good morning ladies and gentlemen we welcome judge of the northern district of illinois who was sitting with us today our first case for argument this morning is fx all against very  for morning please the court we usually come to chicago in december to experience a cold weather from south texas and so i thank you for the invitation to come in january were to look older apparently honorable court plastics a couple of years ago this court's review of the motion dismissed is obviously to noble and to survive a colby six motion to dismiss we need to plead facts sufficient to establish this possibility that the complaint entitles the plaintiff to relief on its face the court to obviously one aware of the that all pleaded facts are accepted as true and all reasonable inferences from those facts are given credibility in order to support the claim whether or not there's enough facts to plead  cause of action depends on the contours of the cause of action and this case there's two causes of action that the plaintiffs and we have brought against very plastics and both of those are under mexican law the two determines the liability of exel and sort determines lybrel you very very is an american fourth rate which is being sued in its capacity as a shareholder of an american corporation which is a shareholder of a mexican corporation now why would that lead to the application of mexican law that very well the the reason that the that mexican initiated the actions in mexico and was approved by varying reports directly to paris legal department in the united states not an allegation that barry did anything in mexico if harry tells its agent in london to do something various acted in the united states and the agent in london has acted in london where is there an allegation that barry did something in mexico in the complaint i think that the fact that  directed and controlled the legal counsel in mexico and the complaints they were complaining about your honor in the uk to solicit those is under article nineteen ten and article nine hundred ten of the mexican civil code that's an applicable in federal district and in any sta territoriality principle which it applies to its own laws laws governing the behavior of u s corporations don't apply in mexico laws governing the behavior of mexican corporations don't apply in the u s i'm trying to figure out where there is an allegation of something on crete that barry did in mexico as opposed to something barry did in the united states allegedly with consequences in mexico with the only caught dony tie and the only provide the court with a copy of the jury charge the jury instructions against a u s company political usa on behalf of oil local mexico civil society out of father to mexico and that niger a charger is in the record directed activity in mexico which was against the law of the united states and the hell out of against the laws of the republic of mexico and held accountable in the united states and the boy location the jury charge there were two questions over submitted the jury i personally supposed that the us company the underlying business actions that started the business relationship between client and that's all worked through the name of client because client is the mexican company a subsidiary of barr or against the good customs and habit causes damage to another and so the pleading in the second many complaint is that it's the prosecution of the of the false positive that was fabricated in the mercantile court against my client to avoid pain that's all for the business that it had conducted through pliant is the act against the good customs of mexico well could return to your  through very hired an attorney or barry had its subsidiary hired attorney one of the other to prosecute this case in mexico ordinarily that wouldn't satisfy the allegations that are necessary in a complaint here for fraud i mean i think material that person who hears the representation relies on it so that you can get the requirements of the who what when where and why as opposed to under mexican law it's under article eight hundred fifteen in article eight hundred sixteen and deception and contract and there's no requirement of intent there's no requirement of a material misrepresentation of fact like there is the united states under a broad claim under mexican law under article eight hundred fifteen deception and contract and means any suggestion or artifice used to induce other parties into error or to keep them in that state and it's bad faith that you can claim for deceit which sounds in fraud which triggers the heightened pleading standards of rule nine after there's right there's if there's fraud of commission and fraud of omission that it's all the same it's fraud but i think a fraud in the inducement claim and so there's really no question that you're subject to the heightened pleading standard several ninety that i mean assuming you can get past the problem that judge easterbrook raised which as i understand it this is a direct claim against barry you're not attempting to pierce the corporate or even explicitly disavowed that so you do you do have this threshold difficulty of the failure to identify acts that very took in mexico as opposed to working through its second subsidiary under this is not a responded to period or trying to appears corporate veil or any type of other attempt to establish by kerry's liability of don't bury it's you look at  prosecuting that falls by going to act threatening to get my china rested and it still hasn't carried out the criminal proceeding was a direct action we alleged in paragraph seventy five seventy six and seventy seven  in the caption in your honour's in terms of the application of mexican law when this case commenced in the district court there were even less allegations in the complaint relating to bury them there are now believe it or not and at that time every single factor action that was referred to occurred in mexico and so applying the indiana choice of lot of rules myself and the court concluded that mexico law applies and dismissed the indiana claims that they attempted to bring at that time it does feel awkward at this point to be dealing with mexican law relating to us and illicit acts and in fact it's presented challenges in the case as i've researched it and as mexican law has been applied in the united states we find many in consistencies and it's difficult in litigating the case to determine what accurate otherwise you are the law where there are never any and not to say that there isn't but but the difference being that we are dealing with common law in the united states and in mexico they're dealing with civil law and so you are to apply statutory language but the statutory language is sufficiently broad that it's difficult to say what that means in terms of application and so to do it really looked at the where the internal revenue code for that matter you know but the problem that we've had as you in the united states what you oftentimes see is that those defending claims are left with trying to find someone who is versed in mexican law to file an affidavit and say what mexican law is and as we've gone through the process there have been inconsistency is revealed in terms of the even whether or not a criminal act is required for illicit acts the district court has declined to address that issue and so that is not u for review today but certainly would be of interest going forward if the case were to survive and of course we believe that it shouldn't for all of the reasons you mentioned it really telling me about this case is that you can go from the beginning introductory sections of the complaint where the parties are identified and get all the way to paragraph sixty six before barry plastics is even really mentioned and so it's you know how in the world can i make the particular sixty six that's a conclusory statement and so there's no factual background as you've pointed out this morning as to what action if any barry plastics took and so when you get to paragraph sixty six in the district court notice and its opinion if the s simply says dave you know controlled actions through pliant to take action against the plaintiffs in mexico but it doesn't identify what actions mary took in that regard the only allegations that they make in the entirety of the of the factual section of the complaint relating to that are that very plastics approved legal counsel in mexico from that paragraph they make the leap that is barry's counsel in mexico but there's never an allegation that barry had counsel in mexico or that barry itself was involved in any proceed in mexico made any threats took any action any action at all and so today what we're asking you to do is to affirm the dismissal affirm the nihilo belief in this instance i think more particularly than i've seen in other cases the district court painstakingly told them what they needed to do to survive a second motion with a third option specifically about it and they admit in their briefs that they responded to most or many of those concerns alleged by the district or asserted by the district court so clearly they have that knowledge that they did not meet all of that which the district court told them would be required in order to survive another most of this mess and and i mode you chose to make your request in a brief and i don't see why we should do anything other than follow the rules and ignore it if you want if you contend that your every share has engaged in the improper litigation practice it always pays to follow the rules yourself yes your honor if my recollection is the seventh circuit hand because the additional dialogue about how to deal with a request for sanctions or cost and so there is a little bit of  lack of clarity in terms of what was preferred and so certainly that is a step that i don't understand that even remotely are you saying there some ambiguity in the rules there is no there is some discussion in the handbook of recommending how steps are to be taken as my recollection and i would have to pull i'm happy to file a motion subsequent i'm not asking you to file a motion i'm just telling you that putting something in your brief is completely ineffectual that was the point of the amendment to rule thirty eight that was made in one nine it's been with us for twenty three years yes your honor my recollection however is that there's a local rule speaking to that there is no local rule relieving somebody of the need to follow the national and indeed local rules and consistent with  national rules are ineffectual sure and we're happy to obviously to follow the motion to file a motion subsequently but the point of making the statement is to say that when we when we received the  brief it became apparent that they now have asserted many statements about what their second amendment of a second amended complaint alleges that are not factually accurate it in their power and we've cited twenty four examples of such in a chart form for you in our brief that indicate many times they begin making allegations in their factual section in their in their opponent's brief that say what they allege theory plastics did when in reality when you compare the allegations made they're referring simply to either aspen who's a nonparty or pliant most of the time client sometimes the allegations on the pier at all and so i bring that up to caution you in reviewing the allegations that they say they've made within their briefing are not actually accurate in terms of the denial of their motion for leave while we're here and i do know both standard the denial of the motion for leave is an abuse of discretion standard and there is a plethora of case law in this circuit that when a district court provides reason as to why it denied and and they follow the rule in terms of you know futility or the inability to correct deficiencies after given the opportunity to do so that that should be affirmed in this case the district court gave explicit instructions warns them that if they didn't work comply with those instructions that the case would be dismissed and that is in fact what has occurred so we would also ask that you affirm the denial of the motion f than we're trying to prosecute a place for them on behalf of that's all against barry the allegations that we've said in seventy five to seventy seven for we include that the person was involved in the business negotiations leading plaintiff to purchase orders for always held out themselves as directors executive vice presidents agents employees and legal counsel report defendant you see the overlap in the president executive officer of berry plastics being the president member of  plant in mexico the executive vice president is also a checker by president and secretary plans mexico because it conducts its business through its subsidiary so all of the allegations that we've made and yet in our second many complain and which we transpose into our brief is that we think that the actions by pliant are the same officers directors that park in barry's and acting through those offices and directors and specifically and in prosecuting the i got a and the mercantile court which is the egregious action against good customs illicit acts that were played in the uk to solicit those was directly as a result of barry's actions in choosing vs american board of psychiatry that on a motion dispossessed dismiss the plate that receives the benefit of imagination so long as those hypothesis are consistent with the complaint here i think we go a little bit beyond the imagination in that the attorney and in mexico reported directly to barry and after the complaint was filed and after the combat very received it the mexican lawyers would say that darvocet mistakes that were that represent