Good morning Call our first case of the day Alan Schmidt versus school us at out Good morning your honors made please the court on Howard Bashman Apella council for plaintiff plaintiff appellan Alan Schmidt with the court's permission I would like to reserve four minutes for a ball. Thank you Your honors the question presented in this appeal is whether on the record of this case plaintiff claims were properly dismissed at the rule 12b6 stage on statute of limitations grounds plaintiff submits that the district court erred in two respects first it improperly relied upon news releases and internet postings and even SEC filings by third-party purchasers of Generous assets whose SEC filings plaintiff had no reason to monitor and Second plaintiffs invocation of the so-called discovery rule under Pennsylvania law raised questions of fact that necessitated postponing resolution of the statute of limitations Question until either the summary judgments or trial stage. What's part of the Either the complaint or the record in motion practice that Would lead us to know that There are questions of fact
. What is it that was alleged in either instance? The lead us to the conclusion the complaint in paragraph 236 on page 108 a of the appendix states that plaintiff learned of the sale prices of the two Most valuable assets of genera In the year 2011 But what does that have to do with reasonable diligence to discover the facts? In other words the fact that he learned well fine, but he under the discovery rule He had to exercise reasonable diligence where is there anywhere in the complaint or the record at all? An allegation that would support that there was reasonable diligence on his part the place where it is In the record is in connection with the motion for Reconciliation where mr. Schmidt came in and filed a declaration under penalty of perjury that said that You need to come forward when the defense Is put forth under Pennsylvania law you have that obligation their Pennsylvania cases that so stay well There was reliance on the discovery rule in opposition to the motions to dismiss So that was one of the grounds that that plaintiff advanced in the Responsive the discovery rule and the district court says plaintiff's explanation that he was putting together all the facts and circumstances Does not reflect an inability to know of his cause of action in spite of reasonable diligence plaintiff has not met his burden of demonstrating that the discovery rule should apply here Tell me what's wrong with that statement by the district? I think what's wrong with it is that In plaintiffs you it's an Extraordinary situation where the discovery rule can be invoked at the motions to dismiss stage to begin with based upon all of these extraneous documents that the defendants put in front of the track point I'm looking at the complaint and I'm saying to myself where in the complaint is there any allegation? That would lead me to believe that the latest date of the events complained of Any later than May 2010 just on the face of the complaint I understand that your honor, but that was a transaction that the the May 2010 date was when the I-9 assets were sold to Legand pharmaceuticals and Also unbeknownst to plaintiff at the time to bbf that got involved by person the other What event that is complained of occurred after May of? 2010 as stated in the complaint I don't I don't disagree with what you're saying in regard to the fact that the purchases took place That they all took place by May of 2010 what what I'm saying is that plaintiff learned of what the sale prices were in 2011 and what the defense has shown well if he did learn that that definitely could sue within the two-year period I'm saying that he he learns in 2000 and oh, yeah, I just never yarn saying that if he learned in 2011 years is about yeah, at that time during which you learned and if he did learn that that is not the way the Pennsylvania law Works with all due respect which is that if if a diligence plaintiff could not have learned Until 2011 then the two-year period begins at that point and you don't look to see whether there's enough of the original two-year period left for Dilligent plans to show what is there in the record that would say that he could not have learned He's somehow prevented or he exercise reasonable diligence But still was unable in spite of his diligence to learn What's what give me some facts that are in the record that support that proposition? Well, again the facts that are in the record are that he went to the website of Genera in in August I'm gonna make sure that I'm saying this properly, but it's in the record at page 1687 a of the appendix and and he and so mr Schmidt says that he went to the genera's website on july 6 2010 and july 9 2010 and that the Updates unit holders dated May 21, 2010 on which genera relies in establishing that notice was posted on the internet Was not available there for him to see because he went and looked for notices and didn't see it But availability doesn't do it doesn't I mean that we've got a discovery rule
. He has to exercise reasonable diligence And he knew this sale took place. He a version is complaint his knowledge
. He followed this company I mean, it's extraordinary how much this man knew about This company and these assets um, I still am struggling with the diligence that he exercise and would want to understand it better Well, what our submission is is that until the sale price was disclosed that it was not possible for him to know whether the sale price was fair or not And and as I understand it what the defendants are relying upon our scc filings that were made by the purchasers of the assets Let's let's say for a moment that the documents that the district court relied on are improper There's obviously case law that says the a.k
. Should not have been considered in this context I understand your argument about emails etc. Let's let's put that all aside for a moment I think what we're all grappling with is When is the aha moment right and sort of why couldn't it have been her earlier right We you know we finish each other's sentence
. That's okay And our each other's questions so go ahead Well, we're saying that the ad that went to Mike was right what was was in 2011 when when our guys what which is In charge of when in 2000 you yeah, you're very clever and I think it's two 36 you just say in 2011 comma and then you go on I mean well the reason that 2011 makes a difference is is because The action was commenced on june 8 2012 and and so Anytime in 2011 if that's one of the two-year clock started would be timely enough So even if we say it happened on July 1st of 2011 the earliest possible date that that would still make the case timely But but again procedurally what what I'm grappling with though between May 2010 and that 2011 date Oh, oh saying that 2000 and what did your sister say July? I didn't give you a specific date of When the financials were He said anytime in 2011 would satisfy the under two years because it's correct in 2012 But at some point the stining that apparently for the The diligence he's exercising and then all of a sudden you know came to fruition sometime in 2011 But what is it that prevented him from before that asking around to in some due diligence taking somebody aside making a phone call and saying you know So these assets, you know, what would you get for? And let me let me answer that because this This is the procedural unfairness That the case represents which is that the answer to that question Could not have properly been put before the court by the plaintiff under the 12b6 procedural rules because it has to be in the complaints itself Well, he could have amended But that's what you that's what you do you you have you have that burden under Pennsylvania law I mean, there's a case but the plaintiff sought to amend the complaint simultaneously with responding to the motions to dismiss and at that point the judge denied that request. So I mean the judge said the plaintiff was amended once except for What had to be said for Uh, you're absolutely right under Pennsylvania law that was a proper time to do it The question is what did you do at that time? So at that time I know you We were cut off from discussion about the declaration and what you did But the the point is is What did you do at that time that would create the issue of fact that you alluded to at the beginning of your presentation That will now allow us to say aha we should reverse because Not only did the district court rely on documents that it shouldn't have but there There is a genuine dispute that should be resolved Other than in the fashion that it's been resolved right and and what we Said was that uh if the court Allow this matter to be considered on the summary judgment record that we would bring forth evidence showing that Despite exercising due diligence Mr
. Schmidt was unable to find out the sale price at an earlier time and let me draw a comparison between case law says Depends on me he may wait until the defendant asserts the statute of limitations defense as new matter and file a Responsibility presenting a factual denial of the defense consistent with application of the discovery rule So that's when you had to put it for and the district court said All you did was say well, you know, we were putting the facts together and and that doesn't do it Well, the the procedure in seagord, which you're referring to is different from the procedure in federal court Discovery rule is the What i'm saying is that you can file a factual a vermince in response to it But here we're stuck with the complaint and saying you know here's where in the complaint we said that we Found out the suit in time. I want to draw a comparison in my remaining 50 seconds to the defenses Assertion of the waiver defense, which is one of the additional eight defenses they bring up as alternate grounds And where where they come in and say you know you waived the right to even bring this claim On a 12b6 motion doesn't the plaintiff have the right to them come in and say you know Here's all the evidence that that we would that we could bring before the court showing that that's not binding on us It doesn't apply and you just can't do that on a 12b6 motion So what we're saying is that they That this was procedurally unfair by the fact that they got to bring in all this extraneous evidence and and we We're not allowed to do so because if we had done so the court would say we're not allowed to consider that on a 12b6 motion Well, let me ask you Yeah, um Because this is about the question that what he just raised but let me ask you this question about that so Is it your position that the mistakes of the district court in its consideration of the 8k and other what you've described as extraneous documents is is that error sufficient to overcome the deficiency in your your Your Clients offering as to why they didn't come forward he didn't come forward with sufficient information earlier assuming there is a deficiency of course and and the answer is yes because The the trial court had to rely upon that extraneous evidence to get the dates That were applied to say that the plaintiff should have sued so we say yes The burden of showing that the discovery will apply Ultimately the burden I believe is on the plaintiff To convince the finder effect that you Right, but but again, this is a case with the court so it's okay if the reading If this were a summary judgment stage case and we didn't bring forth the evidence I agree that would be an issue But saddled with The burden that you had right to show is discovery will apply by by saying In paragraph 236 of the complaint on page 108 a of the appendix that that this is when we learned of the sale prices and I Submit to the court that that the complaint does show that this is a plaintiff who is someone who is trying to exercise all Justifiable diligence to try to find things out The problem is that paragraph says this is when the fit sale prices became available right and there's no Avertment and maybe I've missed it you'll point it out where It is stated This is when I found it out and I couldn't have found it out earlier be cause right and that's what we would aim to supply If we were allowed to bring in extraneous evidence Let's say extraneous evidence
. Let's say we're at some re-judgement just put the say book, you know our Better understand a situation Is there some way in which he was prevented from finding out this information that you would put forward in summary judgment? Well as shown in the declaration he the website was set up to give information to shareholders You don't just rely on websites. You can pick up the telephone too Well, he was big at the telephone He's called NAAC Security litigation from 2002 That says that this is where it's may take judicial notice of documents filed with the SEC but not relied upon in the complaint in a 12b6 motion Along with other financial information whose accuracy may not reasonably be questioned Do you have case law that would undermine that or say that that is not good law in this sort of? I'm not when I'm asking to undermine that what we're saying is that the SEC filings on which the trial court relied were filings that were made by the third-party purchasers and and unless the plaintiff knew that these are were the entities that Purchase the assets and he would have no reason to be checking their 8k filings, but that's a different issue from The issue whether the court can consider an 8k file for the SEC at the dismissal stage
. I agree that the point is was it appropriate for the court to consider it in connection with this plaintiff? Did he have reason to know that he should be monitoring the 8k filings of all companies? No, I better understand. Thank you
. Good morning, ma'am. Please the court Michael kick lines from the record firm
. I'm here this morning on behalf of Two sets of defendants the DNO defendants who are the former directors and officers and then the trustee defendants who are alleged to have sold the assets at unconscionable prices Yes, and that is Repeatedly alleged and early. Yes, Your Honor Your Honor, I think it's important to look at these two sets of claims on their own for statute of limitations purposes the claim against the D's and those is that they failed to exploit these supposedly very valuable assets that they failed to pursue alternatives to dissolution and liquidation and that they wrongfully plunge this company into dissolution as some false pretext to later conduct the fire sale At some too low price Yes, exactly at unconscionably low prices. So the claim is that they engaged in a wrongful dissolution Now it is pled in this complaint repeatedly and extensively that there was a proxy that was disseminated and distributed to all shareholders including Mr. Schmitt In that proxy the management of the company and the D's and Oats very clearly put the world on notice We are liquidating we are going to be selling these assets at pennies on the dollar So our argument Your Honor is that did it say that specifically Uh, he's on the dollar Uh, it It did your Honor what it did was it projected a distribution ranging from one fifth of one cent to 1
. So the claim is that they engaged in a wrongful dissolution Now it is pled in this complaint repeatedly and extensively that there was a proxy that was disseminated and distributed to all shareholders including Mr. Schmitt In that proxy the management of the company and the D's and Oats very clearly put the world on notice We are liquidating we are going to be selling these assets at pennies on the dollar So our argument Your Honor is that did it say that specifically Uh, he's on the dollar Uh, it It did your Honor what it did was it projected a distribution ranging from one fifth of one cent to 1.7 cents I'm not sure that going to all this detail is is moving the ball. Let me just kind of jump right to it if it so So One of the critical questions is in determining error is when the district court focused on these so-called extraneous documents documents that um weren't alluded to on the complaint weren't that appended to uh, the responsive pleadings, you know, was that improper? So We all have the background so maybe you can just address that direct well Your Honor, it was not improper to rely on those documents You believe the district court did rely on those documents? Well your Honor the district court's opinion does say that it it is referring to website updates publicly filed securities filings like the 8k that your honor mentioned um as well as the allegations of fact on the face of the of the complaint as judge randell pointed out NAC does allow the court to consider publicly filed documents that are filed with the SEC That comes to us not only from NAC but also from buck v hampton So the 8k filings are appropriately within the purview of the district court's ruling and your Honor I would also cite the court to the pension trust case Your Honor that the pension trust case also stands for that same proposition And it's very interesting because in the country we just had 8k that's one thing but you referred to the websites um You know, it only takes a few extraneous documents to say, you know, this is an emotion to dismiss
.7 cents I'm not sure that going to all this detail is is moving the ball. Let me just kind of jump right to it if it so So One of the critical questions is in determining error is when the district court focused on these so-called extraneous documents documents that um weren't alluded to on the complaint weren't that appended to uh, the responsive pleadings, you know, was that improper? So We all have the background so maybe you can just address that direct well Your Honor, it was not improper to rely on those documents You believe the district court did rely on those documents? Well your Honor the district court's opinion does say that it it is referring to website updates publicly filed securities filings like the 8k that your honor mentioned um as well as the allegations of fact on the face of the of the complaint as judge randell pointed out NAC does allow the court to consider publicly filed documents that are filed with the SEC That comes to us not only from NAC but also from buck v hampton So the 8k filings are appropriately within the purview of the district court's ruling and your Honor I would also cite the court to the pension trust case Your Honor that the pension trust case also stands for that same proposition And it's very interesting because in the country we just had 8k that's one thing but you referred to the websites um You know, it only takes a few extraneous documents to say, you know, this is an emotion to dismiss. This is some regurgent matter Well the website uh, uh, update your Honor they come from the genera website Which the plaintiff was directed to go to in the liquidating trust agreement said the trustee made post documents there And I would add your Honor that um, this is a plaintiff who As you as you have seen in the amended complaint please lots of different facts and relies on lots of different things like press releases And he himself relies on the website updates and at least Two places in the amended complaint so it seems awfully selective to us We heard and we've seen in the declaration that this plaintiff accessed the website But in a motion to dismiss I think what we're grappling with is Granted there are press releases alluded to other corporate documents But is it proper on a 12b6 for the district court to say with regard to documents that aren't Uh, a pertinent to the complaint or specifically Uh, a verdict in the complaint for that to be Will lie it on in making a 12b6 determination Yes, Your Honor, I believe he wasn't titled to rely on those documents under the law of this circuit Um, it doesn't on a 12b6 motion the court may take Judicial notice of those documents and those documents are in the record website updates are pled in this very Complaint now judge Schiller didn't need your softball here I'm raising myself To me if we have a discovery rule and there's a burden on the plaintiff And the plaintiff comes forth and says I didn't put all the facts together um all these other documents May actually be extraneous to the bottom line ruling that plaintiff didn't satisfy So that's why I asked you you know, are you? Do you agree that the court relied upon These documents and it's ruling unless they're sure to? Well, Your Honor, it's it's not entirely clear It does the judge did conclude that there was a concession that the statute of limitations that argument had been missed So from that premise, he then went to examine the discovery rule and asked whether the discovery rule would be sufficient to save these claims The discovery rule as I think we've heard here this morning puts the burden on the plaintiff To plead facts efficient to toll the statute of limitations and there's a case called We're looking at the we're looking at either the complaint the amendment to the complaint the response to the motion to dismiss based on statute of limitations We're not looking necessarily to the aid care or the other documents Well the the the issue under Pennsylvania law is not what the plaintiff knew But what the plaintiff through reasonable diligence could have discovered and here on this record We know a couple of things we know as a matter of fact that he knew of the existence of the amino sterile transaction And the IL-9 transaction, but last of which occurred in May of 2010 he pleads that he pleads those facts We know that he had access to 8k filings from several of the purchasers of the assets So the burden is on him in southern cross versus quong which is 181 F third four ten This this court asked whether the complaint alleges facts sufficient to toll the statute of limitations Because that's his burden and in that case the court said the burden must be met on the face of the pleading Now here judge Schiller in Concluding that this plaintiff knew because there are lots of facts that he plainly admits he knew or could have known Is is evident and this court can rule the matter of law that it was evident and supplied a basis for Refusing to apply the discovery rule this plaintiff is admittedly an investment professional. He's admittedly a former high ranking investment Manager at Brown Brothers Harrowman He admits that throughout the years of his more than 10-year ownership of assets these assets or this these stock holdings He had numerous direct conversations with the defendants about the value and the prospects of exploitation of these assets And he alleges in paragraph 10 of the amended complaint that he has quote contemporaneous tangible evidence of an incriminating nature and quote He also alleges that he had numerous direct conversations with the CFO the CEO and the vice president of the corporation This is not your average plaintiff
. This is some regurgent matter Well the website uh, uh, update your Honor they come from the genera website Which the plaintiff was directed to go to in the liquidating trust agreement said the trustee made post documents there And I would add your Honor that um, this is a plaintiff who As you as you have seen in the amended complaint please lots of different facts and relies on lots of different things like press releases And he himself relies on the website updates and at least Two places in the amended complaint so it seems awfully selective to us We heard and we've seen in the declaration that this plaintiff accessed the website But in a motion to dismiss I think what we're grappling with is Granted there are press releases alluded to other corporate documents But is it proper on a 12b6 for the district court to say with regard to documents that aren't Uh, a pertinent to the complaint or specifically Uh, a verdict in the complaint for that to be Will lie it on in making a 12b6 determination Yes, Your Honor, I believe he wasn't titled to rely on those documents under the law of this circuit Um, it doesn't on a 12b6 motion the court may take Judicial notice of those documents and those documents are in the record website updates are pled in this very Complaint now judge Schiller didn't need your softball here I'm raising myself To me if we have a discovery rule and there's a burden on the plaintiff And the plaintiff comes forth and says I didn't put all the facts together um all these other documents May actually be extraneous to the bottom line ruling that plaintiff didn't satisfy So that's why I asked you you know, are you? Do you agree that the court relied upon These documents and it's ruling unless they're sure to? Well, Your Honor, it's it's not entirely clear It does the judge did conclude that there was a concession that the statute of limitations that argument had been missed So from that premise, he then went to examine the discovery rule and asked whether the discovery rule would be sufficient to save these claims The discovery rule as I think we've heard here this morning puts the burden on the plaintiff To plead facts efficient to toll the statute of limitations and there's a case called We're looking at the we're looking at either the complaint the amendment to the complaint the response to the motion to dismiss based on statute of limitations We're not looking necessarily to the aid care or the other documents Well the the the issue under Pennsylvania law is not what the plaintiff knew But what the plaintiff through reasonable diligence could have discovered and here on this record We know a couple of things we know as a matter of fact that he knew of the existence of the amino sterile transaction And the IL-9 transaction, but last of which occurred in May of 2010 he pleads that he pleads those facts We know that he had access to 8k filings from several of the purchasers of the assets So the burden is on him in southern cross versus quong which is 181 F third four ten This this court asked whether the complaint alleges facts sufficient to toll the statute of limitations Because that's his burden and in that case the court said the burden must be met on the face of the pleading Now here judge Schiller in Concluding that this plaintiff knew because there are lots of facts that he plainly admits he knew or could have known Is is evident and this court can rule the matter of law that it was evident and supplied a basis for Refusing to apply the discovery rule this plaintiff is admittedly an investment professional. He's admittedly a former high ranking investment Manager at Brown Brothers Harrowman He admits that throughout the years of his more than 10-year ownership of assets these assets or this these stock holdings He had numerous direct conversations with the defendants about the value and the prospects of exploitation of these assets And he alleges in paragraph 10 of the amended complaint that he has quote contemporaneous tangible evidence of an incriminating nature and quote He also alleges that he had numerous direct conversations with the CFO the CEO and the vice president of the corporation This is not your average plaintiff. This is not the plaintiff that we see in the cases cited by by my opponent where you have a medical patient who suffered Negligence at the hands of search. This is not surgery
. This is not the plaintiff that we see in the cases cited by by my opponent where you have a medical patient who suffered Negligence at the hands of search. This is not surgery. This funding wasn't left No, no and to put it in that analogy. I mean in this kind of case it'd be it'd be like a orthopedic surgeon Who's complaining about an orthopedic procedure that he had he's on a heightened state of of of awareness and knowledge and expertise and the Pennsylvania Supreme Court says you can consider The nature of the plaintiff and here It wouldn't typically be a matter of record, but this plaintiff has pledged To a great degree the other thing that's critically important in assessing what the plaintiff knew All right, there is a principle in the Cheshio and the fine case that says While it's an objective test It's sufficiently flexible to take account of differences among persons and they're differing capacities to meet the circumstances That are confronting them
. This funding wasn't left No, no and to put it in that analogy. I mean in this kind of case it'd be it'd be like a orthopedic surgeon Who's complaining about an orthopedic procedure that he had he's on a heightened state of of of awareness and knowledge and expertise and the Pennsylvania Supreme Court says you can consider The nature of the plaintiff and here It wouldn't typically be a matter of record, but this plaintiff has pledged To a great degree the other thing that's critically important in assessing what the plaintiff knew All right, there is a principle in the Cheshio and the fine case that says While it's an objective test It's sufficiently flexible to take account of differences among persons and they're differing capacities to meet the circumstances That are confronting them. So what should we take it into account in this case? Well, in assessing reasonable diligence and what the plaintiff knew or could have known You can take account of the of his unique status as an investment professional Intimately knowledgeable with this business now. We would should require him To know more than the ordinary plaintiff in such a case is that right not right? Well, it certainly suggests he had a greater capacity than most To find the kinds of things that the court would say he could have found and put him on notice this It seems to me that goes against your position doesn't get before your position You're on right think that um, I mean if he's so much more knowledgeable than the ordinary stockholder Why should he get more leeway rather than less I think I think you would hold him to a higher standard and therefore his ability to Therod out and discover the facts that are readily accessible in public filings and press releases and the like Certainly he has that that capacity the other thing he has as And so then why I don't know why these facts Are in your supposedly in your favor? Because your honor it's clear that he could have to be more than some other person Yes, exactly and in fact we know from the face of the complaint that he did figure it out He does plead the terms of the transactions about which he complaints and he So do you want us to create classes? Uh or categories so he's a really sophisticated investor so and he's chatted with the CEO and the cfo so in that case we should say He should be able to figure this out Abin the show Now You get a doctor who's investing, you know, he kind of knows his way around We create a middle category Yeah, uh, and then he get me Aventirated federal judge who has a lot of money invested somewhere doesn't know much about the internet That's a third category I'm not asking you to create classes your honor, but simply to recognize that the Pennsylvania Supreme Court says you can take into account those differences And I just think what's unique about this case is that unique status is pled on the face of the complaint and not only did he have those unique attributes He also had a right to demand the books and records of the trust So you're asking us in the alternative if we don't affirm The on the 12v6 of the findings made by the court that we should affirm um on the Failure to satisfy the discovery
. So what should we take it into account in this case? Well, in assessing reasonable diligence and what the plaintiff knew or could have known You can take account of the of his unique status as an investment professional Intimately knowledgeable with this business now. We would should require him To know more than the ordinary plaintiff in such a case is that right not right? Well, it certainly suggests he had a greater capacity than most To find the kinds of things that the court would say he could have found and put him on notice this It seems to me that goes against your position doesn't get before your position You're on right think that um, I mean if he's so much more knowledgeable than the ordinary stockholder Why should he get more leeway rather than less I think I think you would hold him to a higher standard and therefore his ability to Therod out and discover the facts that are readily accessible in public filings and press releases and the like Certainly he has that that capacity the other thing he has as And so then why I don't know why these facts Are in your supposedly in your favor? Because your honor it's clear that he could have to be more than some other person Yes, exactly and in fact we know from the face of the complaint that he did figure it out He does plead the terms of the transactions about which he complaints and he So do you want us to create classes? Uh or categories so he's a really sophisticated investor so and he's chatted with the CEO and the cfo so in that case we should say He should be able to figure this out Abin the show Now You get a doctor who's investing, you know, he kind of knows his way around We create a middle category Yeah, uh, and then he get me Aventirated federal judge who has a lot of money invested somewhere doesn't know much about the internet That's a third category I'm not asking you to create classes your honor, but simply to recognize that the Pennsylvania Supreme Court says you can take into account those differences And I just think what's unique about this case is that unique status is pled on the face of the complaint and not only did he have those unique attributes He also had a right to demand the books and records of the trust So you're asking us in the alternative if we don't affirm The on the 12v6 of the findings made by the court that we should affirm um on the Failure to satisfy the discovery. That's correct your honor In the objective test Uh, yeah, there's um, there's Chetio and also fine. Yeah, both I think I hope it's it's fine and gleeson I'm sorry gleeson is the most recent pronouncement by justice McCaffrey Okay, thank you I'm sorry, maybe a series of oh, that's true
. That's correct your honor In the objective test Uh, yeah, there's um, there's Chetio and also fine. Yeah, both I think I hope it's it's fine and gleeson I'm sorry gleeson is the most recent pronouncement by justice McCaffrey Okay, thank you I'm sorry, maybe a series of oh, that's true. We have the one minute folks coming up That's the one What you all can do in one minute I really do I never Okay, ready start go me please the court yellow light John T Ryan for the LIGON defendants LIGON pharmaceuticals and John Higgins LIGON CEO You know, I do have a very brief time and I just want to make a few points LIGON's only involvement in this matter was its purchase of the IL-9 program So we are only interested in the IL-9 program as it relates to LIGON I am very much your honor and I do want to point out one thing we quoted a colloquy from the district court oral argument judge Shiller heard her argument lengthy oral argument about a year ago in this courthouse and one of the lower floors You gave him more than a minute You he did have more than a minute and my time is ticking. It was the quote
. We have the one minute folks coming up That's the one What you all can do in one minute I really do I never Okay, ready start go me please the court yellow light John T Ryan for the LIGON defendants LIGON pharmaceuticals and John Higgins LIGON CEO You know, I do have a very brief time and I just want to make a few points LIGON's only involvement in this matter was its purchase of the IL-9 program So we are only interested in the IL-9 program as it relates to LIGON I am very much your honor and I do want to point out one thing we quoted a colloquy from the district court oral argument judge Shiller heard her argument lengthy oral argument about a year ago in this courthouse and one of the lower floors You gave him more than a minute You he did have more than a minute and my time is ticking. It was the quote. It is Mitt jeschiller said but it puts you on notice that you got to start looking into something Didn't it and the answer from plaintiffs counsel mr. Squatery was yes So he had an opportunity he conceded that he had to start looking into it and that was as of the May 2010 correct correct the the transaction was announced on May 18th The press release by LIGON which disclosed bio technology value funds involvement was on May 21st May 24th LIGON issued the 8k the lawsuit was not filed until I'm sorry June of 2012 Thank you very much Next up Mr
. Wilde very briefly your honors my name is Jeff Wilde represent the BDF defendant I just want to note that in his reply brief filed with this court the plaintiff appellate improperly characterized my defendant the BDF defendants as a generic insider presumably to support the narrative of conspiratorial conduct and less than arms length transactions In fact as the record makes clear BDF is not and never was a generic insider as that term is defined by the SCC matter in terms of what's before us not in terms of the statute of limitations argument only if you get to the alternate grounds Which have been briefed your honor? So I'm really not addressing the statute limitations argument But as the SEC makes clear your only insider if you had someone on the board of directors Which BDF did not if you had an officer on the company which BDF did not or if you own 10% or more of the stock Which BDF did not and that's a point that is conceded by the plaintiffs in a footnote filed with the district court and found it page 1224 of the epithets it's all I have thank you May I please the court Michael Blanchard on behalf of the access defendants succinctly I'm not here to address the statute of limitations while the court should affirm on those grounds I just want to point out that there are other additional arguments that were raised below That justice would not take in favor of Affirming on in the event that the statute limitations argument did not prevail with respect to my clients the access defendants They were alleged to do nothing but lose one and a half million dollars Developing pexy game and giving it back to the trust and that's it. They're sued for aiding it abetting. There's no knowing participation That is alleged as required and with that those claims should be dismissed as implausible And the court could affirm on those grounds as well Thank you. Thank you The case of Supreme Court case is a fine versus Chechius So that's that's one case and the other case is Wilson versus LDF What those two cases establish is that merely because the plaintiff had the ability to find out That she was injured as a result of the defendants acts does not necessarily start The statute of limitations. So with we're talking surgery here Those those were cases where she could have gotten the medical records and found out that that's the reason to believe Put on notice and as someone just mentioned their judge Schiller said, you know You got to start looking into something as it made 2010 It's as if someone said to her You know, you know, what what's that bulge in your side? Well, let's focus on what the supposed concession was it or a argument because what was said there And I don't think it was a concession by plaintiffs is is that at most The discovery rule has approximately two weeks worth of work to do here So so we're not talking about a situation where we're seeking to invoke the discovery rule Because the case was horribly on time the I recognize that Statute of limitations can be there is no horribly Can be applied rigidly But but but the fact that the discovery rule does not have much work to do Makes the burden on plaintiff easier to satisfy and showing that the conduct was reasonable and that you only need To the three weeks of an extension That if you you know, it took you four or five years there was something going on But two two weeks or whatever makes it like well, why couldn't you found it out earlier? Well, you're a month out, right? I mean, that's what I think it's three weeks is what I calculated Between the may date and the June date but but a month is fine for rule of thumb purposes great Um my my point is this uh As as we're looking at this Whether it's a day or month or six months isn't relevant in my view. It's what did the plaintiff do right that they can now allege so the um quote that That was read earlier By judge rendel is from a case called Fox v. Burn which is a Pennsylvania superior court case right and I'm sure you're familiar with it and it says there are two opportunities For the plaintiff to come forward either independently in the complaint or in response to be affirmative defense being a servant right so You've had that opportunity and we're obviously continued to to to pro You know that's that's that's the real question. So whether it's a day or week three weeks Really isn't it the question is you know, what's the impediment now if we follow What your adversary has suggested will come up with a permutation on the rule which we'll say in my view It's a permutation my colleagues made Disgray Hypothetically, but if we did we'd say now when we have a sophisticated investor You know that we should put more of a burden for that person to come forward with more information because they have available to him it Not only access but the ability to gain access and the knowledge to know where to look So with all that in mind How can we view this in the way in which you'd like us to go? Well, let me just begin by saying we disagree that we had the same opportunity We would have had in state court where we could come back with factual agreements Our our fault to the center is a fault is that we played by the rules and that we said we're stuck with the complaint at this point We're gonna show where in the complaint we think we satisfied the discovery rule instead of trying to bring an extraneous evidence that the judge Could not properly consider at that stage So so we we did not bring in extraneous evidence to show how we satisfied the rule But that would have been available to us in in state court under the ability to file new matter Which allows you to bring in facts that are other than the complaint Confused so you don't want to rely on the Pennsylvania discovery rule No, we do I'm saying that the procedure in state court is different from the procedure in federal court and and so You chose the court in which to suit that that's true And and we're not complaining about the fact that we adhered by the to the rules in federal court We're saying is that it's unfair that the defense gets to bring in all this stuff and that we're not supposed to and we didn't issue is on the face of the complaint And on the face of the complaint as it is as it is now as I said before you got made 2010 as the last events complained But you could have amended your complaint to Tell the court chapter in verse why between may 2010 and sometime in 2011 you were prevented Basically you exercise reasonable diligence, but notwithstanding that yeah You could not and you could have planned that So I mean I challenge you with respect to this procedural Uh difficulty. I think we did make that argument in our briefs and oppositions It's not clear to me why you claim that defendants did it seems to me that it's failure to give you something Is what you're complaining about you're not complaining about a specific event for you We're complaining about The fact that the sale prices were unfairly low for these assets and that we did not learn of that until 2011 But did not learn is not we couldn't based upon information that was okay That was when Generatrust made the information available to its shareholders was in 2011 and with the defender saying was Well, you could have found out some other way from either the purchasers SEC filings You shouldn't have found that That's what they're saying right yeah And and just slow voters you recognized in the Merck and company securities case was the US Supreme Court affirmed uh, you know encouraging early Early filings of securities type litigation is is not always the thing that courts want to do because that On balance ends up with more frivolous litigation Then less and just green away you in the in the nopic case supplied to Pennsylvania's discovery rule and recognize I think the year 20 is saving you for what Everything you do judge right now is wonderful So with that I will thank the court Thank you very much cases will argue we'll take it under advisement Yo