please the court the district court's decision in this case threatens the vitality of the commodity exchange to address the very type of market manipulation it was designed to cover i'd like to focus my remarks on the two key errors under pending the district court's decision one the conclusion that irk exemptions immunize the defendant generators from liability under the act and to the conclusion that the operator exemption the final order as we called it extinguishes the private ri of action under the sea neither the final order nor caught small fish will eliminate a claim of manipulation for the derivative financial markets the final order is tied is intended to exempt limited legitimate energy transactions involving are closely tied to the physical delivery of electricity it is not intended as not immunize the illegitimate use of those transactions to manipulate the purely financial markets they're tied to or cup prices we've presented the court with dozens of cases illustrating that just because an action or trading practice standing alone is unlawful whether by a common law or statute regulatory fee that does not mean that practice is immunized from anti manipulation regimes legitimate transactions or trade in practice practices pursued with an intent to manipulate is commodities manipulation intentionally losing money i want to know most transactions that fix a price to benefit the value of related positions that are time to that prices market manipulation the fact that the energy transactions themselves may be outside of the cia because they're relieved of some of the regulatory duties that are afflicted all the other market participants are products does not matter a transaction does not have to be governed by the cea to be a trigger that is subject to an anti manipulation claim for example the libel reporting activities that we mentioned in our briefs and again in the twentieth a letter to the court that we recently filed are not subject to the ca but manipulation regulator could clarify the reach and the role of the for this court to ignore the agency's view of its own higher order i would call the court's attention to the final order itself at seventy eight thousand reg one thousand nine hundred three it contemplates that these transactions that are otherwise exempted understands that these transactions that are otherwise exempt and to the extent that they can be used in combination with other actions will still be abusive of the act and w actionable i would quote from that section the commission says if the exempted transactions are ever used quote in combination with trading activity in a d c m that's a designated market like ice to conduct market abuse that remains actionable so certainly the agency extent intended for this to continue to capture manipulation of derivative markets and certainly did not extend intent to extinguish the private  action to do so first again the final order pertains only to the limited energy transactions that are caught it does not pertain to the illegitimate use of those transactions to manipulate another market that so that that argument's an argument you're not saying that the final order itself was ultra virus because the proof extending provisions to private rights of action is limited to the requirement exemption i believe that's correct your hon because the final order does not an ambiguous leap preclude a private right of action that doesn't address that the exemption can not literally mean that it eliminates all but the numerator provisions that are in  in the final order many of those provisions are registration of reporting requirements that were clearly the subject of the exemption but others are part of the infrastructure of the act without which the carve out provisions make no sense and that it make that argument below we relied heavily your honor on the agency's own interpretation of the act as we think the court is entitle to do well but how does that get around the argument that that there was none as i say section one contains all of the definitional boundaries section three which is seven u s c five contains all the fundamental funding and purposes sections twelve sixteen nineteen they  contain the commission's operations and authority to implement the act and further its purposes there's also several references in the final order that say that the carved out provisions pacifically brill lighting to are not exclusive that anything that pertains to two the enforcement of anti manipulation is going to be carved out there's also a section that again this is not one thousand nine hundred three where the commission recognizes the need to reconstruct prices that would have existed but for the manipulation of of the defend that and specifically says that this is necessary for private lead against to measure their damages we know what the agency was thinking through the excerpt that we've included in the bench moment at the bench exhibit tab two that it was exempting the operators from certain duties otherwise required from the actor regulations and was not exempting them from foresman by private litigants then to your honor's point the agency ha told us it did not intend to eliminate the private right of action and it does not believe that the final order does so well as the posen kelso points out there and she really hasn't told us that they have proposed to the terp petition of that that in cost sequential an agency law that is just a proposal it does not matter that the southwest power pool proposed order that contains this statement is not final the agency is interpreted in its prohibited prohibitions they are duties that were were going to be our obligations to prohibit to not engage in activity that were going to be carved out to me that difficult final order is perhaps not a model of clarity but there are ambiguity is the court of the agency has told you what it thinks about it you know of importance the s p p exemption is not a wholly unrelated proceeding that the agency just sort of reaching a cross and commenting randomly on this s p p as an r t o i a so exactly like the r t o i suppose in the final order it was not included in the final order because it did not implement its market based system until two thousand illegally establishing an artificial price for derivative commodities contracts are opponent and has argued to the court that we are still complaining about the too high rate and that's th doctrine bars that but think about that this scheme could have been deployed in reverse g d s could have suppressed prices in arcot to capitalize on a short position in the in the foreign market so it is not a complaint about the filed rate is a complaint about the manipulation of the expectations in the markets and that's exactly what other courts have said does does not fall on the power of doctrine if there were a big unity and if our deference or some deference and does allow us to look at the subsequent interpretation could use it for me simplify what the manipulation is is it are you able to say it as this is the false information and whom in other words the to whom is the cross market theory correct its where is that the false information being injected is is the company taking a loss deliberately by falsely indicating what the value will be the next day is that a fair characterization of what you say so that's very fair your honor and exactly so so by by making false statements of what its intended generation that certain prices were to the day had a market and then not living up to that in takings and in some cases enormous losses to benefit its positions in the forward markets that is injecting false information the liable for decision that we've included in the courts to the court in the twenty eight day letter it deals with exactly that that by reporting false rates and challenges that the panel banks were going to borrow they injected false information in the market  and reconstruct what the process would have been the artificial price would have been but for the defendants illegitimate conduct that necessarily implicates what the l m t would have been at that time but there's no vance just one more i think it was the texas amicus brief that said that c f t c would still have authority to pursue restitution for your client under the existing scheme did you have a response to that if your theory of manipulation and fraud exists they absolutely have authority to address the commission technically has an authority to address that but that doesn't mean that the private right of action should be who are sophisticated and intelligent in these markets to ferret out these types of manipulation that dodd frank what's in tended to address manipulation authority and that means the final order unambiguously avoids the result that plain to see here of allowing juries and courts to second guess and substitute their own judgment for the regulatory choices made by the expert market regulators i would like to address three points regarding the narrow issue before this court first the final orders an ambiguous text exempts ca section twenty two which is the private right of action pr second the see if he sees recent proposed order changes nothing in this appeal and then third the final order squarely applies to the transactions alleged here and therefore means this lawsuit cannot go forward and i'll start with the playing text of the final order because the district court was exactly right that that is the beginning and the ending of this case as your arms have pointed out that the provision clearly says all provisions of the ca are exempted that easily include section twenty two  twenty two is not then listed as one of the exceptions to that exemptions i would submit that this in fact is the model of clarity the final order is very precise and very particular about what it was going to exempt and what it was going to allow to leave and in fact in the proposed order that led to the final order this you have to see even sending a footnote and that's at seventy seven federal register fifty two one sixty three at no three seventy two that it was listing out the the statutory provisions that are accepted to quote avoid ambiguity about what is left so the district court interpreted that provision exactly right and that should be the beginning and the ending of this appeal the pla have made the argument for the first time in a reply brief regarding the word requirements and section c a section for c six as judge taken some pointed out that is not really an argument interpret in the final order that is instead a collateral attack on the authority of the c r t c to issue the final order so it's a way not only because it's raised for the first time on appeal in a reply brief but because it's attempting to challenge a final order from two thousand and three which is an improper collateral attack but i would also just address it on the merits of the word requirements as plain as that knowledge means something that makes somebody act or refrain from acting but easily a private cause of action provision and forcing the fraud prohibitions you know compels behavior compels people to act are we free from bad to get in fact that's been playing its entire point all along is that they think that the private action provision is necessary precisely because it compels behavior by market participants and that plane is also can be rude disruptive to the market but your honor is exactly right that this is a regulatory matter the c f g c made a regulatory choice to exempt conduct to exempt transactions that are covered by the final order from the liability under the c in turn the local market regulators the p c t and are caught have made regulatory choices about how to structure their market what participants in that market are allowed to do and in this case as the allegations state those market regulators allow exactly the kind of conduct that's allowed here they the p c t gave a voluntary mitigation plan that authorizes in fact incentivized entities that are small fish to do exactly what's being attacked here and so i completely agree that this case and this lawsuit is really just a collateral attack on the market on market regulators i mean it's really not a complaint against our client it's a complaint against the market and trying to change the way the market works  have tried in other ways to change the way the market works by directly appealing to the p c t and those challenges were not successful but that's exactly what this now is is a collateral attack and if i can make one more point about the work requirements plaintiffs  cite in their brief the preemption cases from the united states supreme court ship alone medtronic deal or there's plenty of others the supreme court has expressly held in the context of preemption provisions that the word requirements includes not only positive  enactments but also private rights of action and the court and this court has also held the same that that a private right of action enforcing duties behavior every bit as much as positive anathema so we don't think that argument has any merit even beyond the fact that it's this waved it before you get off the requirements as if you put aside that is the is the limiting principle to all provisions be overbroad then defines it as transactions to see if he she went and had a laundry list of provisions and for example see a section four c four which sets forth the excuse me sixty four which sets forth the enforcement authority of the c f t c that contains jurisdiction provisions that contains remedies that contains all sorts of things now that said if there were say a definitions provision that's out there that was not picked up and i've not seen one that is but if that's the case i think there is a vast difference between something like a definitions provision that gives meaning to a term in a substantive provision and a private right of action which is fundamentally different expanding the scope of liability and importantly the private right of action provision is far more analogous to the provision which gives the c f c c enforcement authority to enforce the prohibitions on fraud and so the fact that the c f t c went and explicitly exempted those from liability but did not do the same thing for the private action provision which is far more analogous i think is extremely meaningful so that's the answer as to the provisions that they might not have that picked up which again i haven't seen any now as to the this you have to see is proposed order in the s p p matter we've set forth a number of arguments in the brief why this court does not need to give controlling way to that but the clearest one is that the final order is unambiguous this court as it knows only defers to an agency on the interpretation of their own provisions when the order is ambiguous and here there is nothing ambiguous about the final or which you know says all provisions are exempted and then comes back and says these are the only ones the c f d see in the final order which is very precise and the courts will hold that see have to see to that but now you know you rely on apple tree but that's more of a statutory chevron context as distinct from allowing more informal interpretive material and in their reply they cite belt and why wouldn't our in much more informal documents be informative if we saw ambiguity well and i think the fact that it's unambiguous means this court doesn't need to worry about whether it's proposed whether it's final so i think that the fact that it's unambiguous the court doesn't need to look at bell it doesn't need to address that issue if but if you did receive ambiguity why would not be the more controlling that it would not because that case dealt with with you know interpretive letters and handbooks they were actually the agencies official word what we have here is a proposed order it's a draft it's not them saying here is our final order it's them saying is this  c saying this is what we're proposing to do but we would really like comments now comments have come in most of the comments were negative and the agency has not taken any further action and so i think in that context all you have is a draft you don't even have an amethyst brief that the c you know use its authority to go and file and they get final decision on hey this is our official view so that's why i think belt doesn't doesn't help the plaintiffs and i think a case like you know apple tree which says look if it's a proposed rule we don't look at it but again i think the clearest path for this court is just to recognize that the final order is unambiguous in what exams and go from there i'd like to now turn of the third point which is that the final order squarely applies to the ones actions that are allege in that you know the final order spells out the criteria and the only issue that plaintiffs have addressed about why it might not cover it is their argument that it only covers completed contracts that it can't cover you know unconsummated bids and of course this was an argument not  t presented to the district court but on appeal we've we've addressed it and pointed out that that argument is directly contrary to this course decision and radley which inter interpreted the same phrase agreements contracts or transactions and h includes more than just consummated contracts it also includes unconsummated bids unconsummated offers withholding of supply that's the holding in radley and it squarely defeats the argument here that only consummated contracts can be covered that's the right result and is rather pointed out for a number of reasons but one of them is if if the court were to limit the exemption to only can consummated contracts they would read the word transactions out of the list of items and it would also make the exemption meaningless because the this exemption cannot turn on the fortuity of whether a particular bid clears the market or else no party will have any certainty whatsoever and will not know in advance whether it's going to have the exemptions would really defeat the whole point of the exemption to narrowly constrain this clause to only cover consummated contracts now the argument first put in the reply brief is that the word executed changes everything because it's execution of contracts agreements or transactions but in radley they say the clause that was being interpreted actually said transactions and then kind of before in the text entered into it which is equivalent to the execution of contract agreements or execution is defined by the dictionary in black's law dictionary as the you know carrying out the act of carrying out and it makes perfect sense to say that the c f t c in the final order exempted the carrying out of a bid or the airing out of an off you're forced to put aside what the district relied on and this exemption and the congregational desire to give texas more autonomy for its structure so you just have to address the fraud theory itself i think the sort of the most poignant statement in the record that you challenges did we move the market forward if you align that hearsay statement with the reliance the focus on in the libel case do you see at least manipulation there company saying did we move the market for doesn't that align with the theory of manipulation that's stated in particularly the line but we don't quarrel with the very basic principle that lawful activity in one market three what the c f he said there was yes it's possible that lawful and exempted conduct could impact other markets and their answer to that was but we are regulating and we can identify that in addition the local market regulators will be enforcing their rules they can ferret out irregular trading behavior in that market that might suggest you know something something that manipulation for example in this was in the proposed order that led to the final order they pointed out that a party repeatedly taking a loss in the primary local market is irregular trading activity that might indicate something's going on you can do that with or without the small tissue yes i think that's that's correct i mean it this small fish rule allows certain parties to go in and bid to the cap if you don't have a small fish rule there might be other exceptions that would allow you to bid over marginal cost but that but but certainly at a local market regulator would be able to identify that kind of behavior the other thing the c f t c said in the final order in discussing cost market impact is that the local market regulators are going to be required to feed data and information to the c f t c to help the c f t c in using its enfor identify cross market impacts so in other words the final order recognize the potential for you know local market accidents to impact other markets and its answer was that the c f t c can find that along with the help of the local market regulators and that really underscores the whole point of the exemption which is a c f t c decided that there is enough regulation in place by the local market regulators including the p c t and earth caught in the market monitors and those am because briefs obviously set forth a lot of the regulatory efforts that they that they use and then the c f c see which has ample authority to go and identify any misconduct and bring in forstmann actions and so the notion that we are operating now in the wild west because of this exemption or the notion that this threatens the vitality of commodities markets really just ignores what the c f d see said in the final order and the whole point of why congress allowed it to grant exemptions and why it specifically granted exemption which t pointed out in their brief they likewise have the ability to award restitution so there's extensive regulation in place even in the absence of the private right of action and there are specific mechanisms for third parties to get restitution i'd like to briefly address four points that were raised from a closing counsel first just to get out of the way we understand that the court may apply radley to include all of the activities not just the consummated activities in the in the physical market but congress's intent to provide some stability with transactions and then strawman some products that are traded in the physical markets that are operated by the r t o has absolutely no bearing on the use of these same transactions instruments and products to manipulate prices on a different market so with or without the application of radley our position is still correct to speak to your point judge taken to absolutely matters that what the agency is interpreted in the proposed order is its own order the promise of that type of deference to interpret of statements from an agency is largely grounded on authorship this court applied that  felt this court discussed that again the next along that is the heart of that doctrine and there is absolutely no reason why this court should ignore the agency's view which is in the publish its own order there is certainly not expanded liability as mr oldham indicated there's not any due process or fair notice problem the purpose of prohibiting tinkering with the prior order  applying retroactivity is to ensure that actors can conform their conduct to the law but this is not a change by the agency this conduct this alleged conduct was always under the act and under and under the final order it's always been prohibited g d s does not have any protectable or defensible right having fair notice that there could be more people around to catch it so that that really is absolutely does make a difference that it is its own order it absolutely does make a difference that this is not a substantive change it is not an expansion of a liability at this conduct was always prohibited it's still  the idea that there will still be many many layers of regulation in place that we shouldn't worry is rome under the district court's order and its interpretation the final order sheild all are caught conduct from coins of derivative market manipulation whether by an agency or by a private litigant despite the orders expressed retention of the anti manipulation provisions and extinguishing the private right of action only i in the room they recognized that there needed to be increased threat the private right of action was implied in the act long before it was included in the act for that exact reason but there was a recognition that the best positioned folks to enforce this were the market participants who understood the market they could see these things going on and i'd like to briefly address the statement  the c e o did we move the markets there's a lot of scrambling to say well that doesn't count because it came from a confidential informants hearsay but that's not all there is it's not even the most compelling thing that we have shown the precisely so we have raised enough to show that there is there was an intention there was ability there was motive to do that we have included in our complaint to the court and this is exhibit want to believe it four forty three in the record that g d s had done this before this was not a novel idea there is pointing to show that something hinky was going on and the second circuit has recognised before court and for recognised that when you're talking about market manipulation many of the facts are going to be in the hands of the defendant so that we should not require pleading with absolute