the morning your honors and may please the court i am joseph brooks from the f b i see appellate litigation unit if the court allows i would like to reserve four minutes of my time for rebuttal the current please turn up the sound a little i'll try to speak up as well order to put things in focus i'd like to spend just a minute identifying which issues are in our case and why any of those issues are important this case another r n b a case involves five issues three of the issues were involved in the earlier cases what's important to note about these five issues is one of them was not reached by the district court below and asked of the other four issues the only way this court can affirm the district court as to each issue would be to create a circuit split as to each issue i'm not going to be repetitive but i do want to mention on the extender statute issue as you know the second fifth and circuits have all ruled that statutes of repose are displaced and so we'd be creating a deep circuit sweat in order to affirm the difficult there on the american pipe issue the district court noted only if he agreed that it is legal tolling but otherwise did not address the issue what's been called the american pie standing issue of course the second circuit n w case as the district court acknowledged would require a different outcome here on the american pipe state court class action issue which is the first new issue in our case was not in the other cases this court would have to create a circuit split with judge easterbrook sawyer decision for the seventh circuit and on the discovery rule statute of limitations issue this court would have to create a circuit split with the operating engineers case of the third six circuit so how do all of these issues fit here your honour's if you were to say if you were to rule that the extender statute does display statutes over poems that would cover certificates in this case that had a purchase price of approximately seven hundred sixty three million dollars but it would not cover anything the court would still need to reach the american pie issues with respect to the nonfederal claims the shooting with respect to the federal claims only of guarantee and also with respect to the claims of colonial strategic now those colonial strategic lames alone which again can only be resolved by addressing american pipe have certificates with a face value purchase of over one hundred forty five million dollars on the other hand if american pie applies if the court rules that american pipe applies to both the statutes of limitations that takes care of all of our issues the court does not need to reach anything else and finally if the court rules that the extender statute displaces statutes of repose and it should rule which we don't believe it should that american pipe does not apply only then only then with the court need to read reach the discovery rule issue but in that event those would still be claims which the certificates have a face value of sixty one point seven million dollars i'd like to focus on the issues that are on in this case and not in the other cases you've heard about this morning and make a few minor points on some of the issues that are i will not be addressing the extender statute issue at all except to say that this court should follow the decisions of the second fifth and tenth circuit is and hold that the plain meaning of plain unambiguous meaning of that statute is that it creates exclusive time periods for any action brought by the f d a i see regarding this of any other applicable time period on american pipe briefly on the american pipe standing issue we agree course with the n c u a that the court should not consider this a standing issue at all and certainly shouldn't consider this as an issue that can subsequently block a application of american pipe when you clearly had a class action that was filed the reason is is that a class standing issue would have the same impact if we quire in a punitive class may have to predict the outcome as class certification would you would  essentially of literate in american pipe rule by telling punitive class plaintiffs that you must either predict accurately how you think a court may resolve this issue or else you have to file a suit of course they would file seems but even if this court still thought that it needed to be reached because it is a standing issue we don't believe it is a standing issue and our brief we argued and pointed out at the supreme court in the grass versus volunteer case a knowledge that there is confusion there is no settle rule as to whether the ability of a named plaintive to represent claims of putative class client is whether their claims are sufficiently similar there is no consensus on whether that is an issue of standing or merely an issue of typicality under rule twenty three a and as we further argued we believe that the better view is that it's simply an issue of typicality it certainly tracks the language of twenty three a the most significant thing about this issue for this court i believe is that my opponents did not respond to that argument at all they simply assumed a standing issue so in the first instance we should would suggest to the court that you should rule that this issue of the relative variation of the name plaintiff's claims and punitive classmate disclaimed is not a standing issue at all it's part of a rule twenty three issue that would be considered and deciding class certification and therefore it obviously cannot bar cannot bar application of american pie further just my one level deeper and then i get out of standing even if this court were to determine that the issue is a quote unquote standing if you were there would be confronted with the only circuit level authority on this issue which is nick i b e w and you can i b e w in the same context of this case and or a b s claim the second circuit said look the issue in a case like this and the issue of standing is reasonably said was in the r m b s context exactly what's in front of this court the critical issue is whether the loans which underlie the certificates the loans on which the certificates are based whether they were originated by countrywide so even if this were a standing issue and even if it were appropriate to consider it subsequently in determining whether a putative class plaintive could take advantage of american pipe this court would even at that point have to create a circuit split in order to rule in favor of the victims who are from the district court and we don't believe it should do so the second american pipe issue is what's been called the state law a class action issue state state court class action in this case the class action that you have to see if we lying upon that the banks would have relied upon to toll the statute of limitations even though it was a one nine hundred thirty three act case was initially filed in state court in california because the state courts have confirmed jurisdiction the issue is whether this follow on punitive class plaintiffs action brought in federal court  is subject to american pie polling in the soir case judge easterbrook in a very well reasoned decision said that quote the source of law and that the identity of the forum determin the effect of a failed class action unquote therefore he said in that case it involves federal statute that like the securities act it was the i believe it was the telephone consumer protection act not only did it create a federal cause of action but it provided some statute of limitations same thing here for the securities act and current jurisdiction in state court but federal statute of limitations let me just clarify this show how the purposes of federal rule and silver seizure twenty three further is by allowing american pie to apply the california class act and there's there's two points to make in that you're one of the first one is there further because a happen it's by this case if you have a state court class action that's based on federal law she does class members are just as likely perhaps even more likely to file individual claims if there be no tolling in federal court but more importantly american pipe is not based strictly on rule twenty three as your honor pointed out earlier the court must determine whether or not tolling is consonant with the legislative purpose in sawyer  limitations and therefore in that case which involved a section one thousand nine hundred three class action but at that time section one thousand nine hundred three incorporated state law statutes of limitations the supreme court held that even though all of the litigation took place in federal court even though it was a federal claim because a state statute of limitations governed you could not use the federal tolling rule of american pie but instead you had to look in that instance to puerto rican law to see whether puerto rico would use an american pipe tolling type law in other words because the tolling rule is a part of the statue of limitations it's tied to the statue of limitations arizona state court class action and a subsequent putative class members action in district court the issue of whether there would be american type tolling had to be decided not by rule twenty three because you're in federal court but by whatever arizona would do with its tolling rule so american pie polling is as the supreme court said and attempt to accommodate rule twenty three but it's also based on being consonant with the legislative purpose of the relevant statute which provides the statute of limitations so under judge soyuz decision which is grounded on chart and wholly consistent with how about know in this instance the luthor class action because it is a federal claim a federal statute little limitations notwithstanding the fact that it was filed in state court initially it has american pipe tolling effect in a subsequent individual action in federal court again the only circuit level authority on that case is by the seventh circuit i would note in the district courts there is at best a split and the district court  our case here noted that the district courts there was no uniformity on that issue so again in order to avoid a circus but we would urge the court to follow judges to brooks well he's a decision in sawyer i would mak and this court's decision and dungan in american pie to court applied the statute of limitations from the clayton act but just like the securities act section thirteen statute limitations here it has kind of a two part formulation there is a four year what we commonly refer to as statue of limitations these days that runs for years in the date of a quarrel but there's a second provision that suspends any private and i trust action during such time as a federal civil or criminal action is pending with and it provides critically that the plaintiff would have one year from the time that the federal action ends within which to bring any private action that is classically a riposte statute that sets a period of time to bring a case that is untied to the accrual of the action and it is that part of the clique next out of limitation section five b to which the supreme court applied american pie tolling in american pie in other words it was a statute of a post and you don't have to take my word for that because subsequently in the greyhound case the supreme court quoted this court's decision in duncan and stated a follows quote a ninth circuit panel very recently emphasized quote although the plaintiff is correct in asserting that section five b the riposte what i just talked about serves the broader than if the purpose of a meeting private an len section five b's quote statute of repose purpose and so i would urge the court that american pipe itself apply to american pie polling to a statute of repose and as judge when pointed out earlier american pipe itself rejected the argument that that violated the rules on anyone yet and i believe that's resolve that issue i would make a couple quick points on the discovery issue in the event that the court needs to reach that again i would emphasize the court need not reach the discovery will issue in this case if it rules in our favor on american pie the district court said quote a complaint with general allegations that countrywide was deviating from its underwriting underwriting standards excuse me would have been sufficient to survive a motion to dismiss unquote that statement of the law is directly contrary to prevailing authority in the third circuit operating engineers case the court said as follows quote the statute of limitations would not have begun to run until the plaintiffs discovered the untrue statements or the omissions concerning her particular sophist sure typical it's so if the third circuit recognize it is not enough to trigger the statute of limitations under section thirteen that you are aware of generalized allegations about an originator of practices you must have information sufficient to allow you to plead consistent with your obligations that there is a connection between the originators of the actions on the one hand and your particular certificate other courts have agreed for example the full vs u b s americas case which was by the second circuit the court said you must have quote facts to connect the originators general practices to particular securities unquote another case the police and fire retirement system case the southern just of new york dismissed an action where the plaintiff quote failed to allege that any of the misrepresentations specified in the complaint applied to the particular mortgages underlying the certificates of purchased unquote these courts the suddenness of new york are the courts that our opponents have described as the courts who are most familiar with securities law operating engineers third circuit decision that you would have to create a split with and the sudden to sick of new york cases stand for a very simple proposition it is not enough to simply allege bad practices by originators as you must be able to connect those to your own certificates and the district court never decided that we failed to do that the district court simply it please the court mark perry for the underwriter defendants in these appeals your honor i'd like to make three brief points on the extender statute that have not previously been covered today first judge nelson you asked what is the purpose of the extend or statute mr frederick said in essence to provide a comprehensive in mandatory in uniform one size fits all federal statute heim period taste for that there's no case that says that there's no legislative history that's not what the statute says we actually know what the purpose of the statute is but the agencies have never mentioned it it's in the case that cited on page one of the f jesse's reply brief it's receiver footnote nineteen says some court said that accrued based on the underlying state law and other court said it was upon the appointment of the receiver picking up again with the quote congress resolved this cites the extent or statute that is the reason for this statute was to resolve a split in authority over a cruel and that's why the statute itself uses the term of cruel five times it is entirely in a cruel statute specifies when the agency's claims a cruel and supreme court made clear in c t s the entire concept of a cruel is antithetical to that of statutes of repose reposes do not have a cruel is a cruel is the opposite of  insured institution had brought a thirty three act claim as a plaintiff congress wasn't thinking of the no claim by a receiver had ever been barred by a statute riposte congress wasn't thinking about this issue congress was thinking about the a cruel a fraud indemnity bonding contract claims that it did break the receivers did bring against the charles keating's and other executives of the savings and loans ok so that's what the statute was meant to do it had nothing to do here so fast forward to two thousand and fifteen and now we have the agencies often represented by fancy private counsel seeking lawsuits involving hundreds of billions of dollars in face amount of securities not from the issuers the issuers not in this courtroom from underwriters who have done nothing wrong there's no allegation of fraud to navigation of causation or even of injury these are strict liability claims not for the mr frederick misspoke there but for the insurance fund after the supreme court has already told us in the old melvina case the case my friends hate to cite because they lost that case when they when they in convinced this court the last time around after firing at to do exactly what they're asking you to do now the supreme court said no that's wrong that more money to the fund is not the rule congress could have an activist statute runners that said the f d i c always wins congress could have an active statute that says the f b i sees claims run in perpetuity congress didn't do either of those things which brings me to my second point what did congress do with respect to these points the other thing that has been shockingly missing from the agency's presentations today is any discussion of the underlying claims the most of the money in our cases involve state law claims and the texas securities act this is a preemption problem certain that this federal law supplants the texas law under which the legislature of texas made a very careful policy determination that it was necessary to counterbalance this new strict liability tied it to federal rule twenty three which of course doesn't apply to state cases as the supreme court made clear in smith rich's bear therefore there is no dock trial basis to apply it to the courts and the seventh circuit will simply eroni it however let's spot the agencies the benefit of the doubt and say that sawyer was correctly decided in the context of that claim which was a t c p a claim telephone consumer protection act the one thing that mr brooks should have similar rule twenty three type consideration for of course they do your honor and so as i say with let's assume that some tough actions could be tolling the one thing that mr brooks said today that i agree with is the tolling effect of the limitations provision has to be defined within the context of that provision and judge and when this picks up on one of your earlier questions which is very important in fact i would say the critical language in american pipe that says consonant with the statutory scheme which statutory scheme must be consonant with well is the statutory scheme under which the suit brought this is why the statute of limitation the american pipe issue by the way dovetails with the offender second section thirteen of the thirty three act does not look anything like the statute of limitations in the t c p a which is involved in sawyer vanilla a cruel statute plain vanilla cruel statutes are subject to tolling that's what makes them plain vanilla cruel statutes section thirteen has a specialized hyper sensitive stature to propose it says  the underlying statute the cause of action on which suit is brought extinguishes the claim then no tolling can be applied that's what the supreme court held in lancet is a holding mess not dictum and the supreme court applied that over and over again i irwin and other cases that the agencies don't address because it's holding only applies if congress has left work for the courts to do and when congress says in no event shall a claim to brought up the thirty three years there is no work quote a final deadline that is not subject to any exceptions the whole point of layering a statute of repose over a statute of limitations is to fix an outer limit beyond which no action can be maintained that such a supreme court went on a neck case to explain the statutes of repose kick in only in cases like these where the statute of limitations has for some reason been extended  suspended otherwise you don't need the statute proposed in the california courts extend american pie to california class actions and place a jolly versus lily why shouldn't  we your honor again american pie comes from rule twenty three and while california courts apply evaluation of rule twenty three it is not rule twenty three more importantly however any american pie folding whether the first action is filed in state or federal court is absolutely in consonant with the substantive causes of action on which the f b i see is suing whereas here the f b i see bring suit or the initial class action involves to be more accurate to claim under a statute that has the repos provision the action can be told as to the limitations but only up the repos provision that was the clear holding of the second circuit in the in the mat case i mean we've talked a lot about circuit conflicts today let's be clear to affirm this court has to rupesh to create a circuit conflict with the fifth and tenth circuits to reverse and do with the f t c is actually you would have to create a circuit conflict with the second the first and the third circuit's so either way there is a circuit conflict i suspect either way these cases are going to the supreme court and the question is whether you would rather have be attacked or defended in your decision the other point on the circuit conflicts is everyone that we are urging we have the supreme court already if i could tie that to the third point because i think it's related that i'd like to make about the we have an interesting disagreement among the agencies mr brooks stood up and said it's plain and unambiguous that's why he doesn't want to talk about the presumption against preemption in the doctrine against applied repeal and so forth mr frederick to his credit stood up and said it is ambiguous it is subject to two meanings but the better meaning is is there is the agencies in fact mr frederick urge you to apply quote a presumption ought to be the broad meaning in other words they need a presumption to win their case because this litigation demonstrates one thing that the statute can be read to which we think you know all the judges have debated this point the count right now is eleven to nine eleven judges to side with the agencies nine have sided with the underwriters if a statute can be read two ways then we have t invoke the traditional tools and decide how to decide between those two and let's run through the presumptions mr frederick the only person is mentioned a presumption today as mr frederick who said there should be a presumption in favor of a broad reading  eighty s the terms such of limitations had two meanings inclusive xclusive but it didn't stop there it also said that the primary meaning was that that the primary meaning and the secondary meaning of the inclusive one so it's right off the bat the agencies are asking this court to adopt the secondary meaning when the presumption i would submit ought to be in favor of the primary meaning but that's not the only one in the particular area of limitations provisions the supreme court has told us all to apply a presumption against perpetual litigation that's the gabelli case the gabelli case says where congress has spoken limitation  against the government and i would reiterate this is not the government the stay private entity and the supreme court said that in so many words you know melania says the f d i c is not the united states that's a direct quote from a melanie second it's not just that it's not just that limitations provisions are generally construed typee in the in the simmons case credit suisse versus simmons the supreme court expressly looked at strict liability statutes under the securities laws and said that there's a clear statement requirement for extending the limitations provisions applicable to strict liability claims and this is a strict liability going through another supreme court case that tells us where to put the  real mr frederick gave you a rather dramatic reading a well maybe look at that page it doesn't say anything like he said what it actually says is see the extend or statute extending state statutes of limitations we agree extends state statutes of limitations it doesn't say anything about federal or state statutes of repose however and therefore the agencies cake substantive law as they find in the court is also given another presumption that in business cont s we should hesitate to interfere with settled expectations of the land graft case in the benzene case and many others here we have businesses underwriters that the policy of the thirty three act is after three years the  underwriters can commit their capital to new underwriting is rather than keep it in reserve for liability that's news no dispute about that the texas securities law the policy the statute is after five years the investor shouldn't be able to play the market with the underwriters money shouldn't be able to wait to see which way the bet is going to come out you can't you can't bet after the horse races run those substantive policies would be unsettled by the agency's determination that gives a presumption of the other direction there are of course presumptions against the modification of substantive law one here the presumption against preemption as to the texas statute i actually didn't understand mr fredericks argument of displacement was certainly asked of the texas statute there is no that the agencies are asking this court to rule as a matter of federal law that the extender statute preempts the texas legislature is determination that in no case can its yes a clean be brought up for five years this court has to make a holding on preemption and to make a holding on preemption you have to fly the presumption against preemption this court has applied that presumption many times you have to look at the policy of the state law and determine whether congress made the considered determination and a clear in manifest that mean it only applies to three or four agents of the united states seeking in b s cases the r and b s cases hundreds of billions of dollars in recoveries based on the face of the securit that you know there's no exceptions no de minimus exception to the doctrine against implied repeal and even if there were this case is to des mcanuff your honor not the minimum you've heard nothing about these presumptions you've heard nothing about what congress actually intended you've heard nothing about how to read statutes the way the supreme court told us to what you heard was the government should win because if the government says it's not the government you've also heard  congress did something extraordinary congress did do something extraordinary it did extend the statute of limitations but giving that reading its plain meaning that is to limit the statute of limitations makes it work together with section thirteen and the texas security act it harmonizes the provision and this court's job ultimately is to harmonize the provisions of federal and state law where possible where congress did not clearly in that the supreme court already granted certain india mack it dismissed for reasons they didn't tell us i suspect because the jurisdictional defect in that case but if you want to take it to the supreme court go ahead you know disagree with indy mac and that there's a quick way up there otherwise if who cares what kind of polling it is the whole point of a statute reposes it's a statute of repose it's not subject to judicial tinkering or adjustment even if the doctrine were relevant whereas here the case comes out of state court  supposedly tolling case luther it must be equitable tolling because there is no statute on which the new federal session on which the tolling could be based it is equitable judge nelson in a different way than the diligence of the place of kind of equitable but my friend makes a point in some cases up to view it could be a hard question in securities cases in federal court it's not a hard question these are all sophisticated pari if ten compliance are filed against countrywide news articles in the loser complained did put them on notice of the problems in the country right underwriting inquiry notice such that a reasonably diligent plaintiff would have filed suit on the statue of limitations discovery point within the year and that's why those claims are time bar mystified by mr brooks a suggestion that the operating engineers case in the third circuit goes their way it's clearly supports us it says the luther amended complaint put the plaintiff there on inquiry notice and they had two months to file a complaint because they  have done that in the us he could have done that within two months here to the only thing is different in the operating engineers case is the there was an a statement by u b s a market reassuring statement between the original luther complaint and the amended luther complaint and so the court said you have to move to the date back to the amended complaint there was no reassuring statement by any of these underwriters in this case so we will use the very reasoning of the of the operating engineers case involving these facts essentially billions of dollars the guarantee bank one of the four plaintiffs in this case held four or five billion dollars worth of mortgage backed securities they're monitoring their portfolios they're monitoring what goes on in the world and in federal court when a securities complaint a spot called under the thirty three act or the thirty four act it has to contain a certification as to which securities the name plaintiffs held purchased and sold then the right rule on standing the statutory standing answer the one that congress gave us congress writes the laws after all it says that a plaintiff to bring suit under section eleven or section twelve based on such security that is the security that the plaintiffs itself felt and you have to certify that under the p s l array and the tolling effect of a securities class action is tied to the certification because the only standard the only certain security that you have statutory standing to sue on is the security that you yourself purchased results that answers every one of these questions grab becomes irrelevant nneka becomes irrelevant if you hold to the statute with the words that congress actually gave us it answers all the questions the f t c has one answer to that in a footnote in their reply brief they say judge belzer didn't talk about that's false your honor he did it's in the main state to opinion and mine is that one opinion for that matter she very carefully went through this entire point if you limited to the statute the case is over all of these points in fact come back to the statute how do we look at what's going on here we look at thank you your honor i appreciate the indulge quickly your honor the number of points i appreciate the concession for operating engineers that the third circuit was correct at the time when inquiry notice started was when the amended complaint was filed in luther that was september of two thousand and eight that was less than one year before any of the receivership in this case with respect to the issue of purpose we address it on page one of our reply brief we quote the legislative history that says the purpose of the firey extender statute is to hold wrongdoers accountable and to allow the government to recover the most amount possible we we didn't own up to the purpose and that's it with respect to the point about state claims show how wrong we are i disagree with that but it doesn't if this court rules in our favor un american pipe we we cover every cent that we are seeking under federal under the federal claims and in no event language supposedly shows why section thirteen is incompatible with status or repose the earlier part of the statute which says no action should be maintained is no less to come in the language and nobody would suggest that the one year period under the securities law is not told by america quite so that just american pipe itself on this point about presumptions your honor it's not me who says that the statute extended statute is unambiguous it's the district court excerpts volume one tab five at four it's circuit and that's seven ninety eight f thirty two sixty four to sixty five why is that important because as this court held an association of civil technicians cited in our brief if the statutes unambiguous the  dr of implied repeal doesn't apply and if the second circuit held in new york state restaurant association also in our brief if the statutes unambiguous the presumption against preemption doesn't apply the presumption against preemption also doesn't apply because as we pointed out in our