continuing our third case for this morning is red barn motors against next gear capital it please the court kathleen delaney for a plaintiff appellants red barn motors next year charged about twenty thousand used car dealers interest and fees on funds that had not been advanced the central issue here is whether the take it or leave it form contract signed by all of these dealers allowed next year to charge premature interest in fields next year and use yes in all instances and red barn argues no in all instances nobody is arguing that any extrinsic evidence would generate different contract interpretations for individual dealers next year created this problem by drafting and a us contract which should be construed against the drafter now you conqueror the cases that bear on this issue are ones that talk about the fact that form contracts are well suited for class treatment and which is what our case is and judge pratt did sort of tie this case as a class action with a rick but that's not in the answer to the question i'm not sure he'd have an answer to a a double negative case at all right is there any case hoping that the or vice versa so could i maybe phrase it and break it down a little bit this contract is allegedly ambiguous about whether the interest can start running the date when the the car is delivered to the used car dealers after the auction where their interest can start running only at the time next gear advances the monies that is i understand it is the issue and what does the contract  its four corners situation doesn't necessarily always have to be that way but she thought this contract was that so so that's kind of part one you know whether that's where we are on the question about wh contract because there are plenty of in figure as contracts where extrinsic evidence of the negotiating process isn't terribly useful you argue there's an integration clause here there are other instances where there doesn't happen to be any extr sic evidence and then you just resort to presumptions you do the best you can the other thing is how the district court handled the decertification so it's one thing to say the district court had discretion to certify the class or not to certify the class or to revisit certification and decertify it's another thing to say does the district judge have a procedural obligation both at the certification stage and at the decertification stage to go through the criteria twenty three a and twenty three b three and explain what's the problem you know why are we decertify and i understood you to be arguing that that procedural step at the second decision the decertification decision was not undertaken that's correct the first order where the class was certified did march through all the requirements and some fourteen pages of analysis the decertification order about six months later spent two sentences on you now that's why we're guessing about the extrinsic evidence because we don't have that kind of analysis from the district court explaining what exactly is missing what exactly would be different for all twenty thousand minus twelve or whatever it is dealer's what  you know that kind of explanation would allow us to get our hands around whether there was an abuse of discretion or not but the district court did make factual findings that go to the heart of this issue stating that the plaintiffs were unaware of when next year paid the auctions on their behalf and next year's account executives were also unaware when next year or next year paid the auctions so they were unable to inform the plaintiffs are other clients when the auctions were paid so there's no due to i'm trying to figure out how you want to use that evidence because i saw that and i thought you were using that to show that at least at this stage any kind of course of dealing argument would be difficult to make and i thought you were also relying on the contract to say the changes stemming from later developments whether course of dealing with their later conversations couldn't be embodied in the contract until there was writing and how  correct on both counts but that the fundamental point here is that all the different types of extrinsic evidence that next year's pointing to an arguing require individualized analysis all of those result in class wide treatment they lend itself to class wide treatment because they count representatives didn't know that the interest was being charged prematurely they're for what they told our clients is of no moment because they didn't know the answer themselves the suggest that many a reasonable inference  wasn't even a topic if they didn't know about it well but all of that happened after contract formation as well and the contract also has a no modification or waiver provision that says it can't be changed after the fact without a writing signed by both parties and that didn't happen here either district court in considering the summary judgment stated that the parties had evidences conversations between various hearty representatives about next year's interest practices but that the of your honor i disagree because all of the categories of extrinsic evidence that have been pointed to apply equally across the class and next year is not arguing that anything that one particular account representative told one particular class member would result in a different interpretation of the contract for that particular class member they're asking that uniformly across the class the contract be interpreted to authorize them to prematurely charge interest we believe the contract it's a broader provision than that and it basically says i think i can get cited in our brief and i have it here someone else i want to use it says nothing that's been said before this contract was entered into right change the terms of the contract the deal is the deal and the deal is in the four corners of the document and then there's another provision that says it can't be modified on a going forward basis without a writing reduce to both parties the other important point to note here is that this is a take it or leave it contract the company's representative testified in less than one half of one percent of cases was there any consideration of negotiation on a one on one basis  he said he would then ten out of twenty thousand the general counsel of the company described the contract as quote kind of like a credit card application or a credit card agreement this is exactly it's as if next year is giving credit cards to our use client they use car dealer clients that they can only use at auction and then they're charging them interest on cash advances when the advances haven't even happened yet so that's what's happening here and it  across the class irrespective of when they signed their contract they all signed the same contract it was unused for a number of years until two thousand and thirteen they changed the language to address this problem when we moved arbitration didn't think they'd they'd change the contract on multiple levels in order to avoid the problem but they created the ambiguity in a form contract they provided information that was opaque both to their own employees and to their customers about when the interest and other fees would begin to be charged and we think this case is just like this fusion a case in the newman case and that ambiguities in take it or leave it contracts they do meet rule twenty three is commonality in predominance requirements and they can be resolved by looking at the defendant's uniform conduct across her class additionally we reiterate the point that ambiguities in foreign contracts should be construed against the drafter next year who created the problem do you need that i mean that indiana seems more open to a strands of evidence than then you're canons of construction you like to have and so i don't know whether we've boiled down to that point here or whether you're actually asking us to inserted two thousand at this point we really are at the last resort we were about six weeks away from trial at the time that the class was decertified discovery had closed we were ready to try to get emphasise that so no other evidence was going to come into this record exactly and as the district court found as a fact finding that's on an of discretion standard there was no helpful evidence on that point because the next year didn't tell us account executives and didn't tell its customers when they started lending the money so you know there they like to argue that after the fact some of our clients learned about this timing issue but they learned that they were being overcharged after they had already signed a contract that they were stuck with and none of that bears on the meaning of the contract that was signed in the first place i'd like to reserve the balance of my time the next year has its money in income earning accounts and the money is happily earning income until it's removed from those accounts and sent over to the auction house where any beg to differ on a fee upon the commitment for binding credit and that's not what you're doing you're charging interest well let me ask you this question a fee for one simple no no no no i mean sometimes origination fee you know hundred dollars for can be three percent once the money is loaned let me ask you this is it your position that of these twenty thousand different agreements seven thousand of them once we look at all the evidence are going to turn out to be agreements in which it's ok to charge the interest from the date of the auction and thirteen thousand of them are going to turn out to be agreements when it's not ok to charge interest from the date of the auction i write that's not our position about issue isn't suitable for class treatment because if your position is that that feature at least is common to the full class you could have an issue class where an issue class hasn't been requested but splits may put that aside for a second now to be the same as this i mean as they argue very similar to see china class really is you know all class actions in the end have an individualized when relief is granted maybe some used car dealers only have a few cars and maybe some have very large lot so amounts are going to differ there are lot of things are made that period of time might differ but whether this was a legitimate clause in the contract you just told me is going to be the same across all twenty thousand contract so your honor that clause just begins to tell the story these are ongoing commercial relationships let's consider the testimony we had from two of the three class representatives they both admitted that they knew that they were being charged interest by the contract you know you're telling me something that's different sort of apples and oranges you know what what does the contract say in the interest charges is a state law claim right  position in the district court was the contract wasn't ambiguous that we were entitled to do this but the district judge found that the contract was ambiguous she wanted to hear more because she heard evidence there was evidence of these conversations showing the course of performance of the could corset performance very and also are you going to stand up there in the district court or were you planning on standing up there in the district court in saying an advance under some of our contracts starts the day the money is sent over to the auction house but in advance in some of our other contracts depending on what we've been doing with the deal or what we said during the negotiations can start on the day  provides it applies only to the lender not doesn't go both ways so you could have a waiver of breach either and in fact the evidence the actual evidence that the district judge looked at and with respect can't tell what evidence he looked  at i mean that's my procedural problem with this you may be right and a lot of this substance that her failure when she decertified to explain exactly which elements have persuaded her that this is no longer suitable for class treatment leaves me as something of a loss to know how even to evaluate what she did or your honor there are there's fifty pages of orders here from the district judge just on these last two issues no no but it's not a fifty are two state laws applicable mostly in the and most of the same there was not it's not one of those abuse of discretion cases where the district judge faces multi stage the law have a polygamist eighty watts of elements of different claims in those cases abuse of discretion because of inadequacy of the writing of the order has sometimes been found this is a simpler determination based on the discussion the district judge offered and as i said page eight and it really contract is the contract why is it relevant i don't see anything she says that there is an absence of predominance and commonality i don't understand why i see undermined undermines she says the elements of contract itself and this ongoing business relationship last years there's regular contacts with accounts are presented on people after the fact for whom you cannot charge interest from testimony of the two class representatives about their ongoing performance really matters they asked about one of them asked about the very issue that's in front of us and was told no interest is charged from the date of sale so the remarks about one knowing the date of the sale are wrong that's a different topic entirely that doesn't mean that an account representative sitting on the showroom floor talking with the dealer can say this unit was was paid the auction was paid on such and such a day doesn't have that of course but he knows when interest begins to be charged because it's entirely for one thing it's an industry standard practice we say the contract permits it and it's completely fair given that an extension of credit has been made when that is or merits arguments i don't know that that's the base as for the claim of breach of contract yet they continued to morrow they were ok with that and we all know from basic contracts that one of the best ways of and figuring out a contract interpretation question is how the parties perform the contract and that would be relevant to every one of these twenty seven thousand used car dealers and to certify the class would be grossly unfair to the defendant because only part of the story could be told in a class in a class action trial the defendant would have its arms tied behind its back and that's why it's important to be able to tell the whole story on the breach of contract claim it only begins with that form contract doesn't end with it that's only the beginning of the relationship they want on for an extended period of time in figuring out that very point but she alluded to the evidence of conversations by both sides and concluded that she wanted to hear more at a trial about that but that this case couldn't proceed on a on a class action bas the question before the court in a deferential standard of review is that given the record given the context was that decision within the broad range of discretionary decisions the district judge might have made i don't believe that on even on a deferential standard the court wants to get into word smithing the district court's opinion so long as the record supports it and the district court's deliberative process is apparent from the order so the problem though the last thing you touched on the district court's deliberative process is not apparent from the order because we don't know which if i mean you have your theory about which of the extrinsic evidence may have been particularly persuasive ambiguous at all that it allows your client begin to charge interest from the day of the sale even though no monies have been advanced and uses the word advance until some later date you know sometimes maybe  passes maybe sometimes it's some other date but that your view is that that initial sale is the date and that there and that the word advance in the contract doesn't mean money's advanced goose sauce for the gander the supreme court emphasized in the wal mart case in particular coming to my mind that district courts do have a job at the class certification stage they've got to resolve facts about predominance in about commonality they sometimes need to have daubert hearings which doesn't happen to be this case but it happens with some regularity they've got to take a deeper dive into this than had been thought the case prior to wal mart so the district judges are largely doing that and what doesn't happen here is that same care with explaining and resolving are we would respectfully hope the court on reflection can look at the whole body of the district courts work here since the beginning in this case in two thousand and thirteen we submit it would be a waste of additional resources now just to remain and for the district judge to add a few sentences to an order that is otherwise sound i make one final point there was to respond before my time expires the the point made by the district judge of the evidence was not useful  was not useful he said only addressing the point of whether or not it was the basis for summary judgment which he said it was not because it's disputed that never once was not nonexistent it was simply disputed so we would ask the court from there ok thank you very much thank you i'd like to begin by answering the question that i misunderstood from judge rosen early on and we stated a case on page eight of our reply brief in the low versus southwestern bell our first circuit case where the first circuit reversed a district court in the certification of a class that had previously been certified that was involving cell phone consumer contract that sorry that i didn't understand you at first but i hope that helps in terms of the analysis in judge pratt's order certifying the class versus the order decertify in the class when she certified her class she walked through the elements and said specifically on commonality quote the central common question whether the floorplan agreement allowed next year to charge interest and fees on money not yet actually loaned will produce an answer that can lead to a resolution of the claims for the class in one stroke quoting wal mart that's the kind of analysis that we don't find in the d certification order and there's no explanation for how we go from commonality to six months later no commonality on the same record in the first order certifying the class on predominance judge pratt wrote quote given the specific nature of the plaintiff's breach of contract claim in this case the elements of this claim are capable of proof at trial through evidence that is common to the class rather than individual to its members and if you listened carefully to the answer to your question chief judge would next years not claiming that just that seven thousand people would have one interpretation and thirteen another they want to same interpretation of the language across the class that's why this is a classic case and the language of the contract does not allow them to charge interest earlier than when funds are advanced and advanced as defined in the contract as any loan or payment in any amount made pursuant to this note by d s c t dealer or on dealer's behalf to a third party they're charging interest and fees before they make payments and their definition of advance does not allow them to do that that's why we're here on this case next year is the largest automotive financ company in the country and it imposed its form contract on the dealers on a take it or leave it basis next year allow the terms of the contract to be revised for individual dealers and fewer than ten out of twenty thousand contracts during the class period although they paint this relationship as between equally sophisticated businesses it bears many of the relationship hallmarks of a credit card application as testified to by their own general counsel we asked that this case be remain ended and that our class