federal jurisdiction over class actions with as is relevant here three narrow exceptions this basic guiding  seventy eight should be seventy seven but no if you read all of those statutes set forth in subsection eight together of these subsection limit the exception to warn a security th traded on national stage and doing the sale of that security it is alleged in the complaint a complaint a misrepresentation omission or deceptive conduct  was traded on the new york stock exchange neither complain makes any allegation that this that somehow deceptive conduct for all that was involved as a second circuit law the second exception found in subsection b again this exception does not a plot of the aiding and abetting claim against and ent and here's what the supreme court said in terms of fires means it means and i quote matters peculiar as a key word to the relationships among or between the corporation and its offices directors and share holders and the senate report cites to the edge a case by name and then quote the same definition they are now but q you means in this context the longing exclusively to so in tal afar as means mad as belonging exclusively to the relationship among and between the corporation its offices directors and its shareholders by adding  darl act in this case demanded by definition this class action no longer belongs exclusively to the inter relationship between directives and shero consequently the internal affairs cannot apply in the third exception minute dad referred to as a securities exception it was discussed at length by the second circuit in the trilogy of cases that are cited in a brief the first of these cases is the corelli case in that case a company named agway was insolvent yet its offices this case caught already and a few reversed caught really begins with this recognition second circuit said the imperfect drafting of the calf a statute makes it ambiguous and thus this court must read the words read the words in context and then consult with legislative history the this exception is set forth in dominions reply brief on page nine and is set forth  diagram form hope before ease of explanation it begins by saying this code section set forth simply say federal court shall not have jurisdiction action but it does but anyway that's our well so isn't the fact that diminutive didn't issues the securities here isn't that a point in your favor and a pretty strong point in your favor big strong  ought to explain that farther for me how and in your explanation maybe you can turn to the third of the second circuit trilogies which also involves a similar situation from the obligation set forth in scandalous stock the second circuit considered the words of subsection c in the total context of the statute in here's what the second circuit see it within the statutory car deli right i am ok so blackrock written by the same second circuit judge you mention by name to very distinguished judge route also wrote black rock and he says carr deli explained quote that certain duties and obligations of course relate to securities even though they are not rooted in a corporate document but are instead super imposed by a state well it doesn't exactly say he well it says the duty super imposed by state law as a result of the relationship created by or underlying the security fall within the plain meaning of the statute well let me ask you this if there was a claim that your client had in fact breached its fiduciary duties to these plaintiffs you would concede that section c applies right if they're with that relationship existed where they could reach a fiduciary what we're talking about we're trying to balance standing not standing getting you into port not  not whether in fact they can prevail right ok but so you would concede that that stated an action under caught under the cough exception see the allegation did yeah and i think you'd have to just like i think it would fall under under see if that alone all we're talking about right now what if the allegation was that your client cases what they say is that subsection sleazy to claim that it's found in one of two places and only one of two places and that's what the so i c it certainly has the same sources preacha fiduciary duty to me going back to that language in the second circuit case i can see why you say we don't owe them any fiduciary duty i understand you say that but that doesn't help you with respect to  in the opening paragraph of thirteen thirty two about soley it has to be soley related to or based on the rights and produce area obligations well it's not it is it and is the aiding and abetting a separate tort yes absolutely so it would be independent of a violation of a violation by principle of a producer duty jurisdiction we have to look at what the claim is and if you read the trilogy cases this aiding and abetting claim the second count did not come from a source that is found in the terms of the security or any corporation wall that maybe you can concentrate on this paragraph c since that's where we i think think the rubber meets the road here sure and i think i think maybe  but maybe you can get to but i think we were talking with your colleague on the other side with at the end of his argument and that is that the claim here you are asserting we the allegation is that the scan a board of directors which goes to do share your duties your irrespective of any sort of debt instrument or duties common law and also person to the terms of the security to the shareholders the allegation is that the minion aided and abetted that for you sure you do now the reason why the fiduciary duty exception applies here in this wasn't addressed by the state of pew but it wasn't the blackrock case because you can't you can't resolve the issue investors in less there was some broader something known ball but there has to be the predicate breach of duty once once so the hypothetical how they have a duty at all when they didn't issue the securit they and it's not just duty under sea it's right duties and obligations so i need to also hear how they have any rights or obligations under c i think the case talk about they have a duty to to avoid aiding and abetting your typical tort analysis but i think i think we are in for their share duty runs to the other to the investors of the dominion this is correct your honor however it has to run to the investors of dominion under south carolina state law there is a cause of action duty and there is a sort of ancillary collateral tort which would be the aiding and abetting breach fiduciary duty so if you agree with mr wilkins that the aiding and abetting is a separate independent you can't you can't we don't have a claim against dominion without a claim against scana we in less there is alright then if you don't have a claim against a minion without a claim against gammon then what about the opening related to the minyan we do have a claim soley that relates to the breach fiduciary duty and this is all and this is in i think it's helpful to look to look at the senate report in this regard and how the courts have this is you can only have one action that's removed and if there is a fiduciary duty claim that's part of that action then the entire case need to be remanded and that is why when congress enacted they made clear we're not trying to upset any jurisdictional lines with respect to what susu said decided and that's why they crafted the statute to say solely relates to right so it encompasses if the statute of the exception was only an argument this seems like it would encompass everything it's so broad that there's no exception there where how could the exception ever apply so so there's only a few there i mean there's there's very few things that relate to a bridge for you sherry duty one of them is aiding and abetting you're going to produce your duty and it's got to be right duties and obligations not just duty there's got to be what are the right rights so this is this is this is the issue that was dressed five rights duties and obligations right sections that's the second part of that looked at it said ok these are fiduciary duties so we're going to look at the second part of the statute the rights and obligations related to the security right in the issue in the car delhi case was this was part of the whole you know the countrywide you know the mortgage backed security so with that with that what they decided was look you don't your claim doesn't stem from the rights and obligations from the security right you're just you're not trying to enforce the terms of it you have a claim that arose because you have an issue with it but that's why i didn't apply but i think the blackrock case look back at the real meat of this exception and how it pertains to the issue before the court which is the breach if you do sherry duty and if you look back at the language the perfect or language in the statutes solely relates to if congress intended for the exception to cover only the fiduciary duty and not any ancillary claims related to it why why would it say relates to it would just say sole the breach of duty that's the way the statute would have read the relates to language would be completely surplusage so the rights to language you say makes a very broad exception it doesn't make a broad at all you're out it it if you look back at the history of this the reason why the producer if you will consent it was a very narrow except it is it is it is very narrow and if you agree with them on that i agree and it only pertains to claims that relate to the need to hear this kaffir laws understand it was all that is governed by south carolina law all that conduct if it took place took place in south carolina and is as the panel i'm sure is no doubt aware there's a lot of local controversy going on with what led to the events and the merger with dominion there is that you know the failed nuclear you know there's there's all sorts of regulatory actions within south carolina revolving the events that led to this that is exactly the sort of local controversy that calf want understanding how you have a claim against them reach a fiduciary duty now when two corporations merger one is overtaken by another are such claims or breach of who do you share your duties by the one corporation the would share holders of one corporation made against the merged group or against the do you understand what i'm saying i think we need a little in one of those duties as alleged here is to avoid acting in their own self interest and make sure i have the best deal for shareholders and under tort law in every state and united states specifically delaware because that's why we have the carve out  breach for the share of this requires knowing participation requires a lot of things but the one most important thing that a requires is a breach of duty but if the other side of the deal is breaching if you do you think that's been sort of the gist of my friendship king's questions you see what i mean maybe maybe i just them has the buyer in the cellar here the merger i don't know how this was done each has their own set of cheryl dog in this race they're trying to get the best deal for themselves they are they are going to the best deal for the dominion shareholder exactly that's their fiduciary duty right so if the if the dominion people and this current people at trial we had to demonstrate a predicate breach that was committed by the rule metro board and that is that was what that was the transaction in other words it's the same it's the same thing here is you have to is that in case all of these focused on which we think are the two crucial points here which is the internal affairs and the producer duty exception right the two reasons why congress preserve these exceptions were one we want states to administer cases to proceed in state court it's called a delaware carve out delaware has the big corporation law they have all these companies that come in and says that are socially related to soley related to law i know can you explain to me again how aiding and abetting somebody else so it's only relating to a breach of duty right which is the language in the statute the reason why the aiding and abetting claim here is part and parcel that exception is because they in abetting claim cannot not only i but the senate report and congress wanted that to be the language in the case talks about specifically why that relates to language support here and i would also note is as i mentioned earlier  bucyrus case focused on the first exception it says not a covered security so there can't be a cop exception he stayed a few case focuses on the second part of the third exception the only case that addressed internal affairs  just a few points i'd like to follow up on first i think this is an important decision in which this is the third courts of appeal that have addressed the issue of calf exception the first you've heard a lot about the carnally case interprets the second circuit decision in the trilogy that counsel referred to earlier and it concludes that the cafe exception applies and therefore remained was appropriate and in that case it distinguishes the card nellie case as your honor i think you're on to describe that cardinally was limited because it was a fraud fraudulent inducement case the claim was for effectively breach of section three forty nine of the new york deceptive act practices and here in that case and as a result of that in the two subsequent cases greenwich financial and also in the blackrock case the second circuit concluded that remained was appropriate and in the in in the  that remained was appropriate so this is an important decision for this court because this court will be the first court to find that under these circumstances in which there is a breach of fiduciary duty claim that has an eating and abetting piece to it would not would in effect not not be subject to remit second i do want to i think it's important to go back to the language of it because it does say soley a claim that's solely a claim that relates to the  you that from by from my perspective the most important thing is that it was decided subsequently there are three other courts the room in case the cases that we've cited and the analysis those courts undertake persuasive and i think that's one of the reasons why we've described describing and quoted them aiding in the bedding is it on the on the outside of the lane or is it crossed we say it's on the outside of the lane and i think the analysis that the court should listen also said it's on the it's still in the lane because you cannot have a breach of  aiding and abetting breach of duty without an analysis of the breach underlying breach of fiduciary duty and i think it's important to also point out from a perspective of cafe and making sure that state court issues get resolved by state courts there was it was imprint congress considered the fact that it wanted to stay out of the operation of of courts of companies and their internal affairs and here you have a south carolina company with that was incorporated in south carolina business  south carolina and south carolina courts state courts should be entitled to interpret whether or not there was an aiding and abetting claim and this is not a case where dominion came in and didn't know where it was going dominion knew it was buying a south carolina corporation it knew it was buying a south carolina corporation that was incorporated south carolina that did its business in south carolina so it's not sort of the idea that we need to be in to being in needs to be but i don't didn't know any d but is is is certainly one possible cause of action it isn't oh it's has its difficulties because of the issues you're on to raise but nonetheless in the facts of this case in which there was additional incentives provided that we can we have  alleged i believe i mean we have alleged in aiding and abetting claim the defense could move to dismiss that claim at some point and whether or not the court sustains that motion to dismiss we're just talking about we want to work with sony so even though it puts on a space frivolous usually that done everything to do with the jurisdiction that it's it's law as it states a claim if it's a frivolous claim i think your honour's can consider being frivolous claim if that's what you're honest conclude they don't know if it is if it if hypothetically if it is a frivolous claim on the impact to remain and appeal i think it in my i think a conceivable alternative would be for the court to remain ever the case without to many dismiss dominion from the case because the court concluded that it is that it doesn't have that  claims arising from independent sources of state law aiding and abetting is an independent external source of state law well you and i have both agreed i think in the earlier round here that if in fact you have an while leaving unaffected federal jurisdiction over claim based on the rights arising from independent sources of state law now and in the corelli case know their separate agreements and that's a very interesting thing about this because the violation of the it was that with the people that were involved there  both black rock and greenwich they both involved remember they had that peculiar new york scheme but i know you do remember but i don't mean to interrupt you go ahead with your argument is to construe to find those terms when the statutory context within the purpose that the thrust of the reason congress passed a statute and the second circuit said what we're talking about and only the only two places where the claim the sole claim can be filed you know the terms of the independent standalone cause of action like anything in a betting it does not fall when any of these three exceptions and let me just play book oh each time you've quoted that you said relevant common law relating to corporate it doesn't say that it just says or common law well it but it but if you read all occasions john is not talk about common law in general is talking about the law that imposes benefit that's all i have thank you thank you very much thank you for your argument if you really think we will come down and read the lawyers and then we'll take a short recess that's all the court will take a