good morning your honour's my name is arthur miller i'm hearing for the class of caddies i apologize i am under the weather if i sneeze or cough it is no sign of disrespect blame it on the smoke i believe we have reserved two minutes for rebut i will discuss what we believe are two fundamental procedural errors made below mr major my colleague will turn to the and i trust arrests and substantive elements the first difficulty with the proceedings below may seem technical we believe that there has been a violation of the requirement in federal rule twelve d that on receipt of material outside the complaint that is accepted the motion automatically is converted into a summary judgment motion with full procedural protection in terms of notice and discovery opportunities that was not done when curiously in context the district judge called for information outside the complaint part of his request dealt with an issue of law and namely what was the governing law that's not the point the point is as the tour points out though that the trial court did expressly state that he wasn't a lying on any of that information outside the complainant was was relying solely on the allegations in the complaint that this had been going on for years and years the difficulty with that construction however your honor is that when you look at the judge's opinion he first says there are two ways to read the contract that in and of itself should have stopped discussion with regard to the survivability of the contract claim because there is precedent both in california who's substantive contract law controls and here in the ninth circuit and when you have alternative constructions of a contract the case months proceed but he did not stop there he said despite these two constructions i can decide this based on context and there he steps beyond the complaint what context is he talking of well the only thing he cites is the supplemental brief put in as part of the response to his questions he quite clearly relied on that which allegedly ad myths that the bid bill has been required for many many years something that is not in the complaint the problem here is that although this is technical rule twelve the some of us live and die cording to the federal rules not everybody one of the protections of the rule is that if you're going to step outside the complaint you have got to do it three hundred sixty degrees or you have an imbalance in terms of the information available and the display made to the judge the cabbies have no information on the two questions he asked let me ask you a question that may seem technical to you but i'm having a hard time understanding the breach of contract claim is it your argument that the contract prohibits the the tour from requiring tabs or that the contract doesn't clearly require the caddies to wear it the latter your honor and there in lie one of the problems here the word big business not anywhere it's uniform when was this clause put into what is a registration agreement not really a contract signed it or don't carry when you did uniform come in what was the intention of the parties in using it you know i think case and let me get to my technical point you you allege a breach of contract i mean it sounds to me like what should have been brought is that is a declaratory judgment action asking for a ruling that it would not be a breach of contract for the caddies to refuse to wear bibs because you have to allege that the tour actually breached the contract so is there anything in the contract that says the tour won't require  if one assumes it goes back in history if it goes back to the fifty's you have a bid that is basically a bin it's a just a little garment it's gone through a half dozen different iterations first it has the name of the golfer then it has the golfers number then it has the st louis open or san diego open and then it starts having coca market there basically was no televisions or stone i answering my question about about why wouldn't it have been more appropriately a d j s i cannot answer that question that's procedural choice that simply was not made it does not undercut the vitality of validity of an affirmative action for breach of contract because you are using this contract to make us do something we are not image likeness etc etc etc it all flows from the contract but probably most significantly for purposes of the procedural position we are now in the good judge says well there's an admission or which is part of a statute of limitations argument below the bid that has been required for many many years even though it wasn't an advertising crime doesn't exist well it is a contract in a sense you your honor it is a registration form in which the caddies agree to abide by certain regulations one of the regulations well then it converts itself into something in the nature of an unjust enrichment a quasi mero a quantum era would argument misappropriation argument because as sponsor of the tour the host and for other companies and all of that revenue is going to the tour none of it is going to the caddies and all you have to pick between a contract claim an the last stage i don't believe so the rules permit alternative hypothetical and alternative pleading and we're only at the twenty six point and what frankly appears to me to be a it was dismissed with prejudice which is one of the reasons i think it looks like a summary judgment the problem is this word plausibility which is part of the jurisprudence on a motion to dismiss and it's part of the jurisprudence on the summary judgment motion and i think it's just become a ball of wax what procedurally the judge below acted as if it was now what we have overarching these these markets that we've been talking about are professional golf tournaments and these professional golf tournaments are the product of a concerted effort you have the local hosts and you have the tour who are the coorg and eyes are these tournaments but we all know what the fans come to watch they come to watch the golf competition which of course is put on by the players who are assisted by their employees the caddies now these professional golf tournaments create a sudden market or a derivative market for advertising to golf fans that market is what provides the basis for our entry trust claims but you're trying to narrow the market even farther than that i mean unlike the university of oklahoma case that where this the supreme court differentiated between are said it was ok to differentiate between sports or categories of sports  you're trying to narrow it so far down that you're talking about only the t v portion of the live tournaments advertising that's correct isn't that you know cut it a little fine no you it's not and i think we have support in both our allegations and in case law and if i may i'll just briefly discuss the case law a bit that eastman kodak case from the supreme court narrowed it much for the what we're trying to narrow the market in that case they approved a market that was for the service of a service and parts of a single brand the copier a very similar result was was handed down by the ninth circuit in the new cal case that we it as we did now and you can define it differently depending on which section you're looking at crack you could it depends on i think what the what the evidence reveals and what the facts wind up being if we if we were to agree that at least at this stage it's too soon to define the market for size lee would we want to consider the all of the alternative arguments that you all spend so much time briefing the alternative i would think that once you find that we've adequately pled the market definition which under the new cal case we don't we're not supposed to have to plead with specificity even though we have i think that you can remand this case at least for the purposes of any trust claim  mean there's full jointer on all that on a variety of the other issues in your briefing you didn't say we shouldn't get to write what each of our claims is the reason we address the other elements of the any trust claim was just to cover the bases due to novo review and and the standard of review to make sure that the that the court understood that we did properly plead the other elements of our of our claims and also the district court dismissed all of our claims so we had  to certainly demonstrate that we properly played those claims as well i think the key thing that occurred in the district court that we should address here is is are they the case law cited by the tour or with purposes of market definition now the plaintiffs in those cases just failed to answer the why question it may seem perplexing that that the advertisers that the advertisers are the advertisement opportunities in our market are not reasonably interchangeable with advertising opportunities such as magazine and television commercials but we have answered the why question that the plaintiffs in the tour's authority fail to answer and that question here is why are our advertising products in our market not recently interchangeable with with these other markets and the answer there are several answers that we that we planned first we specifically allege that if you had a an actual hypothetical monopolist in either of our markets they could increase the price of advertising products in our market by ten percent and they could do so profitably and the reason they could do so profitably is because it wouldn't sind  a large amount of demand for advertisement in our market over to the television commercials and magazine ads something else we emphasize in our complaint was the unique price flexibility offered in our market well if you want to advertise on national television commercial or a net i mean national magazine ad the baseline price is pretty high to do that but if you want to market assuming we have to assume that our market is a free market which it's not right now but if you have a low marketing budget a small marketing budget you could hire a few low ranking candies or a few low ranking players on the web dot com to or to to where you're your cap to put their logo on your bid or to use your product during the tournament and that would be viewed by hundreds of thousands of fans who are showing up for the tournament it would be viewed by the television audience when the camera pans to those players and or caddies so so we have this unique price flexibility on the other end of the spectrum for our market if you have a large advertising budget you can be a title sponsor and you can be all the p g a tour's website you can be on e s p n you can have your name everywhere on the scoreboard and on placards and signs around the course and finally before i run out of time we really stress the importance of product placement here unlike a television commercial or a magazine ad you can't really ignore the advertising products in our market and i think that the best example of product placing placement advertising and why it's so valuable is that e t movie with the reese's pieces before e t came out reese's pieces was a little known candidate person pays a million dollars right to participate in p g a tour events on terms and conditions of their own choosing they do not have that fundamental right the caddies did not create these events the p g a tour as the creator organizer and promoter of the event has the right to establish the terms and conditions for participation everybody who would like access to the p g a tour event or any major sporting event or entertainment event always has to abide by the terms and conditions of the entity putting on that event is it your position that the contracts require you some or the contracts permit that you submit the contracts require that the caddies shall wear uniforms and identification badges as prescribed by the host tournament and p g a tour so what do you that mean you have you have to do is when it says you have to wear the uniform prescribed in this case a uniform prescribed as many many uniforms prescribe in port in sports has a logo it has the name of the golfer for whom the caddy is working and it also has  the name of the title sponsor of the tournament that's open so do you believe that if a caddy says i'm not going to wear the advertisement on it i'll wear the have with the golfers name but i'm not going to wear an advertisement that caddy breaches the contract he would be denied access your honor this is a condition of access and the reason he's denied access is because you believe he has signed a contract to all wear the uniform prescribed by the p g a tour which for sixty years has been the acceptable colors nothing about wearing an advertisement for a commercial your honor the portion that you're reading i would not describe the thirteen to that the one you identify yes the second sentence but that second sentence has to do with the dress code not with the uniform the first sentence says you have to wear the uniform prescribed an identification badge is the second sentence describes a dress code because it's been still requires the caddies to get dressed they have to wear pants and a shirt the bed is not going to cover everything it's not a full it's not a full uniform so you can you think the contract could allow you to say you have to wear a clown outfit and or we could deny you access and that i think it absolutely could your honor i doubt the p g a tour would shoot itself in the foot so big or asleep but it could or a sandwich board or sandwich board i see those they could your honor but but the p g a tour for a long time has been trying to put on events that are attractive to its sponsors to its fans and it has not acted in a way that is in any way on reasonable or silly it is simply trying to put on the best whatever it is amazon or whatever with all the detail you give about what the caddies have to wear and the very dimension that may make the kind and big you are i don't think the contract is because the parties the plaintiffs conceded that for sixty years there's been this unbroken practice of requiring companies to wear beds with commercial sponsors on it for sixty years we don't know what the  further but we're what's in this record is from two thousand and ten on and all you know is your position has to be that history doesn't matter that that in fact if the p g a had the right to require this at any point in time it's bolster your argument but i'm it's contractual at least absolutely right and the breach confidently right just it would they could change tomorrow again the so what is that what's the purpose of the present purpose of the bed other than advertised well partly it's identification partly it's a uniform look with the name of the golfer and the name of the tournament but but let's obviously it does provide a promotional opportunity for the title sponsor of the event and i would say a well deserved opportunity for that promotion the title sponsor of course makes the event possible the title sponsor agrees to pay all the prize money that's how the caddies get paid to other golfers get paid and golfers g no they do not they have a dress code but they don't have a uniform requirement on the kind of stuff on the process they see once the trial court found an ambiguity shouldn't the trial court have converted this into a motion for summ judgment if there was an actual ambiguity in the trial court was concerned at first and i think he and i had a exchange about that he asked pretty much same question judge reinhardt did which is well maybe the second sentence is really just telling you what the uniform policy is and i said well in sports it's very common for there would be to be both a uniform requirement and a dress code because not every single last item of apparel is part of the uniform historically right players but that's attorney argument and there is no evidence in the record of all of this right now this was just why he thought there might be a first and he came around to see it that there was no ambiguity here because those two sentences were talking about something completely different he thought they were talking about the same thing but ultimately he claimed he claimed he came to see that they were talking about sentence one was talking about a uniform requirement sentenced to was talking about a dress code there are two different things and there's a very good reason why but here and you don't see that based on evidence submitted outside the record well i mean outside the face of the pleadings based on a concession that he was permitted to take into account by the plaintiffs that that had been the practice unbroken practice for sixty years but i think and your honors can read this contract with well it's just charity did as well as we can and form your own conclusion i think it is crystal clear and if you understand this is in a sports context it is absolutely commonplace in sports for there to be side by side separate things a uniform requirement and then a dress code because players historically sneakers are the best example sneakers are not part of the uniform they have to be worn and there's a dress code as to what color they can be and what material they can be but that's up to the players to decide what it is not part of the uniform so these two sentences are talking about two entirely different things and i think that's clear on their face and the judge thomas said the the history only backs this up if we need to make it clear will make it clearer tomorrow it the p g a tour has the right to establish reasonable terms and conditions for participation in their own events they created the events the caddies are there as invitees as many other but it doesn't matter whether you're a player or a spectator or a sponsor or a host organization a member of the media or a cad you have to abide by the terms and conditions of the private event now there are laws of course we can't violat in general if you create and pay for an established and event you get to say what goes on at that event if you want to do things that are not well put in in the game and whe you must wear the uniform we prescribe what they prescribe is a uniform with with the logo on it and that prescription has been in effect for many many years unbroken unchallenged and  of this bit and again the practice has been so consistent for so many years is to provide not an endorsement that that's really not what's what's going to i don't think anyone believes that when a patch on a uniform is displayed whether it's in our beef from the premier league to the little league and now even the n b a when a patch a local commercial logo is displayed on a required uniform but no one really believes that everybody on the field is endorsing the products of that company it's simply an opportunity for the sponsor to get some promotion here that's what's going on certainly to an extent and as i've said i think it is a well  impose a uniform requirement in golf just given the history of that sport but me and i trust claims the you know the at least the law and the ninth circuit is that you're supposed to define the market by reference to practical in disha how do you figure out what all those practical addition are without examining facts and circumstances and developing the record well the relevant market of fact issues your honor if you get past the legal issue of plausibility of market and the plausibility of the market is going to depend on whether or not the plaintiff has included all reasonable substitutes for the product at issue this is in the new cal case as thomas wrote correctly it's the law everywhere that relevant markets are not defined by consumer preference not defined by what consumers want well i think the ball and line of cases which imposes a serious obligation on the part of the district court to serve as a gatekeeper and this is one of the areas and again new cal speaks to it that you have to make a plausibility determination and many many cases make this plausibility determination that are relevant market is not plausible is not viable when it leaves out obvious alternatives i mean the suggestion here that if you want to reach golf fans and will limit it to golf fans or is a put it older white males who like golf but will click through a commercial and not you know look at an ad in a magazine there are so many obvious alternatives to advertising on the clothing of a golfer or a caddy or that innumerable and judge chabria listed some of them and that makes the market not plausible if you leave out all those obvious substitutes and buy a substitute it's a question of weather there's cross elasticities of demand if the cost of a advertising on the clothing of a caddie or a golfer became too expensive the suggestion is the advertisers have no place else to go to reach golf fans it's not plausible it's beyond not plausible and i think judge chabria said this this is a market he did make a mistake in saying there has to be no not if one type of advertising and i stand well over my time i do apologize if if the price of advertising on the clothing of caddies or golfers became too expensive would there be alternatives that's the question he said clearly there would be it's not it was not about it's again when you're dealing with this threshold question of plausibility of a market you're not making the kind of economic assessment that you would make and which required a new cal and and other cases you're making much more of the ball and twamley judges have to use common sense and they have to use judicial experience but they must they must exercise that gate keeping function and he did that here and in a very easy case because it's so easy to imagine the two advertisers that the plaintiffs choose to use here as examples in their complaint of of corporate sponsors coke and buick it isn't plausible that coke and buick would have no alternatives as to reach golf fans if they couldn't if it became too expensive that's a that's a commonsense point it's not an economic point and i think that's all that the judge chabria was saying here this market was so clearly made up contorted  cases before you launch into discovery here there has to be that gatekeeping function of deciding whether or not the market is plausible here i think it's pretty easy call thank you my time i just want to address a few things that counsel said first your honor you're correct that the judge dismissed our market definitions because he held that our pricing that it's not plausible that a price increase would have no effect on the other market and that's just simply not the standard secondly market definition and this is it has been repeated by the by the supreme court here in the ny circuit the the market definition element is not a common sense issue it is far from it there have even been witnesses who work in a particular industry who have been who have been struck whose testimony has been struck because they weren't qualified to speak to market definition so it is not a not a commonsense issue i also want to address this characterization of what the are doing number one that the kennedys are not suggesting nor do they need to suggest that they have a fundamental right to work now we don't need to because just as in the new cal case someone doesn't have a fundamental right to work on g e copiers either yet that was the market definition there if you look at the o'bannon case from the northern district of california in the ninth circuit these high school kids don't have a fundamental right to engage in college athletics yet the college education market was the market definition there so that's not the question of whether we have a fundamental right also the the exchange the exchanges here the day between between counsel and and you all has made a couple of things very clear number one discovery is necessary in this case for several reasons and under california law california makes make sense on that point because if you have an ambiguous contract california will actually invite you to look at extrinsic evidence california courts have held that whenever there is an ambiguity it's not even a summary judgment issue most of the time further california law requires us to construe ambiguities against the drafting party or if there's uncertainty created by some ex construe the contract against the party creating the uncertainty now these contracts are not only relevant for our contract claims they're mostly relevant to the consent issue which of course bears on our rights likeness uniform yet they don't use the word bid in the contract they include the uniform provision but then they describe a dress code as as we have alleged during the course of time if we are going to look at things beyond the contract we have specifically alleged that throughout the years there have been skirmishes or disagreements about the bid policy and we have alleged that the tour has not justified to be a policy by pointing to the agreement or to the guidelines that they have only relied on tradition that's the way it always has been and that's the way it's going to be just a final point just because the t the local host or co organizers of these tournaments it doesn't mean that just because they issue a published some guidelines it doesn't avoid liability under the n a trust act if we look at the n c double a cases whether it's o'bannon urkel home university the in some of those universities and those players had agreed to those guidelines and still there was any trust i believe there i'm out of time again thank you all for your time