with my colleague peter chanel we represent the appellate in this matter jeffrey birch the trustee in bankruptcy i would like to reserve two minutes for court well knows did not impose a probability requirement at the pleading stage yet that is precisely the requirement that was imposed by the court of the low in dismissing the trust complaint the court below then compounded the error by denying the trustee the opportunity to amend its complaint for the first time the result is that for the last three and a half years the trustee has been denied the ability to conduct discovery and pursue its claims against a group of defendants whose collusive behavior helped destroy a factory to you are two orders that are the subject of this appeal one is an order that was entered on may the thirty first two thousand and nine adopting the magistrate's report and recommendation dismissing the complaint and the second order is a one that was entered on june the fourth two thousand and ten denying the trustees motion to amend or alter the judgment  exchange of credit information with respect to future plans future credit information is immune from any trust scrutiny the case is well the principal case that's relied on by the by the factors in this case is the cement manufacturer's case and it's clear from the type of information that was exchanged in the cement manufactories case that what was involved there was historical credit information there is no problem if competitors exchange historical credit information in other words a customer's credit history in fact the very same information is publicly available and was publicly available to the factors but if you're talking about future plans whether or not you intend to extend credit to the customer in the future at what rates under what terms no court has ever said that that information does not violate the any trust laws in fact the distinction between past and future information was drawn not by trustee but by the supreme court in the gulf or place where i believe its chief justice berger at the time points out that in goal far the situation involved not the exchange of historical information see cement manufacturers but the exchange but it dealt with future otherwise prices are not different from credit specifically the cadillac ok where the supreme court said unequivocally that price of credit is inseparable from prices  and there would be really no reason to draw a distinction between credit and prices isn't that little well i won't say what i'm thinking in c thought that what they said was that an agreement to extend interest free credit for a period of time is the equivalent to giving a discount equal to the value of the use of the purchase price for that period of time so you know i think that the judge's question is regard to whether credit per se and whether it's historical credit information as you draw distinction between that and  analogous to have a discussion but that's really not what we're talking about here is it what we're talking about here is a concerted action where by  factors who are the principal source in fact for companies like factory to use the only source of financing through concerted action and i honor i see that is a distinction without a difference it would be anomalous if companies were permitted to fix credit terms and as do that yet not permitted to reach agreements on price there were there really is no difference the ultimate effect of that is to lessen competition generally in the market and i think that we have to when we did when we look at whether or not the supreme court has ever authorized the exchange of  future credit plants whether or not to extend credit at what terms in the future we have to look at the facts in the cases will upon which the factors rely let's do it so you say that we should draw a distinction between historical information and future you allege parallel action and then we look at what was done and it seems like the dependents are all over the line and so if you want to draw an inference of parallel conduct because the defendants have compared or and are sharing future  hence with regard to the type and extent of credit information then shouldn't we put the burden on you too will allege that they've acted in the peril of fashion and isn't it undermined when it's clear that they have well they don't have to act uniformly every time there is an exchange of information i mean the container corp case is stands for that proposition that was a situation where there was an exchange of an information exchange regarding prices among the the conspira group within the container industry those that exchange the prices were free to withdraw from the conspiracy whenever they want it there were times when they didn't all follow in lockstep  the problem there which is the same problem that we have here was there was an exchange of information with the expectation expectation if you asked for information requested the information there was an understanding that you would reciprocate when the other side called you when that someone else called you for information and that you would provide truthful information but you're providing by the very nature of your hypothetical you're providing historical information but let's take a step back for just a moment i understand theoretically they don't have to be lockstep right i get that but in an instance as we have here that scenario to conclude parallel conduct has occurred because of the exchange of future credit information which is a kin to price according to your well judge made away with what we've alleged and i think this is apparent by the amended complaint that we wanted to  the factory to you and their plans with respect to factory to use that in november and december of two thousand and three they uniformly cut off factory to use credit in it's before they file for bankruptcy the bankruptcy filing was in january of two thousand and four to cut off of credit occurred in november and december of two thousand and three but it was known that they were shaky but not bankrupt and what happened was the cut off of credit which we submit which we've alleged and we would argue we're entitled to every reasonable inference from our allegations the cut off of credit is what pushed them  in our brief judge ross are off is to eliminate retailers that they deem might be weak and thereby minimize their risk well not to lend to information isn't a problem we've never alleged that that's a problem the problem that the reason we're alleging in any trust violation is because these factors clearly discuss credit terms and historical information which is permissible but future players what they plan to do in the future with respect to whether or not they were going to extend credit you have bad credit i'm sorry i'm sorry   why are the actors going to care one way or the other whether factory to you have problems or not well they care because they want to so long as they make that determination independently themselves and when they're and not a concerted way there isn't anything wrong with that when they're exchanging perhaps i didn't express myself well before when their exchang even just passed credit information aren't they figuring out that is in a bad situation and he was not an advanced nation and and making their lending plans according and that would accomplish exactly the same thing you were saying they shouldn't have been well if they're making the decision on the basis of past information if that's sufficient and that's what we've argued and there are commentators one that we've cited in o r in our brief that say this if that information is sufficient historical information why would it be necessary to exchange information about future plans except to system and that is not that aim is not in the process violation well i believe the law states that even if even if it could be argued that each of them by doing that wasn't gate was pursuing their own lawful self interest that that does this made sense because the factors have argued that it wouldn't make sense for them to do this we've argued that it would because what it ultimately does is allows them to minimize risk stabilize their market shares and maintain the price of their credit which they might not be able to do if they sharpen their parents holes and acted independently well you know when you say if they sharpen their pencils and acted independently it seems to me that if you look at the paragraph thirty five that we're all focusing on if you look at the different actions that the several factors took both pre and post december of two you're getting different conclusions as to how each of their businesses should proceed some increase their credit limit the factory to you some decline orders some are taking orders but putting certain limits amount of limits on it some or increasing credit limits the pending way that shows there was some agreement well i think that in milburgh brief they made it a and i realize they're out of the case but that brief was filed in this matter  it helps them eliminate the risk no one factor wants to be the one holding the bag so to speak if a retailer goes under so they make a concerted decision not to extend credit based on information that they get from their fellow competitors who tell them we're not going to extend credit you entirely in november and december i agreement yes and judge greenway says that that's not the facts that were given that's not what's in the complaint i mean the go i just read to you what i did and i don't think you got that you really answered my question so maybe you can help me and just focus on this notion despite the information you believe they received and the actions that shows collusion it appears from the information that's in the twenty seven paragraphs right of paragraph thirty five you're talking about the initial complaint that we filed right well that information i mean that's the essential information is in the proposed mental went well the proposed the magic compla talking about plus more right correct so so so i so i'm actually looking at a better sampling because if it's disparate the beginning it's not going to get any better unless they can all these out right if if there's if there's examples in your original disparate actions this for actions taken by them and you've essentially taken that and then added more the question still remains so my question to you is just so that i understand your question you're saying post november december two thousand and three i'm using your dates i don't frankly at the moment the whole of you said two thousand to the cut off occurred in november december  that time and it followed conversations we also there are also other allegations in the proposer mandy complaint where i think of one example where two of the company's milburgh and legality of sharing credit information and also the district judge's decision not to grant leave to amend the complaint more than seven minutes ok how could it judge i'd like to start by trying to answer your question which was  why were the factors care whether factory to you remained in business or not and the answer to that question is actually the factors would want factory to you to be in business for the simple reason that back three to you owed them money and the longer they were in business and had customers coming through their doors and buying the merchandise the greater the likelihood that the factors would be paid the debts that they were by the factor has a contract with its client the manufacture in that contract the factor agrees to purchase the accounts receivables of the manufacturer the manufacturer signs invoice to the factor before accepting that invoice before doing that the fact or credit checks in the parlance of the industry the retailer if it decides that it wants to take on that credit risk it purchase the invoice if it doesn't want to take on that credit risk the client is free to do business with the with the retailer and the proposed amended complaint shows that these retailers were doing business directly with the manufacturers that's called at the sell goods to the retailer and i'm saying in the proposed amended complaint there are very clear allegations that in fact manufacturers who had relationships with five of the factors here were dealing directly  with the the retailer at their own risk they decided they would take on that credit risk that their factors didn't want to take so the factor whose purchased employ says even though it has no contractual direct relationship with the the retailer factory to you it certainly wants factory to you to remain in business it has no interest whatsoever in driving them out of business and that goes into a two to another argument that plainness council made obviously the the factors have no interest in taking on credit risk with respect to a business that's about to go out of business and that would be foolish and they have no interest in doing that but they they don't all have it in need to act together and the and the facts here as pleaded in the complaint shows that they didn't act together factory to you  lare bankruptcy in january of two thousand and four and the allegation in this in the proposed amended complaint is that in november and december all the factors got together and said we're not going to  extend credit to you or take credit risk as to you anymore but the specific allegations of the complaint say that in in february of two thousand and two one of the factors wells fargo had stopped extending credit it didn't want to take factory to use credit risk anymore and in october of two thousand and two my client h s b c stopped extending credit to factory two year two factors in february and october are out of it with respect to factory to you and then over time the factors of the or the other factors take different positions there are sometimes  extending credit sometimes they're not it goes up it goes down but at the very end of the of the period covered in october of zero three the complaint alleges the proposed amended complaint alleges that there are still a couple of factors who are risk who are extending credit to factory to you so they're not marching in lockstep they're not doing the same thing and there are they there's there's a whole host of reasons why they would take different position we've talked about their factoring relationship pirit and that their clients who are on the factor well some of those clients do a lot of business with factory to view and so they're pushing their factor i want you to take credit risk is to factory to you and the factor if he has a lot of clients that they do business with that with factory to you then they may feel pressure to take that credit risk other factors have very very few client are doing business with factory to you and they can they can be tougher they can say you know i don't like that credit risk and if you don't want to use me as your factor so be it and that's again something that's alleged in this complaint that my client for example had thirty some odd  clients who were dealing with factory to you another factor c i t had hundreds of clients who were dealing with factory to you so it's not surprising at all that the factors are acting  differently and coming back to the the issue of whether the district court here was correct when it said this claim doesn't state and i trust hank klain it focused on the element of agreement which is a pleasurable to each and every one of the section one claims here and it looked you know under the standard of quietly is there mr for other facts here that show when agreement and the only facts that were that were propounded to show agreement was was the alleged parallel conduct which as my discussion i think has made clear in this a complaint makes clear isn't even parallel conduct so yet trombley i think is a hard case to apply in different circumstances but in the context of a ok you know finally i just coming back to catalonia i think when you look at the factory industry you see why cattle on it doesn't apply because cattle on a was of beer wholesaler beer wholesalers all getting together and saying we're not going to give the the people who we sell to the retailers credit anymore they have to buy in cash that's our will all get together and decide cash only when you're dealing directly with each other in that way you can see how the credit we're insistence on a cash sale becomes part of the price of the services but for factors the price of their services it's really between the client and the factor how much the factor is charging that their clients for factoring services when they deal with the retailer with factory to you they're not in a price setting relationship they're taking on credit risks and how do i know the extension of credit is analogous to price because you  read on a particular set of credit terms exactly it was it was it was it was part of the price because if you sell on credit you're in effect giving a discount and if you're saying cash only you're please the court my name is bernard vitale i represent wells fargo i also represented g mac and sterling and just to clear out the discussion that took place at the outset sterling was applied to add to the course of fact refuse acquisition of any merchandise for example one of the fish and so used in the planing and the allegation is that a set forth  ask you this question you have the services that really want this case is about is the exchange of future information and future action i hope i summarized what said what he said accurately if that were the case i know you'd probably dispute that it is but if that were the case would that be an antitrust violation i don't believe this a single case was consistent why should wells fargo join a conspiracy was consistently declining credit for a long time on felt this was not a good credit risk a just be started i don't know the point of time why would they join it and a conspiracy yet there were other factors that were done in private so there's no uniformity and there's no collusion there's no agreement there's none of that it's address now another issue and i see my yellow l thank you with respect to the distinction that has been drawn between exchange of historical information versus future information  in addition to the supreme court u s supreme court recognizing that distinction we would argue in the gulf for a case it's interesting that members of the credit industry as we set forth in or initial brief  at pages twenty eight through thirty one i believe or so recognized that distinction the we pointed out that the national association of credit managers and it's in a trust gu tells all of its members that they can exchange information regarding past prices past credit but not prospect of information concerning prices or credit policies  terms or conditions of sale the printing industry tells its executives the same thing we also attached to our brief as an exhibit and opinion from and bingaman who was the  likewise so this is not something that is unusual unprecedented this is do you read minds thank you very