it please the court matthew dowd on behalf of the steinbeck defendants including thomas steinbeck the late son of the author john steinbeck i'll keep an eye on the clock with the goal of reserving about four minutes you  know i'd like to turn st to the three hundred and four c five issue and then if we have time i'd like to talk about the damages issue both issues both in terms of compensatory damages and the punitive damages issue so with respect to the st issue one of my st responsibilities here today is to convince the panel that the particular issue that was raised in this case was not previously decided by any of the pre the earlier cases how do you get by our panel decision that says we judge tom and that's my biggest hurdle i'll admit that you know isn't that a lot of the case  and i have a few points on that st of all with respect to the claims that were presented in this case being appealed we have there were two tort claims and a breach of contract plain and so if you accept that the three hundred and four c five issue was never finally decided until this court's non presidential decision in two thousand and seventeen well you say non presidential but it is clearly binding on the parties in this case whether it's published or not that that's a rule corrected john and i don't mean to mean that you can just describe that because it's not present centralization but i mention it for a couple reason but let me get  then that steinbeck defendants should have been allowed to present evidence and argument with respect to their beliefs about at a minimum their beliefs about their terminations rights  thought the trial court allowed them to talk about the fact that they believed that those that the new york court decisions were wrong and that those issues had not been decided just how and i respectfully disagree with that because if you look at the august th two thousand and seventeen order judge had are and that this goes to the relate a geisha in order and so throughout the record and throughout the trial transcript you'll see numerous instances of objections being held upon the basis of the so called two thousand and four and i read those provisions but i also thought that some of the i'll call it leaked out i mean there was he did permit your clients that testify respect to the terminations rights and so if you couple that with respect to what happened once gayle's attorney entered this case and attempted to provide adequate briefing on this issue then this was th motion for reconsideration and mr berger who is gal's counsel at the time yes yet sanction for submitting that motion and it wasn't a perfect motion but it was certainly a reasonable motion because gail prior to that had submitted an opposition to the motion for summary judgment a partial some of judgment and when you take a look at her submission it's clearly not fairly presenting the complex issues here so don't but it but again going back to the problem is you want to read argue the determination that our prior panel made i mean we say in our memorandum decision that the district court dismissed the action finding it barred by collateral estoppel issue preclusion and the nd circuit squarely held the ninety three dollars settlement agreement is unambiguous and forecloses any argument that the parties intended the sons to retain control over the exploitation and or terminations of rights in the works of john steinbeck and that the one thousand need three settlement agreement binds the parties and then we affirmed the district court's ruling doesn't that squarely dispose of the issue and make it the law of the case with respect judge thomas disagree for several reasons st if you look at the briefing with respect to the motion to dismiss on the parallel litigation and this is the case that you talking bout the state my colleagues on the other side when they moved to this miss they never raise collateral estoppel that was not one of the reasons that we're ok that all heard it doesn't make any difference if that's the holding of the prior panel this court you're asking us to essentially go back and revisit the issue that the court expressly determined and i don't know how we can do that your honor well let me take you to what exactly happened in the  circuit and those five cases and try to explain why none of those cases actually decide to proceed let me ask the question a different way assuming that the southern district of new york and the nd circuit court of appeals were dead wrong the problem you face is a binding th circuit decision affirming the trial court's ruling that the one thousand nine hundred and three agreement is binding so it doesn't really matter what was presented or decided in the eyes of your client we now have a ruling from this court that says that it is behind the th the other th circuit decision said it was decided via collateral  estoppel and if you go so i mean i'm going to go on for the judge tallman this is all admitted or excluded under discretion base and now you're trying to parse through these decisions when we got a  th circuit decision dead on saying what it asked to say well the say collateral stoppel of the say something else this court now has to exclude evidence or not now i have to review their decision on abuse discretion appealing is judge had his summary judgment ruling and so so his summary judgment ruling were darkened on the summary judgment on the breach of contract correct your honor and the slander correct your honor ok so let's take those t because obviously the dane overview a little more favorable for me is going to say we're going down through the clear down to seat now right so so so if i may let's for a moment let's put aside the th circuit decision and look at what the issue that we have to look at is whether this particular issue whether this one thousand nine hundred and three agreement is quote unquote and then any agreement to the contrary was previously decided there were five decisions in the new york courts i'll go through them very quickly two thousand and six judge owen rules in our favor actually on this very issue then in two thousand and eight judge sec writing for the nd circuit reverses but in that very decision he notes that there's a question about the validity of the eighty three cream and if it were to be enforced as the state says thank you as that's down to the sdn why it's reassigned to judge daniels he writes two opinions one is not particularly relevant not decided so then you go back to the last decision from new york which is the two thousand and ten decision from the nd circuit there are only two issues decided in that one was fraud fiduciary duty claim and one was promissory estoppel now what the state says is that well that decision doesn't matter because we stipulated to an agreement with respect to the validity of the eighty three agreement now i'll turn you to s t r one  one in the record and the court knows that in many instances the collateral stoppel cannot be based on stipulated judgments and minutes that cetera you have to look at what the stipulation says and in that stipulation the parties say that they're agreeing to one thing they're green only to the validity of the issue of the eighty three dollars agreement as it was set forth in the two thousand and nine decision by  seventy eight dollars grants to which germination rights could be applied does that eliminate the the merits argument and not at all a judge excluded because if i understand you question the finest and what portion of the opinion i'm referring to we were talking about different grants for the underlying rights and so in this case we're talking only about the grant for film rights filmmaking that wasn't this again that that particular claim or issue was not decided in any of the new york cases and so going back to what i was saying with respect to what the asked the courts decided we have no decision here we have five decisions from new york so the nine hundred and ninety four agreement only related to non film making educated there are primarily two i don't recall if it was only body or primarily the publishing rights with penguin and they don't affect be any different because for other rights since they were all granted at the particularly with respect to opposing summary judgment is that there has been no decision that has said one way or the other that eighty three agreement is not or is an agreement to the contrary that's an unsettled issue and on top of that we have three new york cases that actually suggest that there's a validity problem or enforceability problem if you read that decision to to to mean that and let me turn to how do you square that with our prior panels holding that it forecloses any arguments that it intends the sons to retain control over exploitation and or terminations of rights in the works of johnst so a few things on that tom and it really does get into some subtlety and and part of the difficulty and confusion associated with just this particular cloris clause and three hundred and four c five and so courts have not been particularly clear whether you look at it from the state law contract or there's preemption issues right you have in this circuit itself if you read or when you read the decision in milne and you compare it to the analysis  those two are hard to reconcile and so if you look at that decision from the th circuit panel saying well this is what the the courts in new york decided what they're saying is that it's a valid contract meaning that there was a meeting of the minds and that there was consideration and there's no validity issues of it but it doesn't decide the ultimate inforce ability of it because really bothered me about this it's beginning to take on the appearance of bleak how this litigation has been ongoing now for what forty years approaching fifty people the parties are dying they're being replaced by successors who turn are dying and there's just no end to it i mean why shouldn't the fair resolution here be to respect the decision of the prior th circuit panel close the door on any further argument with regard to the one thousand nine hundred and eighty three agreement and affirm the decision by the jury that there was active interference that was unwarranted by your clients the attempts by the of state to exploit its rights under the works of john steinbeck's judge tolman the simple answer to that is that this is the provisions and this is the statute that congress has established and for better or for worse in  six congress said that these determination rights are inalienable and i understand your concern here but the simple fact is that this is going to arise in the future you're going to have these fact patterns and you can't dismiss simply because we're looking at events that happened and in fact this is exactly what happens and neal it's exactly what happened in the born in in both of those cases and particularly also in marvel characters versus simon that was the case dealing with  captain america and in fact that case is very similar to the situation we have here because in one thousand nine hundred and fifty six and i think sixty nine in that case mr simon had settled a dispute with marvel characters and then after seventy six with determination rights when and you are going to settle the case submit to the court stipulated findings a clear statement saying that this is what the parties agree to this is what's being agreed to and we're not going to litigate this moving forward but here we don't have that maybe maybe you ought damages i think this is again it relates to the type of evidence that could have been or should have been allowed to be presented i don't think there's any question with respect to punitive damages that intent is a relevant consideration  so going back to the erroneous decision in terms of excluding evidence i'll leave it at that but more importantly under california law it's the burden of the party look seeking pin to enter into evidence by clear and convincing evidence evidence about the defendant's wealth and status we don't have that here that by itself what do we have here what kind of motion are we really looking at where  we've got to give the evidence this is a motion for the judge to say the jury doesn't know what the jury considered there's no substantial evidence to suggest that it ought to get there and so we have to give some benefit of the doubt to the jury so i'm having a tough time understanding why there isn't some substantial evidence about the fraud or the malice given what's in this  given and what's in this particular record but i think you have a better argument about financial ability if in fact there is not enough evidence about financial ability to pay can i just wipe away the punitive damages or do i have to send it back to the district court for an ag for decision as to what is no probs said judge smith the simple answer to that is that the damages get vacated because  a failure of proof on the part of the plaintiff and this is this is clear a year of financial proof correct it is a matter of what if i can suggest that there's substantial evidence of some financial ability then at that point or after return this case to the district court to determine the amount of the damage your honor i think you still have to look at it through the lens of clear and convincing evidence but two things on that i don't think you could find a single case where a california court or a court in this circuit applying california law has upheld a punitive damages award against an individual in which the amount of the award are hundreds of multiples scores of multiples of the i figured it about sixty four percent sixty so meaning one hundred and sixty four percent of the defendants wealth well i think  is gail statement that she may make one hundred and twenty to two hundred thousand per year that varies but i think to just solomon's point is that that's that is not evidence of wealth as evidence of income so i think your number you were referring to you point out is we really don't know what her net worth is all we know is how much she was making in royalties off the books but let me ask you a related question and that is what's the remedy here do we do we  it reverses the judgment remand to the trial court for a determination so so if california law applies and i guess we would do the same to the district we would return to the district court an gerry hearing that the cases i'm seeing in my notes are due mohsen adams holding that if your honor if that's your reading of it i won't disagree with that but what i will say is that there is i don't think so but let me just say this is if that's the outcome of this case we have something along the lines of five million in compensatory damages we haven't talked about that and we'll pass on that but if simply the  here is to say compensatory damages stand the almost eight million dollars dollars in punitive can stand but will have a real man to see whether gale who makes no more than two hundred thousand per year can afford some tens or punitive damages it's just not an efficient use of resources i understand the legal argument in terms of what the law might require but what we would have to find that there was insufficient evidence to support the actual award of punitive correct assuming that we decide that there was then it's a pretty narrow issue on remand and that is what is a fair amount of punitive damages in light of the defendant's worth and ability to pay and the district court would be in the best position to it please the court susan coleman from general block on behalf of waverly fog the executor of the estate of elaine steinbeck let me let me start by trying to clarify your honour's are completely correct that the agreement to the contrary issue has been litigated and there is collateral estoppel in effect here just to clarify i think perhaps some confusion about determination lost the because my opposing counsel suggested going back to summary judgment the nd circuit absolutely decided the issue of whether the nine hundred and eighty three agreement w valid and enforceable agreement there is no question about that what the nd circuit said is that wayne was given unrestricted right to negotiate whatever contract she wanted even if its terms were considered less favorable than what the defendants desired and said moreover that it was ok for the court to determine blake's smiles right so the court held exercise of elaine steinbeck's authority under that agreement and any attempt by the granddaughter to exercise rights transferred to elaine steinbeck under the one thousand nine hundred and three agreement the whether it was promissory estoppel whether it was agreement to the contrary the nd circuit decided that the one thousand nine hundred and three agreement was valid and forcible the opposing counsel referred to the stipulated judgment stipulated judgment occurred before the nd circuit decision stipulated judgment occurred in two thousand and nine the nd circuit's decision came in two thousand and ten that stipulated judgment in which tom steinbeck and blake smile were represented estoppel i do think that it is however even if you were to take all that into account it is a complete red herring agreement to the contrary because there was nothing to terminate the fact that there was nothing to terminate it now opposing counsel was a bit confused about whether it's film rights or book rights the way terminations rights work that you look to when the work was copyrighted with respect to east of eden it was eighty two thousand and twelve notice sorry two thousand and thirteen notice must be you have an excuse me i was going to say yes it's a reason your org ok thank you and notice must be given by two thousand eleven so the time to give a notice of terminations with respect to east of eden had passed yes what would have been terminated was a license grant with respect to a film but that's irrelevant that is granting a license from the book to use the book to make a film but that's not the only reason it's a red herring as the record will show in there has had been a prior agreement in two thousand and four in which the movie studio returned the rights essentially to the heirs because they they wanted to be able to continue to show the old movie but they couldn't do a remake or anything like that so for two reasons east of eden is an old movie groups a row used to be in your honor we're speaking about is to be in with respect to grapes of wrath the courts and the copyright statute is a very clear there is only one but you only get one shot to terminate so with respect to three agreement and at least with respect to that germination of course tom steinbeck and gail steinbeck and paladin are very happy to have the agreement enforced because they are the land signed back on behalf of  effectively terminated the grapes of wrath and those rights therefore returned to the heirs and that's the whole reason why they were able to try to negotiate for a new movie deal with respect to grapes of wrath agreement to the contra is irrelevant but in any event what you would have here if the court were to agree that somehow the summary judgment motion was in appropriately granted if you would have you would enable parties to just keep litigating and raise a new theory every time they came up with some new idea that's not the case here we've litigated that agreement to the contrary i'm not him and that just can't be the law think all of what i have described is in the record and so i think i'm going to turn to punitive damages with respect to punitive damages st of all there was and i think your honour's will find in our brief i'm happy to go through it but numerous instances of malice and fraud if ever there was a case where we needed punitive damages to be awarded it is this ok are you referring to i'll call it the substantive violation that results in warranting punitive damages i'm not concerned about that my concern not only is judge tallman it inappropriate and it's a concern is what the motion was brought it was a motion brought after the jury it already made these determinations so now the standard of review has to making that motion is especially important determining that yes your honor and i would submit that there was record evidence of gail financial condition one being full evidence st of all she testified that she has got they have gotten one hundred and twenty thousand dollars a year and that was her low estimate from domestic book royalties i'm going to have a net worth i'm going to figure out what the net worth was and i saw an income stream but i didn't see anything else i saw that they were working on several films of t v s television series but they were only paid when the film was either or the licenses exercised i saw that tom's books were not profitable i could see that she couldn't live on one hundred and twenty thousand dollars because the kids were in college i saw she didn't own a house i  saw she does not have outstanding liens or loans that's all i saw well with all due respect your honor i think the jury heard the financial condition testimony differently i don't think i think the test of reading it well i think if you look at the testimony i don't think that she did in fact ultimately i think the testimony is clear that those are not she had no dependents and the testimony and she had no more worries that the california cases speak of that phrase which in my experience normally means a forensic accountant gets on the stand and testifies that i've made an analysis of income and expenditures i've made an analysis of assets and liabilities and i conclude th defendant has a net worth of x and an average annual income of y and i don't see that in the record here well your honor i did something i think that there is not that kind of information with the best we c out of the appellant's here enter when we were doing discovery was incomplete tax returns it was our burden but we would submit that that we met our burden and they did call gail find that back and could have actually revisited the issue and put in testimony i mean the burden is ultimately if you compel further production of their work and there were  discovery motions suffice it to say your honor but let me also say that in the th circuit financial condition is just one of several factors there is no bright line and here i would s that for new law i mean i appreciate what we said generally in one circuit jurisprudence but the california courts are pretty specific in firms of what the plaintiff much i i believe that we have shown ad best we can the both liabilities income and future earnings if we disagree with you and think that there was insufficient evidence in the record what's the remedy under california law i mean i understanding is that we would reverse the judgment every man to the trial court for determination i would submit your honor that if  editor and or a choice by the defendant as to whether to accept the remittance amount or to go have a new trial i guess it would be limited to damages damages an ability to pay the punitive damage award isn't that what the california cases yes your honor but i think under i know in providence the plaintiff was awarded eight hundred thousand dollars and the award was appealed and the court only reviewed the district court's denial of the motion for a retrial and remanded or and so i think the court then ordered just what you're suggesting either a new trial  here as your honor has said there has been enough litigation my client has alone have been litigating for fifteen years and to set this back down for a new trial on the issue of when the maoists and utter disregard for the cases and the rulings that have come down couldn't be clearer what i hear you saying is we got what we got and there really isn't anything more that we would be able to offer the district court to answer the question of words and ability to pay i think that's right i'm sure we would be able to definitively show that there are no children i'm sure we would be able to definitively show that  once gaile signed back is no longer able to interfere here there will be movies of these great works ironically right now there that revenue goes to jail later works but that includes if if the movie is done a t v series is done whatever it might be that's why she was so interested in doing a secret side deal for grapes of wrath once she is finally precluded from interfering and we can exploit these rights freely that money will come in we have actually tried to make a motion which has been stayed pending the outcome of this appeal that those for will to use should come to my client she should not get the  benefit of those those would be royalties we would attach to pay for the the damages but yes i mean she she could get millions of dollars for all we know and i would submit she testified to her future earnings she said paladin had four t v series and six feature films in development so i don't think sending it back to to go back to your honor's question i don't think sending it back down is going to add to the record here i mean look at this little bit different judge you could ask your question that it would be the normal california law in this situation to send it back to have the district court decide this it seems to me reading kelly vea hug which is a california case  quoting adam's fever cami that if there is insufficient evidence of the punitive damages that the retrial would be improper because the reversal is based soley on the insufficiency of evidence and the plaintiff is not entitled to another bite at the apple the only time we would return it back is if we found there was evidence there of but that it was excessive now it seems to me that quite on the other hand in this particular case there's not evidence there's no have a if we are going along with what the plane of saying and i'm looking at the evidence there's no evidence of this financial condition at that point it seemed to me and i quoted you the language the retrial would be improper because the reversal is based soley on the insufficiency of the evidence and the plaintiff is not entitled to another bite at the apple absent a full and f malpractise my understanding is that at trial neither side introduced evidence of mark on the financial condition either i'd be fair with the i don't think either side and reduced evidence where i got one person saying this is income i got nothing else but your honor i can't come up with something to say there are some adequate if you will exposition of of financial conditions then i'm right there there is in  i think in in adams the court held that information is necessary because otherwise it would speculate but it doesn't actually explain what constitutes information determining the financial commission and cites to to various cases concerning defendant's net worth and again in our case we've got annual income future earnings and liabilities and your honor the opposing counsel doesn't cite to a single case where the kind of testimony that we have put in is not deemed meaningful evidence and it isn't just some person it is the very person who was on the stand not once and in terms of our putting her on as a as a hostile witness but again on direct call at the conclusion of the case and the jury heard all of this including her statements about her success as an agent and tom's novel so i think in this case it is not a case honor is my hope that when these works are free from interference that there will be at the very least substantial royalties there are royalties now of hundreds of thousands of dollars and i just think that given the reprehensible behavior and the years of litigation that my clients have been subjected to that to throw up our hands and say well five million two  thousand dollars is throwing up your hands i mean you may be walking away from a one million and imputed that is an insignificant amount of money that is true but i do think that there is a price to be paid for the conscious disregard of court after court who has decided this and i and a jury has sat through five days of testimony and heard the numerous instances where she simply claimed she had the right to represent john steinbeck but if we send it back and tell the district court to consider remitted or maybe give some sort of an evidentiary hearing on fashioning an appropriate  amount of punitive you're just going to be back up here on appeal in the litigation will continue if we send it back and simply strike the punitive you'll have an enforceable five million two hundred and fifty thousand dollars judgment that you can start collecting on immediately be again i with all due respect i think there is evidence in the record of even if there is we can determine under said yeah ok i believe that thank you the award the jury award should be affirmed thank the defendant's wealth and to judge thomas point earlier about what you normally see in these types of cases you generally see some sort of witness testify i've looked at the books it's a company i've looked at accounting statements and this is the company's wealth where this is the defendants well th paladin my understanding is that they did my understanding also that they received some information but if they didn't get the information that they wanted they should have done what they should should have done is