think about with regard to a classic ten b case but if you look at the case law and you look at zander and you look at o'hagan you look at judge easterbrook so decision in the th circuit which cited in our brief as well as the trust cases you'll see that those cases are really talking about adjacen as opposed to the classic misrepresentation that goes to an individual and those are covered by tenby so if your position then effectively that the trust i stink in that the plaintiffs are trying to make here and that the district henderson case made your saying that falls distinction at the end the day really matters that is if the security being involved not so much who is the supposed victim in the case it's a false distinction and it's and it is in terms of with regard to a trust you always have the ability to bring an individual action if you've got a problem with regard to the trading in for suckers so it's not shutting somebody writes out it's just preclude ing what the federal law intended to preclude so that's  that's the consistency with respect to there is a lot of fine distinctions with regard to trust law and agency law with respect to it you know in this in this case one of the trust acts in its capacity as a trustee and then there's a benefi who actually has the equitable and ownership rights like the bun bundle of sticks so it's just a different different just a different set of issues with regard to those two just the court opinions one of the magistrate judge on under rule seventy two dollars review right now and the other one we just think that all the wrongly decided and with regard to this case this court's decisions we think that the line of cases that this falls into are the s e c zander cases as well as those trust cases from the other sort of courts of appeal i have much more to say but i am out of time i'd be happy to answer any questions but you probably want me to go sit down well let me see my colleagues have additional  important clarification on the in connection prong trace also the northern trust relies heavily on zander and o'hagan trace also discuss those two cases and why they didn't compel a finding of knowing connection is because in those cases the victim having was the owner of the securities so choice made that clear here the beneficiaries are not the legal owners the trustee is the legal owner this is an important distinction in trust a lot going back centuries the beneficiaries have very little remedies they can file a suit under the pro e code for breach of fiduciary duty but other than that the beneficiaries unlike a broker i hire a broker he's doing a bad job i can fire him trust the beneficiaries or have no control to remove the trustee unless they go to court and seek court approval they have no say in the investments they have no say in how it's managed and our case is not a deception and one final point with the in connection that is a prong for both the deception and elements of both the deception element and the fraud element of slews if the in connection requirement is not satisfied here that's the end of the sluice analysis lucic cannot apply and there's no need to go analyze whether or not there's deception here or fraud but if the court was to look at whether or not there's deception or fraud there's not stuti brose are clearly held that a complaint mail edge a violation of the trust and ministry years to do sherry duty to the trust beneficiaries even when that violation involves trading uncovered securities so long as there isn't an allegation of misrepresentations or omissions and that's what we've done here we have made allegations and these are the breaches with the investment class they failed to conduct an individualized review of the trust assets they relied on this big northern fund portfolio where they put all these captive trusts into they failed to do an individualized review they failed to continually review the trust assets to make sure that it's it's good for this particular trust and they they refused or they failed to remove poorly performing assets from this trust and that they put their own interests in violation of the duty of loyalty which doesn't include fraud or omission they put their own cast doubt on their holdings or affectively overrule them you know are beneficiaries can't can she sue by yourself yes but the beneficiaries of truss have very little remedies under the trusts law they are in our class action complaint is solely based on captive trust where there is sole discretion with the trustee so this isn't a situation where you're going to have a beneficiary with some discretion on in the investment class this is based solely where the trustee has exclusive control over the investments and trust and fisheries have a very little options under the law and  arguments in this case involving some interesting difficult issues will take the matter and submission and issue a ruling later in the case