our second case for this morning is alan against great bank trust company morning may release the court this case involved dismissal of two claims based on straightforward misapplications of law by the district court first the district court dismissed the point is prohibited transactions claims based on a theory that the primitive transactions great bank in which this court ruled that section eleven the way the exceptions are affirmative defenses that have to be proven by the defendant and then it will it violated myriad precedents in the circuit including stewart the local seven twenty seven establishing that should depart from that set a precedent the second is that what they're afraid of i gather is that if anybody can come in and say even in a privately held stock transaction that the value seemed too low argument they rely on an argument that was rejected by the supreme court and didn't offer an argument that was rejected by the eighth circuit and braydon for myriad reasons one of which being that congress set up these credit transactions in the statute in  and congress created these stops which are a special animal and if congress chooses to create aesop's and chooses to create special burdens on trustees then it may choose to do so in addition we're not treading a new ground here with respect to privy to trans actions and there has not been some grand floodgate opening there was no flood gate opening after doing hoffer when the supreme court ruled that six circuits i believe it was were wrong to have created a presumption of prudence in general for them to do sherry's that there's not been a floodgate after braeden there won't be a floodgate after this court relies on its own set of precedent and perhaps the transactions claim of need on the phones are you relying on you obviously have the fact that the value of the stock decreases by twenty two percent twenty two days after the purchase convenient symmetry there  two relatively contemporaneous valuations but the complaint raised the reasonable inference that the first valuation was playing wrong in the first instance so i wouldn't necessarily characterize it as a drop as great big tries to but in addition to that there is just so remind me  complaint so they just pick this number of sixty million dollars out of the heiress a complaint otherwise specify well the complaint says if they miss valued the stock it does not specify exactly how they miss value the stock as noted in  braden the documents that would establish that are not within the control of the plaintiffs so we don't have specific knowledge of exactly how they missed value the stock because we don't have access to those documents even though we have asked for them and were denied and and there is no requirement that they give them to us under section ten twenty four that's really just creates a requirement of getting plan documents right now the only way to get it would be through discovery phase right exactly and that's why this case should not have been dismissed before discovery and in addition to the stock price there is the interest rate on the loan which was above market there's the failure to obtain a loan on the open market which was pleaded in the complaint there's borrowing the money from the shareholders for the stock who are clearly dumping their stock so of course they're going to be a little bit more inclined to loan the money for it in order to exchange it for purity payments and and so given that litany of other factors there is the breach produce your duty claim should not have been dismissed on that ground as well unless there are any further questions i'd like to reserve for me time for  through this case which involves stock in a private company has no basis in either didn't have or text or logic that requirement was tethered to a very specific presumption that was unique to the public stock context which is that public stock prices generally it had been fifteen percent or what if the decline was twenty two percent but for much smaller transactions a million dollars sixty really well the first response i would say is to just stick to echo mr breckenridge that contention is relevant only to the  too as to what whether these allegations are sufficient or what allegations might be sufficient i can say that as a general matter though this notion that the stock price always will go down after an the price to the value of the subsequent valuation to be lower than the transaction price that can happen but it's definitely not the case that every time there is a subsequent valuation that is lower than the transaction price that that discrepancy is thirty second regarding the floodgates argument that they create think is made i think that is overstated first of all the notion that this is a new sort of a preview world here where plaintiffs can just start pleading being unpublished which seems to suggest that the plaintiff might need to negate an exemption in their complaint the way the circuit authority in most explicitly braided is directly to the contrary which is the circuits two thousand and nine to sit so i think that they're concerned that concern is overstated for that recent addition it seems to me highly you know impractical to expect plaintiffs suddenly to start suing willy nilly over transactions that they have no reason to think actually suit that i think is another deterrent to to these cases sort of being filed left or right but i think a broader point is that their position has policy consequences of its own that i think are far far  vigilant in assuring that when they do engage in these transactions that they aren't that exempt well look i mean aesop's are already in some sense an exception to the normal rules under risk for diversification so it doesn't seem shocking that congress would have said that we need to be extra careful with this exception that we've made so we're not going to allow these prohibited transactions but we're not going to be too clumsy about it we're also allow exemption so this court does with the issue of breach claim and holding of the court i think it's essential that this court correct the district court's misconstruction of student hopper and its application of the special circumstances test to to this so before you sit down could you comment briefly on that great dense argument that actually have to do sherry theory and or have a transaction theory overlap here and thus you couldn't find a prohibited transaction were we're not really asking that this court make all of the holdings that the plaintiff in the department of labor are saying we're asking for our attack on the complaint was under and the enhanced pleading standard under rule eight the supreme court imposed on those rules but i think you think the standard is much higher than the supreme court thinks it is if you look at such post see erik's and post it fall you see it's swagger you see you know a lot of cases and we've tried to say notching it from the conceivable to the plausible is one thing but plausible just means could it happen not didn't happen and it's not a rule naing standard so i think that you're asking for much more detail they they do allege transaction took place and it's not impossible that there was a sweetheart deal with the trustees and the stock whether it's stock valuation or this six point two five percent interest rate the time that the prime rate is three and a quarter you well know it seems it seems quite plausible that something like that could have happened and that's a fiduciary claim that prohibited transaction claim i even more straightforward but what the plaintiffs in the department of labor want this court to rule is that every stop transaction allows them to have discovery and to proceed past a motion to dismiss i don't think so i mean  there was the kind of self dealing you know that that the statute covers it's usually the case i dispose not inevitably but usually the case the burdens of pleading and burdens of proof in the sense of your ultimate responsibility at trial are the same so they have alleged that and you know in some ways i have the feeling you're not really disputing that a prohibited transaction took place you just don't want even to move to the rule twelve senior level of a motion for judgment on the pleadings and i'm not sure where you have the right to avoid the need to prove which affirmative defense you exemption then a prohibited transaction is one in which a party an interest you know all right i mean i don't know why that means that it's their burden to go through every exemption and say and this one doesn't apply in this one doesn't apply and this one doesn't and i were not asked to do that you may not be but the next person before us is going to be right because if the general burden of pleading affirmative defenses lies on the plaintiffs based on the language you just cited then you aren't the only litigants we're going to see somebody else is going to have a different affirmative defense that they think the plaintiffs should have negated and it's going to get down to negating every single one and every subsection of one of context at all and certainly we're more than happy to have the court restrict its opinion to the use of context adequate consideration is something that is defined as fair market value determined by a trustee in this i mean i'm actually flabbergasted at your argument that an internal valuation i trust deed is the same as the public market market which is laughable let me make this point and it's something that we addressed in the earlier say silver of the armstrong versus the selling which was the panel judge with the deal well has an entire proposed regulation that never finalized it but they proposed it ninety eight because the statute says that adequate consideration is supposed to be determined pursuant to deal or regulations the fact that the deal was never promulgated that regulation doesn't mean that we can't learn from it and what we learn is they go through an entire process of pages and pages if there's an independent trustee this is the deals on words  brief if there's an independent trustee and this is an independent trust to this is not an internal trust do this is not an employee of a company there's no reason to believe the new penn trustee it's not plausible to think that they would restore their entire business  would have claimed if ever know what steps the trustees took this would be highly confidential i'm sure with the trustees had an independent department that looks at this or where the thing gauged an outside appraiser are aware that they went to the principal shareholder and said how much money do you want or any the front from the most perfect evaluation system to the worst how would the  there's no clue that the trustee would not have that's why we really aren't talking about the pleading here and also it's clear we have a plaintiff the judge dismissed the complaint with leave to amend and in the last paragraph of this when information is confidential business information within the control of your opponent it's not a fanciful assumption that your opponent is a can say oh never mind discovery will just turn it all over to you you have not except on the rule of a not even didn't try to amend we need to understand your honor that every transaction that aesop enters into is a prohibited transaction in less it's exempt because this was a party in interest and so what the department of labor and the pla actually arguing is that they need plead no more than it was a transaction between a party in interest and the supper's one and that's all you need in order to go ahead invoke discovery it's very except that they need not diversified the funds assets so to the extent didn't have pushes in any direction it's holding that the two to sherry's to a high standard however the standard is one of court didn't hear that didn't adopt that standard the court said where there's an independent trustee as there is here and there is a process that that's all you need to prove prudence and here there are no allegations in this complaint outside financing but let's use different terms for those things one hundred percent leverage transaction is lawful in fact it's fostered by statute that allows one hundred percent of these up on this corporations to have tax benefits even though you say that every time on the balance sheet we have no allegation of what the value was before the transaction we have no allegation of whether there were any other factors despite the side of the stock transaction that contributed in any way to the client a value we know is on this pleading there were insufficient allegations there was an attempt to plead around four zero eight that failed and that's all a judge below needs know to dismiss the case and i believe that that's all that this court needs to says consider as well with regards to the process your honor is paramount because the deal while itself if you look at the proposed regulation on how to determine adequate consideration to determine whether the exemption applies focuses completely on the process and it's all spelled out there you would think since this proposed regulation has been referred to by several courts thing the plant said there was a drop in value and they're pleading what they're able to observe as outsiders writers well your honor i think that's a very low standard that's a far lower standard than rule eleven there's no everything else is something that my opponents of trying to pile on of this case i guess to make it a test case all we're saying is take this complaint as you do agree that all of these that i think it's five other circuits don't agree with your but we are that's what they're saying plaintiffs don't have to leave that fact i think what the district court below was struggling with well i'm there you would i please just tell me i do you think we need to disagree with those five circuits or do you think that what you're exemption to the statute what they say is if there is an exemption to a statute pled as an affirmative defense the defendant has the burden of proving that we're not arguing that but what we're saying here is this complaint doesn't even rise to the level after absurd you know they think they felt they pled falsely and then they had to withdraw only pleading when they cited that the there was an admission as to the inadequacies in just rate and we're talking about six and a quarter percent so your know all we would like the court to do is focus on this complaint it's the complaint the plaintiffs chose to file even the deal well it's taking no position on whether they've been adequately pled facts efficient for the for a for breach of the do sherry claim and we're just asking your honor to take a look at the district court did and say this is not enough and if there's another case some day with a different pleading which is which please at least enough to reach the too many standard then they can raise these test issue  test issues but not in this case because they haven't gotten enough to get inside the door to even dignify the time of the court to take on these heavier issues are there any other questions