[00:00:00] Speaker 04:
We'll call case number 24-1311, CNM Resources versus Extraction Oil and Gas.

[00:00:10] Speaker 04:
Council, please proceed.

[00:00:17] Speaker 02:
Good morning, Your Honors.

[00:00:19] Speaker 02:
May it please the court, Stacey Burroughs on behalf of CNM Resources LLC and Winter Oil LLC, the appellants here.

[00:00:29] Speaker 02:
Your Honor, we're here today on a memorandum in order wherein the district court issued an order denying the appellant's motion to remand and issuing an order granting judgment on the pleadings as it relates to an exhaustion issue.

[00:00:44] Speaker 02:
So I'd like to start today by discussing the denial of the motion for remand.

[00:00:49] Speaker 02:
Did the district court err when it determined unilaterally to disregard a proof of claim that was attached to the reply brief in support of the appellant's

[00:00:58] Speaker 02:
motion to remand, and in doing so, did the district court err when deciding that a proof of claim was not intended to be other paper as defined within 28 USC 1446 B3?

[00:01:11] Speaker 04:
Okay, so the proof of claim was not attached to the motion to remand, it was to the reply.

[00:01:18] Speaker 02:
That is correct, Your Honor.

[00:01:20] Speaker 02:
Okay.

[00:01:20] Speaker 02:
It was addressed and attached as an exhibit to the roll reply, addressing the untimeliness of extraction oil and gases

[00:01:28] Speaker 02:
original removal.

[00:01:29] Speaker 04:
Let me ask you this, what on the motion to remand would have shown that the removal was untimely?

[00:01:37] Speaker 02:
Your Honor, the plaintiffs in that case relied on information that was discussed and disclosed in the original class action.

[00:01:47] Speaker 02:
As you may have appreciated at this point, this was the third iteration of the CNM resources class action that had been filed against extraction.

[00:01:55] Speaker 02:
In the earliest iteration of that case back in 2017, it was originally dismissed after some initial discovery had commenced.

[00:02:04] Speaker 02:
And there had been initial documents exchanged between the parties relating to the size of the case and the number of leases at issue.

[00:02:12] Speaker 02:
Extraction had attempted to ask the court to avoid producing the underlying agreements at issue.

[00:02:19] Speaker 02:
And there were discussions related to how big was this case going to be, how many leases were at issue,

[00:02:24] Speaker 02:
and what were those initial disclosure requirements.

[00:02:27] Speaker 02:
So there were discussions originally about what that value of that case would be, which is addressed later on in this and attached as a supplement to this.

[00:02:35] Speaker 02:
It was the appellants or the plaintiff's position early on in the motion that when extraction originally answered in one of the original complaints, that it had recalculated the damages due in owing and changed its methodology of paying royalties, that that triggered the notice of the intended

[00:02:52] Speaker 02:
removal of the case.

[00:02:53] Speaker 04:
Okay, how do I know that from the motion to remand though?

[00:02:58] Speaker 02:
That's included in the motion, that argument specifically about the recalculating of the damages due and owing and the changing the methodology going forward.

[00:03:09] Speaker 04:
Understood that you said it, but what is attached or referenced in the motion to remand?

[00:03:16] Speaker 04:
that the court could have put its hands around.

[00:03:19] Speaker 02:
Your Honor, I believe in the original record, the answer was identified as a specific document, but I'll go back and double check that specific docket record.

[00:03:26] Speaker 02:
So then we get to the response to the remand.

[00:03:29] Speaker 02:
Extraction of oil and gas firmly states to the court, we had no reason to believe that the amount at issue was more than the $5 million threshold until December of 2023 in the third iteration of this case when plaintiffs served the actual first round of discovery.

[00:03:46] Speaker 02:
I would suggest to the court that that was a misrepresentation to the underlying district court.

[00:03:50] Speaker 02:
We had already been, in this case, in litigations through 2017.

[00:03:55] Speaker 02:
In that 2019 case, there was a suggestion of bankruptcy filed by Extraction Oil and Gas.

[00:04:03] Speaker 02:
In direct response to those suggestions of bankruptcy, the plaintiff's appellants here filed a proof of claim in Extraction's Chapter 11 bankruptcy.

[00:04:13] Speaker 02:
declaring that the amount in controversy was $30 million.

[00:04:16] Speaker 04:
I mean, that's outside this case, and isn't that the problem?

[00:04:21] Speaker 04:
Isn't that the rub here, that the information that they had was from outside the case, and that they needed to be provided with notice from inside this case?

[00:04:35] Speaker 02:
I would suggest to you, Your Honor, that that was the district court's conclusion, and that's ultimately extraction's argument.

[00:04:42] Speaker 02:
But I would like to rebut that in two places.

[00:04:44] Speaker 02:
First of all, this court has never determined that 28 U.S.C.

[00:04:47] Speaker 02:
1446B.3 other paper requires that it be filed in the current or underlying state action.

[00:04:55] Speaker 04:
Do you have a case where they've said that it can be filed outside of the action?

[00:05:00] Speaker 02:
Your Honor, I would suggest that there is a plethora of case law from this court that suggests that it could be a

[00:05:06] Speaker 02:
exchange or communication not necessarily filed.

[00:05:09] Speaker 04:
Well, you said we've never held that.

[00:05:11] Speaker 04:
I want to know if there's a case that has held that it can be from outside.

[00:05:14] Speaker 02:
Your Honor, what this court has found is a demand letter that's never filed in the underlying state court action is in fact a communication triggering the removal requirement.

[00:05:25] Speaker 02:
This court has determined that a simple interrogatory response during an interrogatory or during

[00:05:33] Speaker 02:
Your Honor, this court has found, I think in two instances that I would like to talk about, one is the most recent Little Wendy's, that simply a demand letter that's never filed in the underlying state court action, but conferred a demand that equated to federal jurisdiction was enough to trigger acknowledge.

[00:05:49] Speaker 02:
Second, this court has determined that discovery responses, such as answering questions during a deposition or during interrogatories that are never filed in the state court action,

[00:05:59] Speaker 02:
triggered the notice of removal.

[00:06:01] Speaker 04:
Yeah, but those are both things that parties to the state court action are aware of.

[00:06:08] Speaker 02:
That's exactly what happened here.

[00:06:09] Speaker 04:
Parties to the state court action.

[00:06:12] Speaker 04:
Those were documents that were produced in connection with the specific state court action.

[00:06:18] Speaker 04:
There's a difference.

[00:06:19] Speaker 02:
And I would say that they're alike more than they're different, Your Honor, because the appellants here would never have had to file a proof of claim.

[00:06:27] Speaker 02:
had it not been for the suggestions of bankruptcy filed in this case.

[00:06:30] Speaker 02:
Unlike what the case saw that extraction is going to discuss and argue about, where it was far removed, such as Lewis.

[00:06:38] Speaker 02:
I think that's the primary case that the defendant and extraction wants to rely on.

[00:06:41] Speaker 02:
That was a proof of claim filed in a bankruptcy that predated the action at issue.

[00:06:46] Speaker 02:
This court has said there's two requirements.

[00:06:49] Speaker 02:
The notice must be after the action was filed.

[00:06:52] Speaker 02:
No question a proof of claim filed in August of 2020 is after the action was filed in 2019.

[00:06:59] Speaker 02:
And the notice must be clear and unequivocal.

[00:07:02] Speaker 02:
We've met both of those thresholds here.

[00:07:04] Speaker 02:
We've met that the proof of claim was submitted, served, and filed in an action against extraction, identifying CNM resources as the underlying case, identifying these exact parties, identifying the amount of controversy

[00:07:18] Speaker 02:
and identifying the fact that we are still pursuing those claims.

[00:07:20] Speaker 01:
But I'm a little confused.

[00:07:22] Speaker 01:
You say identifying this case as the actual case.

[00:07:26] Speaker 01:
I thought the case that identified was the bankruptcy case.

[00:07:29] Speaker 02:
Your Honor, in the proof of claim that we specifically cite to, and it is at the Appellant's Appendix 716 through 718, we specifically, who is the current creditor?

[00:07:41] Speaker 02:
CNM resources at all for the punitive class in case number 2019, CV 34705, pending district court for the city and county of Denver, Colorado.

[00:07:52] Speaker 01:
And is that the bankruptcy number or is that the district court number in our case?

[00:07:59] Speaker 02:
This is the district court case number in this case.

[00:08:02] Speaker 04:
Okay, so that's the state court case.

[00:08:05] Speaker 04:
And is that the particular case that was removed?

[00:08:08] Speaker 02:
Yes, Your Honor.

[00:08:10] Speaker 02:
So we have an identification of the exact parties, the case number, CNM resources representing a class.

[00:08:17] Speaker 01:
And what is that in the appellate record?

[00:08:20] Speaker 02:
It is appellate appendix 716 through 718.

[00:08:27] Speaker 03:
Council, as previously been noted though, the district court didn't even consider this proof of claim.

[00:08:33] Speaker 03:
It exercised its discretion to say because it wasn't part of the motion to remand,

[00:08:38] Speaker 03:
It wasn't going to consider what was then attached to the reply.

[00:08:41] Speaker 03:
Why would we then say that the district court abused that discretion when it exercised and not consider it, and why should we consider it now?

[00:08:52] Speaker 02:
Thank you for the question, Your Honor, and I think that it would be an abuse of discretion to specifically ignore or disregard relevant evidence about the district court's subject matter jurisdiction.

[00:09:02] Speaker 02:
whether it was a triggering event as to a procedural item, as to notice of removability.

[00:09:09] Speaker 02:
it still directly hinges on and connects to subject matter jurisdiction.

[00:09:13] Speaker 03:
So if your argument hinges that it's jurisdictional, I did note in your reply that you say that removal decisions are in fact part of the district court subject matter jurisdiction.

[00:09:25] Speaker 03:
I think you cited Soto Enterprises for that.

[00:09:28] Speaker 03:
But I mean, I think a fair reading in that case may be that it says the opposite.

[00:09:33] Speaker 03:
So does your argument then depend upon

[00:09:36] Speaker 03:
us determining that removal decisions are jurisdictional.

[00:09:42] Speaker 02:
Your Honor, I think a triggering event in a statutory removal statute is a subject matter jurisdiction question, and I think it is improper, and I think it is an error for the district court to specifically exclude that for two reasons.

[00:09:54] Speaker 02:
First of all, her reasoning as to why she excluded it, she said the district court

[00:09:59] Speaker 02:
I'm going to exclude it because it doesn't matter anyways.

[00:10:02] Speaker 02:
And that's because this paper was not filed in this action, which there's no case law from this court to support.

[00:10:07] Speaker 02:
The second point of that, Your Honor, is I think that there is an error because when you're looking at a motion for remand, it's considered to be similar to a motion to dismiss.

[00:10:17] Speaker 02:
The district court at that point is to be considering all of the evidence in the record to determine whether there is a valid claim issue similar to a motion to remand.

[00:10:25] Speaker 02:
The defendant had the court rely on two other cases, both Green and Conway.

[00:10:33] Speaker 02:
Both of those were summary judgment briefs where the court could disregard arguments first made in the reply.

[00:10:38] Speaker 02:
That's not what you have.

[00:10:39] Speaker 02:
First of all, you have here, we made the untimeliness argument in the motion.

[00:10:44] Speaker 02:
We attached additional evidence supporting the untimeliness in the reply.

[00:10:48] Speaker 02:
We are not like a summary judgment briefing here.

[00:10:51] Speaker 02:
We're more akin to a motion to dismiss.

[00:10:53] Speaker 02:
and its jurisdictional nature.

[00:10:56] Speaker 02:
For both of those reasons, I believe that the court erred in that nature.

[00:10:59] Speaker 02:
I would like to finish quickly.

[00:11:01] Speaker 02:
In 28 USC 1446 B3, state court and state proceeding is mentioned four times.

[00:11:10] Speaker 02:
Not one time in B3 is state court or state proceeding mentioned.

[00:11:15] Speaker 02:
If the legislature intended that other paper must be filed in the underlying state court or state proceeding, the legislature certainly knew how to do that, Your Honor.

[00:11:23] Speaker 02:
I would like to reserve the rest of my time, if I may.

[00:11:27] Speaker 04:
Thank you, Council.

[00:11:34] Speaker 00:
Good morning, Your Honors, and may it please the Court.

[00:11:36] Speaker 00:
My name is Eric Walther, and I represent Extraction Oil and Gas.

[00:11:41] Speaker 00:
This is the third iteration of the same lawsuit filed by Appellants against my client, all of which have failed.

[00:11:47] Speaker 00:
And many of the arguments in this appeal have already been considered and rejected by this court in the nearly identical Bolter case.

[00:11:55] Speaker 00:
After eight years of repeated failed lawsuits against my client, this appeal should receive a similar fate.

[00:12:01] Speaker 00:
Today, we're asking this court to affirm the district court because it correctly denied the motion to remand and it correctly granted the motion for judgment on the pleadings.

[00:12:09] Speaker 01:
And I'll start with the motion to remand.

[00:12:11] Speaker 01:
Those are two different issues.

[00:12:13] Speaker 01:
Is there any order in which they have to be addressed?

[00:12:16] Speaker 01:
If they remand, doesn't the district court not have jurisdiction to decide the motion to dismiss?

[00:12:23] Speaker 01:
And so if we decide that it should have remanded, doesn't that negate any concern about the order on the motion to dismiss because it was improper?

[00:12:34] Speaker 01:
Do you agree with that?

[00:12:35] Speaker 01:
I think that's right, Your Honor.

[00:12:37] Speaker 01:
So we really have to address whether it should have been remanded first.

[00:12:40] Speaker 01:
If it's yes, then we

[00:12:42] Speaker 01:
We vacate the order for dismissal, and we send it to the state court to decide.

[00:12:48] Speaker 01:
If we say it should not have been remanded, then we address the motion to dismiss.

[00:12:52] Speaker 00:
Do you agree with that?

[00:12:53] Speaker 00:
I think that's exactly right, Your Honor.

[00:12:54] Speaker 00:
So I will start with the motion to remand, and I do believe that the court's order on the remand should be affirmed.

[00:13:01] Speaker 00:
So the appellants do not dispute here that the district court had subject matter jurisdiction under CAFA.

[00:13:08] Speaker 00:
There was minimal diversity, a proposed class over 100,

[00:13:13] Speaker 00:
and the mountain controversy exceeded $5 million.

[00:13:15] Speaker 00:
Really, the only issue before the court is whether removal was timely under 1446b.

[00:13:21] Speaker 00:
Under the statute, the 30-day removal clock does not begin to run until the plaintiff provides the defendant with clear and unequivocal notice that the case is removable, either in the initial pleading or in an amended pleading, motion, order, or other paper.

[00:13:36] Speaker 00:
And it's the plaintiff's actions alone that start that 30-day clock.

[00:13:39] Speaker 00:
This court held in Akin

[00:13:41] Speaker 00:
that defendants have no obligation to investigate removability on their own, even when the complaint indicates that the case may be removable.

[00:13:48] Speaker 00:
In Peros, this court held that it will not inquire into the subjective knowledge of the defendant on removability or what the defendant should have inferred from a review of its own files.

[00:13:58] Speaker 00:
The relevant inquiry here is not what the defendant knew, but what the plaintiff's documents said.

[00:14:04] Speaker 00:
And it's undisputed that nothing that the appellants filed in the underlying state court case provided any notice that the amount in controversy exceeded $5 million.

[00:14:13] Speaker 00:
So appellants are arguing that two documents, both of which were filed in separate cases, constituted other papers.

[00:14:20] Speaker 00:
This proposed proof of claim, and we'll get to that why it's a proposed proof of claim, filed in a separate Delaware bankruptcy case and a hearing transcript from the original CNM-1 case.

[00:14:32] Speaker 01:
Are you saying the representation of the $5 million claim in a bankruptcy case was in a Delaware case and not in any case in this stream?

[00:14:43] Speaker 00:
That's correct.

[00:14:43] Speaker 00:
It was a separate case before a separate court in a separate state, a Delaware bankruptcy case.

[00:14:47] Speaker 01:
And was there any other representation of this $5 million other than in that Delaware bankruptcy case?

[00:14:54] Speaker 00:
That's the only one that I'm aware of.

[00:14:56] Speaker 00:
I mean, they're arguing that there was a hearing transcript from the original case that referenced a mountain controversy.

[00:15:01] Speaker 01:
The only reference to something over five million dollars here is from this Delaware bankruptcy case But it did involve the same parties is that right every is that right that extraction was Who is claiming bankruptcy in that case the debtor was extraction in that case so?

[00:15:24] Speaker 01:
Extraction didn't know about it.

[00:15:26] Speaker 01:
It just so that squarely raises the question whether the notification of over five million

[00:15:32] Speaker 01:
can be in a document outside of this litigation or whether it has to be inside this litigation.

[00:15:38] Speaker 00:
Yes, I think that's the issue.

[00:15:39] Speaker 01:
And that issue, apparently, the 10th Circuit hasn't weighed in on.

[00:15:43] Speaker 01:
And apparently, there's not much law out there elsewhere either.

[00:15:47] Speaker 00:
I disagree on you there.

[00:15:48] Speaker 00:
I have to push back a little bit because the overwhelming majority rule is that filings in another case cannot be another paper under the removal statute.

[00:15:56] Speaker 00:
Instead, other paper is limited to filings originating within the state court case.

[00:16:01] Speaker 00:
We cited over a dozen cases adopting that majority rule.

[00:16:05] Speaker 00:
Many of those cases collected dozens of other cases holding the same thing.

[00:16:09] Speaker 00:
My friend mentioned Lewis' case that applied this to the context of a proof of claim filed in a separate bankruptcy case for the same defendant.

[00:16:19] Speaker 00:
That's 205 Westlaw 503-317.

[00:16:24] Speaker 00:
So the overwhelming majority rule from the courts that have

[00:16:27] Speaker 00:
address this issue about a filing from outside the case that's being removed have, as far as we know, uniformly held that a filing in a separate case cannot be another paper.

[00:16:37] Speaker 04:
What about the interrogatory response and the letter that was filed in, as I understand it, this court case?

[00:16:46] Speaker 00:
So I think that my friend was referring to another case where a discovery response or a demand letter could be another paper.

[00:16:52] Speaker 00:
Those were examples of other papers.

[00:16:55] Speaker 00:
I would submit, though, that a

[00:16:56] Speaker 00:
Settlement demand sent from plaintiffs counsel in the state court to defendants counsel in the state court for the purpose of resolving the state court case is a paper Originating within the state court case same with interrogatory responses Responding to discovery served in the state court case those are all things Originating with this so if that had been done here you wouldn't contest that those were papers giving you notice

[00:17:20] Speaker 00:
Yeah, correct.

[00:17:21] Speaker 00:
But that didn't happen here, Your Honor.

[00:17:23] Speaker 00:
And I think it's important to note the rationale for this majority rule.

[00:17:26] Speaker 00:
There's both a statutory construction component and then a policy component.

[00:17:30] Speaker 00:
So in statutory construction, subsection B3 has this list, amended pleading motion, order, and other paper.

[00:17:37] Speaker 00:
And courts have concluded that because amended pleading motion and order implicitly refer to filings within the same case as the initial pleading, which is referenced in the statute, that the catch-all at the end, other paper, has the same limitation.

[00:17:51] Speaker 00:
And that's a rule of statutory construction discussed by the US Supreme Court in the Hall Street Associates case.

[00:17:56] Speaker 00:
So in addition to the statutory construction piece, the majority rule serves the same policy practicality considerations that this court discussed in the Peros case.

[00:18:06] Speaker 00:
So in Peros, this court explained that instead of wasting money, judicial resources, litigating about what the defendant knew or what the defendant should have known, this court created a bright line rule

[00:18:18] Speaker 00:
that the plaintiff has to give clear and unequivocal notice to avoid all that litigation within litigation.

[00:18:23] Speaker 00:
Those same policy considerations apply to this majority rule.

[00:18:27] Speaker 00:
Instead of litigating about what happened in some other case and whether the developments in that other case could or should have put the defendant on notice, courts require certainty by having a bright line rule that a plaintiff has to give their unambiguous notice within the state court case that's subject to removal.

[00:18:45] Speaker 00:
So here, if they wanted to start that 30-day clock, they could have easily done that by giving some notice on the amount of damages they're seeking in this case.

[00:18:54] Speaker 00:
They never did that.

[00:18:56] Speaker 00:
They didn't do it in their original complaint.

[00:18:58] Speaker 00:
They didn't do it in either one of their amended complaints.

[00:19:00] Speaker 00:
And most importantly here, they didn't do it in their initial disclosure.

[00:19:04] Speaker 00:
It was served shortly before the case was removed.

[00:19:06] Speaker 00:
This is volume 3, page 622 of the record.

[00:19:10] Speaker 00:
In that initial disclosure, which is supposed to include a computation of damages,

[00:19:15] Speaker 00:
Their computation of damages section said, we don't know what our damages are.

[00:19:19] Speaker 00:
We reserve the right to supplement this with the amount of damages we're seeking in this case after conducting discovery.

[00:19:26] Speaker 00:
That's not clear and unequivocal notice that the amount of controversy in this case exceeds $5 million.

[00:19:31] Speaker 01:
And that statement did not say, we don't know what our damages are, but we think it is in excess of $5 million.

[00:19:36] Speaker 01:
No reference to the $5 million figure at all.

[00:19:39] Speaker 00:
Not at all.

[00:19:40] Speaker 03:
Nothing.

[00:19:41] Speaker 03:
Counsel, can I assume that you disagree

[00:19:45] Speaker 03:
A removal defect is jurisdictional.

[00:19:49] Speaker 00:
Certainly.

[00:19:49] Speaker 00:
And I have the same read that you had of the Soto case.

[00:19:52] Speaker 03:
So how does that inform our review as to whether or not the district court abused its discretion and not even considering the claim?

[00:20:00] Speaker 00:
Certainly.

[00:20:00] Speaker 00:
So the question of whether it's another paper can be avoided.

[00:20:04] Speaker 00:
The court doesn't even need to get there because the district court acted well within its discretion to disregard this proof of claim.

[00:20:09] Speaker 00:
This court held in both Green and Conroy that when new evidence is attached to a reply brief, the district court has discretion to either disregard the new evidence or allow us to reply.

[00:20:19] Speaker 00:
As long as the district court picks one of those two options, it does not abuse its discretion, and it should not be reversed on appeal.

[00:20:27] Speaker 00:
So because this proof of claim was raised and attached for the first time in the reply brief, the district court acted well within its discretion to disregard it.

[00:20:34] Speaker 00:
And on this argument that the district court was somehow prohibited from disregarding it under the discretion that this court afforded it in Green and Conroy, I agree with you that a procedural defect, like untimeliness, is not the same thing as subject matter jurisdiction.

[00:20:49] Speaker 00:
And that was explained at length in the Soto decision.

[00:20:53] Speaker 00:
And just to put a fine point on that,

[00:20:56] Speaker 00:
Remand statute itself explains that motions to remand based on procedural defects like untimeliness have to be raised within 30 days or that argument is waived.

[00:21:06] Speaker 00:
It's an argument that can be waived.

[00:21:08] Speaker 00:
So because they were trying to use this proof of claim to establish a procedural defect, nothing was prohibiting the district court from exercising the discretion afforded to it by this court in both Green and Conroy.

[00:21:20] Speaker 00:
And that's important because this court can affirm the district court based on its exercise of discretion without even reaching this issue of whether the proof of claim was an other paper.

[00:21:29] Speaker 04:
Can you walk us through your bolter analysis?

[00:21:34] Speaker 00:
Sure.

[00:21:34] Speaker 00:
So turning to the motion for judgment on the pleadings, I guess I want to start by saying that there was no waiver by extraction on the collateral estoppel piece.

[00:21:42] Speaker 00:
This is not a situation where a new

[00:21:44] Speaker 00:
affirmative defense was allowed on the eve of trial or after the close of discovery.

[00:21:49] Speaker 00:
They certainly knew that this argument was coming.

[00:21:52] Speaker 00:
C&M 1 was dismissed for failure to exhaust.

[00:21:54] Speaker 00:
C&M 2 was dismissed based on collateral estoppel and a failure to exhaust.

[00:21:58] Speaker 00:
At the beginning of C&M 3, the parties filed the joint motion to stay the case pending the Antero Airport land decision.

[00:22:05] Speaker 00:
And in that motion, they expressly stated that extraction would likely be filing a motion to dismiss for the same reasons that C&M 1 and C&M 2 were dismissed.

[00:22:13] Speaker 00:
When the stay was lifted, the original answer by extraction asserted estoppel is an affirmative defense, and the answer to the third amendment complaint, the operative complaint expressly asserted collateral estoppel is an affirmative defense.

[00:22:27] Speaker 00:
So this waiver argument, Your Honors, should be rejected because they had a full fair opportunity and had full notice that collateral estoppel was a potential defense in this case.

[00:22:36] Speaker 00:
But even if there was a waiver, the district court under this court's holding in banks noted that it was choosing to raise this issue to a sponte, which it is allowed to do.

[00:22:46] Speaker 00:
They next argued that the district court applied the wrong law to its collateral estoppel analysis, which is an argument that this court considered and rejected in Boulder.

[00:22:57] Speaker 00:
So in Volter, the court explained that it doesn't matter if you apply Colorado law or federal law to the analysis, because the results are the same, the elements are the same, the analysis is the same.

[00:23:08] Speaker 00:
So to the extent they're arguing that this court should

[00:23:11] Speaker 00:
reverse its recent decision in Bolter, that should be rejected because there is no conflict between Colorado law and federal law.

[00:23:20] Speaker 00:
Both this court in the Park Lakes case and the Colorado Supreme Court in the N. Ray Tonko case held that for collateral estoppel, a dismissal for lack of subject matter jurisdiction is a final judgment on the merits for the issue of subject matter jurisdiction.

[00:23:35] Speaker 00:
So while it's not a final judgment on the merits of the underlying substantive claims,

[00:23:39] Speaker 00:
it does prevent re-litigation of the issue of subject matter jurisdiction.

[00:23:43] Speaker 00:
So there is no conflict between Colorado law and federal law on that issue.

[00:23:48] Speaker 00:
So there's no basis for this court to reverse its recent decision in Bolter, and certainly the district court did not err by simply applying the recent Bolter decision in its collateral estoppel analysis.

[00:23:59] Speaker 00:
And the last issue, this airport land in Tarot case was not an intervening change in law for purposes of collateral estoppel.

[00:24:08] Speaker 00:
an argument that was considered and squarely rejected under almost identical facts in Volter.

[00:24:13] Speaker 00:
First, this court noted that airport land could never be an intervening change in law for cases that were filed prior to airport land being decided.

[00:24:22] Speaker 00:
This third iteration was filed almost three years or maybe over three years before airport land was decided.

[00:24:29] Speaker 00:
But even then,

[00:24:30] Speaker 00:
This court noted in Bolter that airport land did not change or even address the exhaustion issue that was present in both the Bolter case and this case.

[00:24:39] Speaker 00:
You still have to start your journey if you're a plaintiff with the commission, and you can't file your case until you get a declination of jurisdiction from the commission.

[00:24:46] Speaker 00:
So airport land was not an intervening change in law under this court, as noted by this court in the recent Bolter decision.

[00:24:54] Speaker 00:
So in closing, your honors, this is a clear case for collateral estoppel.

[00:24:57] Speaker 00:
Two prior courts held that appellants needed to exhaust administrative remedies before filing suit.

[00:25:03] Speaker 00:
So the district court correctly held that appellants were collaterally stopped from relitigating the exhaustion issue for a third time.

[00:25:10] Speaker 00:
As a result, this court should affirm the district court's order granting the motion for judgment on the pleadings.

[00:25:15] Speaker 00:
Unless the court has any questions, I'll conclude there.

[00:25:19] Speaker 00:
Thank you.

[00:25:21] Speaker 04:
Thank you, counsel.

[00:25:24] Speaker 04:
Looks like we have three minutes and 11 seconds.

[00:25:27] Speaker 02:
Thank you, Your Honor.

[00:25:28] Speaker 02:
And I have about three short points to make.

[00:25:30] Speaker 02:
I'd like to start with the equitable stopple argument and the utilization or reliance on Bolter.

[00:25:36] Speaker 02:
If you look back at the Bolter action, that was actually filed in federal court.

[00:25:40] Speaker 02:
So the district court in that case was actually applying federal jurisdiction, federal law to the collateral stopple argument.

[00:25:49] Speaker 02:
Colorado law is different.

[00:25:51] Speaker 02:
The elements are very similar, but under Colorado's substantive law, you have to have a final judgment on the merits for collateral estoppel to apply.

[00:25:58] Speaker 02:
We argued that, and we argued for that reason, the court must consider futility.

[00:26:03] Speaker 02:
If you look at the supplements that were filed by the appellants here, we went to the commission after receiving that order.

[00:26:09] Speaker 02:
We went and we argued.

[00:26:11] Speaker 02:
First of all, extraction tried to stay the commission decision until this court ultimately ruled from the 10th Circuit.

[00:26:18] Speaker 02:
Then extraction argued that there should be additional delays related that the applicant should have to file an amended application of the commission because they didn't understand the claims at issue.

[00:26:27] Speaker 02:
And then ultimately, once a hearing was held, the hearing officer found that extraction admitted that there was a breach, there was a contract disputed issue.

[00:26:35] Speaker 02:
This has been a lot to do about nothing.

[00:26:37] Speaker 02:
At the end of the day, extraction actually admitted there was a bona fide contract disputed issue.

[00:26:42] Speaker 02:
Going to the commission was simply

[00:26:44] Speaker 02:
a red herring to avoid ultimately coming to the ultimate conclusion here, whether there's been a breach of contract.

[00:26:51] Speaker 02:
We're eight years into this case, and we haven't even started the breach of contract yet.

[00:26:55] Speaker 02:
Everything up to this point has been a dismissal without prejudice.

[00:26:58] Speaker 04:
Well, you could have exhausted before you found the first case.

[00:27:01] Speaker 02:
And I would tell you, Your Honor, I was before the commission in about 10 other cases.

[00:27:04] Speaker 02:
And the commission was staying those cases pending the decision from airport land.

[00:27:09] Speaker 02:
The commission in 30 years has never accepted a breach of contract case.

[00:27:13] Speaker 02:
where there was a written document between the parties, never, not one, 30 years.

[00:27:17] Speaker 02:
So we reasonably believe that that was going to be the initial going forward, that the defendant would recognize that the commission was never going to take these cases, and Colorado Golden States is direct point on law, that if you have a futility argument, that going to the commission is never going to take jurisdiction of these, never going to resolve these disputes, because it hasn't in 30 years since these statutes have been in place.

[00:27:39] Speaker 04:
So let me ask you a question.

[00:27:42] Speaker 02:
So you've been to the commission now have they they have rejected your your Claim and now it's exhausted completely your honor It's in our supplemental submission the hearing officer found that extraction actually when questioned during the hearing Admitted there was a bona fide dispute as to contract interpretation thus Removing it from the commission's jurisdiction the commission never had jurisdiction over this breach of contract issues It was always intended to be in front of the court

[00:28:09] Speaker 02:
We've just been delayed for eight years to get to that breach of contract dispute based on this argument that we had to exhaust first.

[00:28:15] Speaker 02:
So that's the first thing I want to raise.

[00:28:17] Speaker 02:
The second thing I want to raise is the defendant here, my friend, argued that plethora of case law about what other paperments, it always means filed another state action.

[00:28:26] Speaker 02:
I think if you generally review

[00:28:28] Speaker 02:
28 USC 1446 and not specifically B3, you could make that argument.

[00:28:34] Speaker 02:
But remember, B3, unlike the other provisions specifically in 28 USC 1446, does not contain other papers filed in the state action, conducted in the state proceeding, any of that specific language.

[00:28:48] Speaker 02:
The legislature knows what it's doing when it's writing its statutes, we hope, and we appreciate that.

[00:28:55] Speaker 02:
So when we look at this and we see other provisions that say,

[00:28:58] Speaker 02:
other discoveries submitted in the state action or state proceeding, we know exactly what they intended.

[00:29:03] Speaker 02:
This other paper under 1446B3 has always been interpreted by this court to be broadly and functionally.

[00:29:12] Speaker 02:
You said that in Huffman.

[00:29:14] Speaker 02:
You said that in Perot's properties.

[00:29:16] Speaker 02:
And you recently said that in Little versus Wendy's.

[00:29:19] Speaker 02:
Broadly and functionally, did that proof of claim provide notice?

[00:29:23] Speaker 02:
Was it served on extraction?

[00:29:24] Speaker 02:
Did it define what the alleged amount controversy was?

[00:29:28] Speaker 02:
No question, answers to voters.

[00:29:29] Speaker 01:
Are any of these other cases, federal cases, where the notice was in a separate proceeding?

[00:29:40] Speaker 02:
None in a separate proceeding necessarily, Your Honor, but I would argue to you that a proof of claim is akin to, if not identical to, a demand letter.

[00:29:48] Speaker 02:
What the purpose of that proof of claim was is identical to making a demand against a defendant.

[00:29:53] Speaker 01:
Do any of those cases rely on a demand letter?

[00:29:56] Speaker 01:
filed in a separate case?

[00:29:58] Speaker 02:
No.

[00:29:59] Speaker 02:
This demand letter was related to the underlying state court action.

[00:30:02] Speaker 02:
It was never served or probably never filed.

[00:30:04] Speaker 02:
I'm assuming it was subject to 408, FRE.

[00:30:07] Speaker 01:
But always in this case, whereas this bankruptcy matter had a separate filing number, it was a separate case, even though it involved the same parties in some of the same issues.

[00:30:19] Speaker 02:
It did, Your Honor, but it was triggered by the filing in this case of the suggestions of bankruptcy.

[00:30:23] Speaker 02:
But for that, these plaintiffs' appellants would have never had to file their proof of claim in the bankruptcy court.

[00:30:29] Speaker 02:
So when you look at the case law that the defendant relies on, stating that it needs to be created from or resulting from the underlying action, we fit within that type of definition.

[00:30:39] Speaker 02:
What the federal courts, when they've analyzed this, Your Honor, they've looked at, there was a demand letter two cases ago that was filed over here, a little bit different defendant set up, or they've looked at a proof of claim that was filed before the action.

[00:30:53] Speaker 02:
No one has had the appreciation of these facts.

[00:30:57] Speaker 02:
Where you had a defendant file a suggestion of bankruptcy in the underlying state court action, the plaintiffs come back and say, we need to tell the defendant now what we think this claim is worth so we can preserve our claim.

[00:31:08] Speaker 02:
So this is unlike any other facts, Your Honor.

[00:31:10] Speaker 04:
Thank you, counsel.

[00:31:10] Speaker 04:
You're out of time.

[00:31:11] Speaker 02:
Thank you.

[00:31:12] Speaker 04:
Sorry, Your Honor.

[00:31:12] Speaker 04:
Whatever.

[00:31:12] Speaker 04:
Oh, no.

[00:31:13] Speaker 04:
It's all right.

[00:31:14] Speaker 04:
It was all helpful.

[00:31:15] Speaker 04:
So thanks to both counsel for your arguments today.

[00:31:19] Speaker 04:
The case will be submitted, and counsel are excused.