were shipped to michigan and the state of tennessee my client was not paid for those trees that were sold and my client may demand on the debt or be a fan operations and be up in operations eventually bought bankruptcy in dallas texas my client is the beneficiary of a statutory lean agricultural products lean and the state of oregon which is essentially a rises up on the sale of the products this appeal i'd like to jump to the very end if the cli's of the district court's decision because i think it's what the through quite an analysis on conflicts of law in the district court ended applying texas law into resolving a number of issues but in the very end the district court honed in on an issue which i want to raise with court topside and then if we have time i'd like to get into the other issues or any questions t court might have it at the end of heard her decision to destroy course said because fishback failed to comply substantially with the oregon law any lien fishback had under oregon law expired and is therefore forcible so in the bottom line for the district court although there were all these interesting conflicts of law issues the district court it came down to the very question which one of which was raised by the believe in that was did we properly give the filing of these statements substantially complied with the extension the forty five day extension of the organ law and by that i mean oregon law says that you have to extend the reach yes you know you see what you're saying the premise of the state territoriality to the other states but you are making it you don't do that this is not a u c c case at some point in the briefing you argue that it it's strictly an oregon law case precisely live it p courts this is a statute only organ books under the agricultural laws it's not used to see provisions this is not a u c c perfection agricultural goods issue this is a statute which says if you sell agricultural products you where the products are delivered well we contend that the deed lead to the lean is effective against p is see the lender even though the products were delivered to the state of michigan s position as i understand it is we're in oregon the products are in oregon before they're shipped wants their purchases made oregon law applies we don't need a choice of law decision we don't need to tennessee or michigan or if they had not called bankruptcy we would contend that we would have that were in law that oregon lien that would apply in our favor that we could then in force against all of the inventory all of the proceeds of the sale of  issue we believe that that lien should follow wherever the debt the account debtors inventory look at it so long as we are properly given the notices under state law with respect so we think the gist of it the district court got it got it wrong because we think we substantially comply with the statute the statute says just so i understand that this is really complicated by filing the statements that you mentioned in michigan in tennessee you want to argue that you substantially comply with in law yes right well we did oregon law requires that within forty five days of the of the lien coming into automatic effect that a notice has to be provided to the debtor this those apply i mean i'm the buyer and we see we file those notices where the product was shipped in tennessee and in michigan if i want to morgan is well right yes yes in oregon is well but of the if it had no operations in not ration business operations in michigan in tennessee thereby putting them on notice and so we we believe we substantially complied with statute and we believe that then the liens would apply to as against be offense products and i understand that we understand that let me just ask you this with respect to michigan and tennessee filing arguments does your argument assume that your lien was properly perfected in michigan with respect to the michigan and t ennessee products properly perfected by because you only trump the the opinion see if you properly perfected the leans right correct we would not have a we would well first of all we would not be just a secured credit in the sense of having a leak and we would not have we would not prime p and c easily why did you write what your argument about why are you proud of how you properly perfected the leans the perfections automatic vexes once we sell the product to be a fan perfection is automatic we have to then continue that with if we if we fall something in the in tennessee in michigan we fall you see one finds the state has to continue the means in effect of course as you know the district court found you didn't properly perfect the wind with respect to michigan and tennessee yes you correct me if i say anything wrong which is always a possibility because of the the name that you put on the one understand one thing about your argument the district court had some pretty substantial reasoning about the name you know b if b f and i'm going to get the name wrong but that the addition of the terms a b and zelenka farms right you say i don't remember the name issue that's that's the rationale for which the district court said that the liens were not properly perfected and you but you know because of the search criteria in michigan in tennessee that the reason i'm asking about it issue is the issue that we're confronting and i think the district court was confronting is whether or not we substantially complied with the notice provisions and i think that that is a very important issue i mean that is one issue the district court recognized with of course as you know the district court started with choice of law yes i think was the proper place to start yes i think so and you have an argument for us about that yes and my argument on that your honor is that in this court's decision in benchmark electronics which is three forty three fifth third seven nineteen two thousand and three decision it we talk about it pages twenty to twenty two of our principal briefs in benchmark this court recognize that texas gives effect to choice of law provisions and this is what we're dealing with here  is if the district court is correct in determining that texas law is the proper law to apply we disagree we disagree because in the contracts between the parties they established that oregon law should apply and we think that that should control but this you know there are substantial content substantial relationship test as well but if that's correct if the district court is correct texas law clearly recognizes that parties can contract with respect to conflicts of indicated as well but we think the court should be guided by the u s airways versus elliott decision which we cite at in our principle brief on page twenty two twenty three this is albeit a number ported decision out of the united states district court mr district o pennsylvania in two thousand and eight the court there said that choice of law provisions are enforceable against non parties that are closely related to the contractual relationship or that should a person in the governance of the clause clearly vation provision p and c is a national banking it so say some very sophisticated they're lending all over the united states and world they should be aware of these statutes and should be aware that they're going to be impacted by these statutes and so we think that the argument that we're making is that that they should be bound by the provision because they certainly should have foreseen the implication of that what is your response to the argument that texas law does not allow parties to contract to to have a contractual choice of law provision with respect to an  agreed to we did business the simulations or we did business with this company for years or twenty years and in fact they did they we had disputes in which we resolve them through or in law the only reason this issue is coming up is now we have a bankruptcy in which a lender third party lender is now claiming that that that are legal does not primarily and so we're saying that that yes it does because the parties agreed to oregon law and the bush i think what what they're what they're seeing is that oregon law would apply orgon law lean statute would apply ok because remember b f in is a wholesaler of agricultur we were not the only law supplier hundreds literally hundreds of suppliers across the united states to need a dose of sophisticated lenders should have been looking at laws that would have affected their lead court let me first turn to the choice of law issue because i think that is among other things i think it is pretty cut and dried but let me let me comment on some what i regard as critical flaws in the argument that the appellant is making and i think i just heard some of them in the oral argument also and so with regard to the texas choice of law issue which i think is very critical here let me let me address three of those issues the first one is i think and again i think it is apparent from the argument that we just heard that the appellant is confusing the concept on one hand of the law that creates a lean with the concept on the other hand of what law addresses perfection and priority of the elite and that's where what mr baker really argues is that he says that the district court errors because the district court relies on what he calls  codification of principles of perfection and priority and the provision that the district court referred to which is controlling here is nine three zero two of the texas business  commerce code which says that with regard to an agricultural lien that the local law the jurisdiction where the product is located is is what governs the choice of law that's what the texas business and commerce co it doesn't matter whether you call that the u c c or anything else that's the texas statute and when the texas statute goes on to define agricultural liens that that that provision applies to  agriculturally and as any interest in foreign products created by statute it doesn't say created by this statute it doesn't say created by a texas statute it doesn't say created by the u c c it's is created by statute this is a lien that is created by statute in oregon and therefore when you look as the district court did to the choice of law issue the court looks to nine three zero two of the texas business and commerce code which very clearly says the a political law is the law of the jurisdiction where the product is located here then for the most part that is the products were delivered to tennessee in michigan that's where they were located and that's the law in that that the district court applied to determine perfection and priority mr jones i know that the district court recognized it's sort of a a gap in our law about whether you appl state choice of law or some sort of federal common law i know the courts have gone different ways on that and in as i understand it our court has not decided that issue is a but as i also understand the district court said it doesn't matter because following either one of those avenues leads you to the same result or it is that i mean is that something you're defending here you think that's correct or do you think there's some to do in other words do we have to wade into that issue in this case and resolve whether we apply federal common law or state choice of law no no no your honor i think that is correct and i don't think that it is necessary to weigh into that because i think first of  all i think it's clear from the that the that what the district court said which is if it doesn't matter i don't have to address this issue i think is is clear from the precedent of this court and some other cases that we cite but i also think that it is it is the same assuming that the court were not to apply the texas and let me just say by the way what the district court recognizes is there is some split of authority on this i will say that  looking at those cases there does seem to be a predominant trend in that case is to say that you do look to the to the choice of law the form just like you would in a diversity case but there are some cases and the circuit cour that i've seen do tend to say that you do look to the former law which here would be texas however if there is there is authority that goes the other way in the courts as i don't have to decide this which i do think is correct if this court were to feel compelled to look at a what i would call a federal independent standard what the what this court has said in mira is that if if if if we're going to do that it says that that is synon the restatement of conflict of laws section six that's what this court has said is that if we're going to if we're going to look at in a situation where we have to create that kind of a federal independent standard we look to section six of the  if you turn to section six three statement it does a couple of things the first thing it does is says that the first thing you would look at would be whether or not there are other principles in the restatement that are specific to this kind of dispute and the court excuse me not because the restatement does didn't say it one of the examples that it uses for that is an issue regarding perfection or priority of a security interest c is entirely consistent with the president of this court would tucker where this court says that generally the use they see should be considered a federal law of commerce we cite the hostas state case where this court talks about the importance of maintaining a simple uniform nationwide system of determining perfection and priority issues secondly what the district court does or what you would do under restatement section six is to look at these generalized factors that you way to determine the most significant relationship and those are in section six point two of the of the reach of the restatement and is the district court pointed out if if if if this court looks at those factors every single one of those factors leads overwhelmingly to two to arguing in favor of the location of the product to determine the not some other not something else and it is uncertain right it is undisputed in this case that the products are physically located or the relevant products are physically located in oregon michigan and tennessee that is forever and virtually all are and were immediately shipped to michigan in tennessee i think that with the exception of about twenty six thousand dollars of product that was sold to be that remained in in oregon and it's because in in michigan and in tennessee and that's where that's where b f in took possession of the products in those states and they they remained there until all of the assets of the debtor were sold and then the proceeds  realized so the district court weighs all of these factors and and concludes that if you look at those factors the needs of an interstate system basic policies underlying that the key field of law here and what what the court points out is that credit is extended more easily when creditors can easily you determine priority in perfection of leaned certainty predictability  uniformity of result ease in application of law policies of the interested states the court points out and i think in a well reasoned manner that the policy here that that the court weigh this court should also weigh is that if you're if you're applying the law of the state where the product is located that provides a simple predictable consistent method of determining lean perfection and priority and that's that's what this is about and that's why yes i believe that you would come to the same result as texas law by applying if the court felt compelled to apply an independent federal standard what's your response to the mr arkell his argument that  that is limited i think the case law is pretty clear especially in texas that that is limited to interpretation of issues involving interpretation of the contract between the parties to the contract and the cases that mr cited in his argument to that effect benchmark and u s airways u s airways may have also involved tort but it certainly involves only contracted toward none of those cases addressed perfection of party issues and in fact very importantly the texas statutes are very clear that when a provision of a statute specifies there are certain categories of types of dispute and when a statute specifies the choice of law with regard to some of those categories that that would govern despite any contrary agreement and that section one three zero one b of the texas business and commerce code and as we brief and in fact as the court questioned with mr a clearly that includes law governing perfection in priority of leaned in so the most important answer to the court's question is that codification explicitly says that you cannot alter the a political law with regard to perfection and priority with a with a provision in the invoice and interestingly that section of the of the business of commerce code the comments to that section actually go on to explain why that is true and why that is good policy comment five explained that this promotes an orderly predictable method for determining leaks in the comments to the texas business and commerce point out that if you could alter that law by contract then that would undermine the central tenet of of commercial finance which is an orderly predictable method that's how we figure out where the arrows are pointing to the substantive law that governs the perfection and priority of the culture is that right the second step is or i think about the merits of the  have never had never disputed what i'm about to walk through they've never disputed it and they cannot dispute this so what the court finds is that under michigan and tennessee law there there are far links there and they did file they  font so there is what i would call surplusage there's additional language there and what they usually say says is to determine whether that fatal or not you have to then go to the search logic in each particular state so we did that and we put on undisputed evidence before the court that if you do that in michigan in tennessee because of the search logic you can't find this because the district court pointed out it's not like google it if you ran a google search for this in a d and you had surplus language you it would still come up you would get a hit a positive hit and therefore if it if the p and c were searching for any other lean there it would you would get a hit but when you search according to that logic that the search logic of the states and incidentally this is exactly consistent as i've had another case like this it's consistent with the texas search logic also it's very common search logic where that the surplus language wolf will prevent you from from hitting this and so because the searches occurred and you couldn't you couldn't find it under the u c c that is fatally that is fatally defective it is serious considered seriously misleading under the doubt is the that's all very interesting and enlightening to me and i read the district court's opinion i don't see an argument being made to contest that conclusion before us i don't see any arguments being made about the search of logic in the name in the is that you're a is is that correct i mean there is no there's the argument being made to us that that was incorrect that is correct i do not think the opponents are contesting not they have not contested that that is correct  it is argument councils in his argument said that we we substantially complied with oregon law which requires that you you must follow a notice of lead to continue the your  earlene under oregon law we substantially complied with that by filing you see c s u c c ones in he said in michigan in tennessee let me just stop there and say will we just extend which we couldn't we would never been able to find those anyway because they were defective and they said we fall to u c c one in oregon also what is undisputed and and again the district court discusses this and we established all of this in the i'm sorry i misstated so the invoices were due ninety days it would be june twenty seventh forty five days after that august eleventh two thousand and sixteen they had to file a note what's called a notice of continuation of out the that here is what's required by the in the in the statute oregon statute very specific in terms of what's to be required you're supposed to it's supposed to be supported by affidavit filed six days before the use a specific form or is the district court pointed out that is the degree of noncompliance here was substantial and what the district court points out is the purpose of a u c c one is very different than the purpose of this of this notice of lien and a u c c one cannot serve the purpose of the notice of lane because what this notice of lien is supposed to be telling you is that the leanest b is actually being continued what do you see c one is doing is telling you about priority of different liens but it doesn't give you the information that the oregon legislature is requiring here to tell you that that lien is being is being continued and so and that the requirements of what you're supposed to provide a very specific is the court pointed out the oregon law standard on this is that substantial compliance requires compliance with all essential matters necessary to ensure the every objective of the statute and the u c c want it actually complies with none of the requirements none of the requirements of this statute and certainly wasn't done on the form that expected to be paid what they what they have is the benefit of the statute in oregon in the statute says specifically in agricultural produce produce or the delivers or transfers x agricultural produce for consideration a purchaser has a lien for the contract price of that produce for it or for the reasonable value if there is no contract price and agro agricultural producer that claims a lien under this subsection one need not file any notice in order to perfect the leave the lien is perfected automatically under organ law which you have to do you know if there's an organ choice of law provision that got applies to agricultural needs and if so what would it how would it apply to the least as to fishback the largest supplier by by all accounts is a contractual provision that states that were the law would apply second is the terms on the website and i think the analysis in terms of whether we perfected arlene according to u c c law is not is not correct analysis now with respect to the continuation of that leap that if we had stipulated we did not file the notice form that was required by the organ statute now there's no longer this particular issue we don't failure to comply failure to not file the notice for with the extension of the notification is is essentially a substantial compliance provision we believe that the u c c ones that we filed gave substantial compliance or worse substantial compliance with respect to the notice provision