please the court lawrence kasdan for the appellant i'll try to reserve five minutes for a bottle oh also begin with choice of law unless of course the court directs me otherwise this case involves allegations of in court litigation malpractise and allegations of violation of court orders and court standards and in arizona action the defendants don't appear to dispute that states have a compelling state interest in regulating the practice of law by attorneys who submit themselves to the state's courts yet despite the obvious and weighty arizona interests here which apply with respect to all of the class members the district court held that the state where a class member happens to live has a more significant interest it found that two of the restatement factors place of injury and domicile supported its rulings and in doing so i committed no fewer than three separate and significant errors any one of which requires reversal first to overemphasize the place of injury factor in the a political restatement section second compounding that first error the court found that the place of injury in this malpractise case court appears to have interpreted as asking only about where each individual plaintive resides when in fact the restatement compels the courts to look at the domiciles of all the parties the court's undue emphasis on place of injury the comments to restatement section one forty five which i believe both sides agree is the key restatement provision here indicate that place of injury should be given weight where but only where the place of injury matters that is to say there should be a nexus between the place of injury and the type of claim that's alleged but where the injury is difficult to ascertain where it's a happenstance where it bears little relationship to the torque it typically is not given weight and here that's exactly the case the question where did this injury occur is quite abstract the question when did the injury occur for fixing the question where did it when did it occur is equally abstracted the damage here the injury here is the loss of a claim for damages resulting from malpractise and the malpractise claim to add yet another level of abstraction is itself a substitute remedy for the underlying remedy that the class believes it should have received in the underlying securities action but for what the class alleges was malpractise bikini area injury economic injury the place where a class member happens to live at a given time which the district court viewed as the place of injury there's little if any significance in this kind of case but that actually brings me to the second area that i mentioned even if place of injuries entitle the district court was simply wrong here about where the class members were injured the malpractise here was in arizona again the classes claims relate to in court litigation malpractise and in arizona action defendants are alleged to have violated arizona court orders arizona court rules to which they had agreed to be bound the defendants are alleged to have fallen short of the standard of care that set by the arizona rules of professional responsibility which are incorporated by reference in the arizona district court local rules and of course what the class members believe they lost here was the possibility of obtaining a judgment or a settlement in a class action that would have been it ministered in arizona by an arizona cord we cited a number of cases that were in court litigation malpractise the place of injury is the state of the court  that's page thirty three of our opening brief footnote twelve there's been another recently decided case that we noted in a supplemental authority letter it's the ace american versus sandburg case that reached the same conclusion and  far as i'm aware the defendants haven't cited a malpractise case involving violation of court orders or standards in which the court has held that the place of injury is other than the court in which the malpractise is alleged  occurred counsel can i ask you some questions about the johnson case from the second circuit absolutely your honor because i do think it's distinguishable from our situation but i want to confirm my understanding in the johnson case was the our case  in johnson is that when there is this johnson case yes and they vacated a certification of malpractise and walk me through why we shouldn't follow that case there's no dispute that there are many kinds of malpractise that will end up occurring in the same place that the class member lives and johnson was exactly one of those kind of cases unlike this case johnson did not involve in court litigation conduct alleged  malpractise didn't involve something that happened in another court with respect to the plaintiffs that the claimant nextel was basically that the plaintiffs employer nextel and the plaintiff's lawyers sort of sneakily set up this alternative dispute resolution them and then the lawyers went to the plaintiffs and convinced them to participate in that process and it was that conduct that the court determined was the deficient performance the alleged breach of fiduciary relationship and that occurred to the court said in all of the different places where the court where the law firm convinced the clients to do that so under the restatement i think the johnson court ask precisely the right question it said where did the an adequate representation occur and as i said it concluded that it occurred in all those places in which the defendants were steered wrongly into agreeing to this dispute resolution but when asked the same question in this case where did the malpractise occur the answer is different it happened it happened in arizona it happened when the defendants we say we allege when the defendants filed their late disclosure and as a result the claims ultimately were lost and i think that's the key distinction for to are you aware of any cases where you have a class that was certified like this i mean this could mean this is a very unique case we have a class that's actually certified then something happens not related to the merits of the case which causes the case to be thrown out and then there's a malpractise suit brought up effectively trying to in a sense revive the earlier case to a different vehicle this time against the warriors and  and the class was and then not certified where you have a certified here malpractise loses and then it's not certified to try to rectify the situation where you are any other case not aware of any case he either way i sort of wish i were of one that made clear that it's proper to go forward in that circumstance what i do think is there are many kinds of cases class actions that could be brought a legit malpractise where the malpractise would have occurred in each class members homestay but this like johnson but this simply is not that kind of case your honor and the third area that i mentioned relates to domicile the court seemed to think that under the restatements domicile factor it was required to look only at each just the plaintiffs want to time and the comments i think more significantly indicate that this factor the domicile factor is to be given weight only if there's a significant grouping in one state but not the other and so what the district court sort of did here is that it it in footnote fourteen of its decision it said well i'm going to ignore the defendant's residences here because there are so many class members and so that the fact that there are these six defendants from six different states doesn't matter but i think that what happened there is that the court that got a little bit caught in the switches if one views this case collectively as the district court seem to think one should then there are thousands of parties in every state and it's impossible to say that there's a significant grouping in one but not the other if instead one views this case as a collection of thousands of individual claims and looks at each claim individually again arizona law would apply to each of those individual claims imagine this were just a single iowa plaintive suing these very same defendants very same allegations suppose these defendants had for whatever reason undertaken to gone into to go into arizona court and bring a claim on that i will plaintiff's behalf well then you would have and i would plaintiffs and then you would have six other parties in six different states florida new york washington d c virginia new jersey arizona those are the places the defendants reside and so in that case again there would be no significant grouping and you could do this analysis for every single class member and for every single class member arizona would have this overarching and compelling state interest in regulating the practice of law and what happens in it states states courts so that's the domicile domicile factor if the court has other choice of law questions i'm happy to address them i'd also like to touch very briefly on judicial a stoppel i think it skews me i think the party's positions are pretty well staked out in the briefs the defendants echoing what the district court said seem to suggest that judicial stoppel shouldn't apply when the claims were made in a motion to dismiss we cited authority and i think made arguments to the contrary just a few points the highlight first is that the defendants claim that they were forced to invoke arizona law in their motion to dismiss by the liberal motion to dismiss standards and that is the centerpiece of their argument i think is simply incorrect  the named plaintiffs in this case asserted in allege that they were texas residents and they are x residence if the defendants believed what they're now telling the court is the case is the law that the law  members residence must apply to his or her claims then they most certainly did not take the facts as played in the complaint as true when they invoked arizona law the second point i'd make on judicial stoppel is that it's a bit in accurate for the defendants to suggest i think that they merely assumed that the motion to dismiss stage that arizona law must apply they did more they made an affirmative reasoned argument for use of arizona law and that argument led to dismissal of the plaintiffs a second amended complaint a question for you counsel are you aware of any cases in which this quarter or any other court of appeals has held that a district course refusal to apply will stop all was in fact abuse of discretion no your honor but with respect to the standard of review here let me just say that i think the fairest reading of the district court's decision is that it was premised of the pillar on which it's premised is this notion that assertions made in motions to dismiss simply don't count and i think whatever so whatever we call that a legal conclusion a mixed question if this court were to disagree if it were to say no under our law we think that assertions made in motions to dismiss if the elements of judicial a software match can be judicially stoppel if you remove that pillar the entire analysis collapses so with respect to standard of review i think this isn't the kind of case where the district court clearly exercise some considerable discretion based on a number of different factors that i don't think a fair successful use of unfair advantage to sounds like the application was there and if that's the case are we really on the deferential standard as opposed to do novo i think specially with respect to the last issue about whether there was an undue advantage if the district court addressed it it's pretty failed in there and it certainly didn't walk through the factors in a reasoned way that i think would allow this court to say to review well was there an undue advantage gained here and even if it did it's pretty clear that there was the entire reason that we're here is because they changed position by tethering themselves from their prior position they made their claim stronger and in fact were able to win on certification and that's exactly what's required this court's law that's the case that's the marilyn monroe case in the bow in case the plaintiff changed her position with respect to whether she needed a wheelchair and by doing so she made her eighty eight claim stronger the courts that that's an unfair advantage the marilyn monroe case the monro estate changed its position on where monroe was d d when she died and by doing so it gave itself better arguments with respect to rights of publicity i think and and that's exactly what's what's happening here by changing positions the defendants have made their arguments to beat back certification more strongly i could talk about jurisdiction if the court would like i think it's now been pretty dispositively decided by two recent cases that were decided while this case was on appeal the burger and baker case on each case the court held that in order rejecting class certification as a final order in the name plaintiff if they voluntarily dismissed their claims that then the case can go forward on appeal i think that's dispositive so unless there are questions i'll this case is not about immunity for malpractise it is exclusively about the requirements of rule twenty three and whether the plaintiffs below satisfy those requirements and the issue before this court as i see it is relatively straightforward it's whether this appellant and the two plaintiffs who preceded appellant combined a million people with state law claims one million people who live in each of the fifty states to their choice of arizona law the district court in this case concluded that they could not and we think the district court got it right they raised two and only two points of error here and with respect to both we submit the district court was correct the first issue they raise they raise that second in their argument that it's first in their briefs is judicial a stubble the elements of judicial stoppel under new hampshire versus maine are three fold the first is the most important there must be an inconsistency in the position taken previously and subsequently here there was no inconsistency inconsistency of any kind the johnson case addressed this question didn't use the words but the issue in johnson was whether nextel which argued in the motion to dismiss that form law their new york law applied took the motion to dismiss up on appeal the court of appeals in the earlier decision applied new york law subsequently on class certification the court said we and the parties despite the fact that the parties agreed on new york before we are free to address our rigorous analysis to the facts as are as they exist before us and concluded that non there the same analysis applies here despite the fact that the words judicial stoppel were not used in the opinion and they cited to the baba decision below for their principle authority on this issue now on the motion to dismiss is johnson pointed out the standard is very markedly different from the rigorous analysis that must be done on class certification before you can bind absent class members i can agree to bind absent class members the court had to conduct an analysis and that analysis yielded a choice of law and the choice of law was the law of each of the fifty states now we had to assume certain facts were true and there were a number of facts that were germane to the choice of the analysis as we wrote that footnote in our brief but i'll point out to the court first bailouts that a substantial number of the events giving rise to their order rule twenty three c to be order requires that the class be defined here there was no class definition and in fact the class definition was in flux it requires that the class claims and defenses be set out in the order and it requires that class counsel be a point there was no rule twenty three g order in the underlying litigation appointing milburgh as class counsel milburgh was never appointed class counsel milburgh was appointed lead counsel early on in the case which of the p s l array is the choice of lead plaintiff for the counsel that will represent the class when the class is certified there is no rule twenty three g order and there is no order satisfying the strictures of rule twenty three see to be now with respect to the conduct they said a substantial amount of the conduct occurred in arizona in their second amended complaint well the two principal bases for malpractise liability here were one the failure to provide notice of the district provide damages disclosures under rule twenty twenty six no bird's damages disclosures would never have been filed in the district of arizona under rule five of the federal rules of civil procedure damage disclosures are not filed their serve nobody was in new york and they were lead counsel both of those things there is no evidence that either of those things would have occurred anywhere outside of new york this was not in court litigation misconduct but it was in violation of the local rules and the orders of the co interesting issue your honor with respect to the state's interest versus the federal government's interest versus the interest of the various jurisdictions when you violate a rule of ethics in federal court the underlying litigation here was not an arizona case it was not an arizona court it was in the federal district court of arizona which incorporates by reference the arizona ethics rules as its ethics rules arizona the state has no interest in the underlying although the initial it was filed in state court and removed correct  at the time of the alleged malpractise in the vacate or however there were three federal claims that issue in that case and no state laughlin's what they claim they lost are the three federal claims not the state law claims but when you're looking at arizona's interest there is no interest of arizona in this case because it was an exclusively federal case at the time of the baker and in respect of whether conduct regulating or loss allocating functions or the functions of malpractise liability ethics rules provide conduct read regulating rules for a lawsuit in arizona you make sure that you have malpractise insurance in the state of arizona correct i haven't analyzed the question your honor but my firm for example practices in multiple jurisdictions and i believe that when you when you obtain malpractise insurance in your national council you get it for each of the fifty states because you can be sued in each of the states did the lawyers in this case have to move pro hockey j to they did they move in the federal district court for the district of arizona not an arizona state court right but i assume normally  pro hoc you admit to apply you meant to abide by the local rules of that district was and usually incorporate the bar rules of that state correct no question judge jones the issue isn't whether they were subject to the ethics rules the ethics rules are separate and apart from the question of malpractise liability malpractise liability is geared towards rican pence in the client's ethics rules apply on their own accord to govern the conduct of attorneys you can incorporate a standard of care from an ethics rule general ethics rules the state's ethics rules in this case the standard of care with respect to the district court's decision on duty was an ethics rule we disagree with it but you can incorporate those rules but the essence of the tort the purpose behind the  recompense and if you look to the restatement we'll get to the choice of law analysis in a moment but if you look to the restatement itself in the text of the restatement in the section that relates to important issues governing all types of tort claims once of the six one fifty nine one fifty seven and one sixty it states in the text of the statement itself that with respect to the conduct whether the conduct is tortious with respect to the standard of care and with respect to causation issues all three issues the usual law that applies is the state where the injury a curse that's because the purpose of tort law generally and the purpose of malpractise exposure specifically is to recompense the client for what they claim to have lost it's not to govern the conduct of attorneys that's what ethics rules are for so the remaining two elements of judicial stoppel have been addressed briefly all address them briefly here there's no question that the district court was not misled in any way if the district court felt misled by what we did i'm certain the district would have said it and there was no suggestion in the opinion and there's no facts to demonstrate that we misled the district court in any way and finally with respect to unfair advantage and unfair detriment there's nothing unfair about requiring plaintiffs counsel who are seeking to bind a million people to their choice of law to prove the elements that are required to do that on class certification it was their burden and it was the district court's obligation to satisfy the rule twenty three factors whether we did or did not agree on the motion to dismiss to the application of arizona law the district had to conduct its own analysis and there's nothing unfair about the just district court requiring the plainest to satisfy their burden to give him the tools that he needed to do it and he concluded that they did not so i'll turn to the choice of law issues there are four elements of the court knows the place of the injury the place of the conduct causing injury the domicile of the parties and where the relationship if any between the parties is centered place of injury here there was a factual finding the district court concluded as a matter of fact subject to a clearly erroneous standard on review that the place of injury was the place where each of the fifty fifth class members in the fifty states the million people lost their economic rights they didn't get a check this is on e c f to thirteen at six that the injury here is purely financial they would have gotten a settlement they would have gotten a judgment at the end of the case it would have gotten a check while they would have gotten that check if there was an injury in the place where they were standing in the place where they live it would have gotten it in arizona they had no connection to arizona bob and sampson didn't even know the arizona litigation existed the only would have gotten the check if the judge in arizona approved the solomon under rule twenty three right that's correct so  in arizona well what they lost was the check that the things that led up to that loss whether the judge would have done this or done that with of the judge would have issued an order or not issued an order that's all part of the case within a case proof that they have to establish but in terms of the injury itself the injury itself was the loss of that check it wasn't the district court didn't get a chance to approve the order it was that that this record didn't approve the daughter because she didn't prove your case and we didn't get the check as a consequence but is that the check or the cause of action you know ultimately that is the race that they are seeking i mean that's interesting fundamental question it's put in my mind as a good question just because they never alleged below and i believe they've waived that they lost a caus this was a class action below when the district court vacated the classification order the plaintiffs lost nothing they could have filed actions the very next day they have their causes of action and they did not lose so as a consequence of that they didn't they didn't say that we lost the claim because of what milburgh did they said basically we lost the financial benefits of the litigation now it's important to point out i think to the court in appellant's brief that the opening is predicated on common eve the restated and they say place of injury here isn't very important it's very important personal injury cases it's not important here and they do that but putting in a big block quote from ca many they put in the first sentence cited to the sentence of a excised from their brief and held at the place of injury was where each of the fifty each of the class members resided in the fifty states johnson is another case in the district of arizona that says an economic loss case the place of injuries do most significant fact that's the district of arizona they also argued in their briefs that the place of injury here is fortuitous well there's nothing fortuitous about plaintiffs in an economic loss case losing the economic benefits that they claim in their home states the restatement doesn't say that the comment doesn't say that none of the cases they cite say that and spence versus glock says in an economic loss case quote it cannot be true that the place of injury is fortuitous fortuitous cases are cases involving plane crashes where the plaintiff takes off from their home state crashes in another or where the wife one of the cases the party site wife her husband was in the army and she left her home state suffering economic loss where she was temporarily residing in and came back to her home state that's fortuity under the meaning of the restated this was not a fortuitous injury if there was an injury here this was a direct financial injury in the states where each of the million cast members know litigation again was a federal litigation at the time to vacate or valid was in texas the name plaintiffs in the underlying litigation happened to be arizona residents that litigation the federal claims could have been brought anywhere were valid was subject to personal jurisdiction  the state that one would think it would be brought his work out was which was texas the fortuity here was where the litigation was not and i repeat not where the injury was suffered now where the initial injury was suffered but there's a difference between the injury that suffered as a result of malpractise allege malpractise in arizona versus the underlying injury that occurred in all fifty states well your damages the injuries the same because of the case for the case doctor so they have to prove that they would have had a claim that they would have succeeded in the claim the underlying litigation and then as a consequence of that because of the alleged malpractise they didn't get the benefits and they alleged that it was purely financial right but that's just a measure of damages issue it's not an injury that's correct the economic injury actually occurred in arizona than well your honor i'll give you an example a plaintiff in tennessee oklahoma new york that plaintiff had no connection of any kind to arizona they didn't lose the check in arizona and i understand that they lost the check where they damages are the case within a case in the benefits so they say to a number of malpractise cases we say to a few my practice cases at bottom none of those cases really address the question here because this was a class action and a class action is different than a case where i'm a client i hire an attorney i say please go defend a case for me in a particular jurisdiction i have claims to be brought there i'm defending claims in that jurisdiction if i lose those claims i've i have lost something in that jurisdiction that's different than this case because the plaintiffs had no connection to the jurisdiction they didn't direct counsel to litigate anything there this case could have been brought anywhere in the fifty states with counsel that's the case then the plaintiff's attorneys in this case decided to bring this lawsuit in arizona correct correct shouldn't that have some bearing then if they choose to bring this lawsuit in arizona and they do what they allegedly did why isn't that enough to say that arizona your control they agreed to abide by the rules of that state and they did they didn't do it well i think i think fundamentally your honor the issue is can this court or can the district of arizona in this case bind a million people to our choice of arizona for the form or or or even on the stoppel issue our choice to move on the motion to dismiss under arizona law they have their claims they have their claims to the extent they still have them to the extent they wish to assert them in the jurisdictions where they are in new york in texas and oklahoma is not always an argument made in class actions i mean is that if you are right about that my would say we would never have class actions because you could always bring it to your lawsuit somewhere  class actions involving multiple states laws first of all they can see that if you apply in this appeal more than one state if you apply the fifty states there's no superiority and there's no class or no appropriate class treatment but class actions all the time are denied on the basis of the fact that the plaintiff claims are brought under multiple state's laws that's why we have mass actions in this country that's why we have an entire field of practice called mess torts fen phen you know there are many cases where you have to bring cases either on a state by state basis with individual states subclasses issue by issue subclasses or on a mass action basis and the reason for that is you cannot manage a class action involving distinct legal issues on every issue in the case i'll give you an example missouri is a case is a state that may not require the case within a case a missouri plaintiff in this case who wanted to sue milburgh and i'm not saying they could or should and i don't think they'd be successful but if they wanted to their state does not require that they prove a case within a case this  and the plaintiffs below are seeking to bind that person to their choice of arizona law which doesn't require the case within a case doctrine to be established that point is losing something because they're there attempting to bind them to form a law it's an important issue it's not a question of what the parties believe or agree to this is a district court and this is a court of appeals applying a rigorous analysis to see if it comports with due process and with rule twenty three to bind a million people to what we do here and those million people have claims in their respective jurisdictions they have no connection whatsoever to arizona they there's no evidence that any of them had been to arizona but in sampson had didn't even know about the arizona cases existence and under these circumstances we think that the appropriate law to apply is the law of the fifty states real quick with a million people this is not an opt out case they could not the class well you're out of the the issue of governing law comes up in the context of rule twenty three b three opt out cases and injunctive relief cases it's the someone in missouri could just opt out of this case and they could still bring their case and avoid the case the case dr they could to the extent they still have a claim but the fact of the question is should they be bound to make that choice or should they have their claim that they have it exist today they could have brought it labor could have brought a claim under arizona law bob and simpson could have brought a claim under texas law the fact is those malpractise claims should not be bound up to an arizona form that in the context of this case is a mere fortuity there's nothing that moberg did that prevented anybody from recovering anything they could of brought their claims and if they claim to have lost those claims they lost them in the jurisdiction where they would have brought them is no reason to suspect that they would have brought those claims in arizona new york plaintiff were brought to new york about the subject personal jurisdiction there i'll just briefly address the jurisdictional question we've raised a number of alternative grounds as well and one jurisdiction we ask that the court seek on bank review we think there's an inherent conflict between huey and baker and berger so it's it wasn't reconciled by either case we asked that the court request on bank review on that issue and it's also pending and on bank determination in the baker case i see that i've got thirteen seconds over so i thank you for your time thank you thank you counsel well every bottle  johnson case judge joan it was certified it was indeed with respect to the comments about the place of injury factor in the restatement the ellipse sees that counsel referred to actually removed several sentences in which the court walked through a number of the kinds of causes of action in which the place of injury matters because it has a nexus to the claim remember the restatement is written for all torts and those kinds of claims that it mentioned are precisely what one would expect the kind of cases where there's a nexus between the place of injury and the cause of action physical injury injury to tangible things defamation false imprisonment and so what the restatement was talking about was precisely those kind of cases where the way i summarized it was a place of injury matters if the rule is to be that you were injured wherever you happen to stand at some particular moment in time which i think is essentially how the district court viewed it and i think what counsel is arguing here then the restatement wasted an awful lot of ink talking about how to ascertain where the place of injury is in judge to tag me i would answer your question about whether it's the cause of action as opposed to simply saying that's where the bank account might have been by again noting that those comments appear to talk about cause of actions false imprisonment defamation all the things that i just that i just mentioned a key point about the notion of absent class members suing in their home states if they don't want to proceed with this class action the point here is that if they did so he he if i would plaintiff did if texas plaintiffs did if they brought this suit indicate in a court that like arizona applies the restatement then arizona law should apply to this case for all the reasons that have been mentioned the analysis under the restatement is the same any court that follows it should apply that analysis because of that's where the malpractise occurred because of arizona's interest in regulating the conduct of lawyers the practice before it my understanding of the state of arizona  that it does in fact regulate the con the practice of law that occurs within its borders i think it's absolutely right that's why we have product ficci applications and part of that application is to subscribe to the arizona rules of professional responsibility which are incorporated has the legal standards under arizona case law for setting forth what the relevant required conduct is for attorneys unless the court has furthe questions just once on as you heard the counsel describe the effect of the certification order in the underlying case what do you think that order compilation in your view and what didn't accomplish there's no doubt that the court certified the class that's unequivocal it stated it absolutely i think had there been an immediate appeal there would be a significant question whether the order was substantial enough or had enough findings  to be given deferential review on appeal this court may have even of remained it for additional findings but there's no real dispute that a class was certified in fact when valid the defendant who sought to challenge it it knew enough to say that it was seeking reconsideration and what was a class to find in the order it was defined as it is the identical class that the plaintiffs in this action seek to represent that is it was defined in the complaint as those who had lost their investments by virtue of the omission about the tax redundancy and it was defined as precisely the same class that's defined in our complaint and thank you thank you your honor