Legal Case Summary

We're here to brush his neck deposit. Good morning, Your Honor. I want to proceed directly to the question that Your Honor has posed in your letter from this Waldron a couple weeks ago. This case involves an issue that this court has never faced before, which is mass market fraud. That is entities that exist as criminal enterprises using boiler rooms and abuse of the internet simply to steal money from people. Is that an issue so much as simply a set of facts? Well, let me give you just a set of facts, but it goes to the inferences that a court can make. Several pages of the defendant's brief is devoted to the fact that you'd have to make an individual inquiry to each person that had their account tapped. Well, it likes the district court's determination that the court made that, but as you can see, we believe it made it a row. Not only for fundamental reasons, but just take us an example in H.S. In the underlying case, the Federal Reserve, effectively the Federal Trade Commission, established that 99.98% of the 20,000 people whose accounts were debted $300 initially and $20 a month thereafter never even attempted to use the card. I think a court could follow the inferences that it discusses in the market's case and assume that all of those people were defrauded because of the nature of the exercise. Because they never used the card. What evidence, if we went downstairs, Sapphire designation called the jury. How would you prove that in front of the jury? I wouldn't do two things. First, I have what they did. And who's the, who's the, who's the, the experts were to look at each one and were able to aggregate them because they're very similar frauds. We have the expert who is the chairman of the marketing department of the Wharton School who said that he looked at everyone and, quote, nobody who was aware of what the terms were would have purchased any of these things. For some of them with the equivalent of paying money to use your own money. Okay. But that's so that the experts, the jury's going to have to have to be told. Second, the experts in the show, what it was. That is, I'm selling you in the case of NHS a card that was free that was intended to be given away free. It was like taking a coupon out of a newspaper on Sunday and selling it to people, but they weren't really selling it. For, for, depending on people's accounts, the $300 and then $20 a month for that free card. So the whole year proof would go is with respect to NHS. There wouldn't be, and I'm putting aside who Mr. Reyes dealt with. So it was one of the Tom Arx he didn't deal with

. So it was a different Tom Archer. We don't have an identified person who dealt with that as far as I could tell from the record. We, these companies, I think, have represented a defunct or put out a business or something along those lines. How would this proof come in simply by the experts? Wouldn't the experts have to have some factual material? And the jury would have to hear it. And that's one of the things I thought the district court was struggling with was what is this proof other than the return rates? 20, Your Honor. First of all, we have the records and all of these underlying proceedings. So we have more than the records and most of them, we have all the documents, the government entities obtained. All right. So Mr. Leinder, I'm at a loss to understand why the government is not going to be able to do this. You are arguing the facts is such an extent to such an extent. When we're here under 23F on your appeal from denial of certification, it's clear these days that peroxide is the poll star. Absolutely. With respect to what a district judge is required to do for purposes of certification and for assistance to us in review of certification or the denial thereof, what do we know from the district court opinion about what the district court thought about or did with respect to all the experts? You know what this is? This is what we know. We know that the district court never mentions any of the experts and misidentifies to witnesses as point of experts. They didn't just, didn't actually specifically discuss the evidence submitted with respect to either plaintiff or defendants designated experts. Right. And realize these are not, these are not paid professional experts we presented. Professor Meyer, the chairman of the marketing department, immediate past chairman in the board and school, professor boss and permanent members. You just want to speak about the quality of the expertise. And their opinions were directly contrary to what the district court found. And you raised this, you were arguing in front of the district court. You talked about your experts, correct? It was a great, correct. And so we know the district court was aware of them. You raised them in your argument. In Marcus, this court has found that it's a district court need not specifically discuss the experts. So how is, why is the discussion in the way as a wrenious where Marcus was okay? Well, Marcus first of all, did you have a discussion of the experts and it was able to cite the court of appeal decision repeatedly sites to the experts that were presented? But the court of appeal also said that the district court should have been more fulsome in its discussion of the experts. And then continued by saying, we're not going to provide this court to do this. Well, it's a, I don't really think it went that far, you're on it as well

. I think particularly hydrogen peroxide and Marcus said it was very important for the courts to, well, peroxide actually has specifically said that in its sound discretion, the district court may find it unnecessary to consider certain expert opinion with respect to the certification of where. But who is, that leaves us in somewhere in between, can you ignore or can you fail to discuss all the expert testimony or is it appropriate to only discuss that would you consider most important? But the expert testimony went to the central issue of the court decided and, well, it is in that the focus also in the courts misidentification of the genius of English, I think it's not in Miller, how, how does that factor into our review of whether or not the district court filed the, the broadside, I think it tells you rigorous analysis, I believe it's rigorous analysis and others know most of the time I have to face it from the other slide. But I mean in rigorous analysis goes all the way back if I'll call on, there's nothing new about that. Correct, but it certainly was stressed in hydrogen peroxide and it was applied particularly with regard to experts. In this case, the district court told us what he relied on, the only citation to record evidence with these, with the two, the two people he cited as our experts who were not our experts, both of whom were not inconsistent with our experts, they said that these return rates were red flags, the courts said, well, that's not absolutely proof, which is a second error that we obviously raised with you. But the response is that that absolutely proof was not meant to define the quantity of proof the district court was requiring, there was just a statement that, well, that's not absolute proof in order to show that that evidence fact that it does not get you over the court. Now, that informed the entire courts analysis because when we look at it, what the district court did was to follow. The district court wanted to see if there was something it could just cite in which it could apply across the board as though it were putting a button in discovering this was fraud. And it looked for absolute proof and it said I'm looking at the return rates along, which was not the predominately, certainly it's a very important issue. The Federal Reserve said that rates like this were pre-muffetian proof, actually rates were below this were pre-muffetian proof, with both fraud and events. That's not the evidence, which is the standard you need to meet. But the way it would work is once one makes pre-muffetian case, something has to come back. And there was nothing presented to explain the level of these rates except for one of the frauds who took the same. You think there is a proof shifting like McDonald Douglas? In this scenario, I understood that the party seeking class of patient, kind of learning proof on each of the elements by proponents of the others. Correct. And what we were showing was that there was in terms of return rates, that there was an objective that the court could look to in addition to the expert testimony and actually descriptions of what each of these frauds were under only five or six frauds altogether, who prior items had to be with 30 defendants, this case compared to say the line of board case that I had in front of Judge McKee many years ago, was not a complex case because the frauds were so basic. I mean, selling something that was a free for 300 hours. The whole way of looking at it that way is in a sense from the state because the goal was not to sell anybody anything. It was simply to get their account numbers. They couldn't possibly have generated return rates like those in this case. By calling all the people and having things bound, so it would mean that everybody gave them, in one case, 85% of the people they allegedly got approval from, gave them the wrong account number when they called them. It was more an effort to do send anyone this call that was to get there bank account number in order to tap their account when 99.98% of the people didn't even try to use it. I could show you I've got a desk and you're a full of cards at home, but I've never ever used a window. I'm going to run the shredding them, but they're just sitting there. So the fact that they weren't used, but you weren't, if you paid 300 dollars for one of those cards, your honor, you would have tried to use it. You're right, I'm going to send a bag and get them right back. That didn't happen here, but I want to point, your honor is out to one case that I think deals with the issue that you put to us in your letter, but which I don't think was sufficiently stressed, which is Marcus versus BMW, because that case deals with the situation where Marcus is an ascertainability case. What does that have to do with this matter? Because at the end of Marcus, the court demanded, and the court demanded because the court, we just focused on language

. It said that there were circumstances as we described in our brief where the court could assume that nobody would have purchased the item. It says as follows. We involved, it discusses two new jerseys, Supreme Court cases, one of which involved a kind of fortifying drink that didn't have the things in it that they said that would fortify it in one, which was really the remand situation in my FUSA insurance product that was sold, but which didn't reveal that its dividends were not in fact matched the premiums. And the court said following, it's distinguishing, excuse me, distinguishing Marcus, we involved, quote, a worthless product for which all representations were baseless. There was no reason for the week court to believe that a significant number of class members would, despite knowing that the product was worthless, purchased anyway. Similarly, Bakarello, it was inconceivable that more than a very small number of plaintiffs would purchase a vanishing premium insurance policy, despite knowing that the promised dividend rights were inflated. Okay, and in this case, the evidence is much stronger than in those cases because the products were essentially worthless. When you hear about this quote, AIG insurance product, there was no website that sold that product, people who went to a payday wrong website, and put in their account number, suddenly found themselves getting charged for this identity theft insurance that was worth virtually nothing to them since if you were at the payday wrong website in the first place you were destitute. I'm having a hard time figuring out how your argument relates to the denial of certification. It sounds to me like you're arguing the merits. Let me go back and address directly because your rights been applied for more. Sorry. The district court in applying the two statements that it made first that plaintiff had not produced absolute proof and that the court could not have any doubt as to whether we all know absolute proof is not required here. Right, but that's what the district court couldn't have. Well, it did. I'll tell you why because that's how its analysis went. What the court did was when it had the end, it looked for absolute proof so that it would not have any doubt. Okay, and the only thing it sites once it felt that it had the end doubt standard, it looked for something in the record that would be the type that might create doubt in a jurors mind. And the doubt it cited and it only makes one citation to the record is to this teller marketer who took the stand and said that his wife had used the product first, the healthcare benefit in the product. First, when you look at the particular thing he was selling, it wasn't a healthcare card in the first place. His wife didn't spend $150 on it, but what the court was doing was it was looking because of its erroneous view of what it had to find, whether there was any doubt. And because it used that standard instead of a preponderance of the evidence standard, it didn't look at the experts who said I looked at that product and it was a complete fraud that nobody would have ever purchased. That's what the contrary evidence was and then there was what it was itself a credit card that a debit card for which you were charged $150 is a sign up fee and $20 a month. And then charge the time you use that on top of that to use your own money. The part of what they're saying in response to that is that you had the opportunity to and did not call any individuals for any of these entities to establish that the entities were identity of the Zion bank were a total fraud. And according to those two degrees, you may not want to put one of those books out of the stand. Well, that's what you're arguing and if we didn't show the complete sham. I think that's what you're arguing. But that's an issue for trial

. I showed more than enough evidence that would have presented the court with sufficient evidence for a jury to conclude that these were complete sham. I presented what they did. I presented experts from three different angles who described what they did. I presented return rates that were at the lowest three times what the Federal Reserve said would be a prima facie case with no explanation contrary to why they would have had these return rates. And I presented because the banks own documents that show that the bank believed that several of these entities were frauds. And that's a pretty strong case to put on a jury could certainly conclude that they were complete frauds based on that because we're not focusing. If I sell you for $300 or something that's for free, we're not focusing on what you did. We're focusing on what was going on, what was sold. So to speak so like I say, debited because I believe many people were in even contact and just have their accounts tapped. But we're not focusing on what this or that class member actually did or thought about. But in the case of NHS with 99.8, not that 89, but 99.98% of the people not using it. What difference would it make what was said? Mr. Reyes was told he was going to get a government grant. And our complaint we say other people were told they were getting called by the Social Security Administration. Another person was told it was the army calling him to follow up on his pension. But some of your allegations go to people who had no contact with the telemarketers at all and their identification information was procured. And so isn't that a different proof? I think it goes back to what Judge Smith is saying is we're focused on the dominance of commonality of the ability to prove through, I think some of the cases say through one stroke, not a push or the button, but through one stroke. So that is an appropriate means of using the classification tool. Let me respond to that directly. The language of quoting is actually from the common questions issue discussed in Duke's. And by one stroke, I mean that there is, and because I particularly discussed in the opinion we sent to you by Judge Wood a couple of weeks ago, what they mean is that one aspect of the case will be resolved for all people. And if we show that the bank was operating with the subsidiary as a Rico enterprise, which is our allegation, we will resolve in one stroke a major element of every person's claim. And the more of these entities that we show were, in fact, these frauds, the stronger will be the evidence for every person who was defrauded because the argument that this is something that slipped through the cracks or something will go away. The fact that we're able to show that the bank acknowledged they were keeping these customers because it was the only thing that kept the subsidiary profitable, which is explicitly said, is strong evidence that goes to everybody. And once we establish the common question of the Rico enterprise, we have in one stroke resolved a major element in everybody's case by doing that. And that's what is meant by the one stroke. Okay

. You guys, but I'm eating covered in time. I don't want to make sure we have time for Mr. Becker and I want to make sure that I don't have to cut your colleagues' time and do this out of the table. I can show you the latest of the sync of red light time that you got. So back how are you? Great. Chip Judge McKay may please the court. I'm Chip Becker here for the Amiki Community Legal Services and the Public Interest Law Center of Philadelphia. And my goal here today is mainly to emphasize, first to emphasize, of course, Judge Smith, as you mentioned earlier, that hydrogen peroxide really is the pole star for class certification analysis in the circuit. And of course, now one of the leading cases nationwide. And we think that the district court ran a foul of hydrogen peroxide in a number of respects, but most importantly, in the district court's failure to acknowledge and to deal carefully with the expert testimony that was that was offered by the plaintiff. And the further point that I would want to make is that if this court ratifies the approach that the district court used, that you will be undermining hydrogen peroxide, we believe. And you will be sending a message that we think will make it more difficult for class actions to be certified in all kinds of cases. Certainly the kinds of cases that CLS and PILCOP involve themselves in special education, disabilities rights, benefits issues, but all kinds of cases where the case really could be tried on the basis of common evidence, but the case doesn't get that far because the district court doesn't pay appropriate attention and perform the kind of rigorous analysis that is necessary under hydrogen peroxide. So from your point of view, if the district court had simply out of the line, and I am more persuaded by science experts, that wouldn't have been enough. Well, Judge, I think that words matter. And Judge Smith said earlier that, well, the district court probably didn't mean what he said when he used the phrase absolute proof, but there it is. That's the phrase. And so I think the how an opinion presents itself, what is on the face of the opinion and the substance of the opinion does matter and does send a message about what hydrogen peroxide means and how it is to be enforced by this court. And so we urge you for the purpose of this case, but more broadly, to reverse, remand and require the district court to conduct the kind of comprehensive analysis that hydrogen peroxide requires not just for the sake of this case, but to hold the line and to enforce the meaning of hydrogen peroxide for the sake of all kinds of other cases. Whereas a practical matter, we realize that if the class action device is not available, there is no remedy for the right that is sought to be vindicated. Okay. Thank you. Thank you. Thank you. Just no needy. Thank you, Your Honor. May it please the court Jason Snyderman from Blankron. Just a little bit more. Certainly

. Thanks. I thought I was okay with Mr. Becker going before me. He said he needed to talk to the new. I don't want to say that, but you force me. That's quite hard. Is that better? That's fine. Thanks. May it please the court Jason Snyderman from Blankron on behalf of the Zionist Defendants App of Leason, this matter? Yes, Your Honor. Mr. Becker, how is it rigorous analysis to virtually ignore the evidence presented of both parties' experts in the discussion section of opinion dealing with certification? And to misidentify the experts, that's what he's talking to me. Well, I'll take both questions in turn. I'll take yours first, Chief Judge. There is no dispute that the court made an error when it referred to the two witnesses as plaintiffs' experts. It was a harmless error. In fact, throughout the plaintiffs' briefing in the case, and both at the trial court level and on appeal, the plaintiff kept referring to Mr. Dicer as an expert. That's not an easy one for you to answer. That's why it's first. That's what I thought. Because the district court did discuss it, he just misdesignated the people. Right. But he did not discuss, I mean, beyond the introductory recitation that he had considered this, we don't know in what manner. What's my employer, where are they? Right. Well, Jeff Smith, there is no discussion of the experts. I think it's important to note, as I believe you said with Mr. Langer, there was no discussion of any experts in this case. So let's start from whether or not the court was required to have such a discussion. Hydrogen block side

. I think the appeal wasn't required to have a discussion per se by bringing the opinion of Boston, Blake, and Mayor. But there has to be something at the surface of the opinion to let us know that what the court did was the rigorous analysis that required 100 in proxies. I mean, the concern is that what the court did with the, he was already good. But the refusal rate of the rejection rate, the bounce back rate. And it seemed the court was saying, well, you know, it's their high rates. And everyone could be considered, you can see their high rates. But in a brief, you argue, well, there are a lot of different reasons that would explain why they might get high rates. And they could say, well, I mean, about the coding, that there are 83, I think, different codes. So the fact that the Someronius codes doesn't really matter. But statistically, and I'm certainly not an expert on statistics, whatever errors are there, I would seem to me would be randomly sprinkled across the universe of telemarkers. So the fact that there may be a Ronius coding, which I think I'd better agree to, is there. But whatever rate of Ronius coding is going to be there, it seemed to me would be there for visa or discoverer or master card or net deposit or all your other folks. And you can see a flip on the flip on the screen where everybody else is moving along at a 1.20, 1.3 or 2 percent rejection rate. And then you see somebody is at 88.5 whatever. And that's just me. It got something other than random miscoding or random mistakes going on. That significantly included the people of the bank thought something was going on here internally. Because all these members that the court didn't really mention either. And what do we do with all that? Again, there's multiple questions here. I'd like to take them and turn it around. I don't want to neglect Judge Smith's question about the experts general. We could go back to the last question. And the question tells why are we here? And I'm happy to answer all of these questions. I just want to make sure I get to each one. So Judge Smith asked, why can we rely on the district court's opinion when it doesn't cite to any of the experts in any substantive detail? And let me add to that when you yourself have suggested alternative reasons or explanations for these high rates. Doesn't that make the expert opinion even more important or critical? I don't think so

. And I'll tell you why. Number one, and Judge Schwarz actually commented on this in the earlier exchange with regard to Marcus VDMW. Marcus was an ascertainability case, you're right, Judge Smith. But in Marcus, one of the arguments, the class was certified there and then reversed by this court. One of the arguments, the defendant's raise, was precisely this argument about experts. And the defendant said, you can't have certified the class district court because you never even looked at my expert. There's nothing in your opinion that ever even addressed my expert. And this court said, that's not an error. You don't have to address all the experts in hydrogen peroxide is what this whole adipement is to say. I mean, isn't that really what's at stake here? This court has never said or even implied that you don't have to address any of the experts in a case. We have suggested, have we not, that you're not required to address each and every expert or expert's testimony. You alluded to a quote which I think you're probably looking at again now from hydrogen peroxide. And the quotes that I'd like you to focus on from that decision from this court were one, when an expert opinion is proper, but that doesn't make it necessary in every case or unlimited in scope. And two, the court also said, in its sound discretion, a district court may find it unnecessary to consider certain expert opinion with respect to assert requirement. So certainly, and I think you've already agreed with me, there's no mandate that experts have to be looked at. Well, then help us with this. We have in the district court's opinion, we have an oral argument that took place. Tell us what we could look to from those sources to know with confidence the district court considered the experts, weighed them in some way, ruled them in or ruled them out. So you would identify things that would be great. I would suggest you don't have to do that because what all of the experts said from the appellant side, all three of them, and Mr. Langer said so today, they all sort of came at it from different angles. But what all of their opinions said was that these merchants are all complete shams. That was the conclusion of all of them. The district court based on evidence before him during a two-day argument in evidentiary hearing found as a matter of fact, they're not all shams. In fact, he made two critical factual findings that they don't even challenge today. One was that digital PPG, the one that testified at the class here, was a legitimate company that sold legitimate products and brought real savings. That's a finding effect. And incidentally, there's 900,000 transactions in this case. PPG was responsible for 400,000 of them

. So nearly half the case, the court found as a matter of fact, was legitimate and not a sham. Was that conclusion the result of the kind of rigorous analysis that we demanded in hydrogen peroxide, or how was it? One witness saying that, well, my life, and I'll use our stuff we sell. Now, that's the witness said a lot more than that. And he was cross-examine for over an hour. And the judge had before him in support of this rigorous analysis hundreds of pages of briefing, I think 150 plus pages of expert declarations. It had sworn testimony, live testimony at the class certification hearing, and it came up with a 16-page fairly lengthy opinion. So I think it's long to suggest the court today is really simple. I'm sorry. He said a 16-page, really lengthy opinion. It's kind of hard to squeeze those two. Fair enough. But on these issues, the judge said in his opinion, he's specifically the type size two, it's seven pages in five. Fair enough. But what he did say in that opinion, among other things with regard to this particular issue on PPG, is that the man testified, we had documentary evidence supported ahead of time. We had a declaration that Mr. Georgioni, the principal, had supported to the court ahead of time. As I say, he was cross-examine vigorously. And he didn't just say I had a relative that got braces. He talked about the fact that he has usage reports from people that get the benefits of this product over time. So are you saying that because the plaintiffs embraced a common sham theory? And evidence was a doose to show there was no complete sham. And evidence was a doose that there was no complete sham. Therefore, the district court never reached, neither had to reach the experts. That's exactly what I'm saying. If the experts are just saying these are all complete shams, and the court found as a matter of fact that they are not all complete shams, why doesn't he now go through each of the experts and say why they're not complete shams? So the evidence shows that they're not. So from your point of view, you're saying that the factual predicate upon which the experts relied was disproved. It becomes of no consequence. Once he made a factual finding that even the appellant doesn't elage was in abuse of discretion. That factual finding controls. And incidentally, there's another thing the court said, and I agree with my colleague Mr

. Becker, words do matter. The court also said as a finding a fact here. In addition to PPG being a legitimate company, it found that it was quote likely that the other merchants would have similar evidence of legitimacy too. That's a finding effect the court made too. That's the kind of extra thing to lead the bottles, my mind. You've got a suit that involves ten defendants. The thing that a comes forth to, to come forth with proof that it's not complete shams and so he said, well, I work with it. A is not complete shams. Here in Susari, there's other nine folks in that complete shams either. Well, we understand the logic of that. I think it's easy to understand when you consider the rigorous analysis that was done. As I said, there were hundreds and hundreds of pages put before the court in a two-day hearing and live testimony. A moment what was submitted to the court wasn't just PPG. Let's talk about NHS, the company that Mr. Langer isolated in his remarks. NHS, there's evidence in the record that one of the other processors after Zionist that was considering doing business with NHS. They bought the card to see if it worked appropriately before they decided to do business with them. They bought the card. It had prescription discounts as one of the benefits associated with it. He went to CVS to get a prescription filled and he got the discount that it was supposed to give to him. So there's evidence of legitimacy right there. Mr. Wright, how did you save that part of me? I'm going to save you paid for that. Why presume you paid what everybody paid? And I think Mr. Langer was right. It was a couple hundred dollars plus a subscription fee thereafter. That's not in the record that he wasn't asked that question in his deposition, but I presume you paid what everyone else paid. But that's just another piece of legitimacy. There's much, much more. For example, PPG testifying and there's evidence of this among all of the merchants that they had contracts with reputable third party providers like AIG, Provident Life Insurance, MasterCard, Visa, Mr. Langer can come up here and tell you these cards were all worthless and they had no value. But he has no evidence that that's actually the case because he never took a single deposition from any of these merchants. He never looked at a single document that he had requested directed to any of these merchants. There were no interrogators, no discovery at all. Instead, he comes up here with an argument that they all must have been a complete sham. He has no evidence to support it and what's critical here, as you said, Judge Smith, to get back to the legal issues, not the factual issues. What's critical here is the burden was on the appellant at the classification stage to prove that these companies are complete sham. Because after all, that's the argument that he's advanced as to why the rule 23 requirements have been satisfied. You know, he doesn't have that burden. He has the burden of showing evidence, showing by a preponderance of the evidence that there's a basis to certify a class for which there is evidence. Never may be completely true. But he has said the reason I'm in this position. You just seem to have conflated the burden of proof between the time of certification with the burden of proof eventually in the merits. No. He has to prove, and this is an important question. The supplemental briefing that the court asked for as to how this case gets around like USA and Austin VHBO, were very oral misrepresentations can't be certified, which even the appellant acknowledges is what happened here. These are all mostly very non-standard oral misrepresentations just like the President in Johnston in my USA. So he has to, he said, you get around having to delve into all of this molasses of individual inquiries because they're all complete sham. Therefore common issue issues predominate. The individual issues are not of a concern because they're all complete sham. That's why 23B3 has been satisfied. That's his theory. And by choosing to advance that theory to say this is why Rule 23 is satisfied, he has put himself to the burden of having to prove that at the classification stage. There's basically two tenants of class action jurisprudency that are both well accepted that intersect on this very point. Number one, class certification, you have to meet the requirements of Rule 23 at class certification. That's pretty unremarkable. Number two, and this was held by this court in all of the cases we've been discussing today, hydrogen peroxide, Marcus VBW, and the Supreme Court more recently in DOOTS and in Comcast V Barrett. The court said that when determining whether or not the Rule 23 requirements have been met, if that requires delving into the merits of the case, you must do so

. For example, PPG testifying and there's evidence of this among all of the merchants that they had contracts with reputable third party providers like AIG, Provident Life Insurance, MasterCard, Visa, Mr. Langer can come up here and tell you these cards were all worthless and they had no value. But he has no evidence that that's actually the case because he never took a single deposition from any of these merchants. He never looked at a single document that he had requested directed to any of these merchants. There were no interrogators, no discovery at all. Instead, he comes up here with an argument that they all must have been a complete sham. He has no evidence to support it and what's critical here, as you said, Judge Smith, to get back to the legal issues, not the factual issues. What's critical here is the burden was on the appellant at the classification stage to prove that these companies are complete sham. Because after all, that's the argument that he's advanced as to why the rule 23 requirements have been satisfied. You know, he doesn't have that burden. He has the burden of showing evidence, showing by a preponderance of the evidence that there's a basis to certify a class for which there is evidence. Never may be completely true. But he has said the reason I'm in this position. You just seem to have conflated the burden of proof between the time of certification with the burden of proof eventually in the merits. No. He has to prove, and this is an important question. The supplemental briefing that the court asked for as to how this case gets around like USA and Austin VHBO, were very oral misrepresentations can't be certified, which even the appellant acknowledges is what happened here. These are all mostly very non-standard oral misrepresentations just like the President in Johnston in my USA. So he has to, he said, you get around having to delve into all of this molasses of individual inquiries because they're all complete sham. Therefore common issue issues predominate. The individual issues are not of a concern because they're all complete sham. That's why 23B3 has been satisfied. That's his theory. And by choosing to advance that theory to say this is why Rule 23 is satisfied, he has put himself to the burden of having to prove that at the classification stage. There's basically two tenants of class action jurisprudency that are both well accepted that intersect on this very point. Number one, class certification, you have to meet the requirements of Rule 23 at class certification. That's pretty unremarkable. Number two, and this was held by this court in all of the cases we've been discussing today, hydrogen peroxide, Marcus VBW, and the Supreme Court more recently in DOOTS and in Comcast V Barrett. The court said that when determining whether or not the Rule 23 requirements have been met, if that requires delving into the merits of the case, you must do so. It used to be prior to the 2003 amendments to the class rules. If that was the old confusion over Isaac, whether or not you could look ahead to the hydrogen peroxide, we know that's not the case. Then Chief Judge Serica said specifically, look at the 2003 amendments. This was a C-Changing class action law. Now you have to dig into the merit. If you need to look at the merits to determine class serve. So Jeff Smith, to your question, can he save all of this proof to later at trial? Absolutely not. That person all says, if you're saying these merit to matter in order to get over the Rule 23 hurdles as part of the rigorous analysis, then you have to prove it now at class certification. He doesn't get another chance at trial. He would have to prove it at both stages. He here to say Rule 23 has been satisfied. And then a trial he'd have to prove it again to the jury. But just to show that the class Shem theory as a matter of theory, that if he could show that these entities were all complete Shem, that addresses the commonality issues and all the issues built into 2382, he could pass that if he can show that these are complete Shem. If he could show based on a preponderance of the evidence at the class certification stage, I suggest that's correct. But he hasn't found as a matter of fact the court has held, he hasn't been able to show that here. No way of showing that is the expert evidence. But the experts, the experts just like Mr. Langer and the team representing the appellant, the experts never spoke to anybody at these merchants. They didn't have anything before them other than the same presumptions that the plaintiff wants you to make here. So, I'm going to have to clear every second conclusion from the incredible return rates on these transactions. Well, I'm glad she came back to that because I was one of the many questions I didn't get a chance to respond to earlier. Return rates here, there are 68 of them. Okay, it's different reasons for a return code. Let's start with this understanding. This case is not about return rates. The puted of class by definition is not about people that sought or received an ACH return. Let's say there's 30% returns for a merchant. This case is about the 70% that never sought one and never got one. We know nothing about that 70%

. It used to be prior to the 2003 amendments to the class rules. If that was the old confusion over Isaac, whether or not you could look ahead to the hydrogen peroxide, we know that's not the case. Then Chief Judge Serica said specifically, look at the 2003 amendments. This was a C-Changing class action law. Now you have to dig into the merit. If you need to look at the merits to determine class serve. So Jeff Smith, to your question, can he save all of this proof to later at trial? Absolutely not. That person all says, if you're saying these merit to matter in order to get over the Rule 23 hurdles as part of the rigorous analysis, then you have to prove it now at class certification. He doesn't get another chance at trial. He would have to prove it at both stages. He here to say Rule 23 has been satisfied. And then a trial he'd have to prove it again to the jury. But just to show that the class Shem theory as a matter of theory, that if he could show that these entities were all complete Shem, that addresses the commonality issues and all the issues built into 2382, he could pass that if he can show that these are complete Shem. If he could show based on a preponderance of the evidence at the class certification stage, I suggest that's correct. But he hasn't found as a matter of fact the court has held, he hasn't been able to show that here. No way of showing that is the expert evidence. But the experts, the experts just like Mr. Langer and the team representing the appellant, the experts never spoke to anybody at these merchants. They didn't have anything before them other than the same presumptions that the plaintiff wants you to make here. So, I'm going to have to clear every second conclusion from the incredible return rates on these transactions. Well, I'm glad she came back to that because I was one of the many questions I didn't get a chance to respond to earlier. Return rates here, there are 68 of them. Okay, it's different reasons for a return code. Let's start with this understanding. This case is not about return rates. The puted of class by definition is not about people that sought or received an ACH return. Let's say there's 30% returns for a merchant. This case is about the 70% that never sought one and never got one. We know nothing about that 70%. And the sixth circuit court of appeals held on a very, the identical theory because it was brought by the same counsel in the Johnson v. U.S. National Bank case that you can't draw inferences of a rico violation based on red flags or high return rates for fraudulent telemarketing. Wasn't that case decided that motion to dismiss case? It was, but the court of appeals said that you can't draw these inferences that they want you to draw. So if we turn on the right, depending on whether the return rate will 100% that statement still be true? No, because you don't know why the return rate was 100%. So as I said, there are 68 different reasons. Let's look at what the most prevalent ones were in this case. Insufficient funds. If a person purchases a product either through a telemarketer or an internet merchant and Mr. Chief Judge, I see my times expire. But again, that goes back to my one reason statistics statistics. I would assume that the rate of return for these nine or eight entities for insufficient funds would be no less and the greater than the universe of telemarketers who deal with the same clientele, maybe different clientele, that that return rate is going to be the same across the universe. When you get to a situation where the return rate jumps off the charts, it seems to me that there's something abnormal or irregular about what's going on there that would make that number so much higher than the universe of people that is a product. There is no question that every witness in this case has agreed that return rates don't prove anything. There is starting point, as you say, to look into this and see whether or not I asked you to have a fitically, if the return rate were 100% would that be sufficient to prove completion? To maybe understand the fact he said it would. I did say it would not because you don't know why it's 100%. Let's say it's 100% because the people that purchased that product didn't have the money to cover the product. That's not fraud. Let's say there was buyer, expires, remorse, which is common in telemarketing world and the internet merchant world where somebody buys a product and then they change their mind and they say they call up two weeks later say I never ordered this product. There was not even so much work over these entities and with all the other hundreds, in the hundreds of thousands of entities that are out there, why would it be so much greater here? Because their telemarketers and internet merchants were people very often purchased things they either don't have the money to pay for or they change their mind. But are they interested in it? Isn't that nervous? No, not with these types of merchants. But doesn't the expert testimony state exactly that or opine exactly that? The excessively high rates of returns are in the case of Professor Boss, clear indications of fraud. That's what she says. Oh yes, all the more reason the expert opinion is important. If I understood the correct assumption, you seem to be suggesting, and please correct me if I'm drawing an incorrect conclusion here, that an expert cannot assume certain factual predicates from which that expert then opines. You had indicated about a lack of depositions and we don't know the reason score. All of which seems to suggest the total opposite of I's and you want the entire case proven at the time of certification. And that's not what's required under peroxide either

. And the sixth circuit court of appeals held on a very, the identical theory because it was brought by the same counsel in the Johnson v. U.S. National Bank case that you can't draw inferences of a rico violation based on red flags or high return rates for fraudulent telemarketing. Wasn't that case decided that motion to dismiss case? It was, but the court of appeals said that you can't draw these inferences that they want you to draw. So if we turn on the right, depending on whether the return rate will 100% that statement still be true? No, because you don't know why the return rate was 100%. So as I said, there are 68 different reasons. Let's look at what the most prevalent ones were in this case. Insufficient funds. If a person purchases a product either through a telemarketer or an internet merchant and Mr. Chief Judge, I see my times expire. But again, that goes back to my one reason statistics statistics. I would assume that the rate of return for these nine or eight entities for insufficient funds would be no less and the greater than the universe of telemarketers who deal with the same clientele, maybe different clientele, that that return rate is going to be the same across the universe. When you get to a situation where the return rate jumps off the charts, it seems to me that there's something abnormal or irregular about what's going on there that would make that number so much higher than the universe of people that is a product. There is no question that every witness in this case has agreed that return rates don't prove anything. There is starting point, as you say, to look into this and see whether or not I asked you to have a fitically, if the return rate were 100% would that be sufficient to prove completion? To maybe understand the fact he said it would. I did say it would not because you don't know why it's 100%. Let's say it's 100% because the people that purchased that product didn't have the money to cover the product. That's not fraud. Let's say there was buyer, expires, remorse, which is common in telemarketing world and the internet merchant world where somebody buys a product and then they change their mind and they say they call up two weeks later say I never ordered this product. There was not even so much work over these entities and with all the other hundreds, in the hundreds of thousands of entities that are out there, why would it be so much greater here? Because their telemarketers and internet merchants were people very often purchased things they either don't have the money to pay for or they change their mind. But are they interested in it? Isn't that nervous? No, not with these types of merchants. But doesn't the expert testimony state exactly that or opine exactly that? The excessively high rates of returns are in the case of Professor Boss, clear indications of fraud. That's what she says. Oh yes, all the more reason the expert opinion is important. If I understood the correct assumption, you seem to be suggesting, and please correct me if I'm drawing an incorrect conclusion here, that an expert cannot assume certain factual predicates from which that expert then opines. You had indicated about a lack of depositions and we don't know the reason score. All of which seems to suggest the total opposite of I's and you want the entire case proven at the time of certification. And that's not what's required under peroxide either. Well, I agree that's not what's required under peroxide. What I'm suggesting is that can an expert assume the factual predicates or assume certain factual predicates such as those facts would not have to be shown. That it would be enough to have one expert or four say that this high rate is a clear indication of fraud and if KSC also I'm sorry. And doesn't get the same thing that high rate rate rate of the plaintiff not aid homework of mass marketing for the plaintiff's homework of mass marketing for right. Oh, it's clearly an indicator and a weighty one I'm not suggesting otherwise. And in fact, one fact that gets lost in all of the other. And that the preponderance of the other than standard. Can't that be enough? But you're missing a central focus of what the point of those experts was. If you would tell you that's not unusual. Well, but those experts are saying you can presume fraud, right, based on the high return rates. You can presume fraud, but remember the theory that the appellant chose to advance here for classification is not that there was some fraud or maybe even a lot of fraud. They necessarily have to have complete shams every fraud in every case. The man who said he used the NHS card and it worked appropriately is sitting here and Mr. Ray is sitting here saying it was a fraud. Clearly the cases of fraud sounds like a pretty strong opinion. Well, look at the sixth circuit court of appeals. They say you can't make such an inference based on red flags which were high return rates there too. How do you know that the high return rates weren't because people had buyers or more? So weren't because there was a technical error. But did even Mr. Guis just say that the high return rates were an indicator of red flag but not proof in enough of self. In fact, he used the phrase, it's a starting point, not an end point. Remember, he has to prove the point that this could prove that. And that was the biggest thing. And incidentally, we agree with that. That is the starting point. But that doesn't prove that these companies are complete shams. And you can't reverse the hold into the trial court who found as a matter of fact the companies were not all complete shams. Half the transactions were from a legitimate company and others were likely legitimate too based on abundant evidence of legitimacy put into the record. We're hoping that abundance evidence of legitimacy

. Well, I agree that's not what's required under peroxide. What I'm suggesting is that can an expert assume the factual predicates or assume certain factual predicates such as those facts would not have to be shown. That it would be enough to have one expert or four say that this high rate is a clear indication of fraud and if KSC also I'm sorry. And doesn't get the same thing that high rate rate rate of the plaintiff not aid homework of mass marketing for the plaintiff's homework of mass marketing for right. Oh, it's clearly an indicator and a weighty one I'm not suggesting otherwise. And in fact, one fact that gets lost in all of the other. And that the preponderance of the other than standard. Can't that be enough? But you're missing a central focus of what the point of those experts was. If you would tell you that's not unusual. Well, but those experts are saying you can presume fraud, right, based on the high return rates. You can presume fraud, but remember the theory that the appellant chose to advance here for classification is not that there was some fraud or maybe even a lot of fraud. They necessarily have to have complete shams every fraud in every case. The man who said he used the NHS card and it worked appropriately is sitting here and Mr. Ray is sitting here saying it was a fraud. Clearly the cases of fraud sounds like a pretty strong opinion. Well, look at the sixth circuit court of appeals. They say you can't make such an inference based on red flags which were high return rates there too. How do you know that the high return rates weren't because people had buyers or more? So weren't because there was a technical error. But did even Mr. Guis just say that the high return rates were an indicator of red flag but not proof in enough of self. In fact, he used the phrase, it's a starting point, not an end point. Remember, he has to prove the point that this could prove that. And that was the biggest thing. And incidentally, we agree with that. That is the starting point. But that doesn't prove that these companies are complete shams. And you can't reverse the hold into the trial court who found as a matter of fact the companies were not all complete shams. Half the transactions were from a legitimate company and others were likely legitimate too based on abundant evidence of legitimacy put into the record. We're hoping that abundance evidence of legitimacy. We've got the guy whose wife is buying his product. And we've got the drug prescription, this no card. We're hoping we'll be abundance evidence. Sure. There's two ways to address that. I'll do it most directly first. The guy who's talking about the relative. He also testified that he spends $1.4 million annually to provide the benefits that his card brings with it. It's not just a debit card. It's a debit card with all kinds of commensurate benefits. He spends $1.4 million to provide the benefits with contracts that he has with vendors like MasterCard, Protective Insurance, Roadside America. He said there's usage reports that he would get monthly that show all of the people that use these different benefits every month like the roadside assistance so that they could gauge how much to charge him to provide those benefits. He said multiple anecdotes of people that got braces through the benefits like his relative. I think it was the daughter. He talked about people that use the nurse hotline. There was lots of other evidence he gave too. And that's just the one company. Let's talk about some of the others. There's declarations in the record here at Joint Dependix 3801 from him and at 3805 from another man named Tassouji who talked about his company and how his company worked and how there's evidence of legitimacy there too. None of these are talked about. I suggest to you because appellant doesn't want as you suggested Mr. Chief Judge as a matter of strategy. He doesn't want anyone to look at these merchants because they might just find evidence of legitimacy. He needs it necessarily depends who's theory does on every transaction, everyone being a complete sham. And I would turn you to one other thing on abundant evidence of legitimacy. Joint Dependix page is 2718-2721. Are the answers to the request for admissions in this case that we served

. We've got the guy whose wife is buying his product. And we've got the drug prescription, this no card. We're hoping we'll be abundance evidence. Sure. There's two ways to address that. I'll do it most directly first. The guy who's talking about the relative. He also testified that he spends $1.4 million annually to provide the benefits that his card brings with it. It's not just a debit card. It's a debit card with all kinds of commensurate benefits. He spends $1.4 million to provide the benefits with contracts that he has with vendors like MasterCard, Protective Insurance, Roadside America. He said there's usage reports that he would get monthly that show all of the people that use these different benefits every month like the roadside assistance so that they could gauge how much to charge him to provide those benefits. He said multiple anecdotes of people that got braces through the benefits like his relative. I think it was the daughter. He talked about people that use the nurse hotline. There was lots of other evidence he gave too. And that's just the one company. Let's talk about some of the others. There's declarations in the record here at Joint Dependix 3801 from him and at 3805 from another man named Tassouji who talked about his company and how his company worked and how there's evidence of legitimacy there too. None of these are talked about. I suggest to you because appellant doesn't want as you suggested Mr. Chief Judge as a matter of strategy. He doesn't want anyone to look at these merchants because they might just find evidence of legitimacy. He needs it necessarily depends who's theory does on every transaction, everyone being a complete sham. And I would turn you to one other thing on abundant evidence of legitimacy. Joint Dependix page is 2718-2721. Are the answers to the request for admissions in this case that we served. Now you'll see there's other merchants reference there because at the time there are other merchants at issue but among them are the 10 here. The request for admission specifically asked does this merchant for each of the 10 sell a legitimate product? And the answer for every one of them was denied we don't admit that they sell a legitimate product and then they went on to explain why. They said it's not legitimate in our view if the price paid doesn't bear a reasonable relationship to the value. So they didn't say no products were received. They didn't say no benefits came with the products. They said if the price is too high it's a sham. Two years ago my wife and I bought a mini van it turned out to be a lemon. I paid $40,000. I feel that the price was way higher than the reasonable value of that car. I don't believe that Toyota is a sham company. Shandongoda is the fraud. I wouldn't go to Honda. But nonetheless my point is their own strategy is disclosed in those requests for admissions. Where they say they're all shams because the prices were too high. That's not fraud, Your Honours. There's not a person in this room that hasn't paid more than what they thought they had to for a particular product. You can't draw the lead that as a result of a price being a bad spot. That's mere market economics and people come to agree on a price. But here again the whole theory to say rule 23's requirements have been satisfied necessarily depends on every transaction being shandonged. If you found this up, let's you learn because you let Mr. Lindgren. How many of them are practical? It would be quite possible that if you're right here what would come out of this would be kind of the Google map to tell marketers in terms of how to commit fraud. If a company were to set up some kind of tell market in the enterprise, 5% of its businesses quote legitimate, close quote. In the other 95% is really there just to host down the people that are calls, get their account numbers, do identity theft. But it's got 5% of its business that it is really selling and even add reasonable value. How would a class action be appropriate? Because if the tell marketer is big enough, you could never, if there are enough people involved in this enterprise, not in the legal sense, one could never ever get past rule 23, a commonality requirement Mr. Bring Your Class Action, which would be the only real mechanism for getting some kind of recovered for the people who are who's done. How do we get around that practical problem with which arguing? Well there's two reasons why it's not a problem here. Number one is this court has identified this precise argument any number of times in Newton versus Maryland, the court specifically addressed the same argument and said how can we help people if you know there's no other remedy available to them

. Now you'll see there's other merchants reference there because at the time there are other merchants at issue but among them are the 10 here. The request for admission specifically asked does this merchant for each of the 10 sell a legitimate product? And the answer for every one of them was denied we don't admit that they sell a legitimate product and then they went on to explain why. They said it's not legitimate in our view if the price paid doesn't bear a reasonable relationship to the value. So they didn't say no products were received. They didn't say no benefits came with the products. They said if the price is too high it's a sham. Two years ago my wife and I bought a mini van it turned out to be a lemon. I paid $40,000. I feel that the price was way higher than the reasonable value of that car. I don't believe that Toyota is a sham company. Shandongoda is the fraud. I wouldn't go to Honda. But nonetheless my point is their own strategy is disclosed in those requests for admissions. Where they say they're all shams because the prices were too high. That's not fraud, Your Honours. There's not a person in this room that hasn't paid more than what they thought they had to for a particular product. You can't draw the lead that as a result of a price being a bad spot. That's mere market economics and people come to agree on a price. But here again the whole theory to say rule 23's requirements have been satisfied necessarily depends on every transaction being shandonged. If you found this up, let's you learn because you let Mr. Lindgren. How many of them are practical? It would be quite possible that if you're right here what would come out of this would be kind of the Google map to tell marketers in terms of how to commit fraud. If a company were to set up some kind of tell market in the enterprise, 5% of its businesses quote legitimate, close quote. In the other 95% is really there just to host down the people that are calls, get their account numbers, do identity theft. But it's got 5% of its business that it is really selling and even add reasonable value. How would a class action be appropriate? Because if the tell marketer is big enough, you could never, if there are enough people involved in this enterprise, not in the legal sense, one could never ever get past rule 23, a commonality requirement Mr. Bring Your Class Action, which would be the only real mechanism for getting some kind of recovered for the people who are who's done. How do we get around that practical problem with which arguing? Well there's two reasons why it's not a problem here. Number one is this court has identified this precise argument any number of times in Newton versus Maryland, the court specifically addressed the same argument and said how can we help people if you know there's no other remedy available to them. And this court said then that that's not our concern here if they haven't met commonality and predominance, you can't trump those factors and say they're ignored because of what you're addressing the disappears. So you're in a kind of case where you really had kind of the format, format, script, single representation, you're right. Such a part of that. But do you know, Newton relied upon to make that very conclusion? I just relied to you a case I'm sure you're familiar with, in red like USA, a case with varied, or this representations that the court held cannot be certified as a class for the very same proposition. It cited that case to say. But maybe in my life USA and Johnson put in a long way that we need to get control of because again it's just the telemarketers look, this is very your scripture. We don't make sure we don't do anything to the sodium form that can be looked at and seen as a script. But basically the people who are working the borrowers who use Mr. Lambert's phrase. No, basically what they have to do, it's up to their own judgment as to how to do it, how to get the content information or how to solve what maybe is useless product. As long as our reading from a script and they can fall back and like they say in Johnson and their men from class loss and how do we avoid that kind of result. You say we have more about it here, but our opinion is presidential and if you were win is going to be applied in other cases just as like USA's being applied here. That's correct. I think when you look at what that slippery slope might be in the future, if in the future there's a situation where somebody says I'm going to have 5% legitimacy and 95% fraud. If that happens in the future and the court should find after doing the rigorous analysis there's no uniform evidence to go across the whole class and there's no individual issues that don't predominate over the common ones. Then class certification just wouldn't be appropriate and as unfortunate as that may be, if it's the only remedy available, it doesn't meet the other requirements that this court has long held or required. You don't trump them for superiority. I think it's important also to note that very good that you would satisfy superiority because that would be the only way. Well, let's say you've got 30% our legit and 70% of fraud. How do you know which pew to the plank to his in and which one is out, which ones like Mr. Ray? So which one was like the guy Mr. Hughes who bought the NHS product and it worked. That's been one's arm manageability. So individual inquiries to determine who was defrauded and who was not, who was damaged and who was not. In this case tens of thousands of people already got the money back and they had no injury at all through either direct merchant refunds or settlements from the FTC class. And that's the damage issue. But I'm saying that when it get past certification that could easily be dealt with. No, because it's not a matter of calculating the amount of damages which this court has long held is not something to prevent class certification. What I'm talking about is the fact of damages

. And this court said then that that's not our concern here if they haven't met commonality and predominance, you can't trump those factors and say they're ignored because of what you're addressing the disappears. So you're in a kind of case where you really had kind of the format, format, script, single representation, you're right. Such a part of that. But do you know, Newton relied upon to make that very conclusion? I just relied to you a case I'm sure you're familiar with, in red like USA, a case with varied, or this representations that the court held cannot be certified as a class for the very same proposition. It cited that case to say. But maybe in my life USA and Johnson put in a long way that we need to get control of because again it's just the telemarketers look, this is very your scripture. We don't make sure we don't do anything to the sodium form that can be looked at and seen as a script. But basically the people who are working the borrowers who use Mr. Lambert's phrase. No, basically what they have to do, it's up to their own judgment as to how to do it, how to get the content information or how to solve what maybe is useless product. As long as our reading from a script and they can fall back and like they say in Johnson and their men from class loss and how do we avoid that kind of result. You say we have more about it here, but our opinion is presidential and if you were win is going to be applied in other cases just as like USA's being applied here. That's correct. I think when you look at what that slippery slope might be in the future, if in the future there's a situation where somebody says I'm going to have 5% legitimacy and 95% fraud. If that happens in the future and the court should find after doing the rigorous analysis there's no uniform evidence to go across the whole class and there's no individual issues that don't predominate over the common ones. Then class certification just wouldn't be appropriate and as unfortunate as that may be, if it's the only remedy available, it doesn't meet the other requirements that this court has long held or required. You don't trump them for superiority. I think it's important also to note that very good that you would satisfy superiority because that would be the only way. Well, let's say you've got 30% our legit and 70% of fraud. How do you know which pew to the plank to his in and which one is out, which ones like Mr. Ray? So which one was like the guy Mr. Hughes who bought the NHS product and it worked. That's been one's arm manageability. So individual inquiries to determine who was defrauded and who was not, who was damaged and who was not. In this case tens of thousands of people already got the money back and they had no injury at all through either direct merchant refunds or settlements from the FTC class. And that's the damage issue. But I'm saying that when it get past certification that could easily be dealt with. No, because it's not a matter of calculating the amount of damages which this court has long held is not something to prevent class certification. What I'm talking about is the fact of damages. Comcast the barren talked about damages having to be proven on a class-wide basis. I'm speaking of the fact of damages tens of thousands of people in this pew to the class already have been made whole and we have no way to know who they are. No way to know. So if you certify class because you're concerned about 5% that may have been defrauded, you're now going to reward the pew to the plank that's with recoveries that tens of thousands of them have already received. This is why I say who's in and who's out is a manageability problem separate mini trials for each transaction who was damaged and who was not likewise separate trials. And by the way, this is a Rico case, Mr. Chief Judge. It's not a case of just alleging fraud against one of the merchants. It's a very complicated Rico theory saying designs defendants knew and participated in this conduct. So they would have to prove that designs bank defendants by looking at every one of the 10 different relationships it had with these merchants. Every one of them to determine if and when designs ever knew that there was any fraud because if they can determine that there was a point when that was the case that point in time any transactions that occurred prior to that can't be part of this Rico case. Only transactions that occurred there after once the defendants were participants in this grand Rico conspiracy. So the trial court would have to see who's in and who's out. It would have to see who got their money back and who didn't. And it would have to see when is this point in time if ever for any of these 10 merchants and it can only do that for 10 separate trials with regard to each merchant. It would be epic manageability problems in the future if there's 5% legit 95% illicit those same problems would still result. You still don't know with any punitive plaintiffs who's been injured at all. Let me say your argument and I think Mr. Langham is there two minutes. Thank you, Your Honor. Thank you. Your Honor, you were asking me about, well, didn't the district court just decide one expert over the other? On the issue of fraud, there were no contrary experts. It was just our experts. Okay. And second, in answering the shorts' question, these experts had before them the entire scheme what was being sold and how it was being sold. What form? How did they have it? The bank had records. We had gotten all the records from all the FTC proceedings. So the court records things submitted by the government? Correct. We could have included business records from the entities that were being investigated by the FTC

. Comcast the barren talked about damages having to be proven on a class-wide basis. I'm speaking of the fact of damages tens of thousands of people in this pew to the class already have been made whole and we have no way to know who they are. No way to know. So if you certify class because you're concerned about 5% that may have been defrauded, you're now going to reward the pew to the plank that's with recoveries that tens of thousands of them have already received. This is why I say who's in and who's out is a manageability problem separate mini trials for each transaction who was damaged and who was not likewise separate trials. And by the way, this is a Rico case, Mr. Chief Judge. It's not a case of just alleging fraud against one of the merchants. It's a very complicated Rico theory saying designs defendants knew and participated in this conduct. So they would have to prove that designs bank defendants by looking at every one of the 10 different relationships it had with these merchants. Every one of them to determine if and when designs ever knew that there was any fraud because if they can determine that there was a point when that was the case that point in time any transactions that occurred prior to that can't be part of this Rico case. Only transactions that occurred there after once the defendants were participants in this grand Rico conspiracy. So the trial court would have to see who's in and who's out. It would have to see who got their money back and who didn't. And it would have to see when is this point in time if ever for any of these 10 merchants and it can only do that for 10 separate trials with regard to each merchant. It would be epic manageability problems in the future if there's 5% legit 95% illicit those same problems would still result. You still don't know with any punitive plaintiffs who's been injured at all. Let me say your argument and I think Mr. Langham is there two minutes. Thank you, Your Honor. Thank you. Your Honor, you were asking me about, well, didn't the district court just decide one expert over the other? On the issue of fraud, there were no contrary experts. It was just our experts. Okay. And second, in answering the shorts' question, these experts had before them the entire scheme what was being sold and how it was being sold. What form? How did they have it? The bank had records. We had gotten all the records from all the FTC proceedings. So the court records things submitted by the government? Correct. We could have included business records from the entities that were being investigated by the FTC. To a substantial extent. Okay. But it had also from the bank as well. And that's one of the things we raised in our brief that the court clearly looked at the experts because he could not have looked at the experts and concluded that we relied solely on return rates because two of the experts, Dr. Meyer and Ms. Blake, went through each scheme to show how similar they all worked to each other and how they studied exactly what the scheme did. You mentioned in your brief that the district court could have certified the subclass. Was any request made of a subclass certification? Wasn't that only like an applied brief in a footnote? Yes, I don't know exactly where it was, but it was done. Okay. It may have been. I don't know what's the top of my head, frankly, but it was request. If you could do a 28J because you're late, so almost going to come out and want to be a little more disciplined and the red light at the high stage. If you could just send us a 28J later, letting us know whether that request was made. Okay. Second, I just want to say that Judge Smith is exactly right. The court held us to this standard that was being espoused by my learning colleague that we had to prove our case at the class stage. We had presented a bundled proof from which a jury could have concluded they were complete chance. And I ask your honors to focus again on the concluding section of Marcus because there the court talks about what describes how a class cannot be denied if there is some small group that falls outside. The Vackerello case that the court talks about is exactly what the USA is saying. The right is on. I'm going to try to just go on second to the court to see if they discussed there. Exactly. Thank you. Thank you, Your Honor. Good days, try. Very, very important case. We thank Council for everything. We'll take the matter under advisement. Thank you