morning may please the court i'm barbara value on behalf of united states i'd like to reserve five minutes for rebuttal in this case the defendants are charged with criminally manipulating the electricity market in june of two thousand the district court here pretrial excluded a portion of the protocol that govern the market that's defendants are charged with manipulating the government is appealing that ruling because without the protocol the jury will be deprived of critical evidence about the nature of the market and about the effect defendants conduct had on it and because the district court offered no valid reasons for excluding it in our view the district court erred in two ways this evidence first if substantially undervalued it's probative value and secondly it seems to have misapplied this court's decision in the united states versus wolf with respect to the first argument that the court actually substantially undervalue this evidence before excluding it and it's important to remember that in this case the energy market in june of two thousand was a regulated industry the regulations in this particular market this particular market was governed by a specific and very detailed tariff and protocols the defendants in this case actually the the defendants in this case that means reliant and two of the named defendants actually signed participating signed agreements that they would abide tariff and the protocols in scheduling electricity into the control grid one of those protocols in this case was the marketing the market monitoring information protocol the so called  outside the what how the market participants were supposed to behave in this market some of those specific practices included for example that they would generate is withholding generating capacity where it would normally be offered in a competitive market market yes it was your honor in the following way the market participants were told at the time that they entered into their schedule in a court of need agreements that they were there that their behavior in this market was different by the tariff and the protocols the protocol is a work plan that would one is that there's an artificial price the fans have the influence they have the ability to influence their price three that they have the specific intent to create the artificial price and for that they caused it to show that there was an artificial price the government has a burden of demonstrating that identify conduct that may render the may render the price distorted in this particular market and the defendants the significance of the and i p in this piece is three fold first it does give the jury some indication and some knowledge about the background in the regulations here how this market was designed to operate and how the crisis response to be developed how it was supposed to be determined this conduct was supposed to be this conduct was considered suspect or outside the normal forces of supply and participants about how they were supposed to behave in this particular market and that if they engage in this kind of conduct yes asked her specifically the regulators could either change the rules they could impose sanctions or recommended that sanctions evidence of the reasons why they were conspiring to develop a cover story for their conduct in other words they were just they were conspiring to keep their conduct from the regulators because they recognize that if they told the regulators that in fact we the price it was actually said is artificial it doesn't states perhaps more importantly the defend its intent its offense intent to create an artificial price because they were purposely engaging on that that was outside the normal forces of supply demand but it also shows for is it motivated the defendants conduct it to some extent or at least in part motivated the defendants conduct it also provides a crucial link between understanding why it is not only that they behaved this way but why they were so we were you wary of the regulators during those days the jury the district court as the reasons why we needed this evidence and the court simply the court excluded it for what we think are two invalid bases the first is the court state you don't need the evidence that is one legally and them sort of an economic analysis of this particular market of course the expert will be then test to find someone in a vacuum there were rules there were rules and there were guidelines and diet and signposts in this particular case and it would be at like asking the jury in th the cite i think our hypothetical in a reply be to characterize it as in a negligent homicide case would be like asking the jury to decide when and how to defend it was reckless and yet omitting any of the signpost along the road that the defendant was warned the market participants and excluding it excludes very important we would deprive the jury of that evidence the judge however thinks the judge thinks that the experts testimony is an absence of two for that evidence is just factually wrong the jury would not understand the experts testimony about what was permitted in this market or at least it would be unsupported unless they see the an ip in addition to that the expert can testify about the defendant's state of mind and can certainly can explain the defendant that post trial examining the trial that the government had misused the civil regulation by the element of a criminal offense here in case what had happened was the government had actually relied on the so called regulation  supply an element to provide the legal definition of an element here and actually in wealth the government actually has and indicted the case referring to regulation though and the government apparently argued that if you want to know that as i understand  one there erred by determining that the government did not need the evidence both legally and factually and secondly it misapplied the court's decision and wolf we think that the jury in this case cannot properly render a fair verdict if  not properly understand the government's evidence without having access full to with the mit without the m and i p the jury will have a significant hole in the a political rules that govern this market at the time and they will not understand the tape actually we filed the notes of peel and right before trial but the court has over forty before trial yes and the court has indicated that it wants the parties to determine a date hopefully the court said august and september but i don't think there's been no trial date that's been set at this point  sentences or three sentences in which he announced his ruling but it is certainly not true that he did not hear and consider the arguments with respect to motives they were are too intent and he took the motive in a minute with respect of intent they were argued by the government and its opposition to the motion they were argued at oral argument and certainly judge walker consider that i would refer to your honor to the case of united states versus ono which was very very similar in that respect in the sense that in making his ruling the judge did not specifically refer to particular arguments that had made or engage in a on the record balancing but the court said that's not necessary we can i  jury and i think fully to answer your honor's question i need to say a little bit more and give a little bit of background in terms of how this fits into the case because it's the court of the where there's never been a case under the statute a criminal case under the statute  judge walker as indicated by his lengthy opinion in february denying our motion to dismiss has been struggling mightily with questions as to whether the standard of conduct provided by the c e o in a criminal case like tricity market where it's never been applied is void for vagueness for one thing and number two how it should be interpreted to say that from void for vagueness he is then presented with a situation where he is undoubtedly going to have to instruct the jury because the only standards under the statute come from civil cases which say that the test is whether the defendants conduct was a legitimate conduct of a gentleman force of supply and demand so the standard and then according to the instructions again of these come from civil cases in the futures markets but they are going to say that if a factor is not legitimate the price is necessarily artificial ip may say that is inconsistent with representations made in the written opposition to the m m ip which are contained and volume three of the excerpts from record at page five forty seven and five any of the possible prohibitions in the mit what is that well in the sense not to talk about it i mean it doesn't it doesn't show that they didn't know about you know in taking action with reference to know ip that will not be true no will any other witnesses claim that that was a topic of any conversation was the i might be known to the defendants of course the m r p was known to the defendants there is however the m i p while the tariff in this case was a thousand pages long the tariff requires to lots of things it prohibits lots of things the i might be however requires nothing other than for the defendant for market are one of the things if that view is accepted then one of the things that's prohibited in this market is quote unquote unusual phrase or transactions i submit to your honor that is not an adequate number two after further issued that order in june of zero three three years after the conduct in this case petitions for rehearing were filed and first said sorry but there is no aggrieved party here this is only an investigation we haven't ordered anything except an investigation and it dismissed the petitions for rehearing in that case now ultimately rely on as well as i suppose everybody else settled with the f e r c these matters without admitting liability for anything and conduct which did require market participants to offer their generating capacity absent you know other reasons not to and that is no more post hoc applicable to the defendants intent fork ruling and over three contrary to the understanding of the market participants what the judge walker had to look at based on everything that was submitted to him was am i going to turn this trial into a competing testimony by experts on what the law was at the time what was legitimate and not legitimate under the n m i p and whether that was a binding regulation are adequate to provide notice and there's certainly good reasons why a trial judge would not wish to do that and i would submit your honor that as to the intent this was clearly argued to the judge sure he could have written a longer opinion or said more when he when he when he when he made his oral ruling but that's not required and he certainly consider that now may i say the court is obviously evaluating this where we're not a trial yet and the government is arguing this is what's going to happen instruct the jury this is what the defense is going to do there are lots of things the district judge could do and rulings on evidence and how he winds up instructing the jury that frankly are not determined yet but i do wish to say your honor mention intent and motive i wish to call your honor's attention to the fact the government now says that emphasizes that the government needs the m m ip to show a motive for the defendants to concoct a cover story for their conduct and the reason for that is because of the cases the wolf case released that fine case in the eleventh circuit the smith and brown cases that entries if for example there is a regulation that prohibits loans in excess of one hundred thousand dollars to any one borrower that is the motive for the defendants to get four borrowers to represent to the bank that they're all independent when in fact they're not and so a regulation would be admissible to show the motive for a false statement but that is not true in this case there is no false statement the cover story is not alleged at all as an offense those cases involve false statements this does not presumably why the government would contend that statements were a cover story is that the defendants knew they were doing something wrong there for all their trying to do is bootstrap the motion we filed to exclude the and i'm happy your artist can look at the transcript of the argument before judge walker and you will not find that argument made that argument was made for the first time two weeks later when the government through mr  um was trying to explain to the judge why they had to take this appeal and send these eighty jurors home and and stop this trial it was not something that was before him at the time it appears to be an afterthought again based on the st case and others but more important those cases simply aren't applicable because these false statements are not the heart of the offense the heart of the offense as the judge interprets it and of course we have fought this tooth and nail as to whether this is  an adequate and constitutionally sufficient standard but the weekly standard that we're going to be tried on will be whether the defendants engaged in conduct that was not a legitimate part of supply and demand and what the government is attempting to use the n m i before is to say that was not a legitimate part of supply and demand and then tell the jury that it is therefore an artificial price that goes to attempting as as judge as judge walker clearly said to be to bootstrap unusual activity or circumstances relating to imports taking unfair advantage of rules taking undue advantage of market conditions these are all things clear the reason they're here is that the they recognize these are not standards that are sufficiently precise to govern anybody's conduct but they are factors this is a new market we just invented this market so to speak in one nine hundred ninety seven and we have place a set of rules for a deregulated market we don't know how they're going to work so what we're going to do is we're going to monitor the market and we're going to have these communities who are going to look at these kinds of activities and determine whether the market needs to be changed the rules need to be modified in order to cope with these problems and your honor that as mr dr training says who was head of the i s o at the time this this market monitoring and information protocol was adopted that was the purpose you know specific prohibitions which offer which are belin to matters of intent motive standard of conduct certainly are and i suppose you don't exclude all evidence of that but let's take the speed limit to give a perfect comparison between what's involved in that case and what's involved in this in a negligent homicide case in a vehicular homicide case where the standard his recklessness and one puts in evidence of the standard of care required from and known to all drivers that's what a speed limit is to say that a a  a market monitoring and information protocol in a case involving specific intent that prohibits nothing more specific than unusual or or undue or words like that  completely not analogous to the speed limit case the district judge had to determine what effect is allowing the government's expert to start talking about this and i might be going to have on  what other evidence is going to be done on misleading or confusing the jury that is the essence of a discretion the fact that he didn't refer to every one of these things doesn't make any difference  if in the record these are the arguments that were presented to him these are the considerations that were argued not just in the motion and ip motion but in the motion to dismiss all of which the district judge took into consideration and we in this particular market that is the subject of the trial in this case the trial is about to some extent obviously gentlemen and not legitimate in this market because the jury is going to be asked to determine in deciding whether or not there was an artificial price whether or not legitimate forces came to bear on that price and the way the jury's going to be able to determine that is to look at how the market was designed operate the only thing that would occur with excluding the m m ip would be the jury would be deprived of additional evidence regarding bearing on that particular question it would not devolve and has nothing to do with the bombing into a mini trial because that particular question is going to the question that's posed to the jury  answer even with with or without the the enemy without the immunity it would just be deprived of evidence that needs to decide the question regarding the standard of review under our view i think we've argued in our brief we we win under either an abuse morning regarding the what the in and out he really meant whether or not the defendants actually discussed mikey itself on the tapes those are all arguments that can be presented to the jury if they are arguments that discuss the weight  than in admitting for example a part of a contract where the contract itself govern the parties behavior the jury will be able to read the words of the contract itself and make a determination as to what they think those words mean they are that's what will testify our expert will