in the course of this argument and good first address the errors made by the district court and granted summary judgment and then to the extent my time permits move to the discovery errors here as shown by our briefs there are numerous bases to reverse judge smith decision below but the simplest is that he misread this court's decision in spirit airlines regarding both the standards for summary judgment and the standards by which we judge whether prices are below cost in a predatory pricing case we will leave that in granny summary judgment he ignored spirits in there somewhere and this is a challenge that all courts in that predatory pricing cases have faced i think that the six circuit sent an appropriate test here first of all if you can show that prices are below average variable cost then the presumption is that you've established your predatory pricing claim and it's up to the defendants to rebut that with evidence and in fact i think perhaps simply  mean plus well actually removing the fixed costs from the the calculation so just the cost for that unit of production and that's why this is so difficult  in the evidentiary sense because accounting systems don't account for things the way economists do and that's one of the reasons as i'll get to that the discovery errors here were so crucial is the gordon wants to argue would just take  just take our public accounting records on cost well that's not what account economists look for and cost but to get back to your question judge merit when you're looking at average verbal cost you're route you're basically looking at that additional unit of production but the court in spirit airlines said there's in another area and that is where your bow at average total cost for the unit then the burden doesn't shift it's still my client's burden to show there's other evidence of court narrowed the rules around predatory pricing it was dealing with a situation in which there was no allegation of collusion in the brook group case it was simply dealing with a cigarette manufacturer that in a product line it had primary error that judge smith below made was that we offered standard economic testimony using the no economic sense test and the judge blind dauber excluded shirt so the total cost would include costs that from an accounting perspective typically don't change depending on how many units you produce so what it cost you to keep your plant what the labor costs are that you don't attribute to specific units of your production what your overall sales costs are what your costs of capital are total cost criteria would not be a part of the cost per day shift issue that we're looking at  believe it would not influence in a determinant in a determination regarding price fixing analysis we're looking at if we were in a case where the evidence was undisputed that there that gordon's prices were above their total costs we would concede that we would lose under the spirit airline test our argument is that when you take our economist report and read that in the talent any of the evidence we've raised a genuine issue of material fact that we are our prices were below total costs we didn't have sufficient data due to we believe the limits that were placed on us in discovery to get to whether they were below the variable cost so it's we believe that there's at least a into total cost so you're looking at components like what you know as i said before where the plant plant operation costs that are there regardless of how many units you produce name fix that would be a cost is a simple way of saying it as is in most things economists make it more complicated than that so there might be units that from an accounting perspective you wouldn't consider is fixed cost but in a contest would you have to be below if you're below total average total cost then you have to offer that additional evidence that predacious exist if you're below average variable cost then to put it simply get to trial i would like to shift gears from this what the test star and you know what terms me to a more much more specific question and it deals with the evidence that you in fact placed in the record and here's the question i want to know apart from your economist to pour now we're not talking about an expert opinion here what facts will evidence did was in the record predatory pricing well there was obviously the the evidence of their pricing which was introduced through our economists but through their own documents in our economy review i don't think there is any dispute of that in terms be an example of what sort what kinds of pricing were in those documents that would cause t predatory pricing the prices that the and the predatory the predator where there is predatory pricing is a question of what inference permissible inference from the figures if so what what i'm asking is what would be an example or two of pricing figures in the record that you believe could be inferred to the credit or well again all of their pricing after why that permits the inference that they are predatory that first of all the fact that they we believe the record shows that they were below their total costs secondly the fact that there were these agreements out there with their competitors which we believe show that here as opposed to competing with their competitors that collusion was gordon standard way of operating that gets to the ruling on the summary judgment motion does i mean not to the discovery dispute correct as to both your honor well and i understand but but i mean these competitor agreements were not in fact in the record two of them were in the ask you relates to the content of the competitor great minutes because we start and this is part partly just a question of how much time i had to put this together and part of that aspect is a certain degree of murkiness in the record but we started with a representation that these competitor agreements dealt really relate to pricing not sure what the something else is so quiet i'm not sure you completely into question what if you're shifting to question to you in answer the question what i would like at the  in the day for you to have been through both and i will i will try my best your honor and i would just say that they that we have talked before this and one of the reasons we were not going away mean we're not going to it's not going to go on forever and the so the river right should be cautionary but it doesn't mean we're ready to quit and let me try let me try to answer your question as succinctly as i can recognizing that i think your question really gets to the core of the theory of this case in some ways it's why if you read our briefs you saw like ships sailing in the night it's like we're talking about i do not that's why i'm trying to focus on the factual record as opposed to a lot of i mean if we can figure out what the facts let me do my best to point you to the facts your honor i think that pertinent documents were attached to our our opposition a summary judgment at exhibits if i'm remembering correctly ease through  they were only withdrawn when it was clear that we were entering the market those agreements were basically were withdrawn what do you mean the parties entered into an agreement to end their anti competitive arrangement when it was clear we were entering the market and  and i'll try to explain to you why they have these agreements with one another they already have built the tools to build these goods they were beating each other up on price so they decided only one of them would make the hoods they enter into these  agreements and the way the agreement structured is up one of them will stop manufacturing the hoods up put away my tools that i've already invested in and i will then make the other party will manufacture the goods well how am i going to ensure that i get a high enough price or i don't get cheated out of this we're going to agree that there's a pricing floor as part of this agreement so as part of the agreement they are the party that manufactures has to sell all the goods to the other party client was in the market because they only withdrawn when they saw that our client was going to get in the market and the whole arrangement won't work if there's someone sell below their cost because they've structured this agreement to create a fl of how low they can price in the united states i'm still not sure i understood you to say that these agreements which the i guess anti competitive because they were they were amongst each agreement the p b s can come in and set their price these individuals them without those agreements or disallow them and then started selling at a price below where p d f i came in and that would use that yeah that's what i'm saying is is that where they already selling at a bloatware p b s i came in you know before we came in they were selling at a price that was way above competitive pricing i think that they their position that is if i understand from the defendant's greed is that that's not exactly the k s that p b s pricing was pretty much consistently higher than gordon's pricing but at the time it entered the market it prior to happened upon your entry to the market i don't think they permitted inference the end about what happened during the period i'm not seeing how they permitted an inference during the period when you were actually in the market and your honor i think the for of all i think what's relevant when we were in the market is that we see the the taiwanese folks and board in particular trained to drive us out of the market so that  into these kind of agreements and that's why our request for discovery that i have that they certainly my hip hoped he wouldn't be a competitor anymore so what did they do they addressed that they ended their agreement that kept the prices love they drastically lowered their price we believe below at least their total cost if not below their their average variable cost in order to drive us out of the market you have evidence of that with respect to total cost but i think you told us earlier you were unable to get evidence that the variable costs we can see that our economists opinion was with the discovery were discovery decision that you believe were clearly erroneous short your honor and and i it with your permission also address your concern about whether we were vigorous in protecting our rights with respect to the discovery there's really two areas the first of them is our requests for discovery regarding agreements that gordon had with its competitors and an issue that just we repeatedly made in the district court  completely ignored which was requests for notes of admitted meetings that occurred between gordon and its competitors after the f d a throughout the whole period there were there was testimony in the deposition that gordon was regularly on a monthly basis fritz with its competitors we threw an assert another source got one copy of those minutes we produced them to the court and the court completely ignored in all of its decisions our requests so that we could understand  that further discovery on that point was not needed your honor i believe that in our supplemental memorandum in support of our motion to compel we attach those those meeting minutes again there in  chinese but again i just want to be clear you're honoring the court now the court never addressed it i mean we in our briefing repeatedly pointing out that the point was ignoring this issue and i don't think you'll find anywhere in the course decision  addressed our arguments about these meetings is there anything we can determine which we can determine the content of the notes since as far as i am now no man member of the panel read chinese my yes my examination of mr chen in the attachments so that is also included in the ten deposition yes and it would be it would be in either or both the attachments on the evidence we presented but we believe that going to trial this kind of discovery is exactly what you would be entitled to and that would allow us to fully paint this picture of the predation that the courts ask about and to fully explain to the jury judge panel with your question are the areas we're beyond that where we were seeking discovery was these agreements which the court and i would say the court later read its first decision to say that it had ruled that you're not entitled to all the agreements the gordon had with its competitors i can't read that decision no matter how hard i read to say that i don't find that it says that i didn't understand it at the time and the court never found that we had waived that argument when we later raised that question with the court there's no burden to the defendant in in producing those they in fact testified that they'd already gathered them but the court nevertheless found that these agreements which related concededly according to gordon didn't relate to the four hoods we're talking about here but did relate to hoods that were that they were manufacturing the same plants selling to the same folks and we're talking about one hundred agreements with competitors we're talking about at some way of operating where you agree with your competitors rather than compete with how  just one factual question do you understand there to be any agreements with competitors that post date your interest in the market our understanding it from mr pan's declaration which is attached to  motion for summary judgment and was originally proffered by gordon was that these agreements were on an ongoing basis to court they were gordon standard operating procedure and part of his argument in his declaration only about that issue what would be done about the case well you know all of that question i follow the question and in an ideal world you would reverse the discovery decisions and explain the standard that the court should have applied under the da rulings and under summary judgment i realize that courts make judgments about how far they want to go in a decision and whether you want to reach  all of the issues on summary judgment or simply want to send this back for further discovery i think is within the discretion of this court and and really a judgment the cork has to make i obviously love clarity  said required gordon to produce some information from which a representative sample of documents could be obtained and then there was an inspection in court and the court said that they didn't really find that there were any  was so if the court you don't argue that a family mechanism was an appropriate way for the court to view that you know your i mean if i understand your question correctly i'm not arguing that a magistrate can't try to reduce the cost of discovery by staging things in effect and saying produce documents for a certain period of time and let's see if there's relevant information there and before we go and ask you to produce it for all that time and in fact that's why from my point of view there's no argument about information or information likely to lead to the discovery of relevant information in that the way the rules yes your honor i appreciate that it's a broader standard than additional documents at that phase was to show that there was something inaccurate in gordon's cost calculations what we did in fact do was attach the mickleson declaration to our renewed motion to compel and it showed that there was additional information in what had been produced that would be useful to an expert dr mickelson is a colleague of our testifying expert and that that in fact when dr mcfarland did his report he relied on some of those additional materials for the periods for which we had them so what we are asserting and this is on the cost discovery side not the the agreement discovery side if we can make that divide that the court in effect later on shifted the burden to to only allow us discovery if we could use that specific documents in there to prove one thing where is the course stated the standard is likely to lead to the discovery of admissible evidence and what was in there was documents that gave a broader picture of cost that we think would have given a broader scope to dr macfarlane's our ultimate report and allowed him to make we believe the conclusion that in i've got a serious problem with the discovery of the agreements and the know because if there's going to be evidence  important to recognize what we're really talking about here that they got the only two agreements that relate to the markets that they have alleged in this case they'd be able to make the decision themselves rather than you're making  exercise of it sound discretion made the made the decision but you didn't you argue for the position the district court took we argued for what the supreme court said in that sushi which is that a in agreement in another market has little or nothing to bear on inferences in this market and let me before we leave the meeting notes i think it's very important to to to say that i'd love to come back to when we talk about the meeting how it's there was not a determination  was their argument that it it will be possible to recoup in in this market because because these defendants have talked to their competitors and had joint ventures with them in the past we can assume that they will itself the facts were that it was conceded that the defendants had a minimum price fixing cartel in japan as to the very televisions that were the subject of the mets you should a case and the allegation was that they were using the product the profits from that cartel to finance a predatory pricing conspiracy in the united states and the supreme court of the united states said has little says little or nothing about the possibility of judge and the district court in the exercise of their sound discretion said in this case is that nothing that the plaintiffs have alleged about these agreements suggests that it's going to lead to useful admissible produced and they cross examined mr payen to pose mr panic about them at his deposition on the subject of these meeting notes request your honor this is a quintessential fishing expedition they asked for  need information of any kind as to meetings or correspondence between the defendant and the other taiwanese companies and if you look at record forty five das three page four forty five you'll see concerning these products are so france can i give you an example your honor so that my client makes thousands of the vital parts and in other markets this case is about goods say there's a separate market for  for you know vendor panels or whatever you want to call it there are agreements in which companies get together and for instance they agreed to share the cost of the new tooling which is expensive and they agreed that they're going have a joint venture to produce tools together relative to that part eight tooling agreement relative to finda has nothing to do with the market for ford f one fifty hoods and that's all that the district court recognized and that if i if i may or i think it's very important to recognize that all of this is a sideline it does not help them to show even if they could show that there was some sort of  tendency to agree among the wounded your honor that they still have a fundamental failure of proof on the most basic element of their claim which is below cost price and they have no proof of pricing in various claims and the the all of them require them to prove pricing below an appropriate measure of cost and a likelihood of recoup the point the point would be not that this that that the point would be still required to prove cost and therefore that element of the claim fails and that's determinative of whether summary judgement was appropriately granted that's absolutely right so that's you don't mean to say i did to merit that that has anything to do i mean if this request should have been granted it should have been granted i mean the point is that if it had been granted it still wouldn't correct what cause that's absolutely correct the whole dispute among the parties about these joint venture agreements and other markets goes only to the case that they would like to make as to likelihood of recoupment there is a separate  matter of law at the summary judgment stage for a a reason that has absolutely nothing to do with the discovery that is in dispute then the there is no path to reversal because the market and he would not opine that gordon was pricing below in the appropriate measure of cost gordon is not pricing below in the appropriate measure of cost all that their own expert would say is appropriate yes absolutely so but i think it's important to start from an understanding that this court and the supreme court have said unequivocally that you cannot have a predatory pricing claim unless you can you can prove pricing but will cost now this court has said that usually the appropriate measure of cost in a predatory pricing case is average variable cost both it there is under this court's case just just to be clear this court has this court has not taken the supreme court's invitation very strong invitation yet to close the door on all predatory pricing claims where pricing was above average variable cost supreme court dipped in brokerage is very strong that that's the right word but this court has left some possibility that in the design between average variable cost  average total cost it might be possible to make out a claim if you can show that that it's the right kind of market for that to be the right standard and that there is no objective lee no objective justification for the defendant's pricing other than total cost if you would urge the court to read their expert's opinion with care all it says is that pricing was close to costs and aggressive and that is being that expert opinion were admissible in its in the cost analysis issue is is absolutely fatal and if you you if if you really look at what they're arguing what they're arguing is that they should be able to make out a predatory pricing claim because  gordon's pricing was aggressive close to its costs and below what their expert regards as the profit maximizing level you know if we should charge more because in his opinion we would have made more that is exactly the theory that this court rejected in d c rogers and arthur s langan felder in the supreme court rejected in brokerage in the in the land in federal case this court said we are not going to get into the business of second guessing for industrial organizations what the their profit maximizing price would have been that is a nightmare for courts and for but for litigants you have to understand the demand side of the market you have to make value judgments about run versus the long run profit maximisation right it's a disaster and so so they have two arguments and i believe you asked a question about whether there is there's evidence in the record other than the expert measure of cost we to the sad that we look at the evidence in the record plus we look at the test outlined in spirit is that right that's correct that's why i was asking the questions about what evidence of cost was more in the record and it's also actually why i was asking other questions about the competitor agreements because i couldn't figure out to what extent if any they were  the sharman at ever keeping the investment in blood cost prices your position is we don't even get there because the element one cannot be sure that's that's absolutely right and we just add the amendment then also under section two you did in concert with others correct well your honor there are there are a number of requirements and this is actually one of the most i'm not saying that's the only requirement i'm saying that that's what we're looking at correct but i think you have to look at all of the question about the discovery of the competitor agreements to know whether the pointed crab to that would have been helpful in connection with the stab that all you have to do is show an agreement among competitors to charge low prices and that's enough the supreme court in brook rupe was very very clear that quote low prices benefit consumers regardless of how those prices are conceded that there is no evidence of below average total cost pricing we dispute that and we have addressed that at pages ten and eleven of our reply brief and so rest on our reply brief for that but we certainly dispute claim recall that there is a conspiracy clause in section two of the sherman act which contains different requirements and and in fact we would concede that that's the focus of our section two claim is on a conspiracy we are not asserting  that that broadly conceived that gordon is without competitors what work in what we're asserting though is that it defacto becomes a monopolist when it enters into an agreement with its only competitors that they're not going to produce the part anymore that's a monopolist straight so that i happened prior to the time you entered the market and i don't do that anymore and in order for you to seems to me that in order for you to get beyond that there's got to be some the testimony as to when those agreements were abandoned and we believe that there's at least an inference if not more that a jury could rely on that the abandonment of this monopoly agreement occurred when they saw centering because they have as i pointed out and pages ten eleven of our reply brief i think we explain very specifically why the assertion that we didn't offer evidence raising a genuine issue of material fact the standard here as to whether prices were below average total costs is untrue very briefly i mean you look at their prices they were they were ninety one to one hundred twenty six percent lower after we entered their prices before one hundred ninety one to one hundred twenty six percent higher than they were after we entered we if you look at dr macfarlane's report carefully and his deposition testimony which they mischaracterized he never conceded light we believe that yes that there is because the agreements specific they contain agreements about how you're going to characterize costs as part of this overarching conspiracy with one's competitors and along those lines gordon relies heavily in its argument on message shouldn't this case couldn't be more different than message in message should if we're talking about the argument that a conspiracy in japan relates to a conspiracy with a different objective in the united states here we're talking about a conspiracy where it's undisputed that gordon is selling a whole range of goods and the only difference between them is which pickup they fit on and then they know that there's the prospect of us entering all of these areas of could and they're all being sold to the same customers for resale so the idea that masuda here says that that wouldn't be a relevant evidence at a trial let alone the sushi that says that you can't discover that information is simply and correct i would just close your honor because i have exhausted your patience i'm sure with i would urge the court to reduce view the district court decision in the  we cited in our brief that is the one case that we have found that very specifically addresses how to apply these concepts in section one case and we think it would provide valuable guidance for the court's thinking so we