defendants class action so you don't see many ma approximately ten thousand u s citizens the issue before this court is whether among other things that representation was adequate and we submit you palin submit that it wasn't runners before we begin i'd like to debunk if you minor  is no absolutely no dispute at least from from the receiver that the the opponents in this were much less the class itself was complicit at all in this game however your honor it is important is  honor mentioned the net the net winnings and even the individual and richmond's your honour's that is a fundamental fundamental issue in this case which has not been properly educated and that's one of the issues that will be addressing your honor so really the simple truth is the simple truth in this case is that there was not an adequate representation of this ten thousand strong member class i want to ask you  needs and the whole thing is an unjust enrichment construct trust like a client and they challenge to many aspects of that and i'm not sure that is subject  also know your honor that for a period of seven months following that certification order there was no point in a class counsel that is unprecedented in the history of class action law we know the rules say that you must appoint the class action all lawyer at all stages to protect the class we've got a during that period every one of the representative parties was represented by an attorney and there was a group of attorneys i don't know how many there were six seven attorneys representing their representative parties and they were putting up a fight and the fact and they also know who they were represent parties so they were all there was representation de facto there was not the appointment and i court was in fact communicating with a cohort of lawyers who were representing individual defendants important resenting the representative part of the parties already knew they were class representative and the class had been certified so at the point they were represented by that it's not as if they were in the intervals and the classes hanging out there without representation the representative partners were represented by lawyers and the lawyers were fighting and they knew knew they were representing defendants individually as represented parties on the after last year we we we believe that the record we believe of the record shows that not none of those lawyers how to soon the obligation one of the things that the court should have done is when vetting these lawyers that it required that it followed number one the mandatory considerations that a court must follow when it is a point the a class counsel so for example run as we know under rule twenty at harmless error or prejudice is there are there cases it's a harmless error or prejudice can obviate strict compliance with the rule is there any of that because i looked at that and i was trying to see  have the authority to fear prejudice like consideration or is it strictly follow the rule or not we were unable to find in fact the law that we found on this very point is that the failure to follow those mandatory considerations words which were common promulgated in the rules is by itself error we have we were unable to find any harmless error theory under the law but we we submit that there was that the error was harmful and will tell you why your honour's look at this record there is not one iota of evidence in this record that mr edmonson or any colleague that was assisting him as counsel had any experience in class action law the only evidence in the record that the court considered when appointing discussing the appointment of class counsel in your honour's he said the court said i know that you will represent the class because adequately because you have to that's what the court sent and that was the extent of the court's consideration mask and that was done early in the process fast forward until until the allens moved for in intervention and in the  edmonson filed an affidavit in his affidavit says that his experience is as an a c c enforcement where there was no indication in his affidavit that he had class actions what would an experienced class action attorney had we submit was one of the more fundamental unfair acts in this case was the it in we believe it was because the class action county council mr edison failed to appreciate the responsibilities of the of the class and the duties that went with it in the answer to your question directly your honor is that class counsel failed to insist on challenging the receivers damages as it related to each of the individuals in this case and allow me to explain because that is fundamental we no wonder under the class action law united states supreme court in amgen products says that the class action rules are simply to create a procedural device for economy to assist in  so the question that judge keenan is raising is what if a person had been formally designate at that point each of these defendants retained counsel of their choice and these counsel worked together and fought the court there was no damages issue there was a procedural question is why how the damages were to be determined but that was perfectly normal the basically start with a prime aphasia case and let each individual challenge it but set that aside the question is on liability they fought and they fought because they were representing their own clients just like they would represent class and their own clients were  so the question is would they have done anything differently during the six seven month period where there was a formal declaration that they were clients counsel yes the answer is yes it is and it goes to this february of two thousand and sixteen that there was no you know there was no class counsel in the court acting without a class counsel without an interim class counsel began vetting experts for the defendant class and again this is this is the poor acting without it an appointed class council begins to vet the expert for the clients it sound as if the class is hanging out coal the fact is they know they were representing a class they had been a their representative parties designated representatives of the class and they were lawyers function and they filed papers and they filed opposition to and made decisions there was no damages they were setting up for ten but the process for damages became it made the class only for live and the process for declaring just and at that point each individual defendant if you wish to go beyond them would have to challenge that now just focus on the period the seven month period what they would have done differently had there been a formal does ignition as opposed to this informal absolutely so during this period during the period where there was no class council what happened was when i was class counsel there were there were there were members who were being who were discussed as being possible class counsel your honour's but there was not an appointment and that becomes significant because as it relates to the damages what happened council to proceed with its phase one report fav b r g proceeded to to prepare the phase one report when the phase one report came out that report a defense report stated that there were serious shortcomings in the ability to determine an individual's net winnings the inflow and outflow from the account so there was a lack of reliability according to the defense expert in phase one to be able to derm to determine the damages the court even the court and even the class even the lawyers who are who are working with the court at that time expected b r g to actually in its face to report make an adjudication of the individual or make a determination as to the reliability of expert the receiver's expert's damages for the individuals and what happened some since i saw a class designation with the certification would have changed that wouldn't change that one iota they would have still done the problem they were fac g they were facing is the data were imperfect but they had data on everybody and so what they said we're going to take make up the court was satisfied there was a private facia demonstration of damages for each individual member and that the each individual member could come forward as an individual to challenge that whole process they could do it by themselves they could do it counsel they could have a jury trial but that was after the class and completed its work which was to get that process sent but to get back to the question that a judge can ask is what would trast counsel done any differently had he had the formal title class counsel because he did exactly what explained why he did it it was a judgment call what class counsel would have done what should have done which was with which was not done in this case is actually challenge the receivers expert damages as it related to each individual that was not done what actually happened was for some reason we do not know it's a date the phase one report was shelved the scope of determining for the defense expert the defendants the damages as each individual was was entered without objection by class counsel which permitted the receiver to use the untested unchallenged in un verified findings as their own expert one of those things are strategy issues that may or may not create  issues for professional responsibility come and go and that before you get to damages issues is there anything about liability for get for the second you talk about damages i think we understand what you have to say earth you said that what about liability should the should the class council for example have challenged personal jurisdiction of class should have done that he didn't do and most importantly your honor i cannot say as a person intersection with that would have been a valid we got issue has been has been argued litigated in class actually before it is something that the court should have considered however from we believe that the the major thrust of the failings that were done by the class council was first of all was the court to not have one appointed during the liability phase to actually determine the scope of the that the the damages in the proper methodology for litigating the damage the damages phase and we know that it in a class action like this where the ultimate question is going to be the  level and the extent of enrichment is what are the individual's damages and there were no protections that were put in place during the liability phase and certainly completely operated during that during the  then they presented that to the court and that was the last act class council had responsibility and then after that the notice was given to the individuals to the best ability to let them under the process  edmonson and yet he did not bill for in there in the record he did not spend any time negotiating we're fighting on the on the process or it was entered without objection what's the problem with process the process or fundamentally your honor allows the a number of problems with the first and foremost it allows the receiver to to literally use the damages numbers the numbers a year are claimed were the numbers that showed enrichment to use those damages when when no one had ever response and say nay now if there's not a problem with fish cases something else but i've looked at those data there's a column that says how much they paid him how much they got out and the differential and if those over a thousand dollars they were member of  enterprise and computer records they were not perfect and they were other records were perfectly kept but they were records that indicated with respect to each person the amount paid in the amount paid out and now the burden shifts to the defendant to say those damages are not good and they had that opportunity if they did not you are in individual cases why don't they have the after they were told that they had the opportunity and they can take class attorneys who put this process wonder into place and then and it is tax it was a fair one it wasn't it it was not a good look at the process or if you look at the process one looked at it very carefully there is no mechanism to be able to conduct discovery of the challenge the experts the image is number one number two legs facially that's especially not demonstrate there is a whole complex process for challenging those numbers including in a jury trial i think the best place for me to start is judge keenan's question which was what would a class action attorney have done which was missing answers nothing in this case yes that in the sense that rule twenty three g was not twenty three c twenty three c says explicitly there has to be a designation of class counsel in the water fact and discussion in the order wise to determine the adequacy of the class representatives and their counsel and that therefore carefully went the lawyers get basically said the lawyers will continue representing what this says in order that certifies a class must define the class and the class claims issues or defenses and must appoint class counsel must consider one two three four and the court never did that well under twenty three g one day and so the question and this was all that the court basically responded to the  submitted and and said ok this is fine because the theory of the case i mean it's a defendant class actually which is it flips the whole coin we don't see many defending class actions and basically it's almost every act you take is a due process problem because every time you're forcing defendants to come before you're forcing lawyers on the defendants you're forcing judgments on it's now in the criminal context we do that but in the class that  ts class action context we have to be very careful and the question is whether these defendants got the process that the rule provides now the argument you make and it may be a is that ok there was a failure on your twenty three c but it didn't occur in this case because they did a good job i believe that's absolutely correct your argument that so that race is judged by the bombs question with rule with rule twenty three i mean i think in terms of that again the substance of what the district court considered and ordered in and you it can be found at page seven extensive answers motions dismissed they were experienced in qualifying attorneys and then the the real issue winds a lot out how they were going to be paid and i say that goes well  appreciation of the due process huge issues that apply to defend classes that are even more severe than the points class your honor with all due respect i don't think that is a fair characterization the in terms of the the fairness of it in what the district court and the receiver and mr edmonson the representation that was provided to the class it we believe the record reflects that it was absolutely fair and that the class representatives counsel understood even before class sort of occasion that what they were doing was benefiting the cla and in one of the council mr turpin ing wrote a letter to the to the john a church and in that's it page twenty five thirty two and thirty three of record he said that understood that well it was actually explicit because it was for terminations that there was a class and that these defendants were representing a class the requirement that a specific class council be appoint d sort of left it where the tournaments representing the representative parties were represented class they had to understand that because the court said they were represent lies but twenty three c inappropriate and i'm not sure where that takes us those were just i guess yes or they were judgment calls but and and let me address that in a little bit more detail because  what was done your honor is that the district court spent more than three hundred thirty thousand dollars on the on the defense expert who went in and validated all of these databases now and your honor as you pointed out the numbers the data was imperfect in some respects in and but it was imperfect according to the defense expert in the sense that the money n couldn't be validated or couldn't be corroborated right so they knew what the databases they knew with the company record set but they didn't in terms of money coming in and bank records to validate that because the bank records were each individual person well what's the fairest way ultimately to get to that it's what we did we gave each individual person the to tell the receiver tell the court if your bank records your records whatever they might have been show a different e mail and there was a long process of appeal to a special master alternately to the court if if anybody wanted to go through that but that was all in place and those numbers were validated those database numbers that were the basis for that th e receiver's net winner calculation were validated both the expert for the receiver and the defense expert who said that we can replicate the data in the in the company's records so that was done also the protocol for the damages the damages calculation was done at the summary judgment stage when there was class counsel and in fact the class summary judge as to him if there was class counsel appointed time of certification would there have been any ability for why ask aunt sol at that point to raise issues like raise if cancel or or other issues related to certification because they've moved that these sort of further consider individual interest is there anything like that that was available or that ship s honor the defense counsel and anyone for that matter in the class had the opportunity to appeal the class or cation or that was not done once mr edmonson was appointed as class counsel a few months light he had the ability to to raise any time issue on behalf of the class that was not that was not born  and for some other reason but it was just a short window of time in which there was not and if designated single class counsel but once he was  mr edmonson can and did rise a number of issues on to the extent the facts in the law allow quite frankly that the the the facts were overwhelmingly the experts were just ran up the numbers but again they were validate those the records were validated both sets of experts and the appellant's contention that there should have been appeals or there should have the that was the the fundamental fairness but yes the class council could have raised any how many what's it about twenty five percent of subtle twenty five hundred seventy if not twice yes or so a bit more than twenty five percent  has been less than it's been less than fifty percent so to the extent that even the year is any imperfection in the data beyond the individual class members opportunity to provide whatever information they would have that the company would not have is a plan that after the receiver completes  s to collect money then there will be a distribution a prorated distribution to victims yes or your honor in fact an interim distributions already have already occur watch that we're making and we're not insensitive to that but what the what this class needs they need the they need on a class wide basis to do what the council didn't do is not challenge if we're going to give you a remedy what is the remedy class would still be a intact because that was never appeal what we have what we have challenge is the the the viability of this class action and we have challenge the certification were because the way they kept the class was was order to monitor the case so what we have what we have org you did what we are requesting is that because there was a failure to do that this court we verse in remained on the issue of the certification order with distributions he's represented but think about this these these cost members we're told in this is something that your honor has has has asked about the not the the fundamental fairness if you're if you're one of the class members and you're told your their files that were kept in the ordinary course of business of the amount of money received from mrs jones they also have a record of the amount of money they paid it's just us and they have done something in mathematics to conclude that mrs jones she can say oh they overlooked this or i didn't get this payment and she can go challenge that under the order but the fact is we're not without evidence there is sufficient evidence presented with business records of the damage the question is whether they we recognize their imperfections and the court addressed that but that doesn't get i'm very troubled by what we can do at this point there was no motion to stay  who have more money than the victims it's it is complicated because there are number of there are number of now subclasses that exist as a relates to the opponent's claims for example just just i can tell your honor that within our small group some of those individuals can tested their damages it look we did i never received what you're saying i received in the receiver said we disagree and at that point there is no way to challenge what the receiver is saying are his damages no one's ever been able to look across the border lays it out in details you go to the mediator you go to the district court you demanded jury trial you get your discovery all of that is laid out in detail and i don't understand why you are going to go for pages here i believe it's in paragraph twenty one of that order in order to even get to the special master you have to agree that that decision will be binding that you have to agree that it just says it will be binding if the other side wants it so and so it is a a lot of text in a lot of paragraphs but the reality is you don't have the ability or the it's to actually get to a trial on damages or to conduct discovery to look under the hood of the receiver's damages but falling back to your to your question so the panel is the inability honest to challenge to fight on the images we talk about fighting because i was raised in their brief i want to clarify one thing on that and that is that when that when that was said when one of the defense counsel so we're here to fight what the full quote from from what that counsel said on the record is my guys are are here to fight they have the same issue that mr alexander's points out there is limited a limited pool of money so get it but getting back to the point there they they're they're in a kind of different situation where you have some members of the class who have judgments against them who have never had the ability to to challenge any of the as you know others who have settled but of course we know that they settled because some of them says oh i don't have enough money to fight this how do we know that that's what they default judgment summary judgment whatever happens but if somebody the court monitors that but if somebody received money that should not have been received and can be discord that person's and that person spent a lot of these people have spent their money and they probably don't have the money to fight it that's but that's the reality of every  most troubling in this context in this case is that they were on the right track with b r g b r g was doing the analysis that one would have hoped this class action would have done in that is to look at the receiver's damages as a release the individuals if we we have not heard yet why they shelved the be the phase one report which was highly critical of of the f b i s report to the extent you are i've never seen one one prominent expert firm like b r g suggest spoliation on the other side and suggest that they weren't cooperated and had laid out a plan to look at the damage is what happened with outclass council because he was appointed yet that report get shelved except you keep saying there's no class council there were more errors fighting for the representative parties who had been designated class representatives so these representative council even without your even even with a class of a group of of representatives who are in it in spirit acting as class what would happen to the phase one plan where there was substance of rights and we submit the failure to allow these parties to fact if we litigate one of the most important aspects of this case which was their net winnings was an abridgment constitutional bridgeman about it and we are we recognize that there are x will come down and great council member see it on to the next case