it's one of the central issues in this case just ten days after the this case we finished the briefing in this case another panel of the ninth circuit certified so one of the central defenses the law firm defendants are raising here to the california supreme court decision that was the question of whether or not the end finish business rule gives rise to a property right under california state law that supports the application and finish business rule as it's been applied in california just last monday the california supreme court notified the parties in the heller case that oral argument is set for december seventh i think  the impacts of the ninth circuit decision in heller underscores the key error of the district court below here which is set these fundamentally are questions of state law state partnership law in the interpretation of group as well is another issue that is unique to states which is the governing of law the lawyers that practice within those states in the back mean case the court and equivocally said pending cases are uncompleted transactions requiring winding up and after dissolution and therefore assets of the partnership subject post dissolution this is the expressed language from the back and the farmer case as a result there is a right to recover the profits on behalf of the dissolving partnership district court below tried to skirt this holding by creating a new rule that where a dissolving firms partners take the end finished business matters to a new firm and the clients execute new engagement contracts it becomes a substantively new matter of fact in itself relied on five cases that rejects the premise that something so easily accomplished  having the client's enter into a new retainer agreement is sufficient to discharge the fiduciary duties of the partner to account for the profits so the dissolving for those cases are unfinished business that are being that are generated by the work of its partners who are representing the partnership and the solution is an important concern of the very  pooled if i could interject your question least at school it seems i understand that principle pretty clearly if if what we're talking about are contingen agreements that somebody has been working on for quite some time none the firm breaks up and they take that agreement to a new firm  but i don't quite understand how that principle from the prior d c cases would clearly apply to how really work so that's my main question opinion relating to a federal case but heller a men and also by a second circuit certification to the new york court of appeals and what they said appeals would rule and it was on solid footing because a number of other states adopt and finish business rule and apply it to our early cases such as california which was the case of the contingency cases do represent an investment in the law firm that should be respected and gives and we're continuing property interest but also good respects hourly matters there's tremendous investments of the partners in a firm to get the hourly fee matters that are the also the lifeblood of the partnership it's a product of olive the partner's efforts it's not just something that comes into the door so the ongoing hourly matters there's no analytical difference when you're looking at the property rights and the right to recover are going profits it should be applied between hourly and contingency ok by the end i'm in the modern legal world and i could be wrong because it's been a while since i've been practicing but at least at the end of the last century when i was still practicing the general counsel's most major companies were taking the position that they they weren't hiring you know law firms to be so a law firm for all matters and their relationship of the client would depend on each individual matter each new matter all our early work on any matter in the future for the end of time i guess well your honor take for example a case in which the partnership has invested in marking marketing in developing a particular practice area and other partners have sacrificed because they paid for the marketing and development not for it's a particular partners and they're able to generate a long term engagement maybe it's a major piece of litigation that litigation is unfolding and all of the partners and associates and people who make up the law firm are working to to do good work for that client and that client and that matter is going to continue into the future that's valuable partnership asset it's how large firms operate there is a common saying that that law firms operate with elevator assets because if the people leave the assets leave with them but that's an important reason to apply the unfinished business rule both to contingency cases into hourly fee cases so that the partnership the dissolving partnership can coop the benefits that have been invested into those matters and it's important for the legal profession to be able to pay the creditors to be able to pay the debts that the partnership owes so i believe in the case law supports the application of fish to finish business rules so both of those cases and ultimately it is a question of states moving on to the heller case judge gould well the heller case is now superseded by the ninth circuit opinion in heller in which they went through exhaustively the development of the unfinished business rule and traced it back to its roots in the eighteen hundreds and so what they felt was the right thing to do was to certify these these key questions of state law  california supreme court because there their fundamental principles of state partnership law and fundamental principles with how you govern lawyers so as well here is that your position primarily that we should not reverse the just record but certify the issue to the d c court of appeals ban on balance your honor yes i don't believe that the district court can be upheld because it substituted its own judgment for the judgment of the highest court of appeals in the district of columbia because it's running headlong into backgammon and yeah unlike in the heller situation where the california supreme court had not spoken on the central issue it was a california court of appeals that spoke and jewel box are here you do have the highest court in d c so i don't believe that the district court could be upheld without certifying the question that is going on but you're not asking us to reverse the district court well that sort of fine the question is are you asking us to  nbalance i think that the heller decision combined with the second circuit decision to certify the question and feel and provide important guidance that way in favor of certification as opposed to reversal there was another reason that the heller the ninth circuit panel and heller felt that was appropriate to refer to the california supreme court and that was the passage of group and whether rupa is passage firm is not entitled to any remove numeration except for reasonable compensation so as a matter of statutory interpretation i believe that would be the correct result but when the ninth circuit panel has spoken so decisively on the issue it has to be taken into account as well as the second circuit's referral and the feel and so i guess just put a finer point on we would reverse and certify we would  well i guess what how would you formulate the question that we would certify the i would formulate the question as whether or not in this circumstances before the court  that were identified as distinguishing factors by the district court so where you have unfinished business matters that are being completed  whether the holdings of back men and young apply equally under roop and under the circumstances that are presented in this case there's also the question of whether there's a pretty dissolution right to a cow which is an issue in which there of statutory interpretation interpretation as well but of which there isn't as developed case law of course is the buckley towers opinion and the bankruptcy courts decision but that would also be a question i mean if if the first question were certified to the district of columbia court of appeals then it would seem appropriate to sort of the second question is well you want to preserve the balance of your time yes thank you good morning your honors may have please the court i'm sure i'd wear at ski with jones day on behalf of the law firm defendants let me begin with the certification question because much of mr solomon's time was spent discussing if the court chooses to certify the certified to the district of columbia court of appeals the question that we would propose focuses on the property question because mr solomon mention that there are various state law issues at play here at bottom though this is a question of whether the dissolved firm has a property interest in the profits earned by the law firm defendants and more specifically i would propose that the question ought to be whether a law firm that dissolves and liquidates in bankruptcy has a property right under d c law to profits earned by third party law firms on an hourly rate matters the clients chose those firms to handle when the defunct firm could no longer do so that question captures both the state law property question that's at issue and the facts and circumstances of this case that are relevant to resolving that issue is that similar to the question certified in heller i mean it has some different nuances toward the end as i heard  right and so that that's your focus there is the is this creating a property right to in these circumstances where you've got hour early great cases you have matters that cannot be completed by the dissolving judge for into our focus is on whether there is a property right to the future profits i would not phrase it as whether the unfinished business will create a property right because the unfinished business rule is a rule of partnership law partnership law as the new york court of appeals recognized and feeling doesn't create property rights it divides up it speaks to how partners will divide up property rights so if i were submitting the question for your consideration i wouldn't phrase it in terms of whether the unfinished business will create a property right but rather whether the defunct law defunct firm as a matter of state law has such a property right  someone interested in that the panel can prove before deciding send the order to both sides of this case to let you and your friend on the other side  stayed in writing precisely how you would frame questions for certification and reasons so from your perspective what that will that work to what you  rly articulate what issues you think should be certified if we do that yes absolutely are if the court order resolve the case without certifying the central principle that resolves the case under d c law is that law firms are entitled to be paid only for the work the clients allow them to do not for someone else's work not for marketing activities to get a case in the first place but only for the work the clients allow them to do any other rule would severely threaten the access of clients to the lawyers of their choice because it would deny profits to third party firms like the defendants here that have no obligation to take on a matter in the first place and that paramount concern for the rights and interests of clients is what underlies the new york court of appeals decision and feel and which is the only decision to consider and to reject claims like the trustees here those same principles are reflected in d c law and indeed in a recent d c ethics opinion opinion three sixty eight that expressly embraces the reasoning and the considerations in feeling d c partnership law is not to the contrary section four zero four as codified in d c law creates a duty to account only for partnership business when a firm like calorie dissolves when its partners disperse and join new firms and win the clients and their relationship with and r and hire the new firms to represent them however as partnership business at that point is over the partnership business is the partnership business of the new firms who perform the work and there is no duty to account by those third party firms to how ry with which those firms never had any fiduciary relationship for the third party firms on partnership business the beckman case is not to the contrary that was a very different case both legally and factually for a number of reasons in first of all only contingent fees were at issue i think footnote twenty six of that case that makes clear that hourly representations were not at issue and so the old firm had not been paid for the work that it did on a case two partners of that firm left and formed an offshoot firm a subset consisting only of partners of the old firm and that subset firm did the same work under the same retainer agreements as the old firm was doing the only thing that changed is that the partners who left the old firm cut off the rights of their former partner this case is very different in each of those critical respects first as i mentioned no contingent fee matters are at issue here we're only talking about hourly rate representations and how he was paid for all of the hourly work that it did second this is not a case where there is any successor firm to how aree consisting of a subset of former how re partners how he was i ding its partners dissipated and went to different firms and they joined bonafide preexisting third party firms those third party firms in turn brought their own capital their own resources their own expertise their own client services philosophies to bear on new representations in that situation this is a fundamentally different case than the sort of unfairness that was at stake backing and in this situation the relevant precedent that the d c court of appeals would follow is feeling and as as we discussed earlier if the court is inclined to certify we of course welcome that but if a federal court like this is also able to predict what the d c court of appeals would do if faced with the question and given the reasoning and feeling that is reflected in d c law governing lawyers that is not inconsistent with backman the d appeals would follow that feel and decision on facts like these in addition the beckman case is also an appetite for legal reasons beyond just the factual distinctions because it was decided under the uniform partnership back rather than the revised uniform partnership act and there are two critical differences in the revised uniform partnership act one is that it gives partners the immediate freedom to compete upon dissociating from a former firm and so to the extent backman and jewel and cases of that sort were based on the notion that a partner could not compete with his former firm during the wind up phase does away with that restriction and allow his partners to compete in that way second of all the premise backman and jewel that it cited was that in winding up the old firm's business a surviving partner could not receive any additional compensation beyond what he was entitled to under the old firm's partnership agreements roopa specifically does away with that rule and allows the partner who is winding up the old firm's business to receive reasonable compensation for that work which means all of all of the compensation that is attributable to that partner's skill and effort as opposed to the old firm's capital is reasonable compensation that the partner gets to keep after after leaving the old firm it's telling that no d c case involving  backman young or robinson for their unfinished business holdings those are cases that were decided under but haven't been followed on these unfinished business issues under rupa with respect to the trustees pre dissolution claims this would really be a sea change in the law governing lawyers there is no d c authority and no published authority anywhere holding what i think the trustee wants the court to hold which is that the first firm that touches a matter even if it works on it for a day has a per pack sure all right to the income from that case no matter what firm handles it in the future as long as that firm is somehow associated with with the partner that started the case of the original f there's nope no published decision anywhere no d c decision holds that and it's as a judge do not know recognized nobody thinks this in the real world this is contrary to how legal practice operates  it's also not supported by the text of rupa the trustee relies on a provision of rupa that says that a partner has a duty to account after dissociating for matters arising and events occurring before the dissociat but the need to account only applies to the old firm's partnership business and again as i explained earlier once the client and its relationship with the old firm and hires a new one the old firm's partnership business is wound up the court has no further questions either about certification or about the merits of see the rest of my time thank you if the piano chooses to certify the question i certainly believe judge gould suggestion is an excellent one that we present the court with our version of the questions with respect to the question presented  to be certified by the defendants here they're mixing two very distinct concepts they're mixing the concept of the state law partnership rights with the rights that exist under the bankruptcy law on the progeny transfer law so the key question for the state courts is one of the state law partnership rights that govern it's a matter of federal law with respect to how the progeny transfer law under the federal statute should be applied in that scenario and there are two very different things and that bears it's critical to analyzing the question because there are just two separate concepts with respect to the feeling case there's a couple of very important points number one the feeling that the highest court in new york is directly at odds with the highest court in the district of columbia because they come out differently on the question of whether there's a  property right with respect to the unfinished business the district court of columbia district court of appeals and the district of columbia clearly says these are assets of the dissolving partnership that can't be reconciled with feeling feeling itself is in the minority of state jurisdictions even after theo and was decided in the colorado supreme court in the pond v sweeney decided contrary to feeling when it held that with respect to contingency fees there is a property interest that the dissolving firm has so in feeling in the theory that new york court of appeals decided to apply its rules with respect to both contingency in hourly cases colorado supreme court when a different way that illustrates that the island isn't controlling its reasoning is unique to considerations of new york law it's also important to recognize that this isn't a question about clients in the client's relationships to the permit it's a question about the rights of partners as between themselves with the rights to the rights to partners and whether or not they have been entitle meant to serve a certain amount of profit is different from what happens with the with the client choice arguments of the client choice arguments or overblown because once the client pays the fees to the firm it's a matter of the partnership principles in the partnership the partnership itself to decide what happens to those  key the key aspects here and the fact that the unfinished business rule has existed for as long as it has and it's been consistently applied and it's been wrestled with by a number of courts emphasizes the importance to make to make the key decisions regarding the part of the application of partnership law in the right context with with a perspective the overview of how this applies to all lawyers and all law firms be they big or small and there  has been a lot of attention that's been given to some of these high profile bankruptcy cases but that the partnership principles apply with respect to small firms large firms medium firms and when they have a responsibility to apply those rules fairly and with the perspective that if a partnership law applies equally to law from partnerships is the other firms as it does here that should be respected and the public has a right to be treated fairly because there's creditors here whose whose interests are very important that have to be taken into account in this circumstance