the court my name is jay breakstone and with me is jessica richmond from my office we represent the plaintiff appellant you want to feel less there are three questions before the court as i see it this morning and i will  begin with the rico distinctiveness or distinctness question because i think that's the elephant in the room right now  that fed ex and we say fed ex we mean fed ex corporation has set up the holding company to be on the holding company yes i don't know if i call it up i think that's fine for our what the stent is a separate cooperations have separate boards of directors some members might interlock and they're very separate purposes and they've been set up to do very separate things i think for rico that's what we're talking about we're talking about as one court said are these corporations merely stacks of stationery or do they have separate purposes was it your theory in the complaint or in this litigation th i think it's fair to say from the pleadings and from the discovery thus far in the documents that fed ex ground was actually an ongoing concern that was parked just by fedex in fact for those who may have practiced law in this area many years ago it was called roadway package delivery small packages on the opposite center and we used to use it to go up to albany was purchased by fed ex solely to do small package delivery now i imagine it did other things and then the fraud plaintiffs like mine but yes that was the purpose in this was for fed ex ground to do what it did to to further the scheme and to make it happen and when i say that fed ex set up these subsidiaries this way it's not me saying that in the record there are a number of the ten k s fed ex corp and fed ex corp says as follows their words we operate quote operate independently complete compete collectively and manage collaboratively well the first one is the problem for defendants here because if we operate independently says yes and you're saying no not when it comes to this situation at all they may have a sickle single corporate consciousness on other things that they do to get or not and i think that phrase is really part problematic i never thought of corporate existence as sort of this and think in terms of consciousness gave me the words i know needed neither would i have made them up for the supreme court's that we need distinctness in other words they can't be an amalgam they have to have separate identities now we start off by saying they're separate entities well that's a good start conceivably you could have separate entities that really just an amalgam but that wasn't the case here and fed ex has consistently over its history fed ex corp consistently over its history argued to other courts just like this one and all the district courts and other state courts that these subsidiaries were independent of fed ex corp they had been doing that time and time and time again and the court below it annoyed them by saying there were many reasons that corporations and corporate to me that's a non sequitur because we have to look as to why and whether these entities were operating independently and this could involve the natural person that was the issue right are legally distinct or separate corporations i think that's so and as i understand it part of your argument relies just on the fact of the go separation that's enough of a predi to advance a civil rico violation well again those aren't my words those are the words of the supreme court and of this court now i think that since we deal with this case in a summary judgment mode where all influences go to the nonmoving party and and the case is presented favoring the nonmoving part of the obligation the burden being granted that in answer to your honor's question what the defendant has to show is no that's not the case here so here these entities are not choose me or that these entities are not separate just for the sake of being separate well there are two things there but my one my first question consciousness that's a big difference if you're saying it isn't god well no i mean because fed ex is set is much that it's not guided by a sequel corporate single corporate consciousness they have they have different they have different presidents they have different obligations they do different things they operate independently which is what fed ex says we operate independent subsidiaries operate independently  what we're reviewing a finding of fact and summary judgment of a single corporate i think there is yet there has been finding here because if there wasn't a finding i wouldn't have my case dismissed yeah ok so there has been a reached out found a case that's never been cited in the circuit again for this purpose of this district and these districts and found a creation of a principle facilitat facilitation i think in those circuits in those cases means at least to me and i would hope to the courts that the relationships can't be obscure it's almost as if they are in the proximate cause chain it's not nearly enough being separate for rico purposes now granted that sort of flies in the face of question but there i think this case is perfect in that sense that even even were we to adopt and say yes we have a new standard here the seventh circuit standard in in buffalo and we're going to say we need facilitation it is clear that it's here you don't make that argument  because what happens in this case is that none of this can none of this can occur unless these three corporations work together on the screen i want to ask you when you want to reserve some time of a battle to more than twenty five depositions more than three point one million pages of document production the evidence clearly shows that the three fed ex companies operate within a single corporate structure guided by a single corporate consciousness to legal east the legal separation of the corporate catches of both the corporate conscious of the legal separation isn't disputed that's never been disputed as counsel points out there is public record for that matter doesn't need to be put on proof forms the corporate consciousness the fenix companies they all the one goal of all of the companies together is to provide a portfolio of shipping solutions for its customers whether that be the obviously in this particular case there was no specific decision identified by the plaintiffs in this case which they say that decision was made by fed ex corp that's because of a decision was made by fed ex corp and they used these other subsidiaries to carry out this this fraud scheme that the companies for example in the cases that opposing counsel sites where fed ex had taken the position that there were different operating companies  we don't control the operations of the other subsidiary those affidavits come from cases where employees were suing ground for example and also trying to sue fed ex corporation as a as an employer secondary employer so in that context facts corporation doesn't have the hiring and firing decision making power over fed ex ground employees or fed ex express employees so in that context is a completely different consideration than the one that's before the work or the structure and single corporate consciousness may be different things in different contexts yes or yes i think i think that's absolutely the case otherwise the rico statute would just apply arbitrarily to every company that chooses to operate through the parents of city area structure there different ways does view this these facts why isn't there a disputed issue of fact that makes requires us to send this back for a trier of fact to figure out whether there's a single corporate consciousness assuming that the test survives center question it hasn't presented any fact that would put that in issue now i don't think that there's any dispute there is no dispute in the record that the company operates as i just described trying to provide its customers with different shipping solutions to meet their individual needs that's why their offer the three different subsidiaries include and then fed ex services that it's also important to note that the three sorry i recall that from plaintiff's comments that this was a separate company that was acquired by fed ex which is i understand it from the record has separate management that is in pennsylvania separate from fed ex corporate management ok how how is that that the record establishes that these new disputed  to them whether or not there's a single corporate consciousness here i think it still goes back to the point i made a moment ago that whether the fed ex ground was acquired back in the mid ninety's or whether it was created  ninety's it really makes no difference for purposes of the rico analysis it's still the fact of the matter is now during the relevant time period it is a motor carrier providing package delivery services for customers test as saying facilitation is required but that's not a new concept in this district in other cases i believe it was while certainly in cruise and it may have been a quotation from the woods case but the court said that it's not sufficient to have merely a corporation and its employees and agents and affiliates merely implying that there has to be something more if that's all there is and there has to be  the open question that's presented in this case i believe when the crews the question i think is in a footnote your honor where i believe this court used to be civically actually wrote that it said you leave open the question of whether or not a corporation can operate one of its subsidiaries as a distinct rico enterprise and then judge for said this is that's precisely the situation that we have here which is an open question and is that was honor it was open question however from the analysis whether or not a single corporate company holding company or two subsidiaries can be sufficiently distinct for rico purposes is not a new question your honor did address that in the cruise case now opposing counsel did not address the thirteen seven zero eight b claim or the statutory or  the class action waiver i think he may briefly well yeah well just because i am limited on time here i would do want to mention that the thirteen seven eight b claim was properly dismissed because so that i think the court properly dismissed that claim as well with that the court does not need to even get to a class action waiver because the case would be completely disposed of however i will point out that the the court does need to get to the class action waiver there's no reason why the court should treat a class action waiver outside of the arbitration context any differently than they would treat the class action waiver present in the italian colors which did have the arbitration provision this situation the clause in this case is less restrictive than the clause in the italian color case here the plaintiff maintains his right to pursue statutory remedy in the court of law without having to go through the expense and time and rigors of a arbitration and briefly finally i want to just i guess address one of the arguments plaintiff made in his brief but did not address moment ago is unconscionably of the contract this contract was entered into between two companies raised in the in our main briefs when we discussed rather extensively the decision alone this is page fourteen we can take in page fourteen in the middle of the page where we were discussing the decision below and the quoted material is what's the difference between the separate corporations and say looking at them is just separate divisions and quotas legally because they're separate corporate entity they're only going to have their own management so it's different than operating as a division which then led into a page one thousand at the bottom where we said because the court below added an was no allegation that fed ex grounds separate incorporation facilitate the a lawful activity it held that there was no genuine question it's true so i think we've discussed it throughout the brief and in fact even if we didn't discuss it your honor the we have a single corporate structure and a sequel quasi group single corporate consciousness but the fact is single corporate consciousness is profit that's the single corporate consciousness if that's what we're talking about that's defendants point at the single corporate consciousness here that defeats rico distinctness is that the single corporate conscious of fed ex corp ground and services is profit well that's nonsense because that would mean with with regard to the issues that that and remember it's fed ex who said we operate independently and we bargain collectively which is again probably getting to the it is very clear that there is no way this scheme to defraud can operate the way it did unless all three of these corporations facilitated one of the not one another co op doesn't do the building the building is done by services services doesn't do the shipping it doesn't do the weighing etc that's done by ground ground utilizes software to do that which is developed by services that software no i'm talking specifically about the about the activity because if you take the canadian custom scheme this scheme doesn't work unless there's something called a broker incentive right where it where the where the recipient is supposed to pay to do the taxes and fees and then doesn't and then nobody in the ground doesn't get it back in the broker and it goes into a building program and then it's this aggregated by the building program developed by services that does the government so that nobody can follow it we're talking millions of dollars and the and the bill backs which never occur which are build back some fifteen million dollars and we have a services employee in this record that it meets we really have been taking money from them but i think that the question is to the extent that there is a facilitation that's a separate question but that to the extent that there is such a requirement the operations doing other things of which the rico scheme is just one so i don't think they have to benefits any case that says that the corporations whether whether viewed as the enterprise are viewed as the actors the persons as  class action waiver issue you argue that the effect of indication doctrine applies quite why doesn't since you don't have a conflict between two federal statutes why why talk about effective indication that at all or were not harmonize into federal statutes well i think i think conceptually what i'm talking about your honor and maybe i was in articulate in doing it was was that without the ability to to utilize a class action here the rule of law becomes if you steal a small amount of money you'll never be brought to justice because nobody can afford to do that nobody can afford to predict justice there's no overriding federal  arbitration act preemption doctrine going here no matter how anybody feels about that one way or the of the fact of the matter is that the evidence in this record shows that in order for my client to bring this action as an individual ready to affect effect yes the class action waiver it would cost between seventy five two hundred thousand dollars just for the expert just for the expert more than the claim might be worth it so the rule of law becomes still a small amount of money and even if your court nobody can do anything about it if this class action waiver is effective and that's why it cannot be and that's why it shouldn't be this is not a situation where there's an overriding princip something that counter vales that such as the federal arbitration the last thing i want to talk about is doing very briefly is the transportation statute this transportation statute which you wanted might understand comes the bill or the invoice of the bill that you issue is incorrect that's a violation the key is truth in billing and that makes sense based on its history it is unambiguous these bills were false that's all that's needed under the statute there is absolutely nothing else needed under the statute and there's no reason to look behind much total in terms of over charges so we talk seven billion dollars per year that's obviously over a wall for my client i think we're looking at the defendant admitted about seven thousand dollars and it made it  on the up waiting see that's on the custom skate on the up waiting scheme i don't think we have a seven or seven broken out separate broken out figure but it is bu well thank you very much