[00:00:00] Speaker 02:
Now I'll move on to the next one.

[00:00:01] Speaker 02:
I hope I'm pronouncing this correct.

[00:00:04] Speaker 02:
Shermer.

[00:00:06] Speaker 02:
I have that right, counsel.

[00:00:07] Speaker 02:
Shermer versus Ross.

[00:00:55] Speaker 02:
You may approach.

[00:01:00] Speaker 04:
Hello, your honor.

[00:01:00] Speaker 04:
My name is Ray Markovich.

[00:01:01] Speaker 04:
I'm here for the moving defendants, the appellants in the case.

[00:01:04] Speaker 04:
I'd like 10 minutes for this portion and five for rebuttal.

[00:01:08] Speaker 04:
You got it.

[00:01:09] Speaker 04:
Thank you.

[00:01:10] Speaker 04:
So may it please the court.

[00:01:16] Speaker 04:
Pursuant to California commercial code section 3402 and Haskell v. Cornish, appellants have contractual standing.

[00:01:24] Speaker 04:
pursuant to Skill Staff Inc.

[00:01:27] Speaker 04:
The court cannot, the covenant not to sue in the agreement means that there is no case or controversy.

[00:01:35] Speaker 04:
Because no case or controversy, Shermer has article three, has no article three standing.

[00:01:41] Speaker 03:
So counsel, I have trouble understanding that argument.

[00:01:45] Speaker 03:
So for one thing, the

[00:01:48] Speaker 03:
the plaintiffs in their complaint seek temporary, preliminary, and permanent injunctive relief for future violations.

[00:01:59] Speaker 03:
Why isn't that a claim that if this doesn't have to be arbitrated that they would have the ability to advance in the district court?

[00:02:14] Speaker 04:
But they're also claiming for damages, Your Honor, and the period that they're claiming for damages is all released by the Covenant.

[00:02:22] Speaker 03:
But in order, I mean, I have issues with that argument as well, but even putting that aside, they're seeking injunctive relief.

[00:02:32] Speaker 03:
Why wouldn't that give the court jurisdiction, even if their claim for injunctive relief

[00:02:37] Speaker 03:
We're meritless.

[00:02:38] Speaker 03:
I mean you don't have to have a winning claim for the court to have jurisdiction And they've asked for injective relief for violating the copyright laws to stop Allegedly the defendants from violating the copyright laws tomorrow Why wouldn't that be easily enough to confer jurisdiction on the district court?

[00:02:59] Speaker 04:
Well your honor, I think we have to go back to the standing issue first because if we establish that my client does have standing to enforce

[00:03:06] Speaker 04:
the settlement agreement then it forces everything into arbitration in any event or there's no subject matter jurisdiction.

[00:03:14] Speaker 03:
I mean if you're right on arbitration then hypothetically we're going to reverse and send it to arbitration but that wouldn't mean the district court somehow ab initio lack jurisdiction which would mean that we lack jurisdiction.

[00:03:29] Speaker 02:
When the one day your honor need jurisdiction for each of the claims and and most of the claims that we're talking about here They would not have jurisdiction I Mean I think we were kind of talking about two different things there's Jurisdiction in the sense of whether something's going to be arbitrated or it's going to be in a federal court Then there's article three jurisdiction, but I think clearly they've alleged an injury an article three injury here the question is is that

[00:03:55] Speaker 02:
Is the decision on that going to be in arbitration, or is it going to be in an Article III court?

[00:03:59] Speaker 02:
So I think when we're talking about jurisdiction, there's Article III jurisdiction, and then there's what jurisdiction the case should be decided in.

[00:04:05] Speaker 02:
Two different things.

[00:04:05] Speaker 02:
So are you saying there's no Article III jurisdiction, or are you saying that it should be in arbitration, where the district court should not be deciding these things?

[00:04:13] Speaker 04:
Well, I think that the key issue is the standing issue, because if we have standing, then the covenant not to sue prevents any action in the district.

[00:04:20] Speaker 02:
OK, so standing also is another

[00:04:23] Speaker 02:
phrase that means different things at different times.

[00:04:24] Speaker 02:
So there's Article III standing.

[00:04:26] Speaker 02:
Are you referring to Article III standing?

[00:04:28] Speaker 02:
Are you referring to the concept of if it should be arbitrated, it should be arbitrated, and if not, it should be in federal court?

[00:04:35] Speaker 02:
Are you saying no Article III standing?

[00:04:37] Speaker 02:
If you're saying there's no Article III standing, then if you're right about that, then we're done.

[00:04:42] Speaker 02:
But I've never heard of a contract case where that would be the situation.

[00:04:46] Speaker 04:
There's two standings at issue here, Your Honor.

[00:04:49] Speaker 04:
First is contractual standing.

[00:04:51] Speaker 02:
OK, so let's put that aside.

[00:04:52] Speaker 02:
Are you saying there's Article 3 standing issue?

[00:04:55] Speaker 02:
The power of the federal court to decide this case.

[00:04:58] Speaker 04:
I believe on everything except the injunctive relief claims, there is no standing.

[00:05:04] Speaker 04:
No Article 3, I believe, because of the covenant not to sue.

[00:05:08] Speaker 02:
OK, so again, we're kind of in a hamster wheel here.

[00:05:11] Speaker 02:
I think that, again, Article 3 standing means that they are not alleging an injury, a constitutional injury.

[00:05:18] Speaker 02:
Now, I think they are alleging a constitutional injury.

[00:05:20] Speaker 02:
Now, whether it's a meritorious constitutional injury, that's a different story.

[00:05:25] Speaker 02:
So are you saying that they're not alleging a constitutional injury, or are you just saying that under the merits of the case, you prevail?

[00:05:33] Speaker 04:
I'm saying that under skill staff, because of the covenant not to sue, it bars.

[00:05:39] Speaker 04:
It's a bar to litigation, which means there is no case of controversy.

[00:05:44] Speaker 02:
OK.

[00:05:46] Speaker 02:
Why proceed with your argument?

[00:05:49] Speaker 04:
So, and because no Article 3 standing, the USDC has no subject matter jurisdiction.

[00:05:54] Speaker 04:
Therefore, an action must be dismissed with prejudice because federal courts have exclusive jurisdiction for copyright infringement claims, but the USDC has no subject matter jurisdiction in this action.

[00:06:05] Speaker 04:
That's the subject matter jurisdiction argument.

[00:06:07] Speaker 04:
The other argument in this appeal is that the USDC had too narrow of a reading of the agreement.

[00:06:16] Speaker 04:
USDC focused only on one clause, not the whole agreement, and there's a clause in the agreement that specifically says that the headings are irrelevant for the agreement.

[00:06:26] Speaker 04:
You need to read the whole agreement.

[00:06:28] Speaker 04:
If you read the whole agreement, it does cover this action.

[00:06:37] Speaker 04:
And the court had no questions on the standing, the contractual standing issue?

[00:06:40] Speaker 02:
Yeah, why don't you continue?

[00:06:42] Speaker 04:
I'm sorry?

[00:06:42] Speaker 02:
Please continue.

[00:06:44] Speaker 02:
So.

[00:06:44] Speaker 02:
Whatever else you want to argue.

[00:06:45] Speaker 02:
Sure.

[00:06:47] Speaker 02:
We'll keep you the five minutes of rebuttal, but you can continue.

[00:06:49] Speaker 04:
Sure.

[00:06:50] Speaker 04:
Okay, so on the, the district court did not decide the standing issue.

[00:06:56] Speaker 04:
They avoided the standing issue.

[00:06:58] Speaker 04:
At, it's in the ER at 05 note 5.

[00:07:04] Speaker 04:
Declines to decide whether they had standing.

[00:07:07] Speaker 04:
Why does my client have standing?

[00:07:08] Speaker 04:
Because page 1, this is ER 148, each of the parties that sign this agreement is referred to here individually as a party and the parties are referred to collectively as the parties.

[00:07:18] Speaker 04:
Each of the parties that sign this agreement, if you go to ER 156, who signed the agreement?

[00:07:25] Speaker 04:
Lighthouse, Immersive Inc.

[00:07:27] Speaker 04:
and Lighthouse Inc.

[00:07:28] Speaker 04:
for itself and each of the Lighthouse release source.

[00:07:32] Speaker 04:
My client signed this as the president.

[00:07:35] Speaker 04:
He is a lighthouse release or and under 3402 of the cal commercial code.

[00:07:41] Speaker 04:
He's the party So he has the ability to enforce this agreement.

[00:07:45] Speaker 02:
He can enforce the covenant not to sue But let me ask you this as I read the district court's order the district court focused on paragraph 6.2 of the of the agreement, right

[00:07:58] Speaker 02:
Said that the plaintiffs action in this case that the copyright lawsuit that they filed after this agreement was signed was not attempting to enforce this agreement and the district court seemed to be saying that You know if it had if it had language like relating to arising out of kind of the broader language We see an arbitration agreement that will be one thing but in this case it has a different language any action to enforce and

[00:08:23] Speaker 02:
They're not trying to enforce the arbitration agreement.

[00:08:25] Speaker 02:
This report says, in fact, there's no mention of the arbitration agreement in the complaint filed by the plaintiffs.

[00:08:31] Speaker 02:
So therefore, this agreement's not relevant to this lawsuit.

[00:08:34] Speaker 02:
Why is that wrong?

[00:08:37] Speaker 04:
Because there's a clause in the arbitration agreement that says the headings are not relevant.

[00:08:42] Speaker 02:
But that's not a heading that says any action to enforce this agreement.

[00:08:46] Speaker 02:
She's not referring to the heading.

[00:08:47] Speaker 02:
She's referring to the language in the agreement.

[00:08:49] Speaker 04:
Right.

[00:08:49] Speaker 04:
And there's several other clauses in the agreement that also address arbitration.

[00:08:53] Speaker 02:
So show me the line that you think she missed.

[00:08:57] Speaker 02:
What paragraph in the agreement did she miss?

[00:09:01] Speaker 04:
2.4.

[00:09:03] Speaker 02:
Okay.

[00:09:04] Speaker 04:
It's at page ER 150.

[00:09:05] Speaker 04:
The parties represent and agree that they have not filed and that they shall not file or pursue any charges, suits, complaints, grievances, claims, arbitrations, or other actions against any of Lighthouse or Shermer releasees which assert a rise out of or are in any way related to the claims released under this agreement provided, however, that this paragraph should not apply to any action or claim to enforce the terms of this agreement.

[00:09:28] Speaker 04:
That is incredibly broad.

[00:09:32] Speaker 04:
And when you take out the narrow reading that the district court judge had where she focused on one paragraph in this agreement and you look at this paragraph which also deals with the arbitration, it covers almost everything.

[00:09:46] Speaker 03:
So I understand part of your argument is they've covenanted not to sue except to sue to enforce the agreement and that since they've sued here and they've covenanted not to sue in your view,

[00:10:01] Speaker 03:
at least it's arguable that this is covered by the arbitration agreement because this must be by definition to enforce the agreement because they promised not to sue for anything else?

[00:10:14] Speaker 04:
Correct, Your Honor, yes.

[00:10:16] Speaker 04:
And then that also raises the Article 3 issues which I parlayed into.

[00:10:21] Speaker 03:
Council, as far as I can tell, and I'm going to ask your friend this question, you did not put in the record below the rules of the arbitration organization's signature resolution, LLC.

[00:10:35] Speaker 03:
Is that right?

[00:10:37] Speaker 03:
You did not put in the record the rules of the organization that the parties agreed to arbitrate in front of.

[00:10:46] Speaker 03:
Is that right?

[00:10:47] Speaker 04:
I believe so.

[00:10:48] Speaker 04:
I believe you're correct, yeah.

[00:10:50] Speaker 03:
All right.

[00:10:51] Speaker 03:
You want to reserve?

[00:10:52] Speaker 03:
Yes, please.

[00:10:52] Speaker 02:
All right.

[00:11:09] Speaker 01:
Thank you.

[00:11:09] Speaker 01:
Good morning, Your Honors, and may it please the Court.

[00:11:11] Speaker 01:
My name is Stephen Rothschild.

[00:11:13] Speaker 01:
I represent the plaintiff and appellee, G. Schirmer, Inc.

[00:11:19] Speaker 01:
I think the court's ruling below is straightforward, simple, and right.

[00:11:27] Speaker 01:
This case is not to enforce the settlement agreement.

[00:11:33] Speaker 01:
It's for copyright infringement.

[00:11:35] Speaker 03:
Counsel, that argument, did you ever actually make that in writing to the district court?

[00:11:40] Speaker 01:
I did not.

[00:11:42] Speaker 01:
My analysis

[00:11:47] Speaker 01:
was incorrect.

[00:11:48] Speaker 01:
I did consider that argument, and I did not include it, but I believe having read the court's opinion and researched the authorities that her honor cited, that it is correct.

[00:12:02] Speaker 03:
But you argued, if I'm looking at your opposition to the motion to compel arbitration starting on page ER 142, your specific argument was the court should deny arbitration because non-arbitrable claims predominate in this case, which looks to me as a concession that there are arbitrable claims, at least from the writing.

[00:12:24] Speaker 01:
I did not intend that to be communicated.

[00:12:26] Speaker 01:
I intended that, and perhaps it wasn't clear, I was under the misimpression that California law applied.

[00:12:34] Speaker 01:
Under California law, if there are non-arbitrable claims and arbitrable claims, the court has discretion on what to do, and I thought that would short circuit it, but I was incorrect.

[00:12:43] Speaker 03:
And now you're conceding the FAA applies, right?

[00:12:45] Speaker 03:
Correct.

[00:12:47] Speaker 03:
Under our case law if the FAA applies there's a presumption of arbitrability yes, correct and if there are any Doubtful claims as to whether it's arbitral or not that should go to the arbitrator right correct now your friend has conceded that he didn't introduce a

[00:13:08] Speaker 03:
the arbitration rules, but the arbitration rules are a public document.

[00:13:13] Speaker 03:
Are you familiar with them?

[00:13:14] Speaker 03:
The arbitration rules of signature resolution.

[00:13:17] Speaker 03:
And I'm looking at rule three.

[00:13:19] Speaker 03:
The appointed arbitrator shall have the sole authority to determine the arbitrability of any dispute submitted to signature and disputes of any kind including but not limited to who are the parties, the validity, revocability, et cetera, et cetera, et cetera.

[00:13:34] Speaker 03:
That strikes me as almost identical to AAA and other arbitration provisions where we've said where the parties have unmistakably delegated questions of arbitrability to the arbitrator except in the clearest possible case

[00:13:48] Speaker 03:
the court should not pass on that question, instead it should leave it to the arbitrator.

[00:13:52] Speaker 03:
Why wouldn't that apply here?

[00:13:53] Speaker 01:
Well, because I think this is the clearest possible case upon reflection.

[00:13:57] Speaker 01:
The arbitration agreement is limited to actions to enforce the agreement.

[00:14:04] Speaker 01:
It does not include actions related to the agreement.

[00:14:08] Speaker 01:
It does not include actions concerning the agreement.

[00:14:12] Speaker 01:
It is only

[00:14:13] Speaker 01:
actions to enforce the agreement.

[00:14:16] Speaker 01:
What the defendants are attempting here is to use the agreement as a defense.

[00:14:23] Speaker 01:
That's not an action arising, rather an action to enforce the agreement.

[00:14:27] Speaker 01:
It's a defense.

[00:14:28] Speaker 01:
The defense is that these should be arbitrated and that this

[00:14:34] Speaker 01:
Covenant not to shoot not to shoot not to sue should be deemed to apply.

[00:14:39] Speaker 01:
That's Not this case this rather.

[00:14:43] Speaker 01:
That's not that provision that provision is limited to Actions to enforce the agreement we have not my client has not sued to enforce the agreement My client has sued hasn't even sued parties to the agreement in addition

[00:15:04] Speaker 01:
to get to that rule, whether it's signature, or AAA, or Jams, or whomever, you have to be a beneficiary or a party to an arbitration agreement.

[00:15:16] Speaker 01:
And I think it's pretty clear the preamble to the contract says the parties are Lighthouse and G. Shermer.

[00:15:25] Speaker 03:
So I'm looking at paragraph 25 of your complaint, ER 176, on information and belief

[00:15:34] Speaker 03:
at all times material herein, each of the defendants was the agent and employee of the other defendants and in doing the things herein after alleged was acting within the course and scope of such agency and employment.

[00:15:50] Speaker 03:
And taking that allegation which you've made even on an information and belief is true, that would seem to me

[00:15:58] Speaker 03:
that all of the defendants in this case would be what is defined in the settlement agreement as the lighthouse releasers and releases.

[00:16:15] Speaker 03:
Am I wrong?

[00:16:19] Speaker 01:
No, you're not wrong, but that's different.

[00:16:22] Speaker 03:
So if I'm not wrong,

[00:16:24] Speaker 03:
on that when I'm looking at ER 156, the signature page, it says Lighthouse, the signature, Lighthouse Immersive USA, Inc.

[00:16:37] Speaker 03:
and Lighthouse, Inc.

[00:16:38] Speaker 03:
for itself and each of the Lighthouse release source.

[00:16:42] Speaker 03:
So it says on the signature page that the signature by Mr. Ross is on behalf of each of the lighthouse release sores.

[00:16:50] Speaker 03:
You've alleged that as you just conceded that every defendant is a lighthouse release sore.

[00:16:56] Speaker 03:
So how can it be that they don't have the right to enforce the arbitration agreement?

[00:17:03] Speaker 01:
Because the arbitration agreement is limited to the parties as defined in the agreement.

[00:17:08] Speaker 01:
The preamble to the agreement defines the parties as Lighthouse and Shermer.

[00:17:15] Speaker 01:
With all due respect, that interpretation I think would eviscerate the no third party beneficiaries paragraph and it would eviscerate the

[00:17:24] Speaker 03:
Arbitration agreement itself which is limited to enforcement of the agreement there's but but I mean even if the way I'm looking at this is Wrong and the way you say it certainly seems to me that if he's signing on behalf of all the Lighthouse release oars there is at least a credible argument that the lighthouse release oars and each of them get to enforce the agreement and if that's the case why wouldn't the question

[00:17:53] Speaker 03:
of the meaning of this agreement be something for the arbitrator to decide?

[00:17:59] Speaker 03:
So explain to me why my reading of this that he's signing on behalf of the Lighthouse Release Source makes them a party, makes them somebody who can enforce this is so off the walls that that question shouldn't be sent to the arbitrator?

[00:18:18] Speaker 01:
Because the parties to the agreement, the actual parties to the agreement,

[00:18:23] Speaker 01:
are Lighthouse and Shermer.

[00:18:26] Speaker 01:
That language relates to, well, it's relevant because of the releases, which by the way never went into effect because there was no payment by their express terms.

[00:18:39] Speaker 01:
But the arbitration agreement is a separate part of the agreement from the releases.

[00:18:45] Speaker 01:
And the arbitration agreement does not mention all the releasees, the releaseors.

[00:18:51] Speaker 01:
It doesn't use those definitions.

[00:18:52] Speaker 01:
It's only intended to, and I think on its face, apply to the parties to the agreement.

[00:19:02] Speaker 03:
Well, actually, I'm not sure that argument helps you if we're looking just at the arbitration agreement.

[00:19:10] Speaker 03:
because the first sentence of the arbitration agreement is, any action to enforce this agreement shall be brought exclusively by arbitration through signature resolution.

[00:19:19] Speaker 03:
It doesn't say any action by only the two people who are defined, the two entities that are defined in the preamble as the parties.

[00:19:34] Speaker 01:
It doesn't, but to take advantage of a term

[00:19:37] Speaker 01:
that's intended to benefit a third-party beneficiary or somebody that's not a party to the agreement, whether they're a third-party beneficiary or not, there has to be language in the agreement that says that, that confers that right or that standard.

[00:19:53] Speaker 03:
Although, again, and I'll stop on this, but it just strikes me that there

[00:19:59] Speaker 03:
that there is at least an argument that they are not a third party beneficiary when on the signature line it says that this is signed on their behalf.

[00:20:11] Speaker 03:
But if you feel you've addressed that, you can move on.

[00:20:13] Speaker 01:
Well, I guess the only thing I'd add is it's on their behalf as released parties, of course, subject to the release language which requires payment which never happened.

[00:20:24] Speaker 01:
In order for the releases to go into effect, but it only identifies them as the released parties or as In conjunction with the release it does not Identify them as Parties to the entire agreement including the arbitration agreement and again the preamble Is clear that the parties are Shermer and lighthouse so if I could just back up a little bit because I'm just trying to understand

[00:20:54] Speaker 02:
what the end game is in this case.

[00:20:56] Speaker 02:
So there was a settlement in this case.

[00:20:59] Speaker 02:
We can talk about who settled and the parties in it.

[00:21:01] Speaker 02:
I will confess it's very confusing because of all the bankruptcy or whatever the restructuring in Canada and all the stuff that's going on in this case.

[00:21:09] Speaker 02:
All right.

[00:21:09] Speaker 02:
But let's say we agreed with the district court and we say this is not covered by this arbitration clause.

[00:21:18] Speaker 02:
It goes back to the district court.

[00:21:20] Speaker 02:
Then you would pursue this copyright case.

[00:21:22] Speaker 01:
Which we've been trying to do for several years.

[00:21:25] Speaker 02:
Isn't one of the defenses to the copyright case, well, we've settled this in the agreement.

[00:21:29] Speaker 02:
Don't we come back one way or the other, don't we come back to this agreement at some point?

[00:21:34] Speaker 01:
The defense says we've settled it, but the release is conditioned on payment of the settlement funds and not one penny was paid.

[00:21:44] Speaker 02:
Right.

[00:21:44] Speaker 02:
Now, as to that issue, that's a factual issue, correct?

[00:21:47] Speaker 02:
Has the district court made a finding on that?

[00:21:49] Speaker 02:
Not yet.

[00:21:50] Speaker 02:
So like I said, it seems to me that

[00:21:54] Speaker 02:
Even if we agree with you in this case, this settlement agreement is still very relevant to this litigation.

[00:22:00] Speaker 02:
Do you agree with that?

[00:22:01] Speaker 01:
A hundred percent.

[00:22:02] Speaker 01:
We just want to do it once, not twice.

[00:22:04] Speaker 02:
I appreciate it.

[00:22:05] Speaker 02:
I'm just trying to understand, you know, where's the engine and where's the caboose on this train?

[00:22:10] Speaker 01:
The arbitration is the caboose.

[00:22:12] Speaker 01:
We want to get to work on this case.

[00:22:14] Speaker 01:
And at every turn, there's been delay.

[00:22:20] Speaker 01:
issues.

[00:22:21] Speaker 02:
Okay, not that I want to delay it more, but I am curious.

[00:22:27] Speaker 02:
Our court has a mediation program.

[00:22:29] Speaker 02:
Have you engaged in the mediation program in this court?

[00:22:33] Speaker 01:
I have asked and asked and asked.

[00:22:36] Speaker 01:
Candidly, the history of this case is one of a defendant who's trying to

[00:22:44] Speaker 01:
not deal with it, and using pulling out every stop.

[00:22:47] Speaker 01:
This is one of them, to arbitrate a claim that's going to lose because there was nothing paid.

[00:22:52] Speaker 01:
We want to get to work.

[00:22:54] Speaker 01:
We've been stifled at every turn to try to do that, and we've asked both with the district court, we've asked with this court, we've asked privately.

[00:23:06] Speaker 02:
So I'm going to ask him the same question.

[00:23:09] Speaker 02:
He's got rebuttal time.

[00:23:11] Speaker 02:
Would you object if we ordered the parties into mediation before our court?

[00:23:16] Speaker 02:
Not at all.

[00:23:17] Speaker 02:
Even though we understand that may delay things more, you'd be OK with that?

[00:23:22] Speaker 01:
Well,

[00:23:24] Speaker 01:
If counsel represented that Mr. Ross would participate in a mediation in good faith and actually try to settle the case rather than use it as an excuse for more delay, yes.

[00:23:33] Speaker 01:
I don't have much confidence that even if counsel were to make that representation, it would be true.

[00:23:39] Speaker 01:
But of course.

[00:23:40] Speaker 02:
Just put aside your feelings about them.

[00:23:41] Speaker 02:
In terms of you, you're willing to go into mediation for this case.

[00:23:53] Speaker 01:
would recommend to my client that they do so, knowing that there is a risk that it would be more of the same.

[00:24:00] Speaker 02:
Understood.

[00:24:01] Speaker 02:
Understood.

[00:24:01] Speaker 02:
I just want to take it to you.

[00:24:02] Speaker 02:
Because it seems to me that we're kind of in a hamster wheel in this case.

[00:24:07] Speaker 02:
And again, I'm not saying why, but I could just see this case going on for a really, really, really long time.

[00:24:13] Speaker 02:
And at the end of the day, it's about money.

[00:24:15] Speaker 02:
And it seems to me that this should be able to be worked out.

[00:24:18] Speaker 01:
Your Honor, you're preaching to the choir.

[00:24:20] Speaker 02:
OK.

[00:24:20] Speaker 02:
All right.

[00:24:21] Speaker ?:
Fair enough.

[00:24:24] Speaker 01:
Thank you, that's all I have.

[00:24:28] Speaker 01:
Unless anybody has any questions.

[00:24:31] Speaker 01:
Thank you.

[00:24:37] Speaker 02:
Let's start with the question I had for him.

[00:24:40] Speaker 04:
Concerning mediation.

[00:24:41] Speaker 02:
Yes.

[00:24:42] Speaker 04:
First of all, I wasn't handling the district court case, I'm only on the appeals.

[00:24:46] Speaker 02:
Right, but I'm saying, okay, fair enough.

[00:24:49] Speaker 02:
Our Ninth Circuit has a mediation office, very good mediators.

[00:24:52] Speaker 02:
This seems to me, if I had to think of a case that would be like the textbook example of a mediation case, it's this case.

[00:24:59] Speaker 02:
Would your client be willing, if we issue an order, would there be an objection to ordering you both parties into mediation?

[00:25:06] Speaker 04:
I mean I certainly take it to my client.

[00:25:08] Speaker 04:
I personally wouldn't have an objection to it, but um your honor.

[00:25:12] Speaker 04:
I think something that Shermer's counsels leaving out of this is they've known for a long time that the Italian defendants had given a licensing agreement to my client so when he says that he's chasing Mr.. Ross and Mr.. Ross is playing all these games and

[00:25:28] Speaker 04:
I've known for, I don't know, two or three years that there was a licensing agreement for the QA issue.

[00:25:34] Speaker 03:
But, I mean, not to, but wouldn't that in itself that you believe that you have something valid as to why the claims on their merits wherever they're going to be heard has some problems.

[00:25:50] Speaker 03:
Isn't that exactly the kind of thing that your client might be able to benefit from having skilled, excellent mediators look at?

[00:26:00] Speaker 03:
And I certainly echo what Judge Owen said.

[00:26:04] Speaker 03:
The Ninth Circuit mediation group is really good.

[00:26:09] Speaker 04:
Yes, I didn't think of it from that perspective, but yes, certainly, because we believe that at the end of the day, no matter what happens, and we think we should be dismissed for the reasons that I've argued concerning the standing under the agreement and the covenant not to sue, even if we were not to prevail on that, he still has to deal with the fact that there's a licensing agreement and he really needs to go after the Italians who signed the licensing agreement.

[00:26:35] Speaker 04:
who arguably might not have an ability to use the settlement agreement as my clients do.

[00:26:40] Speaker 04:
Also, I wanted to raise one point in response to Council for Shermer.

[00:26:48] Speaker 04:
It said that the release language

[00:26:53] Speaker 04:
is inapplicable because the payments weren't made.

[00:26:56] Speaker 04:
I don't believe that to be true, number one.

[00:26:58] Speaker 04:
Number two, he's ignoring section 2.4, which has no conditional language in it.

[00:27:06] Speaker 04:
It is 2.4.

[00:27:10] Speaker 04:
The parties represent and agree that they have not filed.

[00:27:13] Speaker 04:
I read this to the court earlier.

[00:27:15] Speaker 04:
There's no conditional language in 2.4.

[00:27:17] Speaker 03:
Well, there may not be conditional language in 2.4, but there's certainly conditional language

[00:27:22] Speaker 03:
In 2.1, which says none of the release is going to affect unless they're paid, right?

[00:27:29] Speaker 04:
Even if so your honor 2.4 still enforceable, and if you can't bring an action, what does it matter 2.1 or 2.2?

[00:27:38] Speaker 02:
Covenant not to sue is a complete bar for litigation All right, thank you very much counsel to both of you for your briefing your argument in this case this matter is submitted I