this case makes a key issue before this court the plausibility or not of plaintiff's allegations that defendant kellogg had an undisclosed intention to terminate their sub distributorships you know long before that terminations in fact took place in may of two thousand and seventeen and i would like to review the timeline of this matter and demonstrate to the court the plausibility of this contention which was the central it was the central finding of the district court that our allegation of of an undisclosed intention was not plausible the question of fact before this court and  change and distribution program from a central from a decentralized system of distribution under which my clients worked where they picked up goods from local warehouses from master distributors to a instead  national centralized distribution system so this is an enormous change it made news it was part of a multi year cost cutting program known as project k that was initially announced way back in tw thirteen so i think the court would agree that certainly at the time of the announcement of the change defendant would have been aware of its own intention to make a change so i would like to start the timeli our complaint exhibit one where college employee says to the sub distributors you know essentially there's been a change and we think we can all work through it and quoting directly from exhibit one kellogg will begin distributing kellogg's next to each of you through the seven k d c locations throughout the country i'm going to further quote from exhibit one this is different from what was the norm however many of you have worked to ensure this can be a successful transition of deliveries to you from the k t ceased instead of d c locations so this again is three weeks after the announcement what is the reasonable inference he had nothing to worry about and if anything he might get more business because of the change and we go on to quote the statement made to mr masterson moan that this is d s t not d s that is distribution is and you know essentially therefore mr mesereau the moment be affected again this is after the announcement if the court looks at the four corners of the complaint this was a reasonable inference for mr mastro samone to reach because in fact distribution of the new york area is significantly different than distribution elsewhere due to the great number of small neighborhood stores small supermarkets in the urban area you know in the outer boroughs and you know other parts of new york such as the c town grocery stores are small but i guess so small distributors who can double park let's say a box  truck in front of these small shops and deliver through the front door that's a much different distribution scheme than in other parts of the country where we have vast parking lots and loading docks a kind of thing so it made sense for the clients and this is the messaging that was out there out there among the community of sub distributors that new york will not be affected because we're here we're just a different a new york you know different type of distribution so let's go back to the on the earlier time frame if we could all accept the fact that it is difficult to turn an aircraft carrier it takes some time this is a nation my distribution of snacks cookies people or cookies cheese that you know that we can find in almost any type of retailer so it's clearly a significant undertaking you can't just flip a switch and those products don't just begin to appear on the store shelves so certainly it took some time question of fact before this court how long can you  new contract a sub distribute with outfit known as brown after he's you know prime distributor was already already terminated and what happens he expresses it in email he gets a call from again from senior sales manager ted angle and he says you know what do you want to quote the language in the complaint you know one hundred and forty four more stores will give one hundred and forty four more stores so this is you know a big big addition  about and it's an inducement to him from a senior kellogg person similarly for mr aronson engages in discussions including whether to acquire additional stores with the complaint from your senior employee it's number one to play with then recruited and hired by kellogg brought in house to handle distribution gentleman and david miller and kellogg then visit the warehouse in premiere and interviews interrogates we say other employees get their contact information bill or that and keeps track of the routes and manages routes for caliber so he comes from  premier reaches the conclusion they must be phasing out subject abuse and based on what kellogg's trying to negotiate so taking all these facts in the context of the timeline we have plausibly pleaded this time line and the court out of reach reach the conclusion that there was an undisclosed intent dating back six years and out of reverse a district court thank you nly yes good afternoon your honor this is dan weiss for kellogg your honour's the district court was correct to dismiss the complaint for two primary reasons and i'll discuss both i believe what we just heard doesn't address at all the st reason which is that all of the claims that are on appeal depend on plaintiffs alleging facts that establish a non arm's length relationship between the plaintiffs and kellogg their three claims on appeal but it's your duty constructive fraud and negligent misrepresentation and all three of those claims require facts establishing some type of special non arm's length relationship and that just isn't found in the complaint the nd reason your honor that out get to is that there are no actionable misstatements alleged in the complaint you just heard a little bit about that and i think that even in the  in the statements that counsel spoke about you hear that there is at most vague and courage ment's about what might happen in the future and those are not actionable misrepresentations turning to the  judge very briefly before i turn to the st reason i just mentioned factually in cases wasn't clear in counsel's presentation that the plaintiffs are sub distributors who are not in privity with kellogg they don't have contracts terminate those contracts with a nonparty master distr peters the sub distributors have contracts with those master distributors and that's what gets to that's very important in terms of the relationships here as i said the st reason that dismissal was appropriate here is that pointis must establish a non arm's length or special relationship with kellogg time doesn't allow me to go through all the elements of the claims but i know your honour's are familiar with them the bottom line is  these claims reduce your duty constructive fraud and negligent misrepresentation they're all special types of claims that have special legal standards requiring some type of relationship a special relationship not a business relationship and at most what's alleged here is a is a business relationship not a special control relationship or confidential trusting relationship or a pretty like relationship at most it's a business relationship and the reason i say at most is because the relationship is quite attenuated because the sub distributors are not in privity with kellogg and so if we look at the facts that are alleged we have a handful of  discussions meetings that took place in warehouses there's three or four meetings alleged over a period of many years where there were many parties many different sub distributors allegedly at these meetings these aren't secret or confidential meetings they're simply business dealings about distributing a product so there's no allegations of control d required disclosures of confidential information at most simply arm's length bargaining and as a district court held that's not enough to establish the type of special relationship required for these claims and that shouldn't be surprising because new york courts have looked at many different relationships of this nature be it franchisee relations or distributorship relations gas stations all kinds of relationships that are similar to it distribution relationship unhealed time and time again that requires exceptional facts to establish a fiduciary duty or a relationship of special trust that would support a negligent misrepresentation claim we cite the united magazine case for example from the southern district of new york which holds that a relationship that went on for decades and decades involving exclusive territories voluntary disclosure of confidential information that isn't enough to establish a breach of fiduciary duty under new york law d it requires much more in terms of control in terms of acquired confidences that just isn't here ramsey and son's case that i know judge reggie was part of the panel on that case the nd circuit two thousand and sixteen that was a distributorship case involving i believe pasta an exclusive distributor many years  a judgment was entered in that case for the distributor because a distribution relationship simply isn't enough to establish a fiduciary duty we cite several more cases in the briefing  single case in their briefing in the distribution context where a fiduciary duty or other special relationship was found they set a handful of cases from the securities context where somebody soliciting a sales purities those are completely different factual context that reason alone the failure to establish a special type of relationship that's sufficient for the dismissal below and require the dismissal below very briefly a turn to the nd reason the  y mis representation that's what counsel focused on and if we look at what's pleaded in the complaint there simply is not a misstatement of fact there are multiple vague future type statements like sit tight you're doing great winning a lot of points these are as the district court said they can courage admit that most they're not actionable misrepresentations of fact in terms of the so called secret plan that council just focused on that alleged repeatedly on quote information and believe in the complaint with no suggestion as to where the information or belief comes from other than this reference to a two thousand and fourteen litigation between kellogg and premier in which certain letters were made public and the keys aspect of that litigation is that it was a public litigation and these letters the council just referred to a few moments ago they were public in the court's docket in to suggest that there was a secret plan hidden since two thousand and fourteen and the reason we know that is because of these public letters on the court's docket it doesn't add up and that's what the district court held that this so called secret plan just isn't supported by any factual allegations very briefly counsel referred to some statements in two thousand and seventeen it's important your honor that there is no reliance of any type alleged in the year two thousand and seventeen in the complaint so what's alleged is that the plaintiffs did certain things in the year two thousand and sixteen in terms of changing from one master distributor to the other in terms of acquiring new routes their allegations along those lines and two thousand and sixteen there are no allegations of detrimental reliance in twenty seven dollars team so again there were no misstatements made but even if we're going to look at any statements in two thousand and seventeen and ask whether those are actionable misrepresentations plaintiff have not alleged anything about what they did or didn't do in respect of statements in two thousand and seventeen and when we look closely at the twenty seven distributor there's no allegation that caliber was not entitled to terminate a ninety days notice and essentially what plaintiffs are saying is they wish that this relationship had gone on longer they wish it hadn't been terminated but they kellogg ever told them that this relationship would go on any longer than it did they don't allege that they were not compensated for all of the work that they performed while these contracts were in place they simply allege that they wish that this relationship had continued and so for that reason also the complaint was properly dismissed the argument i just made i should have noted goes to the nd two counts it goes to the constructive fraud count in the negligent misrepresentation count so that's a alternative reason why counts two and three were perfectly dismissed briefing plaintiffs suggest that they have another claim   claim for fraudulent concealment we don't agree with that but even if you were to consider that as a claim that claim would also require a type of special relationship so called special facts type of case there is no special relationship for the reasons that i already covered and there is no misrepresentation or admission of fact for the reasons i also discussed so for all of those reasons the complaint was appropriately dismissed with prejudice here there are insufficient facts pleaded as to a relationship that would create a duty to disclose could you do that please you're addressing your question to i'm sorry did you hear my question mr bradley yes thank you judge raji and we do believe we pleaded the relationship as the court knows there is the ability to plead the special relationship or some sparseness under the sou s equity case where the other elements of the claim are planted in a negligent misrepresentation context that one party at superior knowledge and the other party acted based on the stake a knowledge of the fact that we pleaded showing the relationship that kellogg attended meetings with the plaintiffs induce them to enter into the subject to be shown agreements in personal meetings including with senior or excuse me regional sales director angle and that sounded appendix th distributors to use out in new jersey where he was a substantial distributor and if the court canvas is the the four corners of the complaint you could also see there was a significant you know day to day reporting relationship between the personnel and certain of my clients not all of them mostly mr mastro samone and mr aronson where we're just talking with the senior personnel frequently about business and they just haven't had an ongoing mere fact that they're doing business and they're talking about doing business and they're sort of general statements about you know continue doing business in the future you think that creates the equivalent of a fiduciary relationship we think the provision of advice to these clients among other things in the context of knowledge that this entire distribution scheme is going away creates a duty this is a duty created by the exclusive knowledge within the exclusive you know province of kellogg and our clients have no way of finding out about it they're acting based on mistaken knowledge as kellogg notes so we would suggest that under the brass