[00:00:00] Speaker 02:
And our last case for the day is Wells Fargo Bank National Association versus Expeditors International of Washington, Inc.

[00:00:08] Speaker 02:
And counsel may approach.

[00:01:03] Speaker 03:
Good morning, may it please the court.

[00:01:05] Speaker 03:
My name is Stephen Willie and I represent Explorators International of Washington, Inc.

[00:01:09] Speaker 03:
I'd like to reserve five minutes, please.

[00:01:13] Speaker 03:
At the outset, I'd like to address the court's June 27, 2025 directive that the parties be prepared to discuss the impact on this appeal.

[00:01:22] Speaker 03:
of this court's prior decision in the case Explicers v. Cadenya, number 24108, which was issued on March 5th, 2025.

[00:01:31] Speaker 03:
And then the district court's subsequent order for the defendant here to answer or otherwise respond to the second amended complaint in that other case.

[00:01:39] Speaker 03:
And the short answer is that this court's opinion in the Explicers v. Cadenya appeal supports what we argued in our briefing here.

[00:01:48] Speaker 03:
Number one, the district court erred in lifting the stay in this interpletor action before the parallel ex-fighters v. Cadenza matter had been resolved.

[00:01:58] Speaker 03:
The district court's ruling, which is reviewed under an abuse of discretion standard, seemed to be based on the perceived finality of the ex-fighters v. Cadenza matter based on that court's Rule 12 motion.

[00:02:12] Speaker 03:
But the court's order here in March reversed the district court.

[00:02:16] Speaker 03:
And the expedited direct action is now back in the district court and pending.

[00:02:21] Speaker 05:
Let me ask you, what are the allegations in the second amended complaint in the direct action that we just reversed and sent back?

[00:02:31] Speaker 03:
With respect to what your honor there are a whole what are the allegations in that complaint?

[00:02:35] Speaker 05:
What what is the complaint about?

[00:02:37] Speaker 03:
Yeah?

[00:02:38] Speaker 03:
The complaint alleges that Mr.. Cadena is a former financial officer of expellers Mexico then in the course of his work there He embezzled substantial funds and conspiracy with others.

[00:02:49] Speaker 03:
He was subsequently terminated.

[00:02:51] Speaker 03:
He sought to exercise stock options those have been denied and

[00:02:55] Speaker 03:
There is a claim for declaratory judgment with respect to rights regarding the stock options There's also a claim for breach of contract with respect to stock option agreements and the employee stock purchase What does that have to do with the money in?

[00:03:09] Speaker 05:
Wells that Wells Fargo had

[00:03:11] Speaker 03:
Fair question, Your Honor.

[00:03:12] Speaker 03:
We don't know what the money in the Wells Fargo account is from.

[00:03:15] Speaker 03:
What we know is that Wells Fargo pled that there had been hundreds of thousands of dollars transferred from a Mexican bank to Wells Fargo here in the U.S.

[00:03:25] Speaker 03:
in 2023.

[00:03:27] Speaker 03:
There was a dispute about the money and it put it into their pleader action.

[00:03:30] Speaker 05:
Okay, got that.

[00:03:32] Speaker 05:
So let me ask you, if you go back down

[00:03:35] Speaker 05:
And you try the second, you resolve the second amended complaint case in the direct action to get a judgment that's favorable to expeditors.

[00:03:48] Speaker 05:
Does that mean that that establishes your ownership of the money in his Wells Fargo account?

[00:03:54] Speaker 03:
I don't know, Your Honor.

[00:03:55] Speaker 04:
Well, I mean, come on.

[00:03:56] Speaker 04:
You filed this case.

[00:03:58] Speaker 03:
You're correct.

[00:03:59] Speaker 03:
The case has morphed over time.

[00:04:01] Speaker 03:
There have been multiple complaints.

[00:04:02] Speaker 03:
But the short answer is, I would say, if we are successful in the direct action, there is a high likelihood that establishing entitlement to the funds is an interpleader.

[00:04:10] Speaker 01:
And are you saying that it's Expeditors International and not Expeditors Mexico that is the actual owner of the funds?

[00:04:18] Speaker 03:
It depends.

[00:04:20] Speaker 03:
It depends on what?

[00:04:20] Speaker 03:
Well, we believe there has been no discovery and no affirmation and no declaration of where the funds came from.

[00:04:28] Speaker 03:
Our allegation is that the funds are from one of two sources.

[00:04:31] Speaker 03:
Either they are bonds that were embezzled from Expeditors Mexico or they were funds that were derived from the sale of Expeditors stock that was purchased at a discount during the time the fraud was ongoing.

[00:04:41] Speaker 01:
But Expeditors Mexico is a separate entity, is that correct?

[00:04:44] Speaker 01:
That's correct.

[00:04:44] Speaker 01:
And the only entity here is Expeditors International?

[00:04:51] Speaker 03:
That's correct, Your Honor.

[00:04:52] Speaker 03:
If the monies at issue are solely monies that were embezzled from Excavators Mexico, Excavators Washington does not have a claim to them.

[00:05:01] Speaker 02:
So, but the direct action is going to resolve on remand whether Expeditors International had the right to cancel the stock option exercise.

[00:05:17] Speaker 02:
Is that correct?

[00:05:18] Speaker 03:
That's one option.

[00:05:19] Speaker 02:
And I know there's a separate fidelity account, but what's the tie-in to the embezzlement in the direct action?

[00:05:28] Speaker 03:
There is an alley excuse me there is a claim alleged for breach of contract regarding both stock option agreement and the employee stock purchase plan which permits employees to bar purchase discounted exporters stock and the allegation is that those are being breached by Mr.. Kidania by virtue of his embezzlement But does that judgment give you the right to take the does that?

[00:05:50] Speaker 05:
situation give you the right to take a judgment in the direct action of

[00:05:54] Speaker 05:
go to the district court in the inner plea direction and say, ah, this shows that we have the right to those funds in the Wells Fargo account.

[00:06:05] Speaker 03:
It's a good question, Your Honor, and it would depend upon what the source of those funds was, which is what we do not know.

[00:06:11] Speaker 05:
We don't know where they came from.

[00:06:14] Speaker 05:
You know, you had a claim in a prior version of the direct action.

[00:06:22] Speaker 05:
You had a claim for conversion and for a constructive trust over the funds in the Wells Fargo account.

[00:06:32] Speaker 05:
And those claims are gone.

[00:06:35] Speaker 05:
in the second amended complaint.

[00:06:38] Speaker 05:
It raises an interesting question in my mind whether if those claims had survived, the district court would have abused its discretion in releasing the funds.

[00:06:50] Speaker 05:
But those claims are all gone, and all I see in the second amended complaint of the direct action is just a dispute over the stock options, which in my mind, when you look at what the district court did, he said, or whoever it was, I'm sorry, said the account belongs to Cadania,

[00:07:18] Speaker 05:
It's his account.

[00:07:19] Speaker 05:
There is a presumption of ownership and right to the funds.

[00:07:24] Speaker 05:
And you haven't shown me that you have a higher interest in those funds.

[00:07:29] Speaker 05:
And so he said, under those circumstances, we're not keeping this money.

[00:07:33] Speaker 05:
There's no reason to keep this money in the court's registry.

[00:07:36] Speaker 05:
It's his.

[00:07:37] Speaker 05:
He can get it back.

[00:07:38] Speaker 05:
Now, you can sue him and do all you want.

[00:07:40] Speaker 05:
And maybe you can get a judgment and levy on his bank accounts and all that kind of stuff.

[00:07:44] Speaker 05:
But I don't really see the connection between the two.

[00:07:50] Speaker 03:
Let me respond in three ways, your honor.

[00:07:52] Speaker 03:
Number one, the standard review for the court's distribution of funds is under de novo, okay?

[00:07:58] Speaker 03:
It's not abuse of discretion because it's a rule 56 standard the court utilized on the distribution of the funds.

[00:08:03] Speaker 03:
That's different from the abuse of discretion lifting the state.

[00:08:06] Speaker 03:
Two different standards.

[00:08:08] Speaker 03:
Number two, the district court action... I have to think about that, but...

[00:08:12] Speaker 03:
It's in the record your honor, and I believe the court referred to the release of the funds That's why I don't see any abuse of discretion for the reasons that I gave The order releasing funds is not reviewed under abuse of discretion your honor respectfully It's under de novo because it's a rule 56 standard and why that matters in the cadena direct action the claims do not

[00:08:36] Speaker 03:
just simply resolve the question of stock option agreement and rights to stock options.

[00:08:41] Speaker 03:
They also resolve or address whether or not there were violations of the stock option agreements and the employee stock purchase plan such that there was stock derived and funds derived from those during the course of embezzlement to which he has no right

[00:08:54] Speaker 02:
Right, but that relates to a fidelity account, I think, in the Second Amendment.

[00:08:59] Speaker 02:
No, not necessarily.

[00:09:00] Speaker 02:
It could relate to a fidelity account.

[00:09:02] Speaker 02:
But the fidelity account is alleged in the Second Amendment complaint, isn't it?

[00:09:08] Speaker 02:
In other words, the stock and the funds that are implicated in the direct action refer to a fidelity account in the Second Amendment complaint.

[00:09:18] Speaker 03:
We allege that there are funds in that account to the best of our knowledge.

[00:09:21] Speaker 02:
And there's no mention of the Wells Fargo account in the Second Amendment complaint.

[00:09:25] Speaker 02:
Is that correct?

[00:09:26] Speaker 02:
There's no mention of the Wells Fargo account.

[00:09:28] Speaker 02:
That's that issue here.

[00:09:29] Speaker 03:
I don't recall, but you may be right.

[00:09:31] Speaker 03:
What we don't know, respectfully, Your Honor, is what the source of the funds in that account is.

[00:09:36] Speaker 03:
And this goes back to my question or my issue about standard review, which is when you're addressing the question of whether there should be a distribution on Interpleter, there is some sort of evidentiary showing that we must be made.

[00:09:48] Speaker 02:
Right.

[00:09:49] Speaker 02:
Of a claim, of having some semblance of a claim to those funds.

[00:09:54] Speaker 02:
As opposed to just, you know, we think we may prevail and our judgment recovery would be made a lot easier if those funds were frozen for us to be able to recover from that.

[00:10:04] Speaker 02:
I think that seemed to be the district court's analysis of this.

[00:10:07] Speaker 03:
I think you're right, although the wrinkle to me, Your Honour, is that we weren't the ones living for summary judgment.

[00:10:12] Speaker 03:
Right?

[00:10:13] Speaker 03:
Mr. Codinio was.

[00:10:14] Speaker 03:
And so when he is moving, he has a burden to come forth with some evidentiary showing that he has an entitlement to those funds.

[00:10:20] Speaker 04:
Some, right?

[00:10:22] Speaker 04:
He said, it's my account.

[00:10:23] Speaker 04:
They're my account.

[00:10:24] Speaker 03:
He said, he said, he said I opened the account.

[00:10:28] Speaker 03:
He did not say I deposited the money in the account.

[00:10:30] Speaker 03:
He did not say where the money came from.

[00:10:31] Speaker 04:
Were the funds in that account?

[00:10:33] Speaker 03:
Pardon me?

[00:10:34] Speaker 04:
Were the funds in that account?

[00:10:35] Speaker 03:
There were money in the account.

[00:10:36] Speaker 03:
Yes, there was money in the account.

[00:10:37] Speaker 01:
And he opened the account?

[00:10:38] Speaker 03:
He's the only factual representation.

[00:10:40] Speaker 01:
And his name is on the account?

[00:10:43] Speaker 03:
And I think that the case law cited does not support the idea that the mere allegation of my name is on the account means the money I belong to.

[00:10:51] Speaker 02:
Can I ask you this?

[00:10:52] Speaker 02:
Where is Expeditors of Mexico in all of this?

[00:10:55] Speaker 02:
Why haven't they filed a claim for conversion to the Wells Fargo account?

[00:11:01] Speaker 03:
I don't know what Expeders Mexico is doing vis-à-vis Mr. Cadena.

[00:11:06] Speaker 03:
I know they have not brought an action here.

[00:11:08] Speaker 02:
Is there an action, is there litigation in Mexico pending?

[00:11:13] Speaker 03:
I believe there is a labor proceeding that Mr. Cadena has brought in Mexico.

[00:11:17] Speaker 03:
That's my knowledge, that's what's proceeding down there.

[00:11:20] Speaker 02:
Because it seems as if it's the wrong party that's trying to assert these issues, and there might be a different party that's more appropriate to reaching those funds in the Wells Fargo account.

[00:11:33] Speaker 03:
It depends entirely upon what the source of those funds is.

[00:11:37] Speaker 03:
Again, if those are the funds that were embezzled from expeditors in Mexico, then you're correct.

[00:11:41] Speaker 03:
But if those are funds that came from the acquiring and sale of discounted expeditor stock when he was in the course of embezzling, I would disagree.

[00:11:50] Speaker 03:
I would say then we do have a proper claim to those funds.

[00:11:53] Speaker 03:
That's the challenge here is that we don't know at all the source of the funds.

[00:11:58] Speaker 03:
The only thing we know is that Mr. Kennedy says he opened the account.

[00:12:03] Speaker 05:
What is the direct relief you're seeking in the second amended complaint?

[00:12:10] Speaker 03:
Judgment would say sure we're seeking both declaratory judgment Which would say it would say that mr.. Cadena is not entitled to exercise certain stock options That's that's that's that's separate from this What else would it say it would also say that there was a breach of contract and there are damages arising from that those damages are x dollars and

[00:12:31] Speaker 05:
Okay.

[00:12:33] Speaker 03:
And the breach of contract claim, Your Honor, regards expeditor's stock and options acquired, exercised, or purchased, and then redeemed when he was embezzling.

[00:12:44] Speaker 01:
But even if there were damages judgment, it wouldn't create a claim to the interpleader money, would it?

[00:12:52] Speaker 03:
Well, Your Honor, I think if the source of the money was from those funds,

[00:12:56] Speaker 03:
It would arguably do that.

[00:12:58] Speaker 03:
Moreover, the central question to me is if Mr. Kidding establishes he owns those funds and those are legitimately acquired, that's the end of the story.

[00:13:06] Speaker 03:
That would be the end of the story.

[00:13:07] Speaker 02:
There's no allegation that money in the Wells Fargo account were used to purchase stocks at a reduced rate in violation of a breach of contract, is there?

[00:13:19] Speaker 03:
no there is not an allegation.

[00:13:20] Speaker 02:
So at best what you're alleging I think is there were funds embezzled by Mr. Cadena some of that was used to purchase stocks at a reduced rate and breach of a contract and so the you know Expeditors International suffered damages as a result but to Judge McEwen's point that still doesn't connect it to

[00:13:41] Speaker 02:
Maybe there's a whole separate set of embezzled funds in Wells Fargo, but what's the connection?

[00:13:47] Speaker 03:
If the funds in that account are the product of the stock that was purchased at discount, then I believe we have a claim to those funds.

[00:13:54] Speaker 02:
So if you sold it for a gain and the gains were parked in the Wells Fargo account, then you say you would have a claim to those.

[00:14:03] Speaker 02:
That's correct.

[00:14:05] Speaker 01:
But would, yeah, I mean in a way it seems to me it's almost like an attachment or some kind of prejudgment attachment would have been more appropriate here if you're kind of thinking and I recognize there's various procedural hurdles and prejudgment attachments but that's what this sounds like to me and not,

[00:14:24] Speaker 01:
a case that should be sitting here on an interpleader appeal.

[00:14:28] Speaker 01:
Why wouldn't that have been a... I mean, I know you're not stuck to one remedy, but this just isn't making sense in the context of the parties with Mexico, with the uncertainty, with the Ninth Circuit appeal.

[00:14:43] Speaker 03:
I understand your honor on their hand.

[00:14:45] Speaker 03:
I'd say that number one.

[00:14:46] Speaker 03:
We didn't initiate the interpletor Wells Fargo did and so in some sense We are where we are in terms of the procedural posture, but it didn't preclude you from other avenues It did not although There's to our knowledge no assets to attach in the United States Will be difficult for us.

[00:15:07] Speaker 03:
I think to obtain a pre-judgment attachment on property in Mexico

[00:15:13] Speaker 03:
What we would submit the court should do respectfully is to instruct the interpleated funds to be redeposited and to order on remand that either there be discreet discovery to enable the district court to determine the rightful owner of the interpleated funds or a direction that action be stayed, this action be stayed until the exporter's direct action is adjudicated.

[00:15:35] Speaker 03:
Thank you for your time.

[00:15:55] Speaker 00:
May it please the court, Matt Harrington of Stokes Lawrence on behalf of Armando Cadena.

[00:16:01] Speaker 00:
This case is about an unproven cause of action being litigated both in Mexico and here in the United States.

[00:16:07] Speaker 00:
Judge King summed it up well in her order at ER 11 when she noted that it would seem, quote,

[00:16:13] Speaker 00:
problematic that a company or anyone could contact an individual's bank, allege that that individual embezzled money, prompt the bank to restrain and interplead the funds, and at that point pursue a separate action to prove their entitlement to such funds.

[00:16:28] Speaker 00:
Indeed, the law provides other means, as the Court has alluded to, to secure a defendant's assets before judgment, where necessary, such as a pre-judgment writ of attachment.

[00:16:38] Speaker 00:
But instead, Expeditors Washington is here jockeying as a general creditor to get in line for assets that are unrelated to the remaining claims.

[00:16:47] Speaker 00:
But that's not appropriate under step two of the interpletor process.

[00:16:52] Speaker 00:
That does not allow holders of contingent claims for general liabilities against an account holder to be heard in an interpletor.

[00:17:01] Speaker 00:
And Expeditors Washington concededly had no judgment or no lien at that time, at the time the interpletor was filed,

[00:17:08] Speaker 00:
and still does not have a judgment today.

[00:17:11] Speaker 00:
I think it would be helpful to step back for a moment and get a sense of how this all started.

[00:17:16] Speaker 00:
Expeditors Mexico, a non-party, contracted with a third-party company, Asse, that it knew was owned in part by Mr. Cadena, who Expeditors Mexico also employed in its finance department.

[00:17:29] Speaker 00:
Expeditors Mexico had agreed to pay a 3% surcharge on transactions with Asse, but after a falling out, it cut ties with Mr. Cadena,

[00:17:38] Speaker 00:
It fired him and coerced a supposed confession in English from this native Spanish speaker.

[00:17:44] Speaker 00:
Mr. Cadena sued Expeditor's Mexico in Mexico under Mexican labor law with a substantial claim, which is still pending.

[00:17:53] Speaker 00:
Expeditor's Mexico's parent then, or Expeditor's Washington, then orchestrated the two cases here in Washington, including the interpleader that is before the court today.

[00:18:06] Speaker 00:
But Expeditors Washington argues, one of their arguments in their reply is that there's still been no resolution of the ownership of the funds in the Wells Fargo account.

[00:18:15] Speaker 00:
Again, that mistakes the test at Interpleader Step 2.

[00:18:19] Speaker 00:
It became clear to Judge King below that because of Expeditors Washington's pleadings, that Expeditors Washington had no claim to the funds.

[00:18:28] Speaker 00:
But not only were those judicial admissions made in the pleadings, but those judicial admissions were also made by counsel in the Rule 56 hearing on disbursement of the funds, where counsel confirmed at oral argument that embezzlement allegations related to expeditors Mexico.

[00:18:44] Speaker 00:
That's in the supplemental excerpts of record at six, lines two through 19.

[00:18:51] Speaker 00:
What Expeditors Washington is doing here is kind of playing with the word claim or the notion that it might have a claim.

[00:18:57] Speaker 00:
Expeditors Washington has in fact alleged a cause of action against Mr. Kadena, but that doesn't mean it has a property interest in the funds that used to be in the Wells Fargo account.

[00:19:09] Speaker 00:
Expeditors Washington's claim that is is not to the rez it is against mr. Cadena and that was true at the time that the interpletor was filed which under this court's precedent in Texco versus Ponsult is the relevant time that you have to analyze Now if expeditors were right that you can simply go pursue an interpletor by whispering in the ear of the bank any Litigant would begin with or any litigation would begin with

[00:19:33] Speaker 00:
with a plaintiff writing letters to banks, which would be really helpful if you're a well-heeled corporation, and then freezing the accounts of your adversary or asking them to interplead the accounts of your adversary.

[00:19:46] Speaker 00:
This would force every defendant to essentially prove the source of the funds or to disprove the contingent liability against them in an interpleader, but that is an improper use of the interpleader mechanism.

[00:19:59] Speaker 00:
And Expedars of Washington remarkably admits that this is really what their position is in their reply at footnote one, where they argue that the burden is to show that the source of the funds is not some embezzlement or something like that.

[00:20:14] Speaker 00:
They essentially want Mr. Kadena to disprove the contingent claim in the interpleader rather than to simply establish his superior ownership in the rez.

[00:20:25] Speaker 02:
Now, expeditors doesn't want to pursue... Can I ask a question?

[00:20:27] Speaker 02:
At one point, the district court thought that the direct action was going to resolve the ownership question of the Wells Fargo account.

[00:20:37] Speaker 02:
What changed or what went into the thinking that that might happen and then know it's not going to happen?

[00:20:45] Speaker 00:
I don't believe it ever was going to resolve it, Your Honor, so I don't know that I can speculate into initially it was Judge Jones who was considering or was presiding over the center pleader and later Judge King.

[00:20:55] Speaker 00:
It's possible that the judges saw it differently.

[00:20:59] Speaker 00:
But ultimately after serial rounds of motions to dismiss and dismissals, I think that the court ultimately started to appreciate the problems here with

[00:21:10] Speaker 00:
the standing of Expeditors Washington trying to assert claims on behalf of Expeditors Mexico.

[00:21:15] Speaker 02:
And so how would you respond to Council's argument that in the nature of their breach of contract claim, if embezzled funds were used and that led to the improper purchase of stocks and the gains from that could have gone into Wells Fargo, that they might have a claim to

[00:21:34] Speaker 02:
To those monies, I take it your answer is, well, that's still an action against Mr. Cadena, not against the rest.

[00:21:43] Speaker 00:
It is.

[00:21:44] Speaker 00:
It's not unique to any other litigant who's concerned about collections, I suppose.

[00:21:48] Speaker 00:
But still, there is no tether here from the claims brought in the direct action to the funds here in the Wells Fargo account, as the court... So there still is a live breach of contract claim?

[00:22:04] Speaker 00:
It is a

[00:22:05] Speaker 00:
There is a live breach of contract claim alleging that breaches by Mr. Cadena would cause him to forfeit his ownership or his right to convert stock options in the fidelity account.

[00:22:19] Speaker 01:
And there's been no answer in that case to the remaining allegations in the complaint?

[00:22:27] Speaker 00:
That's correct.

[00:22:28] Speaker 00:
We have not answered yet.

[00:22:29] Speaker 01:
Not answered that.

[00:22:31] Speaker 01:
And so if I understand your position correctly, you're saying, well, it doesn't really matter.

[00:22:37] Speaker 01:
With respect to breach of contract, what we should be looking at here is the ownership question.

[00:22:42] Speaker 00:
That's right.

[00:22:43] Speaker 00:
In the interpleeter, remember, it was alleged that there was a $59,000 sum that could be traced to a bank account in Mexico belonging to Mr. Cadena.

[00:22:52] Speaker 00:
In the direct action, these claims that have been resurrected really arise out of the stock option agreement between Mr. Cadena and Expeditors Washington.

[00:23:01] Speaker 00:
Having to do with this different account.

[00:23:04] Speaker 00:
That account holds Mr. Cadena's exercise stock.

[00:23:08] Speaker 00:
That money was granted by Expeditors Washington under the stock option agreement.

[00:23:12] Speaker 00:
That is, there can be no tracing to some sort of embezzlement of funds.

[00:23:16] Speaker 00:
There's no allegation that the funds in that account originated in Mexico or resulted from the supposed overpriced invoices idea.

[00:23:26] Speaker 00:
There's over a million dollars there, by the way, I would add.

[00:23:29] Speaker 00:
And those funds are frozen beyond Mr. Kadena's reach because Expeditors Washington has control of that account.

[00:23:36] Speaker 00:
And as the district court observed, Fidelity is taking their orders from Expeditors Washington.

[00:23:42] Speaker 00:
So at least as to that account, Expeditors Washington has successfully engaged in some self-help and has preserved some assets there.

[00:23:49] Speaker 00:
As for the assets that were already dispersed appropriately by Judge King, those were completely untethered.

[00:23:56] Speaker 00:
to any remaining claims in the second amended complaint or otherwise.

[00:24:01] Speaker 00:
Put differently, a pending claim for rescission of stock option agreements is not a viable claim to the res of Mr. Canana's personal savings.

[00:24:10] Speaker 00:
Now, in doing so, Judge King, it's worth noting, relied on the judicial admissions of the first two complaints, plus the absence of evidence offered by Expeditors Washington on summary judgment.

[00:24:22] Speaker 00:
All of that is still true.

[00:24:23] Speaker 00:
That is not changed, and it will not change.

[00:24:26] Speaker 00:
And the Ninth Circuit's order does not disturb those judicial admissions or that absence of evidence provided.

[00:24:33] Speaker 00:
And as Judge Pius has observed,

[00:24:36] Speaker 00:
Conversion and constructive trust claims are not only gone, in your words, they were dismissed without leave to amend, and then there was no appeal from that dismissal, so that we regard that as collateral estoppel.

[00:24:48] Speaker 00:
There's also, I guess another way, I mean, put it more directly, there's no allegation in the record that the interpled funds that were in the Wells Fargo account are related to these new claims.

[00:24:59] Speaker 00:
I'd like to touch on the summary judgment standard for a moment.

[00:25:02] Speaker 00:
The court ordered Expeditors Washington to show cause why it should be entitled to engage in discovery or why discovery was

[00:25:10] Speaker 00:
Needed that burden was on expeditors Washington and then of course when we brought our motion for summary judgment for disbursement of the funds Expeditors Washington could have advanced a 56d affidavit which says if you can't put in an affidavit that identifies specifically what you need you may be entitled to a delay of summary judgment or otherwise expeditors twice declined to do those things to make this showing and

[00:25:37] Speaker 00:
The judge almost was begging Expeditors Washington to put in some evidence.

[00:25:42] Speaker 00:
It gave them every opportunity, construed their motion as a 56D or their opposition as a 56D.

[00:25:50] Speaker 00:
And it begs the question of why after at that point this case has been going on for four years and Expeditors is talking about this scheme and the investigation that they've been engaging in, why not put in some evidence of anything?

[00:26:04] Speaker 00:
But instead, the record in this matter on the Interpletor review of that 56 has no declaration from anyone at Expeditors Washington or related to them to support the claims or to resist summary judgment.

[00:26:19] Speaker 00:
Do you agree that we're reviewing this on de novo review or the 56 yes yes I do and I agree with my friend on the other side that in review of the dispersal order that was decided on a 56 that's the way Interpolator works and yes that was so this is being reviewed de novo.

[00:26:40] Speaker 05:
How about the release of the funds or the stay I mean

[00:26:46] Speaker 00:
Oh, the stay would be an abuse of discretion, as well as the order on show cause to deny discovery.

[00:26:55] Speaker 00:
Which, you know, I guess you could quibble with that order that denied Expeditors Washington the opportunity to pursue discovery, but that came before our motion for summary judgment where they could have submitted a 50-60 affidavit.

[00:27:08] Speaker 05:
The question is, they were asking for a stay of the release of the funds from the court's registry.

[00:27:15] Speaker 00:
there had been a stay in place yet in the judge king lifted it right that's right i was going to say you know one other thing about choosing to pursue this as an inner pleader i think my friend uh...

[00:27:32] Speaker 00:
sort of said, well, you know, there's nothing to pursue a writ of pre-judgment attachment down in Mexico.

[00:27:39] Speaker 00:
Well, there's these two accounts, both worth over a million dollars here in the United States.

[00:27:44] Speaker 00:
They could have pursued a writ of pre-judgment attachment against the Wells Fargo account, but the problem is that writ would put Expeditors Washington to the burden of having to prove the probable validity of the claim and the alleged ground for the attachment to exist.

[00:27:59] Speaker 00:
And that, but that's the process endorsed by Judge Kuhnauer in the case cited by Judge King.

[00:28:04] Speaker 00:
That's in the Zdurian case, which from the Central District of California that was reviewed and affirmed by this court.

[00:28:12] Speaker 00:
They're trying to use interpletor, in short, as like a super writ that allows them to get out of the obligations of pursuing a prejudgment writ of attachment.

[00:28:22] Speaker 00:
And that becomes even more clear if

[00:28:24] Speaker 00:
I guess, you know, what are we to do here if this court were to reverse?

[00:28:28] Speaker 00:
Is the court going to order that the funds be restored to the interpletor account in the court's registry?

[00:28:35] Speaker 00:
I guess if that's what they're asking for, that is in no way something that could be accomplished by a prejudgment writ of attachment.

[00:28:43] Speaker 00:
You know, a prejudgment writ of attachment, it says, here's an asset, we're going to attach it.

[00:28:47] Speaker 00:
It doesn't say, hey, we have a contingent claim against a potential defendant.

[00:28:51] Speaker 00:
We're worried about collections.

[00:28:53] Speaker 00:
Why don't you take some funds you have somewhere and put it into an account or into the court registry?

[00:28:58] Speaker 00:
So again, that just shows the extreme nature of expeditors Washington's position here.

[00:29:05] Speaker 00:
Um, you know, this is not like further, this is not like a situation where there are insurance proceeds.

[00:29:14] Speaker 00:
You know, there's a specific fund that is in dispute, right?

[00:29:17] Speaker 00:
We're just talking about a general contingent liability.

[00:29:20] Speaker 00:
They haven't identified how much it is.

[00:29:23] Speaker 00:
And so again, the idea that you should restore some NCOAP fund that is just beyond what this court ought to do.

[00:29:34] Speaker 00:
And I guess my other reaction to that is,

[00:29:38] Speaker 00:
You know, expeditors could have sought a stay of the disbursement pending appeal, but chose not to.

[00:29:46] Speaker 00:
And I'm not sure why it did, but, you know, it is hard to understand why we're here seeking to restore funds in a way that I would submit is inappropriate under interpletor procedures.

[00:30:00] Speaker 00:
So in short, Expeditors Washington cannot

[00:30:04] Speaker 00:
escape the judicial admissions, the expeditors, Mexico, it's the alleged injured party, they cannot assert an interest premised on a contingent liability that are untethered to the formerly interpleated funds.

[00:30:17] Speaker 00:
And any claims they still have under the Ninth Circuit order are related to a different fund, which is already frozen, and the Ninth Circuit's order does not change Judge King's analysis or rationale.

[00:30:29] Speaker 00:
Thank you.

[00:30:42] Speaker 03:
My time is limited, so I'm going to be very brief I have six points number one the state order was imposed by Judge Jones pursuant to report and recommendation by Magistrate Judge Toshida It was considered all plot out and explained itself Judge King Sue Espante lifted that stay her order lifting the state did not explain what she believed had changed

[00:31:03] Speaker 03:
Number two, the direct action has two different components to it.

[00:31:07] Speaker 03:
There is a declaratory judgment that is about the validity of an ability to exercise options.

[00:31:11] Speaker 03:
Those are not options exercised.

[00:31:13] Speaker 03:
That's the question.

[00:31:14] Speaker 03:
That's the dispute.

[00:31:15] Speaker 03:
The second piece has to do with options that have already been exercised and stock that's already been purchased.

[00:31:21] Speaker 03:
And the funds from those things, certainly some may be in fidelity.

[00:31:24] Speaker 03:
We don't know where they are.

[00:31:25] Speaker 03:
We don't have knowledge.

[00:31:27] Speaker 03:
Number three, there's no case we're aware of where an interpletor is resolved in favor of a party that has not shown demonstrated rightful ownership.

[00:31:35] Speaker 03:
Number four, the presumption of ownership argued none of the cases that are cited by Mr. Cadena's counsel satisfy or are absent to the facts here.

[00:31:44] Speaker 03:
They are all entirely disparate.

[00:31:47] Speaker 03:
Number five, the district court prohibited discovery, told us we couldn't do discovery, and did so before they filed summary judgment.

[00:31:57] Speaker 03:
Number six on summary judgment the movement has the burden The facts and inferences are construed against the movement and the only fact put forward by mr. Canania in his motion redistribution under rule 56 was the assertion I opened the account.

[00:32:13] Speaker 03:
That's it nothing else Thank you for your time.

[00:32:16] Speaker 02:
Thank you counsel.

[00:32:17] Speaker 02:
Thank you both very helpful arguments the matter will stand submitted and court is adjourned I