i understand that everyone is here accordingly will dispense with the calling of the calendar will hear the first case of the ferry over city of syracuse good morning ma'am please the court my name is nate calum i represent the appellant james to feria who comes to this court seeking meaningful relief namely relief from syracuse's permit zone policy that continues to inhibit his protected speech in a traditional public form and the district court concluded mr the feria has been deprived of his custody rights by virtue of his his rights being violated not being able to speak in a in a public way and the cause of this really relates to the policy of the city of syracuse and the he up public events on public property to have proprietary control over public ways including public sidewalks and described in geographic boundaries that they set out in their permits this is the moving force and the constitutional violations that mr to feria suffered because what happened in twenty fourteen and also in twenty fifteen was it was precisely because of this policy that he was not able to speak on the public way now what is your basis for saying that the city had this policy to limit you've just described giving by officials who have decision making authority and that would be both the chief of police and syracuse corporate council and then third is by the custom and practice first as far as the rioting that's found page one forty three of the  police department training bulletin which in it sets out that it's a policy that allows for permit t's to obtain permits that will have city sad within their control and then it also instructs police officers that they are to recognize these boundaries and that they are to enforce these boundaries if necessary this policy was also exhibited by the permits them selves in twenty fourteen and show that the permit t c n n y r proud was able to obtain a permit for a city sidewalk although it was open to the public and although it was not even part of the festivities they were able to the training college and i mean the training button seems to be to say things like permits are require and describes the process for obtaining a permit and what officers are supposed to so that's where the geographic limits come into play where does it how does that i mean it is to enforce the designated boundaries at the permitted phantom you look at that permit as well it seeks permission to use for purposes of the public assembly use the sidewalks but i don't see anywhere where it suggests that the public is excluded it is the assembly that is permitted can you can you identify what shows that  time that's what you're talking about the hand written yet yes your honor because what was was being sought there are the reasons why they they says for amplification for access and so they want to exclusive use and they were granted that and that's th castro twenty fourteen and captain sweeney and twenty fifteen who both refer to the permit they said ok we've been told that we have to enforce these permits we look at the permit twenty fourteen includes the sidewalks and so they have exclusive use you it twenty fifteen as a same thing they took a look at the permit and said hey we've been told we have to enforce the boundaries of the permit and it shows forty feet from the entrance on the public sidewalks and so they enforced it and so what you have is you have a permit t seeking exclusive use you have the city granting the exclusive use and then you have the police officers in forty and forcing the exclusive use so that happened about twenty fourteen and twenty fifty is there anything in the training manual that bulletin location there and they're not mutually exclusive i really don't know of any other way to interpret boundaries if you're in forcing boundaries i don't know what else you're doing except for you're looking at the geographic limits of the permit and are forcing those and that's exactly what the police are has an assembly but that's not necessarily excluding members of the public in a public place well if they enforce the banners i don't know how else that would work out except to say ok this permitting has a space where enforcing these boundaries we're going to mark those we want to put cones we want to put tape up meaning that the permit days they will use a space but you cannot could mean that the permit can't go beyond that space for purposes of the demonstration suppose that's possible suppose you could work both ways but it certainly doesn't i think what the point is is that there are people who are allowed to use a permanent space and there is a folks who cannot and so it matters whether you fall within the geographic limits and so corporate counsel who specifically created the forty foot buffer that was put in in twenty fifteen and so that's what happens when he was reliant on was his conversation with corporate counsel and different to the permanent self but again this judge jim is asking what turns this into an established policy on behalf of practice over time certainly ratification is one way in which it can be established also if you look at just force custom and policy your honor you have twenty fourteen and twenty fifteen where it was is done i just want to reply to a few points before making a few brief points myself is far is the corporation council creating a buffer zone there's no buffer zone created by anybody within the city of syracuse if you look at the record would essentially happen was there was an application in two thousand and fifteen whereby the central permit office had indicated that i believe that the application itself could have bridge first amendment rights and therefore there was a conscious effort to change that to limit it to something that's content neutral now the district court had recognized that this maybe didn't go far enough and in analyze it under intermediate scrutiny as opposed to strict scrutiny in two thousand and fourteen however they indicated this certainly didn't arise to deliberate indifference mr white had acted as sensually with the intentions of making this something that would be open for free speech so i just want to address that issue second an assistant cooperation council is not a policymaker system corporation counsel providing advice to a beat officer working the detail that day is providing legal history that two thousand and sixteen trainee bulletin happened after appellants had made their file their answer and made their motion for a preliminary injunction the two thousand and sixteen bolton was a remedial effort to assuage the issues with respect to a legit  vagaries of a due process violation allegation that mr to didn't understand what boundaries were as far as a possible nerd of the festival understand what boundaries were and so it served a function of fixing this issue of whether or not the enforceable boundaries to a park in fundamentally what this comes down to with respect to a custom practice or policy with respect to a custom it's clear in two thousand and thirteen there was no constitutional violation with respect to a city being able to provide permit sees proprietary control of a public space not including the public for aside from two thousand and fourteen two thousand and fifteen this is a very function of a permit in process for any festival or any parade this happens routinely and is protected in the police in the city's right to police and it could you help me understand though the your adversary's point is that is reflected in the twenty fifteen permit that the permit gives exclusive use of the right to exclude members of the public from the space rather than designating an area for use by a large assembly of people and the application does in fact refer to exclusive use that granted that applications just a pattern or practice in the city of permitting to exclude members of the public i would say no when it was modified by sam white the intention wasn't to exclude members of the public the intention was to exclude certain types of actions that are not related to speech or exclude members from that particular function of free speech but rather sound amplification and  control to the permanent regarding access to the festival the access if you look at the deposition of sam white in the intention of the access it was for the purpose of not impeding ingress and access not so much for being in that area was its purpose for preventing the impeding of ingress and access to the festival grounds which had only one point of entry it would not prevent somebody from being in that location and exercising free speech in the event they were not using a sun amplification vice or otherwise impeding traffic into the festival so i just wanted to make if you do you have any further questions i just want to make a few just very brief wants  with respect to the events themselves i think there's a there's a stark difference from two thousand and fourteen to two thousand and fifteen and i believe the district court laid this out in line two different forms of analyses with respect to the permit themselves applying strict scrutiny to two thousand and fourteen being that the application had appeared to restrict speech on that public fora whereas two thousand and fifteen it applied intermediate scrutiny because there was an attempt to make the permit content neutral i feel that there is  also a lack of a policymaker decision evident here although the training bowled him which occurred subsequent to this event also the two thousand and sixteen event had not ripened nor is it considered a part of this particular action what does the record reflect the city's position to be in your view with regard to the sidewalks when a permit has been granted for a public assembly in that area that would include the sidewalks what are those sidewalks which sidewalks in your timeline two thousand and fourteen i'm talking generally if a permit is granted for a public assembly an inclusive sidewalk area is that the sidewalk still remain a public forum or it does the permit t have any rights to exclude individuals and to call on those syracuse police to assist in excluding individuals from the sidewalks in the two thousand and fourteen application it does appear as if the request was to exclude people from from spot speakers speakers from those sidewalks as far as what the policy of the city of syracuse is you can see that there that was maybe isolated in two thousand and fourteen as far as a granting of that permit not a policy maker level but an individual who was in permit review but subsequent to that in two thousand and fifteen there was clearly a move away from that and as it stands today as we're in a period post preliminary injunction the city does not grant exclusive use of sidewalks as the perimeter of a public as a public park no exclusive grant correct welcome if i could just just make one more brief point it's just with respect to the issue of preliminary injunction becoming a permanent injunction i believe the preliminary grant was with respect to the exclusive use of sidewalks at the perimeter of the inner harbor which is a specific park within the city of syracuse the district court rightly slated a case from florida talking about the use of an area where the same thing was happening there as far as a permanent injunction with respect to a specific park in a specific event here there's no indication that in the future that particular park will be used in perpetuity by c n y pride hold festivals and so a permanent injunction with respect to speech at that park with regarding that festival would not be a remedy that would resolve the situation is not appropriate  future seeing why pride festivals could be held within grass areas of a park that there there is no sidewalk so i don't think that the extraordinary remedy of a preliminary permanent injunction would be a program under the circumstances let me ask another question which is you pointed to a number of expressions that your adversary has at as expressing the city's view including the corporation counsel's advice and so on and you've discounted them as expressing the city's view what should we look for look at in your view as expressing the city's position on the treatment of sidewalks and the meaning of permits well as far as i'm concerned the city does as evidenced by two thousand and fifteen when cross comes in there is scrutiny applied as to whether it abides by the general legal constitutional sanders and with conference of the corporation council on that i believe is my position to the  city particularly now in moving forward that those era areas are considered public fora but i'm asking what do we look to to determine what the city's policy is we have to look at and range of permits that have been acted on over time  as i would do you agree that the training bulletin is a legitimate source of policy expression i believe the training bullets in serves the function from the chief of police after the fact after th this particular case here of providing guidance as to specificity so as not to deprive the due process rights of individuals not knowing the boundaries of the festival so that's a legitimate source i would believe so that's that's a separate case from court standard i think is that you need a decision maker who possesses the final authority to establish municipal policy regarding patrol why his assistant corporation council responding to the circumstance of  moment a final decision maker for the city certainly because he when he writes a letter and he says he's doing on behalf of the city and on behalf of corporate council so he states that that's what he states in the letter and so i would think that mr to feria would be able to count on that  think something that would be important here is that mr to ferry and wasn't actually within the area the festivities themselves but bordering sadness and that's exactly where i think that's where that's exactly where i think the supreme court and this court has recognize appropriate for camera speech and eric member am i correct in understanding that and twenty sixteen twenty seventeen the following years there were no incidents where injunction was in place but there was actually a plan to do that but the injunction hear the next case in re express scripts holdings good morning may please the court saboteur grants you now for plaintiff a your honour's plaintiff's complaints in this action contain an extraordinary amount of detail that revealed the truth behind the scenes disputes between express scripts and its largest most important client anthem contrary to express scripts repeated public statements to investors in this ten b securities fraud case these companies were locked in a massive fifteen billion dollars dispute over time can you describe what the deal was worth on an annual basis over the ten year course of the contract i think the best way to look at the magnitude of the deal is to look at express scripts admission at the end of the class period that if they would have given them the three billion dollars per year discount that anthem was seeking they would have been losing money on this contract can you please give me an idea of the amount of money that was each year was sure worth i don't have that committed to memory but but it's in the complaint and what i'm saying to the court is that express scripts wasn't even earning three billion in profit per year you can't answer my question is that  i i can i can try to find it in the pleading absolutely but you know because there were there were figures about revenues plus profits related to it and you know fifteen billion dollars swing is a large swing over  it's a large number period but context is helpful sure and in terms of context this was the largest customer of express scripts it represented as much as one third of their profits so if we take the anthem request and we eliminate the profit on the on the contract we get that the company losing so in terms of the  related revenues in two thousand and thirteen through two thousand and sixteen we're talking between twelve and seventeen billion of revenues per year from anthem on this contract to express scripts so three billion dollars off of twelve billion is a material number but the materiality i think has to be tied to the profits because the profits here were one third of even offer express scripts per year per year on this contract so this was a very very significant event there's another way we know the significance of this event because when anthem went public with its three billion dollars per year request that revealed something to wall street that wall street didn't know when the stock price reflects that as well but you could turn to  a different question which is i had difficulty understanding this read to me more like a one nine hundred thirty three act in the one thousand nine hundred four act complaint because you point to different allegations you make different allegations about false statements that were false at different points along in the class period but it wasn't clear to me what rule you were espousing what point you know this became a fraudulent scheme with scienter and with loss causation and someone which is kind of a floating you know these false statements were made about have negotiations were going and how strong the relationship was between anthem and express scripts so you know it what point was there an affirmative jests at all times this was a ten b five violation from the very first statements in the class period in february there were statements made that were misleading that omitted material facts so let's take them one in a time because i think i would be very helpful to answer your question in february express scripts came out and talked about how great the relationship was how very very solid it was they had been talking for four months by that time did they have an affirmative obligation to disclose at the course of these complicated negotiations with huge client over it i mean that seems country to the interest of investors you don't want to skew the actual negotiations they absolutely could have declined to comment but that's not what they did they made selective comments making it seem as if everything was going well in this negotiation they called the negotiation productive they called it current by the time of the first game and they had been speaking for four months by the time of the second same they had been speaking for six months by the time of december when they said they were excited to keep going with the current productive negotiation they had been speaking for over a year so this was a very hostile locked dispy and if it would there have been to investors of the whole class period for them to announce that they were having unproductive negotiations with anthem ok so wall street was very specifically focused on this contract and it was trying to project if the contract was going to be reused renewed beyond the ten year term so there were analysts that were making specific earnings estimates especially because this is one third of the profits of the company how much is this contract going to be worth to express scripts after the end of the first term so the investors were very focused on how things were going they would ring up anthem every quarter they would say how are your relations going with and i'm your most important client i'm sure it's great and instead of being honest or refusing to answer express scripts actually played along and created this this this false situation back to the first back to the first pricing negotiation  a difficult negotiation in the end they worked out something these these allegedly false statements things are great very very solid why aren't those statements  two to allow accounting for an a contract that has an assumed five year term built into it beyond a ten year contract is misleading and it's a violation of both gap and the securities law you know you've got a period of time to negotiate this and there are also there were also statements along the way that in essence saying we can't guarantee that we will resolve this but we are trying well you know if they would have said we are trying that would be one thing but what they said is we are engaged in good faith productive negotiations we have a great relationship with anthem our relationship is very very solid it is business as usual so your honor respectfully if they would have said we're trying and we don't know and we're going to counter this contract during its ten year term i would agree with you instead they accounted for this contract not for the ten year term but as if it would be renewed for another five years and they did everything to create the appearance to investors and we see this because when they speak the complain is replete with analysts picking up on what they are saying and using it for their forecasting this is one third of their profits you see every issue a qualified opinion p w c issued an annual opinion but there is no evidence at this point in the case that p t c knew what was going on in this bitter negotiation there's absolutely no evidence that the back and forth where these parties are refusing to speak to each other was was made aware that you have to sign off on the it's conformance to gap and the financial statements conforms to gap yes but that doesn't mean they were proving  include the reasonable probability about the fifteen year duration of and value of the contract the f c c asked about the fifteen year contract at the very inception they told the f c c it's based on a high probability the contract would be renewed for at least five more years we have no reason at this point apt require a high probability yapped require at least a probability likelihood that it would require each quarter for them to reassess the situation kept it require a high probability to know what their investors understood from their statements to the f c c they were public as they were basing it on a high probability they said this was the most probable outcome gap required that this be assessed for the most likely outcome of each quarter and they're there there is it is inconceivable that by the december of two thousand and fifteen when they have not even negotiated for over a year since the demand was made in october of two thousand and fourteen that they would continue to account for this as if it was likely going to be extended we're talking they can't even agree on the pricing in the original contract but their accounting for it is if it's been renewed for another five years the reaction of wall street is quite revealing in this situation when when that when anthem goes public and not express scripts by the way and talks about the nature of this dispute there are four days of statistically significant declines in the face of quite a shock by wall street as to what's happening here when the complaint goes public we have the back and forth detail of what was happening and that again leads to a statistically significant reaction thank you billion dollars per year in revenue to seventeen billion dollars a year in revenue and with even going above a billion in some places and several billion hundreds of millions of dollars in earnings it's a complicated structure in terms of how you calculate revenue and earnings but we are talking about that size of a magnitude i also think judge corning your point about it seeming like a thirty three act case because the briefing in the says there is no duty to disclose the status of ongoing negotiations in fact the case they primarily rely on judge man's decision in high crush she herself dismisses the earlier section eleven they are because even though there were foolish statements about the relationship but the customer relationship was strained that they were accused of breaches there she dismisses those saying there's no duty to disclose breaches unless the relationship itself is at risk so let's break down the clasp or let's go back to the very beginning my friend says let's look at the february twenty fifth statements well what does mr queller a senior vice president of sales negotiation we're not going to talk about that i don't think it's appropriate to talk in public about the negotiations but he says the relationship is very very solid we're helping them roll out new states with the memory group and it's business as usual we're working with them very very closely so if you could skip forward to actually you know accepting your position that there was no duty to disclose nonetheless representatives of express scripts went forward and described the course of negotiations in december twenty second twenty fifteen in particular that representations made that this was very early on and they were continuing productive discussions which in fact they've been stonewalling since march why isn't that an actionable misstatement judge carney first go back to mr pass remarks where they say we're currently in discussions he says we're currently in discussions with  them regarding the periodic pricing provisions that set a for twelve and them itself in january of twenty sixteen after these statements and this is on pages eight fifty eight five six eight to six nine and a five five three the general counsel beyond them tells its shareholders we remain in dialogue and then again on january twenty seventh two thousand and sixteen the c e o of amp them says the dialogue will continue and we're hopeful that still in two thousand and sixteen we will reach a resolution to this matter that we are engaged with with the e s i that's what i am proud of that the record shows that anthony had been reaching out to express and getting no there were multiple meetings they're claiming they didn't engage because they didn't accept the three billion dollar demand being made on them when amp them through out the entire class period is telling their shareholders we're only looking to get about five hundred to seven hundred million dollars a year in savings which would have potentially gotten a deal done in their negotiations their starting with three billion but to sit here and say there was no engagement is not true in fact throughout two thousand and fifteen amp them themselves on page forty nine says they're optimistic they're going to get something done on five fifteen we remain on track a five fifty that's july twenty fifteen in september of two thousand and fifteen amp them at a five thirty two says we're hoping to fin conclude in a way that captures we've made this public something in the order of five hundred to seven hundred million a year so throughout this class period them saying that but what is the statements again that mr possum we're currently in discussions consistent with what amp i'm still good shareholders we're excited to continue productive discussions with them but then he says based on the range of variables that could influence our discussions with amp them we are unable to provide a timetable or the likely financial terms of it successful negotiation and then the early on statement is mr wentworth c e o in a q and a again in an oral response to  question when asked whether and was reflected in the twenty sixteen guidance he says it was not included in the guidance because we're very early on in the process and we're working our way through it so there is just too many variables at this juncture when they already a year into it but they don't have they don't know where it's going to end up that's the point so they should wait they're telling their investors don't we don't know there are so many variables that go into this we can't estimate any of the financial impact and by the way th talking about twenty fifteen to one hundred seventy five million claims a year they're processing one hundred thirty thousand fully insured groups i believe the the revenue we discussed for twenty fifteen was sixteen point six billion dollars a year they're saying we're working closely with this company and just like in federal gas it was an important enough relationship that they were confident that they would try and reach a resolution and again this is a year before the end of the impas and i think point is to a lot of that they take a bench from the end and then use the statements that were made at the beginning because what's made a year later in february of twenty sixteen and this may be one of the most egregious examples of taking a statement out of context there's a risk factor contained in express scripts twenty fifteen ten k that's issued on feb sixteenth two thousand and sixteen this is following a few weeks after amp them saying dialogues continuing what's the risk factor while we are actively engaged in good faith discussions with amp them and intend to comply with the requirements of the agreement anthem has made public statements threatening litigation at this time we were unable to provide a timetable or an estimate as to the potential outcome of these events any of which could result in a material adverse effect on our business in a result of operations so what a p say they say in february of two thousand and sixteen you told the public you were actively engaged in good faith discussions and that's false misleading but when you read the statement they say well we're engaged in these discussions they have a meeting set up in a few weeks they had a mediation in november they say well we're still engaged in these discussions they're threatening us with litigation any of these outcomes could have a material adverse effect when obviously we did make though with the fact that it had already served  distinguish high crush from this situation notices of operational breaches do not need to be disclosed happens all the time recognizing business judge pauley in the in the  bent birch case you know if there's not imminently to geisha if it's not relationship and even judge man's decision and i crush says the same thing these types of operational breaches go back and forth throughout but you're talking about over a year before they even threatened litigation so that it again the operational breaches we would argue there's nothing in the complaint to allege the magnitude of them nothing to allege that they could have been cured instead they take anthems post class period end  mechanism all it requires is every periodic period where you're supposed to sit down no obligation but to sit down in good faith and try and negotiate repricing your friend also points out that makes the argument that the fact that mr passed described the fifteen billion concession as ludicrous and yet that was anthems continued position over the course of more than here also makes it misleading to describe the negotiations when speaking up about his ongoing productive and good faith there's been no movement judge carney the anthem is publicly saying what they're looking for is five hundred to seven hundred million dollars a year that's what they're telling their public shareholders in their  filings and otherwise the fact that in a contract negotiation they're starting at fifteen billion dollars is not only ludicrous but it doesn't suggest that with these multiple meetings that they may not be productive with all due respect to my friend i've been to many mediations wit where their numbers start off quite ludicrous and we end up with the with the resolution so it doesn't necessarily mean i'm sorry finish the answer just so so i think that's important and then i'm just conclude with the gap violation these are very  all sorts of things and again on page and i'll conclude with this on page eighty seven five five to seven five six what plaintiffs leave out of the original s b c letter even though that's well before the class period is even there and tim says we do not know with certainty that this contract will be renewed renewed what the exact length of the new contract will be and therefore they use a probability adjusted measurement they never say there's a high probability it's going to be five years with that w on our papers for the remainder thank you thank you to hear the yes thank you the district court summary of the facts in this case was actually quite accurate in terms of summarizing what was in the complaint but then the district court shifted scripts answer and counter claim compare those facts to what express scripts was telling its investors there in lies the fraud in this case for months had gone by before the first class period statement when express scripts called the relationship great very very solid they had not been negotiating what do you point to in your allegation to suggest that the people making those statements didn't actually believe them i actually optimistic about concluding a favorable agreement with them well first of all that they could have been optimistic about concluding a farewell agreement fine but they could not be allowed to to deceive investors as to what was going on at the time that is my point what are the facts that they knew they were directly copied in correspondence this was the this even though this record agreed was a core  important contract to the company they were all aware of it they were negotiating their names were in that were in the emails they were at the meetings and them said to express scripts as late as december second you haven't even made a single counter to us you haven't even predict those statements take away a lot of what you are right i don't think they do for two separate reasons so so so first imagine a scenario where a company says we don't know what's going to happen but we're negotiating and in fact they were not negotiating that's doing it for certain reasons of sox but but there are there are multiple indications from publicly that it is negotiated that is not true your honor and them says we have been trying to get them to engage for a long time we have been unable to the general counsel and them says what do i do they won't respond to my demand i guess i'll go to litigation and he says that in january two thousand sixteen anthem is not saying that they're negotiating or they're successfully negotiating if anthem was telling its investors it was looking for less five to seven hundred million a year there is no evidence that express scripts use that information within them to say ok will you take the five or seven hundred million a year instead of three billion there is no evidence of that in the record moreover i want to make this second point which is express scripts  they were not negotiating both express scripts and anthem agree there was no negotiation over that number but the second point i wanted to make in response to your honor's question is the accounting here also require them to take a look at the accounting each quarter they were accounting for this contract not based on its ten year term but they were spreading out the costs over a fifteen year term there was no valid basis for them to do that under a gap unless there was a likelihood of an extension they couldn't agree on prices on contract number one but they were counting as if there's going be a contract number two and that was false and misleading and it was clearly what wall street was taking into account when they were looking at this company thank you thank you we'll hear the next case holland lowder versus  held that that breach quote shafted my client the loader and swallowed up a proud american company yet judge would then felt constrained by the proof and how that how lowder had failed to prove damages with a reasonable degree of certainty that was only one he issued as presently before the court on this appeal and that issue is whether or not holland has simply proven the fact of damages not what the damages are or dollars in sales and that means the contract was the number of contracts your honour's not in the record there was a number of products there was a refurbished loader there were certain spare parts but the context here is really understand the quantity of products so one load or spare parts and i believe there was also some tractors and trailers and the period i'm focused on is that and maybe for the ten years prior but certainly for the five years immediately preceding the contract there was one point five million dollars in sales now going for it and am i right that pursuant to this was called an intellectual property agreement that was the acquisition of the business director right there was not a warehouse full of stuff or you know loaders bi directional or otherwise that was transferred right it was patents and good we all and ideas that were transferred right correct then there was also several trailers of spare parts that were transferred over yet cert so weird they weren't product they were product to describe machines it describes intellectual property that could turn into actual goods that could be is that right that's that's correct it was an intellectual property purchase agreement so there was a number of products that had been developed that had been sold in the past the intellectual property incorporated in those products were sold as part of this transaction correct your honor yes yes and so again the fact here it's a very threshold issue right the threshold issue is whether or not my client has even prove in the fact of damages that that's a low threshold and we know that for three different reasons if you look at this courts and the courts of appeal press and then you look at judge woods decision below and you look at the facts i respectfully submit that my client has proven the fact of damages now how do you prove the fact of damages all you need to do  you have to prove some damages that's all you need to do if you look at the truck the boat case this court found that the plane to prove some damages when a defendant we puti to this contract he felt it before and he didn't buy certain energy the contemporary mission case also from the court very very similar to what happened here this court held that there was a defendant who was supposed to promote the sale of products the defendant didn't do that f l s was supposed to promote the self the products judge awards found that f l s didn't do that and i am i right in understanding that to create products that could be sold that f l s would have had to spend substantial money to develop items to bid on items i mean it didn't have these other breeches about feeling you know trained the sales force and so on but it wasn't as if there were items the air kind of ready to sell it had to invest in order to develop products that would be covered by the earth that provision they certainly had to invest or own but if you look at the deal memo and the deal memo was drafted by n f l s executive for the board was the basis of this deal they say there's little work that needs to go into this year there's already drawings the products are synergistic with our existing products that we have all we need to do is really update these drawings spend a little bit of time and we're off to the races and the deal memo makes it very clear that there's very little work to be done here they have been working with mr tech who whether the plaintiff prove with reasonable certainty that it had in fact been damaged i think if the fact of damages your honor i believe is a legal question and their second circuit precedent that we cite in our brief that goes to that issue any time you have an issue concerning damages quantification of damages that's a legal issue that's reviewed by this court de novo one other point your honor see only have three minutes left i would search that if you look at what this court did in the race of its case the second circuit case that the wrong door rule comes into play there and i would assert that this case is just like race of it this court held in that case when damages are at some an ascertainable amount below an upper limit and when the uncertainty arises from the defendant's wrong the upper limit will be taken as the proper amount now there's no dispute and apply to the amount of damages as opposed to the fact of damages correct that goes that goes to the amount of damages and inhuman even get second circuit cases we cite near breve go to the point where if you have any issues concerning damages the amount of damages the fact of the damages that's a dyno will issue i believe your honor that is reviewed by this court on a on a global basis i'm sorry is the fact of damage or factors in something else yes i believe it's the fact of damages whether or not there's some injury at all this is the proper threshold issue here your honor you for george below and are you are this is somewhat of an why isn't that subject to review just like every other fact we look well because again you're right it's a damages issue and i think this court has been very clear in the past that when you have issues that concern damages those are issues that this court looks number of things here that judge would looked out with a reasonable certainty standard now f l s admits that that's the wrong standard we only had to satisfy the stable foundation but if you look at in two thousand and twelve there's a deal memo the deal memo says on a conservative basis  values my clients property at thirteen point five million dollars without is that the judge would seriously discount that he said based on what he heard the purpose of that was to get  level i certainly believe your honor hit it provides a stable foundation for damages and it's not just that it's in two thousand and twelve thirteen fourteen fifteen there are consistently numbers in an internal document and this is in the record this is that j a four seventy nine here's what to f l s senior executives are saying this is three years into the are now period they're talking about these forecasts have any legs are they real one executive says here i think the holland products has some real possibility as no one has provided any engineering efforts this acquisition even one time even one full time employee focused on this may have a fairly quick effect the five million dollars for two thousand and fifteen is backed up with some real data they used the words backed up by real data three years into the earn out period real data i respectfully submit is a stable foundation we have missed opportunities we have sales forecasts we have are in the reports we have documents where they're saying these are real prospects with the same exact property that we had was a portable conveyor and they say our competition has reached by five hundred million dollars in one year we had the same product they did nothing with it so i respectfully if you get to the quantification of damages the records there's certainly enough insufficient to provide a stable foundation but you don't even need to get there your honor because again the race of each case provides that you accept the upper limit when the uncertainty is caused need for our client to be selling the bike directional over big products three hundred thousand dollars a year on average for the past five years for one person in colorado is a substantial salary he was only focused on spare parts that's all he needed to do this deal was supposed to be his golden ticket to retirement this is a company with fifty subs worldwide a worldwide selling force he said let me give you my intellectual property i have deals all over the world i can't fulfill because i have capital constraints you don't have capital constraints that but the contract they entered into it was remarkably sketchy for something that was supposed to be a golden ticket to retirement i mean it just refers to commercially reasonable efforts in a general way it effects the transfer of the intellectual property the patents but commercially it didn't really have set you know you have to expend a certain amount on r and d you have to spend certain amount on training you have to develop in this matter and that matter was just very very generic and that as the district point out made very difficult to you may feel that these were not reasonable efforts overall are commercially reasonable because it required the input of significant capital to develop any thing it's you know you have a tough row to hoe i think what they had to use commercially reasonable efforts to develop a new product a bi directional loader the end they had to promote the sale of the products  one is a new product parkers just pointing out this is like a new business whether there was one new product your honor there was only one new product was the bi directional load or the other products and if you look at the deal memo here if you look at the testimony they say this is proven technology these products had been in use for twenty five years i didn't that the products had been sold going back when my client took over the business again he was focused on spare parts because that's all he need to do that's all he needed for himself but f l s concedes this was proven technology they say in the record that we only need to do a little bit of work here to f l s size these products that's their term we need to bring them up to our standards this is not a complete total redo they want to take all the products f l s size them and continue selling them  to rely the court did not question the fact of damages focusing instead on only on the calculation of the amount this is not such a case rather this is a case where the court found that there were no damages whatsoever we submit that the closest case indeed the case that is almost directly on point in respect of damages is this court's decision in any us financial versus j p morgan where this court held quote the district court did not find  so for instance he says that we shafted them he says that we dumped the new zealand deal twice maybe more in the opinion itself he justifies that we didn't bid on new zealand they were completely unrealistic justify the finding that we never intended to carry out the provisions of this contract the court takes into consideration this is stark downturn in the market it mentions the stop the bleeding program it and those were not followed up on it and if i didn't see any reflection or in the district with the district court wrote that some of the products that been sold in the past were inadequate in any way they had to undergo this f l s izing process but still you know there was no training done just record seems to say and that these sales opportunities could have been followed up on with minimal capital investment why doesn't that constitute a communicating this is a this is a company that's fifty offices throughout the world in the us southeast asia india south africa indonesia they were all communicating with one another they were responding to increase that were coming in the they were getting support from the spokane office spokane office in the the  increase turned into a sale and this is this is something where they're given the number of inquiries and the modest gap between where the products where they've been sold in the past albeit not in the previous decade why isn't reasonable to presume some form of general damages in that context given the breach and the repeated inquiries looking for even if it's just one out of a hundred increase the sale these are multi million dollar items  to the evidence and it cannot be speculative and is judged correctly noted this is this was a case where you had one sale of a loader in two thousand to these two and t transferred why were those increases sign that sales would have been made well i guess the best the best answer to that your honor is that there were no comparable sales during this entire period we did not prevent to go out with its expert or whoever however it wanted to prove its damages to see what comparable products could have been sold during this period this data this historic downturn i mean let me just remind the court that not a competitor but a major player in the in the same industry caterpillar let go ten thousand employees at this period of during this period of time we had we were closing offices left and right they could not identify one single sale of a comparable product or instant tire period and in fact the irony is that our expert found one sale and that was the that was the related to the new zealand deal where thousand and fifteen our expert finds out that they were still looking for a dozer trap and then they built it themselves so this is a case that's a little bit similar to judge  damages and nominal damages but they don't get to the fact of damages because we already prepaid them three hundred fifty thousand dollars we gave them a three hundred fifty thousand dollars advance so the fact the only seals with these spare parts now these are all of eighty thousand dollars of spare parts translated under the under the formula that came to all of eight thousand dollars so my client over paid for the spare parts forty four to that he just didn't think that he didn't need to get into that because he just found there was no historical record they their expert adopt brought forward any evidence that during this period of time no matter how much resource my client had world resources you could've made another one hundred maybe they could have made another one but they only have eight thousand in eighty thousand eighty thousand of spare parts for translates to eight thousand dollars against the vans payment because it's ten percent so you and well my response is that i refer the court to upper deck breaky which with the exact same i mean in this context was actually in fact tell me why you think that would not  predicate for some damage when you could present as as i as i expressed i tried to express the three hundred the fact of damages does not come into play until you get to the first dollar above three hundred fifty thousand then the cradle paragraph of the opinion should have said something along the lines of already been paid through their duty thousand dollars  well they didn't even bring this up in the in the in the briefing if i just have one second i'll just respond to three points that were made by my friend mr one is he mentioned one point something about one point five million dollars in point that there were no we just very very quickly on the wrongdoer rule i would just point you to the case which and the cap where the judge says no matter even if you do look at a cap and if you were to get i j a two forty two that there are one point five million dollars in sales in the previous five years what is he what what is being transferred your client's obligation in the deal memo that's not in the agreement itself the isn't that correct it's not need remember there are plenty of documents in a record your honor where they're doing projections and are looking for r and d and they say the price of that product the bi directional lower will be twenty five million clear in the record that they manufacture the numbers there's no question about that whatsoever and why was it clearly erroneous that finding the fact that he made a finding that the deal memorandum lacked any established or reliable indicators of accuracy and that it could not be substantiated or justified why is that finding clearly erroneous well because this was a year that had been negotiated for four years there was plenty of data they were asking my client for sales numbers for product numbers for mortgage numbers there's even a couple years later there's sixty one opportunities worth one hundred fifty million dollars there's plenty of e mails where they're passing up the opportunities that the record is robust with respect to plenty of opportunities that they just passed up so the fact that they're making these projections in a deal memo directly borne out if you look at all the opportunities one hundred fifty million dollars in opportunities they only had to get a very small fraction of that and the four million dollar earn out would have been achieved here and get with respect to calculating damages you don't need to wade through the evidence because of race of it and the last thing i'll say your honor just on the fact of damages they cite to one case in their  case they cite the court there found that any s f had suffered no damage is at all the whole that any s f has offered insufficient evidence of any damages look at what judge woods does he's struggling to quantify damages he says there is insufficient evidence on the basis of which the court may calculate with sufficient certainty he says the little historical data in evidence in connection with past sells home products also fails to provide a baseline by which to calculate damages he did not find that we did not establish the fact of damages he held that we did establish the fact we did not establish the quantum and when he looks at the quantum he admittedly uses the wrong standard thank you y three one point one also states that in an extraordinary case a person can also get acceptance or responsibility credit even when one has obstructed justice i think i can i can see a case more extraordinary than this one this case is not sufficiently extraordinary i can imagine any cases  he while he was on supervision he was arrested three times he slipped off his bracelet if he absconded for three months why was it unreasonable for the district court to deny him acceptance of so insignificant that the court the government never asked that his cooperation agreement be deemed to be violated the court never the government never asked that he be remanded within them was assault was the assault there his former fiance clearly had a drinking problem i had a drink driving probably had a drinking while driving problem he had an anchorman management problem and he had problems with this woman for your fiance there's no question about that but  the fact that he was arrested while he was awaiting sentence for these things didn't trouble the government or the court take the court let him leave the country to go to guy enter to attend the funeral o sister when there's no extradition treaty with guyana he could have stayed there you stay there the evidence of his accepting responsibility was as an immediate cooperation with the government totally truthful telling him everything hundred fifty kilos of cocaine mr james was involved in recruiting a few mules in connection with three kilos of cocaine he got sense as a sense far greater than the people who were much more culpable than he was and he his i did read the disparities as one of the issues as one of the issues but he did it the district court addressed the disparity in the district i didn't address any of the arguments that were raised for a down two and he's never spent a day in jail which would be a reason to give a lighter sentence the fact he never been to jail before is a reason to give a sense of the united states recently show a reason to get a sense below the god of it i was also a little confused and i'll ask the government this is well about what the district court understood and exactly he was doing it looked to me like the everyone agreed that the range was one hundred eight months two hundred thirty or one point the district court says why start at the top of the guidelines one thirty five and the other point he says no i'll start at one seventeen in the middle the judge seemed then he says i'll start at the low end of the guidelines  following the original sentence what the judge was supposed to do is figure out the total appropriate punishment for the underlying offense and for the failure to appear to appear figure out what the total punishment was and since he had already imposed a sentence of eighteen months on the other failure to appear which was not subject to be appeal then figure out what the total punishment is and then subtract eighteen months from that and impose a sentence on the underlying charge for the difference that's what the judge was supposed to do both sides were in agreement that was what the judge was supposed to do the judge was was confused as to what the guidelines work was confused as to whether going to the top of the guard as the bottom of the guidelines he never addressed any of the arguments as to why there should be a variance you never over five years now he's been in jail for for over six years he's been in jail for almost seventy five months since it since he came back after his of scott he had nothing to do with it with this case had nothing to it except in responsibility  may please the court my name is tunisia pain i'm an assistant united states attorney in the eastern district of new york and i represent the united states in this matter the district court sentence was procedurally and substantively reasonable both fast in the sentence itself and the procedures employed in arriving at the sentence i would first like to draw the court to three main points that i will refer to in my arguments with respect to procedural reasonableness first the plain error standard of review applies to this case because the defendant did not object to the dip to the district's court's alleged failures to explain its reasoning for its sentence and to discuss the section thirty five fifty three a factors second the mandate from this court to the district court was specific on remand the district court was ordered to first determine the total punishment appropriate in both cases and then offset that amount by the eighteen months imprisonment already imposed in the failure to appear case third the proceeding at issue was a recent and sing at which the court heard essentially the same arguments it heard during the initial sentencing hearing this is relevant because at the initial sentencing the court stated that it had heard and considered the arguments as well as the relevant thirty five fifty three factors notably this court applies a robust plain era standard in this context because it would have been easy for counsel in the defendant to object if they were dissatisfied with the court's explanations and reasonings miss payne i'm troubled reading the transcript here about the confusion about what the district court would start what point the district court was starting from and his records lack of any explanation for where the district court was beginning his analysis on the concurrent sentences before taking the eighteen months off as i mentioned to your adversary the defense counsel everyone seems to agree that the range was one hundred eight months to one hundred thirty five months that that was correct and  r didn't make a recommendation but at page eight one thirty of the hearing the district court says i'm starting at the top of the guidelines as mr gordon points out that he did doctor the eighteen months from one hundred thirty five at the top of the range the following sentence after some of that after that's pointed out he says well actually what i'll do is all start with one hundred seventeen months the low end of the guidelines and then subtract eighteen months will be ninety nine and then i guess you point at that that's the low end of the guidelines but that's the midpoint is what you start to say and then he says well if you're at the intention is to sentence at the low end of the guidelines that would start at one hundred eight and then he changes again his starting point  and you know these are significant seventeen months difference this is a lot of time in jail that that is he's he's moving around in his calculus without offering any explanation about why and so he ends up at the low end of the guidelines where there's been an argument still that he should have very low given some of these arguments about the reasons that he gave  he ends up at one hundred starting at one hundred eight and subtract eighteen months and ends up at ninety but he's gone from one hundred seventeen months to ninety in the space of twenty lines in the thirty lines in the transcript without any x a nation at all so the defendant needs to spend this time in jail why is that procedurally correct or why doesn't it raise questions even about substantive reasonable as well your honor i agree that the court  in my opinion did evidence confusion as to the math that it was to apply as far as the the this court's mandate i do think that the court understood just the math if i could you know when he says starting at the high end of the guidelines then he starts in the middle and then he starts at the bottom i think that the court's confusion was asked to the mandate not specifically as to the applicable guidelines range each case though he's subtracting eighteen months as was directed by that remain and it's the starting point that changes very significantly over the course of this brief colloquy and being before him my understanding of his confusion was the fact that he needed to first make a decision as to the appropriate total punishment and i think that's where he initially had computers when i pointed out to the court that if your intention which is what he said was  is to sentence the defendant to the low end of the guidelines then i said that we would be starting at the want to wait so i do think that it was more so when he starts out by saying i'm starting at the top of the guidelines correct but i think that  think the slight issue is that i think the confusion from the court was that he was supposed to first determine the the not first do the subtraction but to first determine the appropriate punishment for both cases he ends up going from one hundred seventeen months to send him to ninety without any explanation that's obviously in defendant's favor but i'm troubled i see no explanation for it and he doesn't address i mean i think you're arguing that he doesn't have to address more because this was a real sentencing and the fact that it was established and he doesn't really have to say anything further but i mean he has an affirmative obligation to explain his consideration of the thirty five fifty three factors and i don't see that in the record here how can i be comforted about his thought process here while your honor at the initial hearing in two thousand and fourteen the district court did state on the record although he did cooperate he did violate the cooperation agreement i have read the submissions heard oral argument i've considered the factors and thirty five fifty three a just want to remind the court that these factors and these arguments were the same arguments that the defendant argued at the two thousand and fourteen sentence hearing in its sentence admissions in the numerous objections to the pre sentence report and again at the march two thousand and eighteen hearing so the court heard again these arguments acknowledge that the court had again heard the defendant and then proceeded to adopt the guidelines range recommended by the department of probation which was the  again this was continuing to to argue the acceptance of responsibility where he said i've heard your point and then adopted the guidelines range proposed by the probation so he on this is appendix one thirty when the court says ok you had your say this is line eleven and then says that i find that the guidelines is one hundred eight to one thirty five and that's what the guidelines six months i think that's correct so he went down to one hundred from one eighty six to one only yes and that was based on extensive again arguments changes in the revised pre sentence report where the defendant argued for that that the court consider a lower quantity of narcotics to attribute to the defendant the government did not object and the court accepted that and one who worked as a driver received seventy months the government you have all three that he should be responsible for only three point one right so that also accounts in some part for the change in the sentence and the guidelines range right wrecked thank you and in addition the dishes district court statement a reason established that the pre sentence report was adopted without change and specifically the court indicated in his statement of reasons that the factors under eighteen us c thirty five fifty three a submissions an argument by counsel and the defendant defendants extensive criminal record their seriousness of the offense deterrence to criminal conduct to protect the public from future crimes by this defendant and the need for the sentence to be sufficient but not greater than necessary to achieve the aims of the statute his record included harassment criminal contempt driving under the influence i don't believe that i believe that he served and i apologize i don't have the specific time that the surge but it could have been between a day but definitely less than a year i do know that had not really fulfilled the requirement of the statement in open court of the reasons for the sentencing because it was specifically that the court had not it wasn't clear that the court had calculated the guidelines range that there was confusion as to the guidelines range not that he had not stayed in open court his recent i c and so your approach here you think is consistent with that you you believe everyone understood that what the court was aiming at despite that what i pointed out in the transcript yes standing before him in the courtroom it appeared that the court did understand the apple guideline guidelines range the only confusion was as to how this court had mandated that he carried that out as far as subtracting the eighteen months even though he went basically from one hundred seventeen months to nine months and in my impression of that was not that he was starting the year at his sentence but that he was starting there with the subtraction of the eighteen months and then it was going to you know  reminded him of that he started out saying the highest he started out saying that that's ok i think i have a pair thank you thank you thank you thank you sentencing that's not true the usual sensing there was a lower offense level there were different guidelines the defense lawyer the initial said he never made an argument about acceptance of responsibility  to meet the objectives of thirty five fifty three eighty two you don't let the guy stay out on bail and leave the country and then sends him to nine years in jail because he was going to because his life was in danger i mean i