calendar please the court for appellant busy o ink under connecticut's novel regulatory program which imposes state recycling fees based on national market share that is how many televisions a manufacturer sells nationwide a dominant interstate manufacturer that sells just one television inside connecticut would have to shoulder the lion's share of the costs for connecticut's recycling program the commerce clause precludes connecticut from shifting costs to out of state manufacturers  paint a disproportionate manner now to be sure connecticut is free to impose costs on manufacturers but it must do so without reaching out of state sales beyond its borders just as other states have done including connecticut with respect to every other type of covered electronic product or number of alternatives that could use state market share advance recovery fees take back programs return share calculations and although connecticut's program presents an issue of first impression it implicates the same economic balkanization concerns that motivated the framers to design the commerce clause to protect against that is as the district court observed the only way for an interstate manufacturer like  avoid connecticut's unfair regulation is to keep its products out of connecticut altogether really it's not controlling conduct in other states i mean i can understand your argument that in some circumstances you could be affecting price  price you're right your honor we're not making a price control argument here this is different than the facts and healy the argument that we're making and what healy recognizes as a separate category of impermissible extraterritorial conduct is when a state directly apply its regulation to out of state commerce that's the problem that we are relying on separate and apart from when you have facial discrimination separate apart when you from when you have dry price and call if a state is directly applying its regulation to out of state commerce it triggers this and there's two ways in which connecticut here is directly apply it's always law to out of state sales one it's doing it most obviously to calculate their in state recycling obligation it's looking out of state sales to do that but to beyond that for manufacturers like this whose national market share exceeds its state market share it's letting a charge for every single sale that makes outside of connecticut so for every television that visit sells in california it is paying a small fee to connecticut to fund its recycling program that is direct regulation of an out of state sale and that is the undeniable impact of the state's regulation on manufacturers like busy whose national market share exceeds its state market share there are a couple cases that i would point to know the state contends that  extraterritoriality cannot extend beyond the direct price control or other direct control circumstances point this court to the recent on bank decision from the ninth circuit in san francisco not a direct control case but there california had a regulation attaching the fee to completely out of state sales of artwork in which it routed a small portion of the sale price to the artist and the ninth circuit said we can quote easily conclude that that's extra territorial it didn't control the sale of and prevent the sale but it said we're going to add a commission that you have to pay and arguably that had a greater stake connection than this one because at least the person paying that fee had to be a california resident the other context it out for you to in terms of our extraterritoriality argument is and we know this is not a tax case but i think an analogy works here just like connecticut is loving a ch every out of state sale that makes in the tax context it's well established that a state cannot tax a purely out of state transaction that doesn't have some connection to the state itself for example connecticut cannot impose a sales tax on that same california sale and the idea is a manufacturer shouldn't be subject to a double levy well but by changing the label from a tax to a regulatory fee it shouldn't be able to accomplish the  same objective that is it's a commerce clause problem for a single manufacturer to be subject to a double levy from two different states california can legitimately impose a regulatory fee to recycle the television sold in california but for corporations are right for the same category as you do your honor this was dismissed at the twelve b six a motion dismissed state so we just don't know that what we do know and busier has done its own research into its sales data it can say that it is estimated twenty five to fifty percent greater national market share to state market share i'm not sure which other manufacturers fall into that same boat now the state does  and i think this is their primary argument that look this is just a proxy we're just using national market share as a proxy for state market share but the problem is they may no showing at all that that proxy is remotely a reasonable one and we have contrary allegations in our complaint at the twelve b eight that it's not remotely a fair proxy with respect to manufacturers like busy that should not come as a surprise this year has zero distribution centers in connecticut it's retailer footprint is smaller in connecticut and connecticut which has the highest per capita income of any state there's reasons to believe that visitors television which is a low cost producer are going to sell less there and here is what shows that this is not just a proxy even if it were undisputed that you had a manufacturer who had a ninety percent national market share but only a ten percent share in connecticut the state would still impose a ninety percent share of kinetics recycling fees there is no discretion under the statute there's no way  can say hey look look at our data and we're way lopsided here fix this so that belies the notion that this is a proxy and that brings us to the second argument which i realize i'm running out of time is but the way if you don't want to look this is an extra territor case then i think you have to look at this as a user fee case because the way that one tests those proxies to see if they're actually a fair approximation because states can impose on interstate players a fair share of their cost of supporting interstate commerce there is a test for that the supreme court set it up in evansville state does not deny that on the merits the district court would have to be reversed if evansville applied at the twelve b six stage the only argument that the state makes in front of this court is that the user fee framework does not apply at all it rests on two sentences well here's what's wrong with that argument and i acknowledge footnote six of oregon waste we reject knowledge there that a private landfill owner can appeal to two responses to that first that is clearly dictum in that footnote that is regardless of whether you treated that as a user fee in oregon waste it made absolutely no difference to the outcome that regulation was struck down as facially discriminatory under the commerce clause in the supreme court said it in that footnote so you could have taken that footnote out no difference to the outcome that program still failed its dictum and as this judge in the volatile written extensively supreme court dictum is not binding on this court this court that has to see on the merits doesn't make sense and i submit and the state still hasn't offer an explanation of why that dictum makes any sense at all a state sets up a regulatory program the only difference is the last step of the program who does the recycling whether it's a private recycler or state personnel who do the recycling can be a reason explanation for why you disregard the user fee test the test that the supreme court has set up to determine whether you are imposing a fair share on interstate market so without any it because it's there has to be some at least defensible basis to say to use that dictum as a basis for excluding that test we have not seen one in the papers nor can i fathom one that you could have the exact same but without contracting out that last step suddenly you  e constitutional scrutiny it's simply his adversary argues that the plaintiff that you haven't alleged any facts to show that the law burdens interstate commerce as opposed to your client's bottom line so can you give me like how does this burden interstate commerce sure as the first thing i'd point out is the extraterritoriality and the user fee test are already incorporate that so you apply those tests and you get it but to answer your question directly i think the most direct burn is the way law benefits those manufacturers that sell a disproportionately higher share of televisions inside connecticut and it does it at the expense of those manufacturers that sell a disproportionately higher share national market used as a proxy for their in state right i think that when a millionaire at the problem right if every state had a national market share it wouldn't be perfect because national market share is measured in different ways people use different data sets and all but if they all agreed on the same dataset they all use that it was certainly a million at the problem there's a volume difference in each state so it still wouldn't be perfect right if you have california applying the same percentage to a much higher volume than connecticut applying it to a lower volume it still doesn't work out as a wash but it was certainly a million at the problem but the reality is that only a small number of states use a require the use of national market share like connecticut other states that have these regulatory programs have a variety of different methods that don't even require using market share at all do you know how many other states use approach connecticut is take your honor the state has a foot of handful of states i think a half dozen states but not all of those require use of national market share i think there's only three by my count that actually require some of those states that have national market share at least give the manufacturer an option to show its state market share data and will consider connecticut like the maine and i think one other state doesn't even allow that option  can probably speak to this even more precisely but my understanding is that the state essentially uses a third party contractor who calc at third party service that gets national market share data and my understanding is that that third party service gets it in part from retailer data and power part from manufacturers and comes up with a number on national market share and then connecticut pays that contractor for that data and allocates national market share the only case to rely on that public private distinction the other thing i would say a judge could promise an opinion that you wrote called us a recycling which we cited in our brief that wasn't exactly on all fours or because it was one of the garbage private entity and so you know that is some evidence we think that this court post oregon waste has recognized that the contracting out of part of the program to a private as he doesn't mean user fee analysis not user fee announces wasn't the center piece of that case but the court did discuss the apply the user fee framework and rejected it on the merits because unlike here the user fee in that case was perfectly proportional so there was no problem there but your honor there isn't there isn't morning honors mit please the court and assistant attorney general michael scolding are present the defendant in this appeal your honors the plaintiff fundamentally misunderstands both the purpose and the scope of the dorm comes as the supreme court has been very clear th clause does not put elevate free trade above all other values it does not displace the state's ability to regulate in the public interest in the interests of public health and safety and most importantly for this case it does not exist to ensure parity and fairness between manufacturers in a particular industry when it exists to protect is the interstate market itself is to invoke the clause under any theory plaintiffs must demonstrate that the law talking about we can talk until we're blue in the face about how the law looks at national sales data and how that impacts this manufacturer or that manufacture but at the end of the day none of that matters unless it actually impedes the market and here there is no impediment they've abandoned their discrimination claim they would ban any claim that the larger at the controls conduct there is no allegation anywhere in the complaint that the law's reliance on national sales that in any way restricts the flow of televisions into and out of connecticut and there is no allegation that the law in any way changes plaintiffs or any other manufacturers business practices in connecticut or in any other state there is no burden on the market itself all that we have is an alleged  particular manufacturers whose national market share exceeds their connecticut market share and they're claiming they have to incur higher costs in connecticut than manufacturers who have a higher kinetic and market share than the national market share that is a burden on particular firms it is not a burden on interstate commerce and so i think that that is the focal point that really underlies this entire case and turning to the particular theories that the plaintiff has has invoked i want to focus on the extraterritor y and the user fee claims with regard to extraterritoriality your honour's every single court that has applied that doctrine to supreme court this court and every other circuit court including in the san francisco case that both the extraterritoriality doctrine and the law at issue must directly control conduct that's true in the price context in the helium brown form in cases where the supreme court expressly held that the critical inquiry is quote whether  sort of conduct plaintiff is free to price its products to sell its products to distribute its products however it wants anywhere in the country the law doesn't say anything about that all that it does is impose costs for televisions that are recycled in connecticut that approximates connecticut market share by looking to those information about those national sales in the me ask i mean this is a very naive question i recognize why why is national that irrelevant why do you find that as a policy matter an appropriate measure in these circumstances because the state does not on the statute on its face looks to connecticut market share but we don't have connecticut data and so the law is looking to nationally if because even if they have the connecticut data your only very very clear that just because they look at national data in and of itself does not have any relevance at all you know and maybe and i'm interested in the argument but let me ask you is there any other regulatory scheme of the sort in any other state other states do use national markets or do know there are several that we've cited in our brief are you talking about other industries yes and also the evil wast states and it's more than three it's i think twelve or so that rely in whole or in part national market share data and it goes beyond the record but my understanding is that even some states that look by statute to st and end up relying on national data at least in some part so if you connect it is not unique in that sense and again i want to go back to the point that just because it looks a national sales data by itself is is not relevant at all you have to look at how that impacts interstate commerce and that's what the court did in helium brown foreman and every other case in those if the simple fact that the law looks to or incorporates out its information about a state conduct incorporates that into the statute or per se unconstitutional by itself then helium brown brown foreman would have been one page decisions because in each of those cases the law explicitly referenced out of state pricing decisions and it expressly incorporated that into the in state pricing scheme but the supreme court didn't say that that by itself is automatic renders it unconstitutional went through a detailed analysis about how that reliance on the conduct actually burned commerce and in particular it held that the effect of the law was to control conduct which is something that is other states which is something that states have no constitutional authority to do and the upshot of that was the result of that control was that in those other states there would be regulatory gridlock and inconsistent to inconsistent pricing schemes within that single state that would make it impossible for sellers to conduct business so that was a very specific you footnote on page seven  case of first impression as a legal matter the legal framework is very clear that has been uniformly applied in these actually matter by every single court and we don't fit legal theories to facts facts have to fit legal theories and we don't just get to make up a new legal theory when our facts don't fit within the ones that  exist i think that the visit was self knows that this is how the xor territoriality doctor works because in the district court below that's what they argued they tried to argue a price control theory underground river and freedom holdings it didn't work they tried to argue a direct control under the american booksellers vs dean case it didn't work and so now on appeal they've completely abandon those claims and they're trying to make up a new extraterritorial extraterritoriality doctrine that just has no grounding in any constitutional principle especially when there's no the laws reliance on the national data doesn't impede the market raises costs on some manufacturers compared to others so the only possible consequence of that could have that i can think of would be that that manufacturer might decide look it's just not worth us to do business in connecticut costs are too high we don't make enough money we're going to withdraw from the market and exxon both make very clear that that is not a cognizable burden on your state commerce and presumably that market share will be picked up by a different manufactur a burden on commerce sounds like if it resonates is a factual question and certainly the courts are recognizing the pike contacts that yes it is generally a factual question but that doesn't obviate the need to plead facts to support that  was not dicta the organ supreme court in that case had expressly relied on the evansville standard to clear the law unconstitutional and on appeal the supreme court's specifically said no that was not the correct analysis you do not analyze any way applies user fee analysis to anything remotely like this the the fact of the best case they can rely on is the case i think illustrates the weakness of this claim that was they didn't say that in any of the proceedings below just report inside they didn't cite it in their opening breach of this court it's something they just come up with at the last minute which i think is improper and in that case there was no user fee point the point just didn't raise it they didn't brief it they didn't cite evidence so there is a c f reference to the evansville only opportunity to argue we have to at least to make is greece and imposing institutions is there anything about their arguments that you honor let me just start with one quick factual point and then move to the legal legal points you would ask counsel whether connecticut could use state market data if it had good state market data the statute itself on its face this is twenty complete bunk does not correlate at all as our complaint alleges they would have no discretion they have to use that national market share data i think that squarely belies their claim this is merely a proxy and they should be given deference now and want  directly applies to out of state transactions that can be decided as a matter of law that's on the face of the statute the user fee analysis isn't as applied in inquiry because that is whether the state is having an entity pay its fair share of the use of the program we've certainly alleged enough facts on a twelve b six we say that we have zero products in the recycling stream and yet we're paying twenty percent of the recycling fees and our market share is fifty per cent higher nationally than it is in connecticut they make no response on the merits of the evansville test so i think at a minimum if evansville applies the district court's reversal of the motion to dismiss has to be reversed they haven't argued otherwise in their papers and it would make no sense for it not to be reversed if the user fee framework arrives and we might win on summary judgment unless they can based on every fact that we know we've played the complaint that it's nowhere in the universe of a fair approximation they haven't disputed that maybe they would want some discovery and come up with some new arguments to dispute it but they could do that on remand in the district court certainly the disposition from this court would be a reversal of the dismissal on the user fe fee case if it's not the squarely fits in the user fee framework and if i can say a couple things that require any findings you for the user if you framework again would we've met are pleading obligation they don't deny that so on remand if they want to come up with some merits defense we could we could have proceedings on that if they want to concede that it could be a quick summary judgment but yes that could that could proceed now on user fee that you know the state keeps saying that we haven't pointed to burdens on interstate commerce as opposed to an interstate entity well first of all every commerce clause case you see is brought by a burden on an interstate and any that's how you burn an inner state commerce and the user fee test itself is the doctrine that is if you are in a state is imposing on an interstate act or something a manifest lee disproportionate share or something that's not a fair approximation of its use of the facilities supporting interstate commerce that is the violation of the commerce clause you don't then ask after you've won under the evansville test oh can you show some additional harm to interstate commerce the other thing i would say as to the harm on interstate commerce even if you grafted on beyond supreme court precedent some additional inquiry undisputedly benefits those manufacturers who share sell a disproportionately higher share of television in connecticut than those that sell outside of connecticut so if you had for example an in state manufacturer they would come out way ahead that is a burden on interstate commerce that actually goes to the core of the commerce clause nor do they have any response to the tax analogy in their view where is the burden on interstate co are those transactions right and help me understand i'm misunderstanding but if we accepted your argument that the user framework was appropriate here its effect would be taking a lot of cases that are now within the  ring work in a less demanding one if i'm understanding correctly and elevating them into a framework that is not really been the one they've traditionally been analyzed under and this seems to me you know local state interests and health safety recycling your honor i think as a practical matter there'd be virtually no cases that move from pike to that is because user fees are pretty rare and how local and it is regulate and when they actually most regulation is you can't do this you need a permit to do that it's pretty rare that you have user fees imposed usually when a state regulates it's done as imposes a feat it's tax there is a separate doctor and it deals with those but if it actually is a user fee like in usa recycling that the circuit has decided usually those are waste disposal cases or transportation cases those are the only two contacts that we've seen something like a regulatory user fee that's not a tax come up those are in fact already analyzes user fees now a lot of them lose under the user fee framework on the merits because an entity can't show it's manifestly disproportionate this is the rare case where we have the facts here to show that so it's not going to create some sea change in the framework in fact we have not found a single case and i've read a lot of them where you've had