my name is thomas tuesday i'm one of the attorneys for the appellant to me in this matter this is the second time this case is before this court on a dismissal of the complaint for lack of subject matter jurisdiction like the first appeal this is a case of first impression subject to do novo review this court should reverse the decision of the district court on either of two grounds number one either by accepting the invitation which the fourth circuit put forward inflamed and asked this court to review f f a's and determine that all f f a's are maritime contracts because of their salty nature as the kirby court has described it and these kate subsequent cases in this court have refined it or alternatively that this f i f a was a maritime contract because it was entered into by to mico dry company and gauged in maritime commerce as part of its shipping business either way the district court's decision should be reversed and remanded with a district court ran all the district court correctly talked about the general principles of maritime contracts subject matter jurisdiction was properly quoted kirby's general principle that the general principles behind it or to protect maritime commerce where the district court when iraq was when it tried to determine what constitutes maritime commerce in that instance judge co to look to instead of decisions from this court of which there were many he went to the fifth circuit court of appeals in a case called alpha mate alpha mate was a grain sale a bolt grain sales case had nothing to do with the mad time case and f f a and was a case that had only a minimal involvement of predates kirby and benedict on adults he says that a maritime contract must have a direct and substantial link to a cut to a ship it's navigation or management afloat you talk about alpha made but you know i understand your your argument but aren't there plenty of other points where the district court used the the correct standard the court relied the court reference the correct standard but ultimately went to alpha mate and made continual connections to the fact that we did not connect it to a vessel in to our physical vessels we did not use it as a specific hedge for specific shipping citing and several occasions firemen fine folks merican and kirby who did not again the court properly were used those are referred to those cases but when it came to its ultimate application of the to the facts of this case it used effectively it made numerous factual findings that to me go did not show that there was a connection to its physical ships and specific physical ships that to mico did not show that there was a substantial link there are numerous findings to that effect to substantial link to a vessel in navigation etc what the district court did was to accept a definition of the term  which was as their own expert said hedging the term hedge has many different definitions if this court looks to the fourth circuit's decision in flame you will see that what is generally referred to as the use of an ev of a as a hedge is as if it's used to diversify its income it does not have to be a specific huge for a specific vessel but you can diversify income by betting on the price of pork bellies but couldn't you and the judge said that there's really no particular difference you just betting on something that you knew about your client knew and would ignore entirely all of the elements that an f f a head has which are specifically maritime services and if a involves specific types of ships in this case pending ball carriers in gauged in specific trade routes which are unique to those ships you when people used to cross the ocean and ocean liners the passengers used to bet on one day on what time they're going to get to new york or southampton  that that was not you know and maritime a contract that was just a bet and it was very somewhat like on a bet that your client if we go down that route we would be effect maritime contracts because in no case is ever anyone ever required evidence that an f a a is used to space as a specific hedge in fact the fourth circuit rejected that argument if the court directions attention to footnote nine in the fourth circuit's decision you will see that this argument was raised at that time and rejected flame in that case could not have been  cases trying to figure out what being salty means and i think i've determined that a contract to purchase a ship is not within the maritime jurisdiction but a contract to rent a ship is within the maritime jurisdiction that didn't help me very much what what would be wrong in saying that these are these are as a category outside of maritime jurisdiction meaning that they may be in some way related to maritime commerce and that bro sense but they they essentially are not about ships and their use as such which is one articulation i ran across well in it's because your honor the test as it has been established both which may be over many contracts which might be acceptable or employ it will in land based businesses when employed in the shipping industry now become maritime comers and time contracts such as in the williams on case where standard non competing non disclosure agreements became maritime in this particular case you have an f f a which has only maritime elements it's a it involves specific fossils in specific routes at specific times of the year which then impose specific contra cargoes in the mix trading in this market had any effect at all on real world shipping cri i think it's the other way around real world shipping prices have a direct connection to how one f f a is settled and that's what a settlement what the settlement rate is based upon and i asked about the other way in there is that it doesn't have any effect on actual attempting to very much manipulate the physical market as a result i think the let me ask you a couple of things just so i can under better understand how long is it normally take to negotiate and if a if a from start to finish it may be what is the process of trying to get it to understand for example the connection between what happened in this case what i can refer to as my own client's experience and that is a he may come to an end to a determination that he's got too much open time on his future employment of ships so he considers whatever his alternatives how might he be able to hedge that in it so he goes to a broker and he says i'm looking to either buy or sell time that broker then looks to see who else in the industry may be interested in that same market and there are contra contacts back and forth in the f a market in two thousand and eight there were a set number of regular maritime players in it and you will see many of the same names coming about but there may have been thirty forty fifty fifty of these players there were four or five brokers all of whom were speaking with one another you would put out an offer to buy time in a certain rate and you would broke with and seek a counterparty today that whole process is almost is lost a bit because it's no longer over the counter it's done through clearing house is is a sound you know a market where there are standard routes  usually linked to a limited number of rooms for four peculiar kinds of this and many people making bets on these things at the same time i think if we get the word making that many people who are you know what the you know what the odds are for each horse you know ok i don't know enough about that kind i'm going to tell you but i contend that i am not aware the odds are formed by what the people or i want people bet so the question is whether published terms of fs no sir but on the other on the flip side of that the demand in the physical market makes which makes the determination as to what the settlement rate will be so as you're as you're viewing you use of your employment of your vessels coming down the line you're saying ok what's the demand going to be in q one two thousand and nine on the physical vessels because that's going to determine what the settlement rate is on the f f a what is the demand on the physical vessels as a stablished by the baltic exchange for those specific routes which are the routes which those vessels generally plug ok so this whole connects back to the physical vessel type of vessel routes in which implies the time in which it's occurring which determines then what kind of car goes it's going to be affecting that settlement rate etc everything about an f f a is keep connected you i meant by some of the terms that were used and there was a are explaining the footnotes very clearly that following flame this whole idea of whether we used to hate each physical unemployment of our vessels against this contract is irrelevant it doesn't matter the fact is we are shipping company engaged in maritime commerce using f f eighty's in our shipping business and all of those as we know we assume just you know argue and just just for the sake of argument that we view your client as entry into this the songa f f a and closing out its position as by that same speculation but first i would say to your honor's that there's no thing that ever said you know first everything in shipping is speculation ship boning is speculation these people don't build a ship and short of it out for the next ten years on a fixed contract they send it out for two weeks two months six months etc they're working in more everything is speculation but in terms of the song f f a first of all if it's a maritime contract it's a maritime contract and you know there's a second contract just look at the first contract and you don't look at anything that comes after well i would i would say to your honor that number one you don't have to because it has all of the salty elements necessary but number two if what you could you good we look at the song yeah and check on i mean rather circumstance other circumstances where you would look at a subsequent contract in relation to the first contract there's never been an instance in maritime law were a second contract is made non maritime because one is entered into a for a contract later many cases the first contract be made in essence a contract because my maritime because what happens after nothing that i'm aware of your honor it in terms of contracting with a separate party i'll give you an in an example in that if i may there are many companies and in two thousand and seven eight nine there were many many companies that were chartering in ships and chartering them out immediately just making money on the difference in the rates they didn't operate the ships they didn't provide cargoes for the ships they didn't provide any services to those ships at all they just entered into one charter party and followed it by another charter party many times and same day because their markets we've all fluctuating natural magically the second charter party doesn't make the first charter party any less maritime there's nothing in that that would happen there is no instance where a second contract makes a first contract non maritime but it to follow that point through further your honor if everybody did with they were supposed to do it for merit had in fact paid to make a would have assured itself fo two thousand and nine a profit of eighty one thousand dollars that's certainly a hedge against the potential for lng market on its physical market it was used in its business as part of its maritime business is as another method of managing its riches one more instrument just the same as it enters into contracts of a freight meant voyage charters future charters time charters long term charters charters  one more tool with all of the elements of a charter party with the exception of a specific ship so let's say that you have one party that enters into the contract for all the appropriate reasons that we would say that a maritime contract obtains but the other party doesn't does that matter in terms of whether we find we have jurisdiction i think your honor would find that in every case where the party the other party has contested they're being subject matter jurisdiction maritime law would contend that that was not my intention in fact in folks america the  and the maritime obligation of utmost good faith now applied he certainly the issue and said that wasn't my intention i didn't think that was going to be what happened here that happens i believe your honor in every case where there's a contest between subject on the issue of maritime contracts subject managers to and it is and if you have let's say f f a's that a country contracted between two non shipping companies sufficient there are sufficient maritime elements such that even those f f a's could be deemed to be maritime however you don't even need to go that four so that was the invitation that flame left open and flame talked about the fact that they didn't enter into them as mere financial speculators reoccurrences morgan stanley mike realizing that we don't have to go that far off card for your client to prevail and  that you don't have to make this argument is there any reason to get that far i mean is there any reason to say that to none shipping parties that there are there's something about these contracts that they use a policy reason any reason they should belong and maritime jurisdiction i don't know of any particular reason they need to go that far and f f a's your honor my concern is this this is there is a conceptual view to maritime contracts subject matter jurisdiction if we create boxes that we're just checking off we're reverting back to the spatial approach we're supposed to be looking at what's the nature of the contract it doesn't relate to maritime jurisdiction and not so far not always and just in case of an f f a but there are going to be countless new contracts coming into place as the new technology is put into place which is exactly what justice o'connor was speaking about when she talked about the need for the expansion of the conceptual view of maritime subject manager stiction so that's my concern about i believe i'm out of time thank you physical shipping positions in any other way and what the district court was doing there was playing off the instructions from the court of appeals in kirby in the flame case when she testified in that case hasn't and that actually shows that affidavit not back in two thousand and eight and nothing when this market was so hot the f f a trade worldwide global trade was about to hurt and twenty five billion almost as much as the physical trade which was about one hundred fifty billion and the point of that is it's very clear that people around the world and clothing my client who didn't own those types of ships or didn't own any time they were betting in this market that is the f f a market simply as a bit it had  hypothetical let's say that somebody wishes to hedge on on what the what the shipping costs will be one of their ships on a certain route two months from now they actually hedge and they may win on that they think they end up with with with the counterparty having to pay them money according to judge  they could collect on that contract until i had a hearing as to whether one party and or the other party half formed intentions to hedge it would be in a sense an unusual contract it would i don't follow that because if if if it's not if it is a maritime contract or if the plaintiff wants to allege maritime jurisdiction that's where we are right they have to come into the federal court and if someone is challenging the jurisdiction of the court yes but but you know that's true in so many cases who are in so many other issues it isn't it's a little different than i agree with you many times you have to do it yours to actually vary but in a contract well here here's the other look back to us not the other way if it is a maritime contract and someone has entered the contract who isn't about maritime shipping at all and we make the point in our brief  that all of our major trading partners around the world none of them treat narrative contracts but if a fellow in australia or china or the u k gets involved in one of these contracts and he's being brought to united states to us a yes council's been talking about two thousand and seven to two thousand and eight two thousand and they were pivotal years for this market and in two thousand and seven in the southern district we had the brave book decision which a plate of us relying on extensively and which we submit judge cowrote distinguished completely four or five of his findings and what the brave book decision the facts of the case are different than this but it's not enough for they for the contract simply to refer to ships and wages in trading routes this is i believe the f b o decision from the same judge that wrote the b it has to do more it has to there must be a direct and substantial link between the contract and the operation of the ship its navigation or management afloat and then i think the district court judge found the only witness that testified on behalf of the plaintiff with respect to the intent of entering this contract the only witness was not credible and what happened in two thousand and ten those before is their position and is first their position in a supplemental exploration and the two declarations were in the appendix when this case was last before this court and the th w i'd be curious i mean most of these contracts would be would be made international so yes there are a lot of i think you're on page twenty one is that what you're referring to pretty pretty clear that the last time this case was in front of this court it was because the if you got it found that pursuant to english law there's no doubt there's no maritime jurisdiction here but many of the the t disregard we make another motion to dismiss because our view is that those declarations and the deposition testimony are insufficient to create to help the plaintiff meet his burden of proving that maritime jurisdiction that we think their bald statements without sufficient support without corroboration they're inconsistent with that but the judge the district court judge that looked at it and said to hedge against the risk of unemployment so it's really three the rehearsal where he he was concerned certain to whether they whether they had made that showing we had a trial and after the trial very clear that those were not correct there's no credible evidence that they were using it as they say they were using it we say they were only using it to vet and it seems to me fair to say that he before this court ges and ships and such that's all we need that's clearly not the case that's not the case in the prior a war in this in the district in this circuit and in kirby because kirby farm and phone and  mind about market conditions after entering into after signing the f f a in this case primarily f f a and later decides to  and a bona fide hedge at the time it was signed is no longer a maritime contract yes that is not all i mean let's say that it's let's say that the the the song  that there's any evidence of that there was ever any intention that the that the first contract was a maritime contract it was we said there's no evidence of that in fact we say all of the preponderance of the evidence as the court found is that and all of those contracts show a pattern of speculation well and then the judge found that this contract nor any of the other f f a were used to protect the maritime business so so we know now we come back and we say yes we have that september second the first contract we say is not a maritime contract or not well what's the evidence we have that the testimony from someone but it's false testimony and so there's no evidence contract is to protect a maritime business maritime congress and maritime commerce is something that relates to the operation navigation or management that relates to the operation navigation or management of a vessel afloat that's maritime commerce before this we're trying to figure out whether the contract itself has a primary objective of protecting maritime commer f it and i don't want to argue with the need to argue that these contracts do not have that as their primary intention certainly there's no evidence that the contract in this case the primary contract had a primary intention just a few point your honour's first of all when it comes to this idea that there must be a connection to a ship afloat that is precisely caught contrary to the holding in kirby in kirby justice o'connor says to ascertain whether a contract is a  appeal and in this case in which just judge katzman was a member of the panel specifically held we cannot look to foreign courts to determine what our subject matter jurisdiction is ok and that's part one reason point number two is very unique factor in american maritime jurisprudence is the rule be attachment and that our a maritime jurisdiction is common law not statutory all of these other courts statutory it doesn't matter in england for instance whether you're in the adult court or the commercial court you don't have any other additional remedies you don't get any additional benefits by being any analytical of the commercial court it makes no difference but here in the united states we're the only ones the only country in the world with a rule be attachment where i can attach a third party's assets because i have a maritime contract america and case against them and they're not subject to jurisdiction of the court otherwise but they have property year we're the only ones who have that so we we have this whole common law concept of what constitutes a maritime case otherwise it wouldn't matter it would make no difference at all but to england does not deem maritime insurance contracts maritime you know every court has its own specific references or reasons they deem a ship sale contract in a ship's construction contract maritime we do not we have specific reasons for ours they have theirs but we do not look to form want to determine our courts this court subject matter jurisdiction parameters on the issue of  sorry there is no other contract in maritime jurisdiction or anywhere else that i'm aware of where the intention of the party it is an element in determining whether or not their subject managers diction there can think of no other contract and in maritime  require that the f f a be used as a hedge it talks about the fact that a use by ship owners is to use as a hedge to protect against fluctuations in the future that's not a requirement no courts ever so help and in fact the flame decision specifically rejected that kind of analysis in the fourth circuit if we follow as my colleague would contend that all f f a's are non maritime we would not only be overruling all the prior decisions before it but we would be coming up with a decision which is contrary to the fourth circuit's decision in flame which specifically held that f i f a was a maritime contract the discussion about cases such as go foods indigo etc are all like alpha mate they are old grain contract cases they are all the sales of pig iron grain iron ore bulk cargo contracts where there's a very minor