thank you judge reinhart and may it please the court matthew mckeel of gibson dunn and crutcher for the appellant and m l capital argentina's national space agency the kona i as an executor or a contract with space x under which cohen i is obtaining valuable commercial services those contractual rights are attachable property under california law and by exercising its contractual rights to obtain services here in the united states kona is using its contractual rights for a commercial activity in the united states the district court here erred when it analyzed the use of the contractual rights from the perspective of space x rather than kona at pages eleven and twelve of the excerpts of record the district court says quote space  conduct is nothing more than maintenance in connection with a commercial activity and it later says again quoting to fit the space x s conduct within the definition of use requires of xico graphical distension and quote but the question here is not whether space x is using its contractual rights for a commercial activity it's whether kona i is using the contractual rights for a commercial activity so the district court here looked at the case in the key question through the long wrong end of the telescope and that led to the somewhat absurd conclusion that the contractual rights here would be used but only once the satellite was actually being launched into space the correct analysis is derived from this court's decision in africa app which looks to the fifth circuit's decision in connecticut bank of commerce and in the connecticut bank of commerce case the fifth circuit explained that a letter of credit would be used for a commercial activity where it was and i'm quoting here from page two fifty eight of the connecticut bank of commerce case where it was used to quote secure the services of an american corporation to do drilling work i would submit that this case is an even stronger case than connecticut bank of commerce because it's a the contract the contractual rights here are securing services of an american opportunity is the contract it is the console of argentina's rights under the congress tracked with space x which may for instance include a right to a refund it could include of course the right to launch the satellite it could include any number of things  don't know because the contract was not presented to the district so it's the rights that derive from the contract including the part of the it's lying in the launch sonar that's  correct and it is our belief and understanding that we could remark it though the opportunity to launch a satellite because essentially there is a supply and demand issue here and there are far many more satellites that need to go up into space than there are vehicles to launch them now i couldn't read that the district court interestingly the district court when it dismissed the case didn't do it with prejudice that's correct your on that signal to me that there was a possibility that you could amend i threw satisfy some of the judge's concern i think with judge which judge wilson was doing was recognizing the fact that  begins right after that just to me that it that you're he thought you were just premature in in serving the the rich right and that conclusion though as i said mitt is derived from his looking at this case from space x s perspective rather than kona ice if you if you read what he says and what one part i have not said already he says he characterizes n m else argument my argument here the judge dismissed the case without prejudice normally when that happens you have a right to amend and we don't have jurisdiction because you have a final judgment why do we have a final judgment before us in this case because the legal rule that judge wilson sets forth is that we keep that the we can attach the property only once that quote launch process begins and that legal rule is both eroni as as as we have set forth in our briefs and also it is as a practical matter it's it's not a it's not a remedy for us so we sta clearly you have an appealable judgment because it's final why is this a final judgment for purposes of an appeal first he didn't explicitly provide leave to an end and that so that's point one and point case so that's a question well he issued a judgement and you're asking the question whether it is not withstanding his characterization of it as a final judgment whether it is final under section twelve ninety one and i believe it to be final both you have any case that you could refer to counsel that would suggest that given the posture of this particular judgement that we have jurisdiction under twelve the new one i don't have one as i stand here but be happy to provide one to the court by letter declining that's that's correct your honor i mean we we did not amend because under the legal rule that judge wilson set forth there was no practical way for us to attach  that that's correct i think that's correct i mean not with save the ability to go to the supreme court but the we are seeking to to attach and execute upon and eventually sell commerce case it points to one way that this court could result this case the court look there and said we don't have a record before us that would allow us to determine how the in that case it was royalty obligations how the royalty obligations are being used the case was remanded to the district court and then discovery ensued and guess what they were being used to secure a loan and the fifth circuit then later held that those royalty obligations were used for a launch services to cater the rocket to specifications of the satellite or vice versa but i don't see things like those allegations in the complaint it is necessary that you have such allegations i mean i  admit that that kind of an allegation is much more susceptible to beating the plausibility requirement of well but you don't have and complain that we do but obviously not  but i'll come to that but first no it's not necessary we're not required at the pleading stage to articulate a particular legal theory for use of a commercial activity particularly when we don't have the contract and we've had no discovery of the of the communications between space x in argentina that would allow us to determine exactly how the contractual rights here are being used that second and then a lot of civil rights cases to it and you know how the discovery of the supreme court says too bad about well i  purchase commercial services there is no dispute about that and i would submit that the claim that the contractual rights are being used to obtain those same commercial services is not just it is intuitive and it seems to just follow from common sense the bottom line and i gather what you're saying is that to the degree that the complaint of fish and or just say not as fulsome in its description of purchase of private launch services from space x as well as the launch services to be provided to coincide by space x our commercial activity within the meaning of the f s a so i i think that it's not just the only place that we statute really and i mean of the treaty no i think what it's it is we're stating that there are launch services that are being provided from cohen i that you know there are all kinds of pre launch services that are inevitably included in this and you know going to be back and forth how once is this way how's it measured what is going to do what so on these have a commercial value and this is a hotly sought after launch period it has real value it has present value wouldn't that have been a better pleading for you i think if there's any concerns about the sufficiency of our pleading under twelve p six then the answer i think would be to allow us to amend the complaint and i had to get back to when in my initial question since you didn't do that and the district court  futile in the face of the legal ruling that the district court set forth that there is no use until the satellite is watched well i don't i didn't quite read his order to go that far that makes no your statement about africa but i'll just read from line fifteen to seventeen of page twelve of his opinion just as satellites are not put into action until they are in orbit the want service right or not pressed into service until the launch process begins but  but you know the launch process if there been some discovery we might have been able to know we might have learned that the launch process starts way well in advance of the actual day and hour of the launch i mean there's much i mean you just know we don't know what what with the term launch services really mean yes that is correct because there's been no discovery and we have no but it's nice to be nonsensical to say it means only one it's on the it's on the launch pad  there ready they're counting down i couldn't agree more judge it makes no sense to me that we think the standard is found in this court's decision in africa which sites you know if you go to afghanistan we did attempt to provide a definition of what it what is used and what is the commercial whether the property is used in commercial under the statute so we said something else like the fifth circuit we conclude that property is used for commercial activity in the united states when the property in question is put into action put into service a veiled or employed for commercial activity which is not simply in connection with the commercial activity or in relation to commercial activity we tried to give some meaning to it but what we didn't do was impose any sort of tiny or time limits or that in writing of that nature that's correct but in this court also in after adopting connecticut bank of commerce is definition of use for a commercial activity and then went on to say to represent friends it's analysis of the fifth circuit decision in atwood about the letter of credit  and it and it basically it referenced that that court's decision that the that petro bras plainly use the letter of credit for a commercial purpose when in the ordinary meaning of the phrase used for because it used the letter of credit to secure the services of an american corporation and that is the work that the contractual rights are doing here it i contract rights it is not a normal use of the term use in this context or in any context to say the receiving of the bargain for consideration which is obtained by using money to purchase the rights is a use of the contract rights that are underlying all that council do you agree let's just say this case didn't exist and i or argentina and these rights you think they have commercial value and i sell  that's that is a question whether they're a assignable and whether b how unique they are for this particular launch whether they could be so ashton but whether they could be sold to judge smith that's the point ownership of property under sixteen ten is not enough and the ninth circuit trying to i'm trying to explore what this could possibly mean it seems to me that admittedly an act that we have a narrow definition we're doing with but also we don't have to deal certainties and i'm a little concerned about how narrowly it's construed here it seems that the idea that these are not currently being used flies in the face at least of what i think i understand about space program space exploration there are months and months and months and sometimes years and years and years of ongoing activity that's involved in preparing for the longe making certain the satellite has certain elementary requirements and all the electronics work and and you know the launch vehicle has certain characteristics those presumably have commercial value there's a demand for this sixty percent of space  s business is private it's commercial it's not for governments so can you answer my question is is there a commercial value of this from your perspective or you don't want to act that there could be value to it  is i think there may be value to it however that doesn't answer the question if we follow the line that an analysis is urging the court to follow here after up would have come out differently because there you had obligations owned by a group of chevron entities to the congo and they were an obligation they just haven't though to them they're all pursuant to a contract right and so if you said well every time that money is about to be paid by chevron to the congo that is  congo it's contractual rights and that citizen would have come out exactly opposite to what it did come out but that's a strictly that's a strictly monetary difference is it not here here we're talking about ongoing activities as i understand it or are you telling me that there's nothing in the record to substantiate that in which case is it better that we send it back let the district court deal with the little more realistic definition and then permit discovery and then have some kind of a summary judgment is that what we're dealing with here i don't think so your honor because even though there's activity and there is activity clearly in africa and you can and i think of commerce under a long range contract the t est is not whether there's activity in connection with what they call a commercial activity the test is is their property being used for commercial activity  delivery of the consideration by space x to launch the satellite there's not let's think about an every day parlance you subscribe to a magazine i subscribe to the new yorker i've paid for it i've used money to get the subscription every monday the new yorker arrives at the door it's neither normal in common parlance or in a legal sense to say oh i am now using my right to receive the new yorker i am receiving the thing that i own that i've paid for did i disagree with counsel that he was measuring this by space x s activity and not by common eyes activity he was following their reasoning which is basically saying every time space x does something that's an expression or a use of our contractual rights and you say that your your position is that under california law the space x contract is not attachable under any circumstances is that your position that's that's own is not attachable under california law under any circumstances i'm not sure i'm saying no i'm not saying but you did forget the f s a ok right now i think there are questions about whether you can attach something that's not assign assignable there was a representation made by spacex is counsel on the record below in the court but the contract itself is not in evidence but that's number one and number two whether a simple supplying of unique  clearly correct grounds because put another way again the test is not whether there is and they say it's commercial activity but i also argue that the launching of an intergovernmental satellite for scientific research that is being used for research shall be distributed for free and hardly can be seen as commercial but even accepting their characterization that launching a satellite is commercial just activity in connection that's explicitly after says if it has some connection the commercial activity that does not satisfy section sixteen ten and the obligation of the requirement that the property actually be huge for a commercial activity i want to change just just for a second counsel get your take on something question is is there a requirement that the hedge fund be able to pierce the corporate veil or something equivalent to that i don't think there's any discussion of that because court didn't get to that but as a practical matter if there were a determination that this was gets past the treaty issue how how do you how would one execute on that would it be there were there be a requirement that you amusing the commercial term in footnote five said i'm deciding is a matter of jurisdiction that were properly the parties are before the court however i would then need to decide at some point where the case to proceed that this property of kona i and when i as a matter of argentine law owns its own property and this is indisputably the property of corn i and i think it would be appropriate and needs to be done to have a dance a band second now says i will call it what the supreme court sketched out in that case to show that argentina is so abusing th energy or that otherwise it would be a fraud or injustice to respect the separateness and i think that analysis clearly gets you so it would be a fraud or injustice if you just said that cone i now which has its own creditors including space x which has its own employees which is doing work for the good of all all of a sudden now could be tagged with having all of the deaths of the republic of argentina that it be made liable for it and would that would such an analysis occur under u s law or or that been decided the ban say case says it's a it's a common if they said federal common law and they say over a federal common law tracks international law and you take into account all the different factors which we presented as part of our twelve b one motion which is it sue or be sued does it have its own property is it run independent from the government those are the types of elements there's a debate in the papers over the so called core functions test and the ninth circuit in the cubic case involving iran so we're not adopting even for the military which i think it's more governmental and military in for the military the ninth circuit so we're not adopting a categorical rule that the military is always good to be deemed the parent state so when you look and  again the district court considered that and he said i still believe that this entity for jurisdictional purposes i'm going to treat like the republican there for here and it's here because the republic waved its immunity from suit in the u s even if i soon that i still have to get that dance like issue i think that's right i think the court erred in doing the measuring the way it did i think it undervalued because in the cubic defense case the ninth this court said that there was no evidence of some of the factors that would get you away from the presumption that the military is the state so i think the court gave little weight to the factors that show cohen i should be treated differently and then said well because what it does a so governmental i'm going to treat it as one for jurisdictional purposes but i think it did recognize that under federal common law you really have to think about are you going to make these assets this space program and the spaceport case is essential here the spaceport case and this is the reason why i think they've tied themselves up into not saying we recognize we can't go after the satellite because spaceport says satellites aren't used on the ground they're using to space they're used in space so we recognize we can't get that we recognize and that's a big part of the jurisdictional argument that what's going on here is governmental activity and then we're talking of the government space agencies of italy belgium and argentina we recognize all that but if you parse these transactions many many transactions you are using your contract rights for all this to happen where i think the core recognise in any normal use of the word use that's not what is happening and so rejected the case and i think that was right outcome and it should be affirmed so i would just i would just close to say that adopting their their definition of use would go well beyond any precedents of this core and cubic defense i would mention  judge smith just to follow your analysis there was a judgment there and judgments have value you can sell a judgment you can do lots of things with a judgment and this court said but the judgment is not being used and they said it could be used and if you used it to secure a transaction if you tried to sell it that would be commercial activity but it's not happening the same thing here can i is not alienating its rights it is receiving the bargain for consideration and the court was wholly correct my my opponent mentions that was a separate document being used to secure that activity it wasn't the analysis of the fifth circuit that the fact that they were receiving these drilling or  thank you your honor so just be make of very few quick points first judgment on the peers the corporate veil point that is a second order question the first the first question is under the core functions test whether cohen i is a legal separate person and that is a question that is resolved under the fs ira every single circuit that has elected the issue second circuit d c circuit fourth circuit fifth circuit ninth circuit has held the core functions test is the test that you apply to determine whether a in agency or a subunit of the government is inseparable from the government that is and the district court here did not clearly error when it determined what cone ice core functions are based only on our own eyes own declarations that that's first point second point my friend mr coote he says the contractual rights are never used that can't possibly be back at connecticut bank of commerce that just that the action of a letter of credit simply being out there securing the the performance of the counter party counts as use for a commercial africa was not attachable this is a page net ten ninety three it was found that the obligation the royalty obligation in that case was owned by the chevron entity it was not the property of the congo that's why it was an attachable not because it wasn't use for a commercial activity the representation that space x is council made the property is not assignable that is true he asserted that before the district court but we have no way of knowing anything about that because the contract is not before the court and that points to a fundamental defect in the analysis of the district court here it just accepted basically as given what space x space x s council said about this  contract and finally the commercial activity point that this because it is for to study the environment it's not commercial that line of reasoning was rejected by the supreme court nine nothing in two over that's page six seventeen of wealth over it was actually rejected by a huge judge reinhart five years before wealth over in the