the case that we have today is a case that addresses the question of the sufficiency of allegations in a complaint that claims injuries and damages as well as  for intentional interference i think it is fair to say that courts around the country have struggled since the issuance of the supreme court's decision in twamley and it all over the question of what meets the standard of possibility as it was articulated in those cases this court has grappled with it on a number of occasions notably in the starr versus baca case coming to the conclusion that where there are factual allegations that are possible on both sides the plaintiff and the defendant and essentially create a situ situation where there is here isn't exactly a complaint problem neat the main problem is that you and how much in friends of agreement can you do in a are you well i think it's fair to say that if the court reverses we would be back in the district court and discovery would occur there after fully last comment was home and maybe to come up with an agreement that's correct and lead to but it's a total fishing expedition no i don't see the way the district court thought well i'm not i'm not saying that judge mcconnell used that phrase it's just it's just that she didn't think that you had alleged enough in terms of who what when and where i think that's correct that is precisely what the court ultimately came to a conclusion and you've got names and you've got where but it's just the biggest of allegations is just it's just these folks were here something happened that we don't like later on and therefore therefore they must have conspired yes i disagree and let me say why in this case there is no question but that there were factual allegations distinct from conclusions and the court in twamley the court in star all make the point that what you do is you can eliminate the conclusions price fixing and the sixteen million and larry if i can your honor actually let me take that and then i will turn to judge by the your question one thing that we do know throughout all of the cases not only from this court but from the u s supreme court and the u s supreme court cases were tell labs and otherwise you treat the complaint in its entirety this was not a claim where the plaintiffs were alleging there was a discrete little conspiracy here there was a discrete little conspiracy there that was the argument that the defendants and tempted and i think successfully did in the district court make the point so that you were essentially looking at little buckets as distinct from one entire conspiracy and its whole form this was a client of this sixteen let's say the whole expiration of that agreement would you have a case at all i'm all we have no if you didn't have that isn't that the foundation that is the foundation and so as i understood it the screen actors guild was the group behind this sixteen g coming to it and my right on that that was the argument accepted by the district court that i think that fails to give credence to the allegations in the complaint which made clear that a group a committee of the a t f which is the talent associations organization had decided collectively amongst themselves and these are the defendants and to other non name defendants to eliminate sixteen g b tell me h  but it was an agreement between the screen actors guild and the talent agencies right and so then the question is how does the sixteen g l in the nation hook up with what you say all tim lee happened i e that these four entities became so predominant and in particular change the whole final that nothing the whole  entities that had a relationship with the ultimate product for want of a better explanation we set up the movie is that for the best is the reason they were able to set up this alternate for scheme where they would get a part of the profits absolutely well i completely missed that and maybe i don't really well but i i thought it had more to do with investments not with this actual financing scheme you know it actually was the core of it and to return to ju question what is alleged in the complaint and in facts which were that the committee of the made it clear that what they were going to do was to drive the demise of sixteen g b only half of the agreement and so there's no allegation as i read it that committee somehow infiltrated or was  sixteen g b the trial talent agency had to give notice to the screen actors guild that they were imposing a request that they now negotiate their there has always changing what was about it no but what this is critical to this is the financial interests that flowed into the talent agencies those three clan are the defendants and the two others as a result of the demise of sixteen g b sixteen g ultimately was voted down by sag but it was voted down that what your representation to me before which i said i didn't understand was wrong i did understand  let me see if i can articulate this much clearer the point of what was the prohibition on in sixteen g investments in talent agencies by and cities that were producing a product i thought it was the other way around no ok and then all right so now the production companies can invest in town agencies what is that how does that lead to that the change in the compensation scheme and so on what it did was allowed for the extraordinary growth of the defendants and the other two entities in a manner that was unparalleled and after having that infusion of money you can then engage in the balance of the activities that you are intending to do which is to concentrate the market on packaging of scripted television series as opposed to what the talent agencies were doing before which was providing essentially a service industry at a ten percent commission as a result of the infusion of money you now have the ability the defendants as we've alleged it had the ability to grow exponentially to be able to hire much more to essentially be able to develop what we say to be a conspiracy to ultimately eliminate smaller talent agencies so that they can concentrate on the three three ten packaging go back to judge place and your question alternately sag voted this down but it came about after negotiations and after there was a deal in place which is the deal that sag voted down the deal that they had it had sag not voted it down the talent agencies had gotten a lot of what they wanted and if sag voted it down the net result was sixteen she was going to die because the  then did not need to negotiate further and it would die of it's own terms so no matter how you looked at it the talent agencies the defendants that we are asserting a claim against were in sitting in the driver conspiracy so the conspiracy derives itself from as we've alleged the idea that what you have is a conspiracy to basically make these four agencies  that's if the rule is going to die of its own terms and the envy of the members of the eighty eight think that that will give them the opportunity to leverage a different deal with the studios that's a business by what's worse the conspiracy that that your honor is where you need to look at the entirety of this whole package of allegations in the complaint it is not simply sixteen g that was the start of it that allowed the money to flow then next the packaging of these scripted television products began to be overwhelmingly the business model if you will but in our view a conspiracy and the evidence to stand and talk to each other and so now we're going to have got in i think that's probably something that we obviously would have the right to look into but i think it's fair if you look at the numbers that that is precisely what occurred but you don't have do you have any evidence that would suggest they talk to each other and arrange for this the kinds of things that would demonstrate a conspiracy as opposed to independent actions by by a couple of very large companies we have your honor alleged in the complaint all of the activity that was occurring with respect to the committee of the a t f as it related to rule sixteen g we  right you actually have them sitting down together and doing some we have them sitting down and doing something in the late one nine hundred ninety s through to early two thousand what we also have is in twenty fourteen the four agencies sitting down publicly pronouncing that they are going to set the price at which everything will be charged so you whereas that is your own or in excerpts of record at in the complaint it's in the complaint forty nine and it is paragraph forty seven on page fifteen is it related to scripted t v series or something else it is related to scripted t v what occurred in the lower court is the defendant argued that had to do with netflix but it had to do no doubt with the scripted television series the district court below made a comment that it was either in jest or it was unrelated but at the end of the day what that statement related to was the decision by these four individuals to say publicly at least one of them speaking for all that we are going to drive we will come up with a system of mathematics in which the four of us will judge what everything is worth and it related to the issue of the ten and so if i can get back to this packaging fee that they charge which is three three ten three percent at the beginning three percent at the end and ten percent on the backend and what we have here is evidence but just and to clarify so that was in place well before october two thousand and fourteen the three three ten yes absolutely and it is alleged in the complaint that that is what all four of these agencies charge for every scripted television series there are facts and the in your brief make a separate pretty separate argument with regard to that evidence being creating an inf understand it say that the prize the horizontal price fixing was not argued before i understand they said horizontal price fixing wasn't argued before i disagree with that in the certainly the district court below disagreed with it and her order the he argue it it was an allegation in the complaint the argument in terms of that three three ten i think it is important to recognize the significance of these four agencies charging that and we've discussed this  the opening brief how that figure number one was a sea change a dramatic sea change in terms of how they were billing before before it was a ten percent commission based upon what  client earned and then turned into an amount that the they work the agencies would say to the potential clients and clients were not charging you any commission we're going to get it all from the studio so under the text messaging  case where you have a dramatic difference in the change in the manner in which you are charging courts have held that can be evidence of a conspiracy so that's number one and consistent  consistent nobody is trying to cut it or no one has ever endeavored to break it in fact we have facts in the complaint that are alleged that where talent has argued that that deal should be changed because it is impacting their ability to properly produce a series and this is the merit of the steam instance that is alleged in the complaint the studio refused to do anything because they were afraid if they did so that the agency would somehow or other do something harmful to them yes but that's a different problem that doesn't that's not horizontal in any event your time is up so why don't we give you a couple minutes or about thank you thank you very much and good morning america please the court k t o sullivan for the appleby's we submitted separately but i'm here today to argue the common issues on behalf of frank united talent you see and my client international creative management partners and mr marron berg would like two minutes to cover issues relating to his client the district court properly dismissed the plaintiff's first second and third amended complaints and was well within its discretion a ruling that after four tries the plaintiffs should not be given leave to file a fifth version of its complaint the third amended complaint failed at the most fundamental levels it failed to sufficiently plead a conspiracy or any antitrust injury flowing from that conspiracy and its state law claims were equally deficient to respond to some of the pellets points first the argument is well you need to consider these allegations in their totality and the district court did so the district court understood that there was kind of one sprawling conspiracy spanning nearly twenty years with disparate elements over that period and zero plus zero plus zero is still zero it was simply not plausible whether in its component parts or viewed as a whole and secondly a major part of the conspiracy are you know on appeal the three three ten was not pleaded in the third amend that some have any trouble at i mean first of all it is true that the  order does say that there was an allocation and it's just says it was inadequate well what the order has and thank you just because i wanted to address that there is one paragraph in the order dismissing the third amended complaint it cites that it was inadequately done but not that it wasn't there here's what wasn't there what wasn't there is that there was a fixed and uniform agreement all the large talent agencies had to impose the same three three hour price fixing i mean well what the complaint actually said in paragraph seventy three was that the system encouraged price fixing which is of course a far cry from actually alleging price fixing but if you look at paragraph fifty three of the third amended complaint that's where there's actually a reference to the words packaging fee that paragraph says nothing about there being an agreement to set that fee but it was uniform among all of the large talent agencies and if there was no deviation that is simply an argument that they have alleged in theory in their appeal briefs but it has not been pleaded i'd like to then go to the sixteenth would that state a cause of action in your mind you know it's simply it would simply not be sufficient even let's say this but waited conversation comes in that there was some kind of agreement and it's simply too little too late the allegation about an agreement that came from a conversation with mr haskell was from a different time period apparently one thousand nine hundred five to one thousand and six where is this sixteen g b conspiracy supposedly started in one thousand nine hundred nine so you have a different time period you have a different subject matter sixteen g is not connected i think you understood it correctly the first time  implication was that was the other things brought up yes and i did want to respond to that this was an interview with the hollywood reporter and the full transcript of that interview is available in the supplemental excerpts of record if you look at pages s r one thirty four to one thirty five you can see that statement was in response to the following question do you care that you don't know how many people are watching on netflix and amazon and the words we have these new streaming platforms that didn't even exist when the suppose a conspiracy began how are you going to value a quantify that will have to figure that out the district court mentioned that in a footnote it was unnecessary to the outcome of the it the screen actors guild that killed this in the answer is yes and that is pleaded in the third amended complaint if you look at paragraph thirty seven of the third amended complaint it says quote the dysfunctional leadership of sag is what was the cause of the demise of that rule so it was not some kind of a conspiracy by the large talent agencies that ended that so the predicate according to the point of but in terms of a conspiracy it seems an awfully far fetched an attenuated conspiracy that we're going to propose something reasonable and negotiate with the screen actors guild board they're going to agree with us but then somehow that the rank and file organize constructive allegation of an agreement right there has to be an agreement but the even after trombley and so on you don't necessarily need people in a room in a complaint do you well court said in kendall that you do need the who what when where who did what to whom when and whether the people are in a room where they're exchanging it by e mail you may not need them literally in the room but you do need them but that seems entirely unrealistic that somebody i mean it if for example and in the texting case that she talked about before seems somewhat to the contrary i mean that there is some point at which you can say that there is no way this could have happened without  first and second amended complaint you haven't had sufficient detail here but the words come up with something and they come up a list with all these packages but not one where the small talent agency asked to be included and wasn't i mean they had persons there right the one place where they added to the third amended complaint of people but it doesn't say what you said it said and this so far i can find i'm i'm sorry your honor but the one instance where they have any of that is for sixteen g b which was which was killed by the screen actors guild and then it's totally disconnected to these other allegations where there are really no additional details at all let has pleaded if you look at paragraph seventy six a veiled threats against the studio well a veiled threat by definition is one we don't know who was making it or to whom and my favorite take one of your shows so the district court ruled on this sherman a claim really on two grounds one of which was there's simply no conspiracy here no agreement and secondly on no injury and the most straightforward path to evaluating antitrust injury is the one the district court reached which is they hadn't pleaded the predicate agreement but it would be equally straightforward to conclude that there was baka case which was three years after kendall seems quite clear about the fact that you can't have circumstantial evidence to prove he had an agreement has not disavowed the ruling in kendall and which says that the complaint there does not answer the basic questions who did what to who or with whom where and when there are circumstances under which we would say ok it's clear that in every contract that said all funds are to be paid into account number along account number in the bahamas and everybody had the same account number where we would go ok not sure not sure who got together but it's pretty clear somebody has been talking absolutely your honor unlike the court said in tuam glee if you had a historically unprecedented change all at the same time numerous companies all doing the same thing for no discernible reason then of course much more likely to infer that the theory was plausible the argument here would be something along the lines of i understand you say that it wasn't raised or maybe it was but it would be something along the lines of there was a complete change and it was a change to a specific set of numbers not just the general notion that you're going to have a team of front and back compensation from the studios but specific numbers those specific better and so they must have agree and that's that's not what they allege here what they allege to the last minute that they didn't actually file an amended notice of appeal from related to a conversation that one of the talent agencies not a name dependent actually what word it's packaging price in response to pressure from the studio and so it's entirely the opposite of the scenario where they all act in concert to do that what that was earlier and way earlier right that none of that has been alleged it can be a perfectly lawful practice industry practice to charge the same base fee but see what's odd about this is not just everybody charges don i cannot it's that it's a very specific scheme with fixing agreement so to get up here and say that this is somehow what they have pleaded is just simply not consistent thank you thirty still haven't answered my question what i think would be a different case is the answer to your honor it would be an entirely different case  the district court was extremely patient here gave the plaintiffs four chances they were deficient at every stage and the notice of appeal was the final deficiency there's not a case where they asked for limited discovery  anything more to support their complaint until it had been dismissed three times the district court was well within its discretion and ruling that they should not get a fifth shot thanks thank your honour's let me first take an issue that i think is important then the court has touched on it in the complaint a paragraph fifty three it is alleged that u t a and i see him are charging three three ten across the board in paragraph seventy eight of the complaint and you know really saying that they can carry and and so on we say the packaging agency receives a guaranteed fee of three percent of the budget which is often already more than the town receives in addition to three percent to furred and ten percent gross profit participation before the talents net profit participation and in paragraph seventy eight it is alleged that as follow on page twenty four in lines one or two that paragraph seventy at the beginning a paragraph seventy eight defendants conduct his car caused injury in at least two respects and then it goes on to say that they allocate the market amongst themselves but limited to co parenting claim is that are exclusive and they set the price for the packaging fee paid by the studios so there are allegations that were in there and the district court recognized that in the kendall case as well as in the musical instruments case there was a very significant distinction to be made in those cases both of those cases came up to this court after having had an opportunity for discovery to occur and so in those cases there was a record as the court recognized in the earlier case that we heard today involving sanusi dro and calexico it is important to be able to have a record that you can go to reach if we get to the fact that you didn't seek to have the opportunity for discovery prior to the work entering the final i don't know that there is a much to be stated other than to say that that did did doc occur whether it would have or would have not i don't know but it is fair to say that the  request was not made in addition the argument is being made that the three three ten is a business decision it is not and it makes no colorable sense as  mentioned this is not a case involving a product that is standard in the industry it's not a widget that one competitor can make and another competitor can make we're talking about packaged scripted television series and it realize belief at least to me that where you have a situation where talent agencies are able to say i have a package scripted television series and let's just take as for example i've got a series that involves a newspaper and i will bring to you tom hanks and i will bring to you meryl streep and i will present this to you it defies belief that they would accept three three ten for that series when they're accepting three three ten for a series by young artist not developed and not a program that has no basis in reality as my hypothetical of the washington post would be so what makes this interesting and what i think the court i believe the facts do demonstrate is that this is a case where you don't necessarily need to always say here's the who here's the what and here's the  and i think judge by the you recognize that also there has to be the case out there there are two text messaging there was no indication that's not from the ninth circuit but it is from the seventh circuit the sony versus  a i believe is a case out of the second circuit where there was no who what when or why that was necessarily specifically pled so what you have in in an a trust cases is a very difficult situation right now that has developed on the possibility front i think the facts that we have alleged not the least of which is the existence of this agreed upon pricing for these package series  the limitations in the numbers of times that the defendants will cope package with small town agencies the demise of many talent agencies during this period from two thousand and one two thousand and two to two thousand and fourteen where there's been a drop of approximately seventy one percent in small town agencies and you have  there are comments in here there comments from talent who are frustrated by the system who can't seem to get their studio to break it which demonstrates if anything a stranglehold that the agencies these four agencies have over these studios as a result of the volume of these package deals there is testimony in this complaint from and it's not testimony but it's a statement in a record by gavin polo a talent agency was paid money for doing nothing because of this what we say is an agreement in its entirety to try to monopolize this market to create one group