good morning may please the court my name is tom slowly and i represent glad our techniques there are a number of points that have been raised in our brief that we submitted to the all for consideration by the court but i'm going to nine or ten or eleven reversible glad i don't know the exact number of employees you care about the exact number approximately how to make an engineering branch in new jersey that is the sales arm they also do some pharmaceuticals it's about a two million dollar case so it is a significant amount of money and we believe that the district court did tourney's fees your attorney's fees now there was an award that was entered by the district court for attorney's fees  attorneys fees and professional fees as well too that came up to about one point five million dollars so what are your top three the first is that they all deal with the expert's opinion relative to the fact that there was opinion to stand he needs to show that there was a crack in one of these filters in addition to that not only was there a crack but that the crack came into a connection with all three corners of it and if you can establish the and he can establish causation theory that the spark energy created the necessary energy to start the fire now what happened here is we have the first point is the fact that we had service of rule thirty six admissions in the case and that those had been answered and the plane of said indicated that there had been no evidence no observations and no information that there were cracks filters in the granulated or at the time of the fire itself and what happened at trial is that and when we asked the district court to enforce the admission and make the admission stand because that issue had been resolved now this is an admission that had been made some two years before the trial and under rule thirty  six in order for you to withdraw the admission you need to make a motion to amend or withdraw that was never done so we asked that they stand on that if in fact that admission stood that would in essence be fatal to their case because there would be no evidence that the first way that there would be a crack in the filter and absent a crack in the filter the expert couldn't sustain his causation very honest slowly if i got this right that there's plaintiff in essence was pursuing two defect theories understands filter pro in order for the expert to get his theory to work he not only needs to show that there's a crack but he needs to show that all three pieces of metal within the filter element itself came into contact at the same time mesh on the top of the filter and then there are some metal on the sides of the filter itself all of this metal is incased with and thick plastic and the way the metal is or with a filter is designed the metal doesn't connect at all ok so there's no disagreement that this as designed can't create the necessary energy to create a spark sufficient to ignite the powder so what this expert has done is he's kind of trying to create the gotcha moment where he said well what do we need to do in order to get the spark energy to occur we can rip off the plastic on the sides but even then we still don't get the connection what we need to do then is we need to take something else outside and put a connection here a metal connection on these sides of this to make all of these pieces of metal become electrically connected together now there's no evidence that this ever happened and under seven zero to one hundred dauber this is his problems are the rule thirty six missions that's well that's part of it there's nothing well let me put this way there's no evidence that the filter cracked in such a man or that any of the filters cracked in such a manner that would allow these pieces of metal to come in contact with each other he's never seen a filter that's done this so what do you what did you think is the cause of the far i think the cause of mixture of sucralose which is like a sugar and they were having problems operating the machine which they never told anybody about including their own expert and it was our belief that this material self heated the problem was is that no one had a representative sample of what was in the machine because what was in the machine is a mixture i don't know what you mean with self heated new spontaneous combustion yes sure that's correct and it's an understanding yes kind of like you know you have a pile of hay  the stuff and there's no way for the energy to get out so you know as far as is as this opinion is concerned you know there is no evidence whatsoever that this connection could ever come in contact and he's never tested it what he's done is he's created this hypothesis that says look i have this hypothesis that says that i can you know do this or that it's possible if i manipulate all these things but he's never put that to the test and he's never tried to falsify that and because you know and i put that to the us well he could have caused a fire now he could have done some type of failure analysis to see whether or not this ever happened he could have done some mathematical calculations to see if we put a certain amount of force on one the indemnity agreement and paragraph twenty four point seven that there is a waiver of circumstantial or consequential damages special damages was the crew key phrase you roll drafted it looks deliberately ambiguous you've cited a couple of cases on that point that say special damages can include attorney's fees special damages as one of the slipperiest phrases in the law if you want to read it like headley versus baxendale sorts of damages i would totally get that but to promise remedy which would seem to cause some problems on the u c c so ira i think you're you've got a pretty tough argument on that case on that issue your rule thirty six are you on the other hand has some some legs and i'd like to hear a little more about how the district judge tried to navigate that problem and why you think that solution was not sufficient well the district court i don't believe really navigated the problem i believe that they just simply apply the wrong you know we have the rule thirty six admissions we asked and to hold them to those admissions you know at trial they basically then try to argue their way around the admissions by now talking about the fact that there were there was a crack in the filter and the district court simply said you know look we're going to allow it to come in now what's kind of telling is you look at the separate appendix there are some comments in there from the district judge wright  beginning pages seven three nine where he even sort of says look you know we're going to allow this evidence of the crack filter come in but unless the expert can actually show that these things can actually come connected to each other i don't know how a jury is ever going to make a determination that this is you know a theory that's viable and you know frankly you know my thinking is is that look at the time he made that ruling there was no evidence that any of these connections could come together and he had a request for admission in front of him that said that there was no evidence but yet he said let's let it go to the jury  let's let them weigh it well then we get to the trial and there's no evidence that comes in off the stand that indicates that that's the case either and all of a sudden we ask him on a road if the motion to do something about it he does what about the testimony from m  have contradictory evidence that comes in when that issue has already been resolved if the court had said that that issue was resolved i probably wouldn't even have to have gone down that road in asking the question in the first place but  that the judge signaled before trial that he was going to allow the right that's correct his own that's relevant to the i'm sorry it's a claim that he was going to allow ernster or that he was going to allow evidence about crack filters right that's correct because the plaintiffs are using  morning it please the court and jack kiley on behalf of the plants in this case we do not believe the court of uses discretion in the way it handled the rule thirty six issue if i may just skip ahead immediately to the issues just brought up with ernster you know this was something that was not testimony that was admitted to the extent that mr slowly elicited on cross examination the only evidence that was admitted up until that point that we would because we had  conclusive evidence put on a trial that there were cracks filters in the granulated you know what you did argue that you had circumstantial evidence right absolutely so the how do you how do you reconcile that with your rule thirty six which well because the fire know it's very confusing well what we're trying to do is make a good faith response to it because we anticipated that you know that was a question intended to ask that the thing i struggle with don't think you're obliged to indicate here's the circumstantial evidence we have what i think we did i think we filter filter housing because filters are poorly fitting which would suggest that the filter housing and filters remain poorly fitting even at the time of the fire and we also indicated that the circumstantial evidence response is seven or eight years only three questions here that  this pertains to and we indicated that these defendants employees advised other defense employees that it's possible some filter elements had stress on the support and that was if that was the case was a high risk the new filter on its would break again so we september first and that was an issue with both parties experts and throughout the trial so you know we have this additional informations that we consider corrective pursuits rule twenty six nearly two years before the trial well the the  problem at least as i see it is this reliance on rule twenty six when rule thirty six b is what governs here and in particular we've got you know we've got the rules committee making it quite clear that unless the party securing an admission i'm quoting from those notes can depend on its binding effect he cannot safely avoid the expense of preparing to prove the very matters on you secure the admission and the purpose of the rule is defeated looks like to me and tom will tell me why that's not what happened here well i think looking at what the court applied and going to david b caterpillar case as well as rule twenty six that the discovery doesn't need to be supplemented if the corrective information is provided that is are completely wrong for rule thirty six admissions what my reading of rule twenty six pacifically mentions rule requests for admissions that was the basis of our position and i think that's the same language that was used by by the do you think you can get out from under an admission by just saying we produced some conflicting evidence oh no your honor so what do you think you think those who work well i think i think that we provided correct best we could considering the the damage it was caused by the fire we simply don't know their work we had we had the information and this this again is all information it was was widely known that to to glass for a very long time but i don't know that i could answer that question differently now because of the fire and believe me we've thought about that in great detail why isn't the response to nine where you say you admit deny that here's the circumstantial evidence the filters were cracked including the email i don't understand that well we had at this point in time there was discovery was still ongoing the request for admission was sent before we had even turned over all of our witness coverage so the email was from your own records right and we had collected it and distributed until after that point time and what did you do about it then when you discover that e mail what did you do about modifying your rule thirty six admission admittedly did nothing to modify that and that's what thirty six b is for right and again i i don't dispute that my my my problem with with suggesting the court of use is discretion here is that we still don't know because of the fire if any of those filters were damaged or not so that's really the problem our mission was was such that it was because we didn't have the evidence available and so that we had to maintain that position we wouldn't change that answer asked for any evidence and then you say no we don't have any and then you argue in closing we've got all the circumstantial evidence and the judge let you get away with oh we've got it the question is farce number seven it was admitted that we had i on glass cross examination that answer would have been changed that was the first evidence we have of that fact existed so i again i don't know that we would have changed that answer at any point time  strategy testified at trial so what were you fighting about this before trial over so if you look or decided before the trial it's really it's with respect to number seven number nine really wasn't brought up as much he didn't strike me as that much of an issue we think up to it because the expert discussing this practical to issue both sides of the defendant's expert had been provided with information that these filters could crack in the metal could come in contact if significant mechanical forces were applied so this was always an issue always an issue in our position always has to be just because the fire completely destroyed all the out of this we're not we're never going to know  again i think that we would have been in a situation where our answer would have probably been the same just because of the destruction of the fire but looking back at it now and certainly this was early on in discovery we still had a lot of you know depositions have been taken with these requests for admission except maybe one records because sodium had been deposed we had still a lot of written discovery to be exchanged so these states came on very very early and having experienced a trial and everything else what caused the fire our position was that there was a static discharge from a filter there were sixty five filters in this particular grand later and our expert's opinion was that a static discharge in the filters ignited a dust cloud that led to the lead to the fire hypothesis the the connected metal hypothesis referenced in the in the brief in the defendant's brief is that these three pieces of metal it was never tested to see those piece of metal were touching he did test other things he did test what would happen if the metal were touching and we have provided you know certainly a lot of information in our brief that relates to the evidence that our expert rely plan in that particular respect including the acknowledgement by their own expert and that was gleaned from an e mail from a glad employee that these metal pieces could come in contact so from our perspective we have a situation where the other party is even acknowledging these metal pieces could come in contact there be no reason to then you know a completely different situation we looked and we were no we're not aware of other fires and glad equipment we didn't have any other fires in this particular machine until april twenty sixth team when there's a fire in a different room and they defective the damages were caused by the fact or and so forth that we would be entitled to attorney's fees professional expenses etc so what do you think special damages means in the notwithstanding clause i think well is mr fully points out we got died kit for about a motion for purchase from a judge on lost lost profits that in that particular instance judge long applied twenty four point seven to find that special damages included loss profits we don't believe that you can construe attorney's fees  or trigger pursuant to the indemnity clause is special or are consequential damages because they are specifically set forth in the contract not to mention those fees naturally flowed from the breach because we never would have incurred any fees had contemplated by the parties that they would naturally flow from this particular loss as they did which would make them direct damages not subject to twenty four points out so if i may very quickly one of the third points that i different system but where our argument is that it should have had a system and that's what our expert testified to and it did simply did not have that sort of equipment above the great grandmother better abo that it did have an explosion suppression system but not a fire suppression system and mr o'connor who was a g h you witness testified that the two were not to be confused with one another the explosion suppression system was designed to detect the rising pressure to avoid the vessel exploding of course and this particular system installed took five or six minutes to detect the fire and to apply this to this retardant to it  completely ineffective in doing so as the fire continued to sue heat up the machine for a number of hours in fact four hours later they had to turn the building sprinkler systems to to cool down the machine so it's our position that the system that was installed was inadequate and that they gave us a defective zine i thought you told us no spider suppression systems installed correct there was no fire suppression system above the processing area and there was a fire suppression system below the processing area and in our expert i think this is an important point indicated that the point of that system would have been to detect the fire early and put it out before any damages have been caused so to the extent they're claiming there is no evidence for the jury to find the damages would have been reduced or eliminated i think this is simply not consistent with the testimony now that we had this particular case and we think it was fair for the jury to conclude that a different system that was specifically designed to detect and put out fires would have detected a fire cleared out sooner far sooner than we had here the cause and six significant amount of damage how much did you ask the jury to award that we had at the the the amount with american guarantee which was the intervenor we  american guarantee had paid through the jury ordered a new trial that would all be up for grabs right yes and also g a t a has a counter claim that they were initially claiming for you know the nine hundred seventy six thousand dollars plus interest on the purchase you judge just quickly turning back to rule thirty six i mean we're playing a game of semantics here we're doing the same thing on the suppression system as well too we'll get to that and second that you know we're we keep trying to parse out the facts of this circumstantial evidence that  insurance yes rather well those that pay for the eight hundred fifty thousand technically speaking it would cover any type of consequential damages that were it doesn't cover the product itself so it's glass money that's on the line and judge asked before you know why is glad litigating this well obviously you know there's a claim that their product is defective here and they take that pretty seriously they don't believe that it's defective and from day one they've been trying to get to the bottom of what's going on here and they've been basically not given all the information didn't tell us about operating issues that were going on that they had a fire where they were trying to dial in a new process of a product that they never made before itself it would cover any type of consequential damages to the building itself so but the judge getting back to you know the rule thirty six issue and in here's here's why i think rule thirty six is designed to prevent things like this from happening we have an admission we rely on that admission for two years we get to trial and now we start trying to argue that when we said there was no evidence what we really that was there was no direct evidence there was circumstantial evidence and now we're going to try to explain that when we asked a district court to hold them to that admission the judge says no we're going to let it go applies the wrong law in doing that and basically now we're in a situation then where witness comes up and volunteers information and tail out basically says oh we're surprised we never knew it was going to say that even though the whole time we've been arguing that we think we have circumstantial evidence even though our requests for admission say something else and then lo and behold his rules conclusively established unless the court on motion permits the admission to be withdrawn or amended so doesn't that give the judge a lot of latitude it doesn't your honor i think the judge on admission correct but the problem here is the judge apply the wrong standard doing so because he used david versus caterpillar which requires a balancing test on prejudice and here when you're doing it to rule thirty six be the proper standard to use is just whether  prejudice is us and we do think that after trying to ponder for two years differences the difference is that you use rule twenty six as to matters of evidence correct rule thirty six applies to conclusive admissions that a party is not allowed to dispute