Legal Case Summary

You ready? May it please the court. My name is Adam Carter and I'm with the Employment Law Group. I represent Paul Feldman, the appellant, and Tom Harrington, my colleague is with me at Council Table. I thought I would address the court's concerns from Thursday's order and then move on to the facts that a reasonable jury could rely on. There's no issue raised below regarding exhaustion or relation back, no dispute that Mr. Feldman was fired on August 27th of 2009 and then he filed with OSHA within 90 days, 82 days later in fact, on November 17th 2009. Then according to SOX, you have to have it rest with OSHA with the Department of Labor for 180 days and he did that. The 180th day is May 16th, 2010. He filed a notice of intent to go to federal court which he's allowed to do and that was on May 7th and then it wasn't until June 7th of 2010 after the 180 days. The Senate has noticed on November 17th, you didn't file your lawsuit January 8th and you have put it in the vein that you have 180 days which of course January 8th is not and you wait 180 days and you file an amendment and under Rule 15 an amendment relates back. But sir, there's no, there's no statute of limitations that you're concerned about because- No, I'm not concerned about statute of limitations, I'm concerned about jurisdiction. You can't file this until 180 days from the date of it and if it relates back on the Rule 15, that's not 180 days. The 180 days ran on May 16th, 2010 and then we didn't file until 180 days was over on June 7th, 2010. So- I'm not sure it matters again- It relates back as though it was filed back then. If it relates back, that's the purpose of the statute of limitations, it relates back to the time when you first filed it which is January 8th, that's not 180 days. You see what I'm going with this? Well I see you're saying that if it does relate back then it's- Under Rule 15 it has to relate back. That's the reason you got it, that's what we're going to like with amendment because they want to beat the statute of limitations so they say relate back to the date that it was filed. So you file something in May on the Rule 15 as an amendment, court grants it it relates back to January 8th, January 8th, the court did not have jurisdiction over this claim. Well I think that I'm interested in that, I'll be briefing it your honor. But it's not interested, I'm trying to understand is that not correct? I don't think it is because- Well it's not correct that you file for an amendment or that it relates back, what is not correct? It's true that we filed an amendment, I don't think that it just, if so facto, goes back to being filed on- So is that the same thing as the Rule 15 saying that? Well that's for purposes of- I think it's a fiction that would ploy so that those claims can then be covered by the statute of limitations. In this case- I have an out if it's a supplemental pleading and when you're looking at it, look at it from that perspective. But I don't think you have an out on the Rule 15. Because if you do then that's not something you just will in ill, it just say, well this time it relates back this time it doesn't. Who 15 says it right there? I understand your honor's point and we will be briefing it. I frankly didn't understand it with the application of SOC's because there is no statute of limitations. There's nobody in, there's nobody brought it up. No, we have to because it is jurisdiction. And the court doesn't have jurisdiction, it has to be dealt with

. I totally agree and I think that there's no question that the court had jurisdiction because we brought the claim after 180 days in federal court. If your honor's point- Yes, that's true. You didn't bring a new claim. You brought an amendment to what was already there and an amendment relates back. It was in fact a new claim. That's an amendment but you called it, it was an amendment. It's an amendment. It was, that's true. And if your honor's point is that we had to do a technically separate case and file a totally separate case rather than merge it in with the existing case. The point is that there's an administrative, exhaustive administrative, remedive provision under the, under the SOC's. And in order to get that, if you filed it on January 8th as a related back claim, that's not 180 days. I understand your, your honor's point and we will, we will be briefing it. I think there's some authority out there that I've seen on this point but it's, it's not at my fingertips. And when you, as you researched that and you don't have to answer this because as you said, I think it's a point well taken, you still have the process of briefing it but answer this is in terms of a question of a concession. If you had not filed an amendment, do you concede that you would have a jurisdictional problem having filed it initially before the 180 days but you can see that, I mean, not the answer unless you want to but I'm saying, please answer that respect when you file your supplemental. 28 J brief. I will. But you can go ahead and have you want to venture into it. Well, I now understand the issue and I know that's why I thought I caught you back because you didn't but that's really an important question and because that really relates to your argument, what a relation back really means. I think, I think where it takes us though is it takes us to the point that it's a, it's a technical form of pleading rather than filing a completely separate action but, but I understand your honors point and I'd mention and we'll be briefing it. Any questions. Please record as finished with your sticks. You can proceed at least today as if we do have. Let me, let me move on then. So Mr. Feldman blew the whistle on December 27th, 2007 and soon thereafter Mr. Rand told Mr

. Carrington there was this issue of false minutes. The retaliation began right away. He wrote to the Commerce Department to self report regarding export violations on January 14th, 2008. There was Mr. Litman's email from March the 6th and soon thereafter there's all this objecting to leaks. There's the hiring of Mr. Finkelstein. What you have to look at this in the context of what it is. I mean, you got to look at this board. You got a three two board. Three of them diametrically posted. The other two just so happened. Your client is one of those two who are part of the corporation. And so when you look at it, not like he files what he says is a notice to O'Shoi meets with this clue, I guess. Mr. Cue. And he doesn't report it to the board because he says boards leaking this thing or whatever. No, sir, that's not quite right. He did. He did tell the board on December 27th at the. So whose minutes you read? That's true, but, but, but, but, but we have to take adopted by the board, which is that three. It's not exactly put it that way. Right, but aren't at this stage. I think all the facts have to be taken in the light most favorable to Mr. Phil. I don't know if you take the minutes. Sure

. People do you because because the minutes would be what the minutes are be what the board adopted. But there's nothing favorable about that. That's just what the board adopted now. That could be somebody else took minutes and you say those are the minutes. No, there are competing minutes from that December 27th. There's only one set been adopted. No, no, no, as I understand, no, no set was adopted from that meeting. And then later on, the minutes were adopted by a vote of three to two. But as I understand it, and the factual, certainly the fact is that, and Mr. Letman, I can see did not write down. We told them about, but his recollection and his sworn testimony is that on December 27th, they did tell them about the need to self-report and it was about Carrington and about safe source and all of that. So in the light most favorable to my client at this point, and with the lowest possible causation standard that the court, sorry, that Congress has invented with contributing factor. Judge Dorsey has called it a drop in the T cup. Can we not conclude that he has made his prima facie case, shift the burden now under Sarbanes Oxley to the employer to prove by clear and convincing evidence. And the district judge just never got there. And so. Did he made his case that this was a contributing factor? So all the other factors have been met that, you know, that it was protected activity and the people knew about it. That's true. So we've got, we've got all those things. And so then it just boils down to causation. And causation can be, the district judge was fixated on temporal proximity. Well, as we know, temporal proximity is just but one way you can prove causation. And the opposite is not true. If there's no temporal proximity, that doesn't mean that there is no causation. You can still prove causation without temporal proximity. And so what we have here is we have a situation where there is the board, the majority of the board, outside directors sitting and waiting for their first opportunity. And when the work lived in months, it was from May of 2008 until August of 2009

. And it was in April of 2009 that the so-called Wirtly deal went down. And then when they found out or so, they thought, again, the facts in the light most favorable to my client is that he did not undercut the board with the Wirtly's. And so they were waiting for their first opportunity. My point is with the standard as low as it is. And I implore the court to look at the Aurocio decision from the third circuit and the Lockheed Martin that I included in my 28J letter. Those are two very, very good cases. You don't need to show motive, you don't need to show of that. And Lockheed Martin stands for the proposition that when the temporal proximity, when the adverse retaliation happens close in time to the protected activity, but the ultimate termination decision happens months and months later. In Lockheed Martin, it was 20 months later, that was not fatal. But in the context, Mr. Carter, although you're not prohibited from filing under socks, obviously, but you come in a different situation. Your client is the CEO, you're on the board. You almost say, who's greater than he is. Of course, you would say because he's on the three-two minority side, but he's not the typical employee. And then you have flagrant insubordination, don't you? No, sir, if anything else, the facts in the light most favorable to my client and I think a jury would conclude, he's doing all the things that a responsible CEO would do. Let's just unpack it a little bit. The lawyer's in on a letter to the three-member of the board, telling them they ought to resign. And let me tell you what that's about. They're not meeting their obligations under the audit committee charter. This is a publicly traded company. They have to do that. He's also telling them they need to get involved with the company. And most importantly, when he's trying to physically get them away from Carrington, who's a criminal, and he's trying to physically distance themselves from them, move out of their offices, get away from them, get them into offices that is better for the company. So it really all comes down to your client and Carrington just didn't get along. Well, they had such a wonderful relationship. That Carrington rises a father-son relationship. And they fell out after Carrington, inside the cell, just stalking the company into Raymond James

. And your guy just kind of did a 180. And I embrace that. That's all true. And the reason. It really just, it really comes down to, if you look through this thing, it's really something your client has against Carrington. And he is upset in anything that tends to favor Carrington. That's not the point that your honor should focus on with respect. The dialing it up, I mean, yes, he's upset about the selling of the stock. That's true. There's the district court pre-existing contention. Fine, all true. But when you dial it up to the point you're ratting out this guy who's going to be going to jail, there's a raid on his company. The directors who are loyal to Carrington take it out on my client. And they wait until they are first opportunity and they fire him. And it's not insubordinate. Well, ratting out doesn't start to after you start having problems with Carrington. I mean, this company is supposedly being selling stuff to this. What is it? Safe? Safe? Safe? Safe. And then all of a sudden, after he's not having problems, he then discovers you've got potentially a violation of the previous order that puts him in violation of the export for that company. Then he decides that he's time now to go and report this. He learns in December and he tells the board in December. It's all the same month. And he is doing what is a responsible CEO of a publicly traded company would do, which is to get away from the guy who's had them violate federal law. He's told the Justice Department, sorry, the Commerce Department about it, the Commerce Department comes in and raids. And then immediately, objecting to the false minutes, the false billing and all of these other things. It is certainly possible that a reasonable jury could rely on these facts and conclude that my client was the whistleblower. Why would the attorney for the corporation of Mark Finkelstein take false minutes? He didn't become the attorney for the company until the March 2008 timeframe and the competing minutes pre-existed that

. But what originally he was hired according to my client. The pretty strong statement to say that a lawyer who's in a meeting, he's represented corporation and even in whatever capacity he was there, and some kind of represented capacity would take false minutes. That's right. And it implies a books and records violation of the securities and exchange commission and it's covered by socks. I think you recorded that too. That's right. To the State Bar and a whole bunch of people. Well, I don't believe there was a bar complaint, but there was a, there is a, it implicates socks because it is a books and records violation of a publicly traded company. I notice I'm out of time. All right. Thank you, Mr. Garret. Thank you. Ms. Jenkins? Good morning, Mayor. Please, the court. Amy Jenkins here for the Apple Leaves. Let me first start by addressing the merits if I may. I think first and foremost, the district court grant. I'd be happy to if your honor would prefer I start there. If you are, that would be, I think. Okay. I misinterpreted or interpreted differently the court's question last week just as Mr. Carter did. So I think I have two responses to the jurisdictional issue. First, if you look at it the way the court just questioned about it, then correct it. If it does lay back, if the June complaint relates back, is it a rule 15, see, see a member? That's what the district court said, but I do not believe it to be

. Do you see a relate back? This is not 15D. I do not believe that 15D fits any of the parameters fit. And here's what I realized. I don't believe that. I'm not telling you either. No, I didn't, but I did raise latches and statute limitations as a defense in my answer. Not on appeal. Not on appeal. You're right. Let's talk about that. Let's talk about jurisdiction. Okay. It's jurisdiction. You can raise it in and out. Correct. And I think that if the statute of limitations is jurisdictional, the court could raise it or a party could raise it now. And what if the statute of limitations? Is jurisdictional. And I'll tell you the difference. I'm not expecting limitations. This is a question of whether in filing, the amendment on a rule 15, see it relates back to January 8, which is, which is not 180 days as required by SOX in order to be able to bring an action in district court. So, district court does not have jurisdiction on January 8 if it relates back to January 8. You don't have jurisdiction. That's correct, Your Honor. There was a different interpretation. I took of your question if I could address that. Well get the one that I just gave right then. That's the one I want you to ask

. Yes, yes. Yes, if the district court said that it related back, then there was not yet jurisdiction with the district court because 180 days did not run. It was not ripe yet. Well, that's why I'm kind of, the statute says the read relating back. The district court didn't say that. The district says rule 15C. That's what they asked for. That's the problem. And so I agree with your honor that it does not appear to be ripe if you look at it from that perspective. There's a different perspective that I took when I read your question. I thought you were asking a different issue. And that was, if it related back based on 15C sub part two, which would require that the new claim be substantially arising out of the conduct alleged in the first complaint. I don't think it does. And I'll tell you why the complaints are so drastically different, but assuming that it did not relate back under 50, the sub part two, I think there's a statute of limitations issue, then that comes about under 28 USC 1658B. And I'm happy to address all of that, but if that's not the court's question, then... That'd be something interesting to address. Okay. The question does arise on the 15D as a supplemental plea. Then he's okay. Correct. If, however, it was under a 15C relate back, and we looked at 15C sub part two, the new claim was drastically different than what was alleged in January of 2010 in the original complaint. The original complaint said nothing about the essential facts that would support a survey and sexually claim. Nothing about publicly traded, nothing about fraud, nothing about false SEC filings, nothing about protected activities or knowledge thereof, nothing about reasonable belief contributing factor or any of the things you would expect to see in a survey and sexually claim. So if this was a relate back issue under 15C, I purport that it was not something that should have properly related back to the original complaint because they are so drastically different. You get no hint of a true survey and sexually allegation until you get to the June 22, June 2010 complaint

. Then the question becomes, was that file timely under applicable statutes? As the court may, Sardin's oxyly does not contain its own statute of limitations in 1514A. So then we say, where does the statute of limitations come from? I purport that there must be one, because otherwise somebody could file a claim with OSHA, wait 180 days, give notice of removal to federal court, and then sit on it for 10 or 20 years. And that's surely not what Congress intended. In fact, this court in the Stone versus Instrumentation lab case, which was argued by Mr. Carter, talked about how socks cases come from fact patterns were times of the essence. So surely there is a statute of limitation. And that really goes beyond what we've asked you to do. And you brought that up in your... I will brief that, Your Honor. I do think there's an interesting question there, and I thought that's what you were asking. You didn't bring that up. So you didn't bring this up either, but we put this out because it's jurisdictional. And I think the question that you have to decide is why should we not treat this as a supplemental pleating on the 15D, which then sort of gets us there? It may well be that's the answer to this, but the other business you're giving is wonderful. Would have been nice for you to brought that up in your case. You didn't. And I don't think that's something we need to get into at this point. Sure, Your Honor. I ask my point. I'd be happy to brief that. I don't think it's waived. It was something that was in my answer. And it was not something that I or the district court addressed. I addressed the merits. And so I'm happy to address that as well in my brief. Well, Judge Wynn gave you sound coach and advice, but I must say curiosity has got the best of me

. Can you give me 10 seconds? Where should we borrow that statute from? As you were setting up for? I think the applicable statute of limitations, 28 USC 1658B, the Ellis Court, which was a district court in Texas, used that in 2008 case. And if that's the applicable statute, then the statute ran from May 1, 2010, which would be the two-year outer limit from the discovery of the alleged fraud. It was not filed by that date. It could have been had the OSHA complaint been filed earlier. And I will brief that. The claim. On from common law frauds in terms of discovery. I kind of think it could have been discovered. Well, there are publish cases out there that say 1658B runs from the discovery of the fraud, the alleged fraud, not from when an injury occurs later. So the alleged fraud, the latest, it could have been discovered was the May 1, 2008 Finklestein invoice. Two years from that would have been the statute of limitations of May 1, 2010. Thank you. You can proceed to the marriage now. All right, thank you, Your Honor. Turning back to the merits. I think first and foremost, there is no issue before the court with respect to the individual appellees. The district court found that there had been no proof that they violated Sarbanes' oxley and granted summary judgment in their favor. I think that that decision, obviously, is not up for debate here and should stand. Secondly, the district court ruling on elements two and three of the Primaphasia case has not been addressed on appeal by Mr. Feldman. And so I think the law stands or the decision stands that with respect to element two, LEA had no knowledge of alleged protected activities after May 1, 2008. And that's important if we go to the statute of limitations issue. And as to element three, the only adverse employment action was the termination August 27, 2009. So I don't believe those issues are up for reevaluation here, the district court ruled and they were not appealed. What the district court did address on the merits was the fourth element, which was contributing factor. Well, I may make sure I understand it. On the first three elements, you say the district rule, how about the district court is simply assumed? The district court made a ruling on elements two and three, which were not appealed by Mr. Feldman. And so I'm just saying as to those elements, those two. Those two, correct. I think the simplest and easiest way for this court to address the merits is the element four, the contributing factor. And the district court found that that element was not met by Mr. Feldman and I agree. And I submit to the court, that's the easiest, perhaps, basis to address the merits of this case. First of all, temporal connection was only one issue that the district court looked at. And I agree with your honor that it seems highly implausible that a corporation would sit around for 15 plus months to look for an excuse to fire its president. It's just not likely. And there are many cases out there of some of which are cited in my brief, which say even three or four or five months is too long of a connection in time for there to be any causation to be inferred. Here we have 15 plus months. Second, the district court noted that there was no direct evidence of a contributing factor decision. There's not a single witness who came forward and said, I heard one of those outside directors tie this termination back to alleged protected activity. There's not a minute about it. There's not an affidavit about it. There's not an email about it. There is no direct evidence whatsoever. Likewise, there's no circumstantial evidence. As the court noted, there was a long history of adverse feelings between the outside directors and these two individuals, Mr. Perry and Mr. Feldman. So to the extent that they were frustrated with him at any point in time, that predated the alleged protected activity and is not because of the alleged protected activity. So they knew he was in cooperating with the federal authorities, didn't they? The only federal authority that they knew he talked to was Department of Commerce. And that was early 2008. His communications with that body stopped spring of 2008. So again, that goes back to the temporal connection that there's no evidence he they were mad at him for talking to the Department of Commerce, but there's certainly no connection to the termination a full year later

. Feldman. And so I'm just saying as to those elements, those two. Those two, correct. I think the simplest and easiest way for this court to address the merits is the element four, the contributing factor. And the district court found that that element was not met by Mr. Feldman and I agree. And I submit to the court, that's the easiest, perhaps, basis to address the merits of this case. First of all, temporal connection was only one issue that the district court looked at. And I agree with your honor that it seems highly implausible that a corporation would sit around for 15 plus months to look for an excuse to fire its president. It's just not likely. And there are many cases out there of some of which are cited in my brief, which say even three or four or five months is too long of a connection in time for there to be any causation to be inferred. Here we have 15 plus months. Second, the district court noted that there was no direct evidence of a contributing factor decision. There's not a single witness who came forward and said, I heard one of those outside directors tie this termination back to alleged protected activity. There's not a minute about it. There's not an affidavit about it. There's not an email about it. There is no direct evidence whatsoever. Likewise, there's no circumstantial evidence. As the court noted, there was a long history of adverse feelings between the outside directors and these two individuals, Mr. Perry and Mr. Feldman. So to the extent that they were frustrated with him at any point in time, that predated the alleged protected activity and is not because of the alleged protected activity. So they knew he was in cooperating with the federal authorities, didn't they? The only federal authority that they knew he talked to was Department of Commerce. And that was early 2008. His communications with that body stopped spring of 2008. So again, that goes back to the temporal connection that there's no evidence he they were mad at him for talking to the Department of Commerce, but there's certainly no connection to the termination a full year later. And finally, there were the critical intervening events that the court noted. It's not every day that a president can tell board members you need to step down. And even Mr. Feldman conceded in his deposition that he knew just prior to his termination that those outside directors believed he had thrown them under the bus with their biggest shareholder, Mr. Wartley. So you can see a very strong pattern of in-sport nation occurring over the summer of 2009, which was discussed at the August 10th, 2009 board meeting and then culminated in his termination at the August 27th, 2009 board meeting. Mr. Carter says we should view all of these facts, including which menace to accept, in the light most favorable to his client. And none of those facts it would indicate he reported this to the board and thereafter the board undertook at his first opportunity to terminate him 15 months later. Obviously, I strongly disagree. And he has the burden of showing a contributing factor. Well, that may not be a high threshold. He has to make a connection. And other than Mr. Feldman's pure subjective speculation, there's nothing in the record evidence that ties. His alleged protected activities in spring of 2008 to the termination August 27th, 2009. There's absolutely zero testimony, emails, documents, minutes, and thing that ties the two. The reason for this ordination is that he was basically talking to the waterless negatively about the board, but in the light is favorable to his client, from his perspective, then that just didn't happen. That did not talk unfavorably to about the board to the waterless. What the employment law case says is what matters is the perspective of the employer. And even Mr. Feldman admits that the perspective of the employer was that he had thrown them under the bus, those were his words, with the largest shareholder Mr. Wartley. So whether the board was correct or not, there's no evidence that it's belief that he had disperaged them, was false. What about moving that headquarters from Young'sville, which is the place that's owned by Mr. Carleton, who had been to jail and moving it to Raleigh instead? He says that was just a prudent decision to make. It saved him money

. And finally, there were the critical intervening events that the court noted. It's not every day that a president can tell board members you need to step down. And even Mr. Feldman conceded in his deposition that he knew just prior to his termination that those outside directors believed he had thrown them under the bus with their biggest shareholder, Mr. Wartley. So you can see a very strong pattern of in-sport nation occurring over the summer of 2009, which was discussed at the August 10th, 2009 board meeting and then culminated in his termination at the August 27th, 2009 board meeting. Mr. Carter says we should view all of these facts, including which menace to accept, in the light most favorable to his client. And none of those facts it would indicate he reported this to the board and thereafter the board undertook at his first opportunity to terminate him 15 months later. Obviously, I strongly disagree. And he has the burden of showing a contributing factor. Well, that may not be a high threshold. He has to make a connection. And other than Mr. Feldman's pure subjective speculation, there's nothing in the record evidence that ties. His alleged protected activities in spring of 2008 to the termination August 27th, 2009. There's absolutely zero testimony, emails, documents, minutes, and thing that ties the two. The reason for this ordination is that he was basically talking to the waterless negatively about the board, but in the light is favorable to his client, from his perspective, then that just didn't happen. That did not talk unfavorably to about the board to the waterless. What the employment law case says is what matters is the perspective of the employer. And even Mr. Feldman admits that the perspective of the employer was that he had thrown them under the bus, those were his words, with the largest shareholder Mr. Wartley. So whether the board was correct or not, there's no evidence that it's belief that he had disperaged them, was false. What about moving that headquarters from Young'sville, which is the place that's owned by Mr. Carleton, who had been to jail and moving it to Raleigh instead? He says that was just a prudent decision to make. It saved him money. It's what he put, the way he put it, saved him $79,000. In money, why wouldn't you move it from that location to the other? And yet that was considered to be an adverse action. Your Honor, I agree with your synopsis a minute ago when talking to Mr. Carter that this case really seems to stem from some resentment by Mr. Feldman toward Mr. Carleton. It has nothing to do with... But wouldn't give the board the right to retaliate against him for making a complaint. I mean, yeah, they could have the most bitter dispute. And I submit this sort of thing that television shows are made up when you read it initially. But that's not a basis to retaliate and fire someone. If that is the prime of face of case, that's what we're talking about. The basis for a prime of face of case for it, if he has made this report and they retaliate against him by ultimately firing. Correct, Your Honor. And I think the district court got this right, but there was no proof in the record of retaliation between those events in Spring 08 and his termination August 27th, 2009. Did they fire him over the move? I don't think that was the ultimate cause. I think the record evidence shows that it was the wartly issues that caused the termination. That was simply part of the part and parcel of the history of bad feelings that had pre-existed even the alleged protected activities. Was it a smart move to move it? I submit no because the board at the November 1, 2007 board meeting explicitly told Mr. Feldman do not move headquarters. He chose to ignore the board, chose to move headquarters to a whole other city. Board didn't even find out about it until after it occurred. So was that the reason for his firing? No, but it's part of the history showing the bad blood between the two factors on the board leading up to the termination a full year later. So again, Your Honor, I believe that the fourth element has absolutely no support in favor of there being any kind of, any kind of reliance on the protected activities to cause the termination much later. It's a bad blood

. It's what he put, the way he put it, saved him $79,000. In money, why wouldn't you move it from that location to the other? And yet that was considered to be an adverse action. Your Honor, I agree with your synopsis a minute ago when talking to Mr. Carter that this case really seems to stem from some resentment by Mr. Feldman toward Mr. Carleton. It has nothing to do with... But wouldn't give the board the right to retaliate against him for making a complaint. I mean, yeah, they could have the most bitter dispute. And I submit this sort of thing that television shows are made up when you read it initially. But that's not a basis to retaliate and fire someone. If that is the prime of face of case, that's what we're talking about. The basis for a prime of face of case for it, if he has made this report and they retaliate against him by ultimately firing. Correct, Your Honor. And I think the district court got this right, but there was no proof in the record of retaliation between those events in Spring 08 and his termination August 27th, 2009. Did they fire him over the move? I don't think that was the ultimate cause. I think the record evidence shows that it was the wartly issues that caused the termination. That was simply part of the part and parcel of the history of bad feelings that had pre-existed even the alleged protected activities. Was it a smart move to move it? I submit no because the board at the November 1, 2007 board meeting explicitly told Mr. Feldman do not move headquarters. He chose to ignore the board, chose to move headquarters to a whole other city. Board didn't even find out about it until after it occurred. So was that the reason for his firing? No, but it's part of the history showing the bad blood between the two factors on the board leading up to the termination a full year later. So again, Your Honor, I believe that the fourth element has absolutely no support in favor of there being any kind of, any kind of reliance on the protected activities to cause the termination much later. It's a bad blood. And you obviously would talk quite a bit about the bad blood on the side of Mr. Feldman. But what about what bad blood do you can see then existed with the outside director? What was the source of that? I think if you start with the November 1, 2007 board minutes, you'll see that there was some frustration with the outside directors over what they believed was Mr. Feldman seeking a sweetheart deal in terms of a severance package and a written employment agreement. And the district court even mentioned that and it's ruling that part of why Mr. Rand hired a attorney, Finkelstein, was to come in and deal with some of the hostility that was existing on the board and some of the concern over the fact Mr. Feldman was pushing for a written employment contract. So that was one of the early issues. The other issues include the moving of the headquarters right after the board told him at the November 1 meeting do not move without prior permission or instructing you not to. So there were a number of issues where they weren't seeing eye to eye and again that was part of why Chairman Rand brought in the new attorney, Mr. Finkelstein, to assist with issues in terms of board governance. So the issue on a PO deals with this contributing factor. If we hold in your favor, is there anything else for us to review? At least on a contributing factor, any other issues presented for review? Not on that fourth element in your honor. Again, I submit there's no evidence. It's pure speculation by Mr. Feldman regardless of whether you look for a huge amount of evidence or even just a snippet. There's nothing there other than his own speculation tying his activities to his termination. Let me put it another way. If we rule in favor of the appellate here that there was enough of a contributing factor, what then do we do? Is it then our task then to remain to the district court to consider those issues that it did not consider? Do you know ones that are assumed and that's what I think? Or do we decide the other issues? I think that's the court's prerogative. You could decide it. And I think for example on the so by saying that when you say could, you mean it has been properly presented to us for review? The other issues. I'm not sure of that, but you seem to be seeing it is and that makes me pause. Well, I'm not sure either. And here's an example. The district court purported not to rule on the second step of the analysis of whether the entity, LEA, would have taken the same action regardless of alleged protected activity. Although purported not to rule in the very paragraph it went on to say LEA had substantial reason for terminating Mr. Feldman and that it wouldn't second guess that decision

. And you obviously would talk quite a bit about the bad blood on the side of Mr. Feldman. But what about what bad blood do you can see then existed with the outside director? What was the source of that? I think if you start with the November 1, 2007 board minutes, you'll see that there was some frustration with the outside directors over what they believed was Mr. Feldman seeking a sweetheart deal in terms of a severance package and a written employment agreement. And the district court even mentioned that and it's ruling that part of why Mr. Rand hired a attorney, Finkelstein, was to come in and deal with some of the hostility that was existing on the board and some of the concern over the fact Mr. Feldman was pushing for a written employment contract. So that was one of the early issues. The other issues include the moving of the headquarters right after the board told him at the November 1 meeting do not move without prior permission or instructing you not to. So there were a number of issues where they weren't seeing eye to eye and again that was part of why Chairman Rand brought in the new attorney, Mr. Finkelstein, to assist with issues in terms of board governance. So the issue on a PO deals with this contributing factor. If we hold in your favor, is there anything else for us to review? At least on a contributing factor, any other issues presented for review? Not on that fourth element in your honor. Again, I submit there's no evidence. It's pure speculation by Mr. Feldman regardless of whether you look for a huge amount of evidence or even just a snippet. There's nothing there other than his own speculation tying his activities to his termination. Let me put it another way. If we rule in favor of the appellate here that there was enough of a contributing factor, what then do we do? Is it then our task then to remain to the district court to consider those issues that it did not consider? Do you know ones that are assumed and that's what I think? Or do we decide the other issues? I think that's the court's prerogative. You could decide it. And I think for example on the so by saying that when you say could, you mean it has been properly presented to us for review? The other issues. I'm not sure of that, but you seem to be seeing it is and that makes me pause. Well, I'm not sure either. And here's an example. The district court purported not to rule on the second step of the analysis of whether the entity, LEA, would have taken the same action regardless of alleged protected activity. Although purported not to rule in the very paragraph it went on to say LEA had substantial reason for terminating Mr. Feldman and that it wouldn't second guess that decision. So this court may want to address whether in fact a ruling was issued on that second step, that same action step. And if the court chooses to address that, I think there was ample evidence that LEA would have taken the same step in terminating Mr. Feldman regardless of whether he engaged in alleged protected activities 15 plus months earlier. Again, the district court said it wasn't ruling, but then went on and commented very strongly about what it believed LEA had as good grounds to do what it did. I think there was- Well, the Elbe-Yo burden to prove it would be shifting to you then. Correct, and I believe we did, Your Honor. I believe there was ample evidence in the record before the district court about how his insubordination over the summer of 2009 was a legitimate basis to fire him, having nothing to do with the alleged Sarbanes-Oxley protected activity. Why would I decide directors want to continue relationship with Carrington? It seemed to be inconsistent with good practice of corporate operations. I don't know that there's any evidence that there was a continued relation. He stepped down from the board. Is there any evidence in that? You mean the plaintiff didn't- the Pellet didn't produce evidence in terms of their steel communicating with him? That's not- That wouldn't before that. I'll tell you what was before the court that he stepped down from the board. He no longer had an employment position. His only role was as a shareholder. So I'm sure in his role as a major shareholder there were some interactions. In fact, he was about to sell off the majority of stock to Raymond James. So yes, there was some interaction on that front. He also had an office in the same building as LEA. So there were some passing communications as noted in our brief. But there's no evidence of any other ongoing relationship beyond that, behind the- beyond the shares being held by Mr. Carrington. You did not- The outsides were eating information to Carrington. That's right, Your Honor. But wasn't it alleged by the Pellet? It was alleged and not supported. The Pellet has alleged many things that were not supported in the record. Everything he said is not supported in the record. But everything you said it is

. So this court may want to address whether in fact a ruling was issued on that second step, that same action step. And if the court chooses to address that, I think there was ample evidence that LEA would have taken the same step in terminating Mr. Feldman regardless of whether he engaged in alleged protected activities 15 plus months earlier. Again, the district court said it wasn't ruling, but then went on and commented very strongly about what it believed LEA had as good grounds to do what it did. I think there was- Well, the Elbe-Yo burden to prove it would be shifting to you then. Correct, and I believe we did, Your Honor. I believe there was ample evidence in the record before the district court about how his insubordination over the summer of 2009 was a legitimate basis to fire him, having nothing to do with the alleged Sarbanes-Oxley protected activity. Why would I decide directors want to continue relationship with Carrington? It seemed to be inconsistent with good practice of corporate operations. I don't know that there's any evidence that there was a continued relation. He stepped down from the board. Is there any evidence in that? You mean the plaintiff didn't- the Pellet didn't produce evidence in terms of their steel communicating with him? That's not- That wouldn't before that. I'll tell you what was before the court that he stepped down from the board. He no longer had an employment position. His only role was as a shareholder. So I'm sure in his role as a major shareholder there were some interactions. In fact, he was about to sell off the majority of stock to Raymond James. So yes, there was some interaction on that front. He also had an office in the same building as LEA. So there were some passing communications as noted in our brief. But there's no evidence of any other ongoing relationship beyond that, behind the- beyond the shares being held by Mr. Carrington. You did not- The outsides were eating information to Carrington. That's right, Your Honor. But wasn't it alleged by the Pellet? It was alleged and not supported. The Pellet has alleged many things that were not supported in the record. Everything he said is not supported in the record. But everything you said it is. Well, negative of it is supported, but the positive- I believe I can point to record pages where there was discussion about the communications with Mr. Carrington being related to him being in the building or relating to him owning shares. I don't know of any other record page that talked about an ongoing relationship with Mr. Carrington other than that. I will point out that the ninth circuit in the Kim versus Boeing case did take the opportunity to go straight to that second issue. Whether the employer would have taken the same action regardless. And it said, I'm not even going to address whether there was a prime of a case. I find there's enough evidence of insubordination to grant some re-judgment or affirm some re-judgment purely on that second step. And so the court did. So that was also the case with the sixth circuit and the RIDL decision and RIDL, the sixth circuit found that there was ample evidence in the record of questionable judgment by the individual who had been fired. And the court said that alone would have supported the termination regardless of adverse, I'm sorry, regardless of alleged protected activities. And I'm sorry I see I'm out of time. I've apologized. That last issue is the one the district court said it was not proven on. And then in my opinion went ahead and made comments that seemed to be along the lines of a ruling. Thank you, Your Honor. Thank you, Mr. President. Ms. Carter, you have some time reserved. Thank you, sir. Let me race across the rooftops here. Just on this point about Mr. Feldman's evidence in the case regarding the dealings with Carrington, the evidence is his eyewitness testimony that he saw immediately after the disclosure on December 27th that he saw the lawyers in there together with Mr. Carrington and granted he didn't hear what they said, but it was, you know, speculation. Well, okay, but it's a jury is entitled to speculate about that fact. The jury was after the Raymond James? This is yes, it's after the Raymond James, but it's immediately after the board meeting on December 27th and his criminal attorney is in there also

. Well, negative of it is supported, but the positive- I believe I can point to record pages where there was discussion about the communications with Mr. Carrington being related to him being in the building or relating to him owning shares. I don't know of any other record page that talked about an ongoing relationship with Mr. Carrington other than that. I will point out that the ninth circuit in the Kim versus Boeing case did take the opportunity to go straight to that second issue. Whether the employer would have taken the same action regardless. And it said, I'm not even going to address whether there was a prime of a case. I find there's enough evidence of insubordination to grant some re-judgment or affirm some re-judgment purely on that second step. And so the court did. So that was also the case with the sixth circuit and the RIDL decision and RIDL, the sixth circuit found that there was ample evidence in the record of questionable judgment by the individual who had been fired. And the court said that alone would have supported the termination regardless of adverse, I'm sorry, regardless of alleged protected activities. And I'm sorry I see I'm out of time. I've apologized. That last issue is the one the district court said it was not proven on. And then in my opinion went ahead and made comments that seemed to be along the lines of a ruling. Thank you, Your Honor. Thank you, Mr. President. Ms. Carter, you have some time reserved. Thank you, sir. Let me race across the rooftops here. Just on this point about Mr. Feldman's evidence in the case regarding the dealings with Carrington, the evidence is his eyewitness testimony that he saw immediately after the disclosure on December 27th that he saw the lawyers in there together with Mr. Carrington and granted he didn't hear what they said, but it was, you know, speculation. Well, okay, but it's a jury is entitled to speculate about that fact. The jury was after the Raymond James? This is yes, it's after the Raymond James, but it's immediately after the board meeting on December 27th and his criminal attorney is in there also. We also have the fact that the jury is entitled to speculate what the conversation was. Well, I think the jury, did you say that? What I meant is the jury, the jury is, I didn't quite mean it. What I mean is the jury is entitled to weigh that fact. We have that evidence which is that nonverbal communication and you have no reason to know what it was. We have the fact that the meeting right afterwards. We also have the fact that he told just days later, told Department of Commerce, and then there was the raid. We have the part about the, I want to get to the other points about. Make sure this pronoun say he told the property, you mean your client. Feldman, that's right. Yes, then we have other circumstantial evidence. Council appointed out that there's no direct evidence. Well, very rarely do people say I'm firing you because you engaged in protected activity under socks. What we have though is we have, I'm firing you because of your bad performance. What bad performance? He's got great performance. I'm firing you because of insubordination. What insubordination? Where's the record, where in the record is their indication of his great performance? The record evidence is that 260% increase in sales his last based on one large sale. True. And also the last quarterly report is... They'll fail until you're left. Well, I think my client still gets the benefit of it as CEO. Department of Census is doing census and comes in and hand you $7 million. And he gets the credit for that. What happened, whether or not you could have had Mickey Mouse's head of that corporation in that situation. But the fact is that he was there in the right place, right time, and sales were up.

. We also have the fact that the jury is entitled to speculate what the conversation was. Well, I think the jury, did you say that? What I meant is the jury, the jury is, I didn't quite mean it. What I mean is the jury is entitled to weigh that fact. We have that evidence which is that nonverbal communication and you have no reason to know what it was. We have the fact that the meeting right afterwards. We also have the fact that he told just days later, told Department of Commerce, and then there was the raid. We have the part about the, I want to get to the other points about. Make sure this pronoun say he told the property, you mean your client. Feldman, that's right. Yes, then we have other circumstantial evidence. Council appointed out that there's no direct evidence. Well, very rarely do people say I'm firing you because you engaged in protected activity under socks. What we have though is we have, I'm firing you because of your bad performance. What bad performance? He's got great performance. I'm firing you because of insubordination. What insubordination? Where's the record, where in the record is their indication of his great performance? The record evidence is that 260% increase in sales his last based on one large sale. True. And also the last quarterly report is... They'll fail until you're left. Well, I think my client still gets the benefit of it as CEO. Department of Census is doing census and comes in and hand you $7 million. And he gets the credit for that. What happened, whether or not you could have had Mickey Mouse's head of that corporation in that situation. But the fact is that he was there in the right place, right time, and sales were up... I think the stock had been in continual decline. The entire time Mr. Feldman was in charge there. My point though is that... Is that right? It's a penny stock. So the fact that the company has not, you know, the company's got the war at least to contend with. There's a lawsuit out there. It's a publicly traded company. That brings me to another point. Your honor asked about the employment agreement. The AMEX was saying that it was unusual for a CEO of a publicly traded company, not to have a contract. So that contract was a requirement that they thought they had. What did with the little golden pension plan that he wanted the board to agree to? Well, what he wanted was he wanted a severance in the case... After building up this company, he wanted severance in the case they were to get rid of him. You can understand why that would be a legitimate contention between the board and the CEO, correct? Well, my point is that, again, when they say that the reason we got rid of him was because of insubordination regarding the war at least. Remember, the war at least have enough power as shareholders to put this company under. And he's going and figuring out the war at least a problem. He's the one who in April of 2009 is getting the war at least to the point where they're not going to sue and he's solving the problem. That's what a good responsible CEO does. The war at least want to either replace these members or become on the board themselves and the response of your client during that time period is to go to the board and say, you guys need a little design. No. It's not good

.. I think the stock had been in continual decline. The entire time Mr. Feldman was in charge there. My point though is that... Is that right? It's a penny stock. So the fact that the company has not, you know, the company's got the war at least to contend with. There's a lawsuit out there. It's a publicly traded company. That brings me to another point. Your honor asked about the employment agreement. The AMEX was saying that it was unusual for a CEO of a publicly traded company, not to have a contract. So that contract was a requirement that they thought they had. What did with the little golden pension plan that he wanted the board to agree to? Well, what he wanted was he wanted a severance in the case... After building up this company, he wanted severance in the case they were to get rid of him. You can understand why that would be a legitimate contention between the board and the CEO, correct? Well, my point is that, again, when they say that the reason we got rid of him was because of insubordination regarding the war at least. Remember, the war at least have enough power as shareholders to put this company under. And he's going and figuring out the war at least a problem. He's the one who in April of 2009 is getting the war at least to the point where they're not going to sue and he's solving the problem. That's what a good responsible CEO does. The war at least want to either replace these members or become on the board themselves and the response of your client during that time period is to go to the board and say, you guys need a little design. No. It's not good. No, that wasn't it. It was, it was, I met with the war at least. I think I can get a deal with the war at least and war at least wants to come on the board and he doesn't, he wants you guys to resign. That's what he said. He's reporting. Let him do it himself saying you should resign. Yes, that's right. He's reporting. That was his left. So you guys need to resign. This is true, Your Honor. And my point is though, he's reporting what the war at least have said. And these are their terms to solve the problem. Again, this is what a responsible CEO does to, to a board to say, look, we've got a problem here. We're out of business if the war at least want to put us out of business. I want to just point one last thing about the, when the burden shifts, Your Honor's question counsel about if we assume, you know, what should we do? I think your, I think the court can shift the burden to the, to the defendant here and ask, have they met the very, very high standard of clear and convincing? And what we know is that summary judgment is not available. That issue on appeal. I don't, well, the, the judge down below, I agree with, with counsel, that the judge down below did not address it under socks. But then under, yes, Your Honor. And I think what counsel's picking up on is the Macdonald Douglas shift. He then goes and says it was legitimate. That legitimate business reason, that is Macdonald Douglas language. Doesn't apply here. What applies here is clear and convincing. And as the 10th circuit has just instructed, third circuit, that's a very, very high burden. And it's, it's in rule on it and in a rule in your favor on a contributing fact that we send it back is the bottom line. That's certainly available

. That's right. Thank you. Thank you very much, Mr. Carter. We'll come down and greet counsel