merchants of the riaa deities different beings for credit card processing services that were not authorized by the merchants contracts the case is not suitable for a class action treatment because the contracts are not uniform the agreed upon fees in the structure of those fees different from working to merchant and the merits of any individual merchants claim cannot be resolved without an individualized inquiry into the trunk of the merchant contracts and the negotiations they had with the company  me let me interrupt you and i don't mean this is hostile is it sounds but i notice that in your brief both the main brief and reply brief you did not address the rico point and particularly  the st amended class action complaint about your clients about their relationship with the f t c and and you know all the allegations i will spell them out does the fact that we have the rico allegation here make this more like that tyson case where the liability side of the case is fine for a class action and the only issue is the damages side of it so your and your on the answer to that is no and i would refer your honor to page twenty nine of our reply brief where we do address the rico issue but your honor what i would say there is that in order to establish a rico claim you still have to show reliance not st person reliance but you do need to show alliance and you also have to show some form of causation that the injuries were a result of the scheme we don't have either of those here and the reason is is on reliance there is no allegation that can show it reliance by rd party so they have to go st party reliance but you can't look at determine that without understanding the individual terms of the individual contracts and so your honor if you take a case that they rely on extensively when they talk about the rico cases they cite to the nd circuit's decision in u s food services and you will know from that decision what was key there was that one it was only a single cd it was in this group getting more people different variations of porkies nd it was a situation where there was only one representation that was uniformly across the class which we don't have here because of the way that the contracts were negotiated they argue there's a billing notice but the billing notice came after the individual contracts were negotiated so you can't show reliance on that without understanding what the contracts were and rd your honor perhaps most significantly the nd circuit put dispositive weight on the fact that in that case there was no evidence of variations between the parties contracts of course here even the name plaintiffs have variations beyond the contract so without a uniform contract you can do that and your honor you'll see that the nd circuit distinguish this thing the circuits case in the sandwich case which really makes exactly this point from the other side so your honor the reason we obviously address the rico claim but the reason we didn't focus on it is because the rico claim is really just a tag along to is you have to do a couple things you st have to take a look at the cause of the class as it was certified by the district court and you will notice that what's happened in their response brief is that they are running away from that class definition in a number of ways making concessions of things that are not in the class but you st take a look at what the class and how it's been certified you can that your honor i would take a look at how they describe their four k and so if you take a look at page twenty seven dollars of their response this is them describing their rico and you say we're sick right pay twenty seven dollars it says and this is in the st full paragraph as already noted c p a generally overbuilt merchants in two ways one by imposing rate increases without contractual authority or any other legitimate basis and to by charging illegitimate fees accompanied by deceptive notices and your honor you notice that here in there is that their argument as to why it's rico violation or a problem is because it's without contractual authority of course whether it's with contractual forty goes back to the individual ised inquiry as to what the individual merchants agree to they also talk about legitimate basis but here are the legitimate basis under the case for how they played their case also collapses down to a question of what did the parties actually agree to in their individual contracts your honor what i thought i was going to try to do today and i appreciate why because it's taken us through some of those arguments but what i really want to do is three things which was st start off and emphasize the variations and why this case cannot be sort of fired as a class section nd your honor to really turn to this question which is that they've shifted their theory but in a lot of well what they try to say is that be overbilling but they can get around those problems and explain why that's that's wrong and then lastly i just make the point for the court that even if you disagree with us on those st two points at a minimum the district court's analysis here is not rigorous enough to allow you to affirm so you at least should be sent back down for further analysis but your honor is going to the st point which i really think is helpful is you can take a look at the class definition that's either in the denton page three foot no one which is the court's opinion or page sixteen of our opening brief where we reproduce it but you'll see that there's four different types of fees from january two thousand and ten to the present that's the what's known as the tease us network b which of the processing fee is reflecting cost imposed by the credit card companies there's the p c i non compliance speeds which is the the fees that get paid when you don't comply with certain security standards that are imposed by the credit card industry there are the discount rates which they said were increased above the agreed rates and then there was a higher rate tears then their arguments that people were shifted between tears what's key to look at is not only the variety of all the different types of fees that are put into that but the structure of each of those feels very there is no one dollar piece this network the non compliance fee discount rate or higher rate each of those fees how does different structure for different merchants with a different amount that was charged depending on their individual life circumstances that means what types of credit cards they were processing how those credit cards were processed and what the mix was for them our basic point to the court is that you cannot know whether all of those or any of those fees were permissible without looking at each merchant's contract understanding what was agreed to by that merchant and what amounts were charged under what particular circumstances and your honour's just to give you some nail sketch of the evidence goes by the senate below you can take a look at the a dent in one pay thirty six with the declaration for mister ratner that goes through this in more detail but what you'll see there is that there's two hundred thousand alleged class numbers looking at a sample of two hundred contracts we found at least twenty eight dollars different template there's ten thousand dollars strong sales force that's negotiating these contracts with the individual merchants and the key triremes relating to what the discounts would be what he is would apply whether it would be a cheer or whether it would be a cost plus contracts should have been charged a tease us network feet or a p c i non compliance fee without understanding whether they agreed to pay those fees in the contract or counsel tell me how this is different than a secured by the way has there been a united states supreme court case classes you're honor i wish i knew that off the top of my my head i don't think there is one that's directly oh yeah we don't think there's one either feel free to do twenty eight j if you do find one but we didn't find a class action rico case different and nd why the other side hasn't relied on that i think would be more helpful to take a look at the two cases they do rely on because it's really telling the differences so push your honour's you know in the securities context there are principles relating to fraud on the market as a whole that do not apply in this context and you so that's an important distinction which is why i think the other side really focuses on the two cases they cite there's the nd case the nd circuit case we talked about u s food services and then there's the th circuit taurus case now remember in the u s fruit services case again as i made clear that she treat points of difference as it's only one feet we all know what the fee is there wasn't any variation in the representations that were but surely are a lot of fun and then last honor it was there was no evidence to show variations in contract in the th circuit case what we're talking about is a ponzi scheme and the whole scheme was alleged to be fraud there was nothing about it that was alleged to be appropriate you could see the differences between the dissent and the majority was whether actually the people knew that it was upon what is your nd carry that you just mentioned and i'm sorry i didn't get it but it is your nd case like this case once you look only at the rico allegations no your honor because again you have to understand that the rico allegations require an element of the lions and also causation and injury and you can't show that without looking at individualized basis here they don't even argue reliance on a class wide basis because they have to in order to do that s that someone relied and you can only do that through st person winds here they also haven't shown causation your honor i see on down to four minutes i would like to reserve i'm for a photo but i also would like to answer more questions if if you'd like to at this point sure let's check the othe the court judge benefit could i'd like to start with your question because i think you've got to the heart of the issue in this case which is the rico claim and i believe that you are right there isn't a supreme court case that's addressed the certification of a rico claim but there is a supreme court case that's critically important to this issue which is bridge and in bridge what was the pre court said is that you do not have to have an affirmative back it's too much trouble don't worry mister harris can tell understand that this scheme is not based on what's in the contract it's what's based on what's not in the contracts and some think the key point on the rico claim and the reason why every circuit to it decided this issue and just  was was that the it was it was literally the word that the th circuit use and so the idea that somehow this is restricted to so many of us that it's the scheme that is the key and that's critically important and it's i we're going to have to these different themes or perhaps look at the contracts right we will have to look at the case at the contracts and we'll have to look at see case buildings billing data to see what they actually charge and if you look at our class definition because one of the things that the defendant is trying to contend is that we've changed the class definition and i want to be clear that we serve two expert reporters in this case we hated the supreme court's warning and wal mart and income cast that don't just plead these claims prove them and that's the scheme a contract will not say that and that's the scheme so at trial we're going to have to prove that these are two dollars fees that they made up to extract extra profits but they were just skies cost through fees and that's what that's just this is what and that they use c pay this company and days were telling small businesses that they were charging these fees because the credit card companies were imposing the those to those to sound like you could look at some and see if they're there but what about scheme what we're talking about is the billing statements that were sent to customers which are if you look at this would probably be very helpful if you look at the joint appendix at eight hundred and ninety eight  and eight we catalog the representations and when you see that those are those are the statements that are made and so these definitions of a class or time specifically to the categories of pieces where increased rates and so so here what we've got is we've got over time c p a sending billing notices to customers in which they're indicating that the discount rate has been increased or  an increase or de did what's called a shift and so they they systematically went and shifted the tears from a lower rate to a higher rate and they told the customers in each of these instances we're doing this because of fees and so so the point being if we go back to why should a class be certified point is just been it is exactly like tyson this rico claims exactly like tyson it's exactly like a securities fraud case and  instead used a lower statistical sampling judged and you could probably explain a much better than i can but the put it so the jury then so then it became an allocation issue for their own editor class members in the class are there not and chief justice roberts although you affirm the opinion and said that the class should not be dissed decertified he wrote separately in concurred being concerned that the case they may not be able to allocate the damages because it was a general verdict form so how do we figure out who was injured and who was what subsequent to that the parties actually did figure have yes or no and so the issue is this is there a scheme and what are the categories of fees in the scheme and so if there's a concern about our i don't know occasion issue that would be one way to deal with it but she point here which is different than scheme where the company does have the records and so we know down to the penny of what this company charged these class members and we've hired an expert and you'll see in giving the supreme court's warning we didn't just rest pleadings we actually hired an expert in the data and he's going to calculated and show that he can calculate the damages to the penny so when we get to trial we will have each one of these categories of charges and he can then calculate how much damages exist for each category if the jury for some reason said that's a legitimate charge you know that's not an illegitimate charge that's not part of the scheme then the jury would be able to reduce the amount of the jury verdict in that way so actually this case is much more amenable to class one class trial you don't need bifurcation you don't need you know any of the typical remedies or procedures the district courts up and do in this case given the fact that it's you know it's an overblown scheme but obviously for purposes of our case right now the question is this other common and answers that will drive resolution of this case and the quote in the answer is no question if you look at the other four cases in real u s food service that case settled after the cluster vacation was affirmed c g c holding was another example that case recently went to trial and there was a manageable rico trial the tour as case in the th circuit which we cited in our previous settled after class certification law by not taking into account that business discretion of sort of business necessity defense and there were six hundred and fifty different jobs in that case and the a b a claimed it this court found that it would require exaggerate you know the lack of rigor by the district court because if you look at the district court's opinion in effect what the district court did was agreed to apply you know the logic in the reasoning in food service in cla and if you look at the predominant section you could characterize or just one short paragraph but if you look at that section and you and you look at the language that the district court used you know he's making actual findings it's on page sixteen of his decision thank you saying how the legal theories all you know further the common issues predominate over the individual issues the important evidence will be ascertained from testimony and expert reports the legal theories all turn on the same evidence assuming the general elevations are true the plaintiffs in the case have made a prime a basic case based on the common evidence only various possible variations that the court says at this time the computation of any damages which is judged benton's issue however and then it goes on and explains why in this type of case that's not an issue citing for or excuse me however in this time either fighting is not good because that may be individualized and predominate you know we've got the statute of limitations question i mean he's defined this class going back and years something ten years old has gone the statute of limitations i think in every state and so that's an issue that is that generally your argument but i think as to i think that the nature of the scheme and the fraud does does address the statute of limitations but there is not any evidence on the record  that any small business merchant in this class was aware of the scheme and that's critically important i mean in every case involving an issue like this where there is no evidence you have a concealed scheme then it's clear that the statute of limitations wouldn't preclude  wants to talk with you go ahead think thank you yeah it in this case yes you're right that clock starts when they discover the scheme we discovered the scheme in the middle of discovery in this case that's when we found internal e mails we found that documents that give rise to the rico claim that's what this case was initially filed was a breach of contract case and then once we reviewed you know thousands and thousands of pages of documents that's when we started to put this scheme together and that's when we filed be amended complaint and that's when we had expert courts and so you're absolutely right judge erickson if there was if there was evidence that this was not concealed but they had taken steps to conceal the scheme statute of limitations may be a problem in this case it's it is not judged and if i might could i just go ahead and conclude that one sentence so i would just say it was a meekness mainstreet alliance explains in this case the class action may only it's not only the difference is there is the contracts there were you know form or not uniform here the contracts there there was no evidence of individual negotiation there is evidence here and there were not multiple fees it was just one dollar fee this case is much more like sandwich which is another case that talks specifically about when you have that lack of uniformity you can deal court why because you need to prove reliance on the bridge case talks about it doesn't have to be st person but at least it has to be some alliance and you have to show causation they can't do that here the nd point judge benton goes to your point we had a big discussion about damages but of course we don't get to damages and so we get past injury their whole argument is that over billing is essentially a sham they could mean one of two things either that you shouldn't  charge it at all in which case if that's true you have to look at the contract to see whether they agreed to the fee or they could be arguing that the charge was too much relative to what they agreed to in which case you have to understand what they agreed to but what are the experts for the other side  that we take a look at the st month billing statement and any fluctuation in fee after that is an improper increase but the point that we set out in our brief is that the agreement as to what the fees would look like many of them included fluctuations that would based on like you would agree to apply to eating mortgage rate they agreed to the fluctuations and b s based on what was passed through from the card company see can't understand whether the fee went up and down without looking at the contracts to understand whether the cost charts were proper or not that takes us to the last question judge pratt's your point about the rigorous analysis st i'd urge the court to look at pages forty to footnote twelve and forty three footnote thirteen of the other three both of those are concessions that the class as certified is not what they're defending in this court they say it doesn't include all types of tears just and they now say that those who agree to a certain type of fee are not in the class that appears nowhere in the district court's decision the problem is that the evidence in the record is extensive it's not like he says there's lots of evidence going both ways and the district court never and analyzed it and that leads me to my last point your honour's in that howard's case you from my reading of the decision did two things one is you said you have to do the type of rigorous analysis that is required so the court of appeals can understand whether you've gone through the process to take the exceptional step of taking an individualized case and turning it into a class action that was not done here but lower than that in your harris decision you did not  wouldn't have gotten the parties anywhere what you did is you looked at the arguments that you were presented and you provided important guidance to the district court as to how to think about the case on remapped your daughter's our basic submission in our brains and is today as we would be very grateful for the court to provide some guidance on these issues that the other side has computers so much it is true that in a rare circumstances contract claims can be certified it is true in rare circumstances as this court's decision in saint jude recognize fraud of five but they cannot be certified when issues of material reliance bury from party to party and when the contracts are not uniform and the representations are not uniform and the underlying fees structure is not uniform that's what we have in this case your honor we'd be very grateful and we heard the court to one reverse the district court and send it back down with instructions that that type of case the one that has been presented and argued in this court cannot be certified as a class action and to provide the guidance that this district court would appreciate thank you very much for your time we're very grateful for the court's attention ok thank you counsel for the argument case number twenty day one thousand six hundred and seventy seven is submitted for decision by the c