[00:00:01] Speaker 02:
Case number 18-7161, Klobobu et al., defendant, Yung Tzu Lee vs. Yabu Ying et al., Mr. Wong for the offense, Mr. Isbel for the offense.

[00:00:17] Speaker 00:
May I please the court?

[00:00:23] Speaker 00:
Time is long for the plaintiffs.

[00:00:26] Speaker 00:
Your Honors, the mere fact that this hearing is even taking place is, for my clients, a triumph.

[00:00:33] Speaker 00:
In China, it's routine for people with money and connections to wield power with impunity.

[00:00:40] Speaker 00:
And for a time, that's exactly what my clients feared would happen here, that no one would ever be held to account for the profound corruption of the Yahoo Human Rights Fund at the heart of this case.

[00:00:52] Speaker 00:
And in justice, Your Honors, that defendants have all but admitted

[00:00:55] Speaker 00:
and one that continues unaddressed to this day.

[00:01:01] Speaker 00:
Now we're here on a Rule 12b6 motion to dismiss a complaint subject to Rule 8 pleading standards.

[00:01:10] Speaker 00:
As such, this appeal asks two main questions.

[00:01:13] Speaker 02:
Let me interrupt you.

[00:01:17] Speaker 02:
Your action is not a class action, correct?

[00:01:22] Speaker 00:
That's correct.

[00:01:23] Speaker 02:
And so what, if any, estoppel would there be from other potential beneficiaries for bringing another suit?

[00:01:35] Speaker 02:
Let's see, even if you were to bring this suit to conclusion, let's assume that we reverse and send it back, and then you lose on the merits.

[00:01:50] Speaker 02:
What's to stop somebody else from bringing the same lawsuit?

[00:01:54] Speaker 00:
Well, I suppose that would depend on the reason it was, we lost on the merits, to be honest.

[00:01:59] Speaker 02:
Let's suppose the district court finds that there's no trust.

[00:02:04] Speaker 02:
No trust was created and we affirm that.

[00:02:07] Speaker 02:
What's to stop somebody else from bringing another lawsuit?

[00:02:11] Speaker 00:
Well, I believe that would be a final judgment of the merits and wouldn't be dispositive of the issue of whether a trust exists in this case.

[00:02:18] Speaker 02:
Even if they weren't a member of the plaintiff class?

[00:02:21] Speaker 00:
I believe so, under res judicata, Your Honor.

[00:02:32] Speaker 02:
The Hooker case was a class action.

[00:02:35] Speaker 02:
So it was clear that any member of the class would be bound by race to the cattle.

[00:02:41] Speaker 02:
I mean, ordinarily, non-parties aren't bound by race to the cattle, right?

[00:02:48] Speaker 00:
That's right.

[00:02:49] Speaker 00:
But I believe even now, it would be perhaps

[00:03:00] Speaker 00:
collateral estoppel, the issue of whether a trust exists has been litigated and decided in this case.

[00:03:10] Speaker 00:
And I think it – I'm not sure it matters whether you're a member of this formal – you know, the fact that we haven't brought this as a class action means that another beneficiary could try again without risking

[00:03:26] Speaker 00:
collateral estoppel.

[00:03:27] Speaker 02:
Well the reason I'm asking about this is that it seems that the fundamental purpose of this, you know, exception was to allow private suits in circumstances where they couldn't be repetitive and so where they wouldn't deplete the trust assets and kind of be harassing to the trustees.

[00:03:52] Speaker 02:
So this is a pretty important issue.

[00:03:56] Speaker 02:
And that seems to have been an underlying rationale that the DC Court of Appeals used in Hooker and also in Family Federation.

[00:04:12] Speaker 02:
So it seems to me that it's a problem for you if indeed there could be repeat litigation.

[00:04:22] Speaker 02:
And there's already been repeat litigation here, right?

[00:04:24] Speaker 02:
Because one of your plaintiffs had brought claims previously, right?

[00:04:31] Speaker 00:
Not under a trust theory.

[00:04:33] Speaker 00:
Certainly not to enforce the humanitarian fund that we're seeking to enforce here.

[00:04:38] Speaker 00:
Now, to your honest concern about repeat litigation, there are a number of protections in Hooker that we meet here that would apply.

[00:04:45] Speaker 00:
One of the most important ones being the nature of the challenge of conduct.

[00:04:50] Speaker 00:
So as Your Honor will recall, the second prong of the hooker test is that the nature of the challenge conduct has to be something egregious, something that's not something that's committed to the discretion of the trustees.

[00:05:06] Speaker 00:
So when my colleagues say that, you know, warn about a rash of

[00:05:11] Speaker 00:
litigation that's going to result from people challenging spending decisions from 12 years ago.

[00:05:15] Speaker 00:
That's not what this case is about.

[00:05:18] Speaker 00:
This case is about something deeply fundamental, which is the termination, the complete termination of this fund entirely.

[00:05:27] Speaker 00:
And under Hooker, that is one of the key protections for preventing the concerning honor just raised.

[00:05:37] Speaker 02:
I'm turning to the merits of whether.

[00:05:42] Speaker 04:
Family Federation, this is another case where standing was granted with respect to extraordinary circumstances, is that right?

[00:05:51] Speaker 04:
Correct.

[00:05:51] Speaker 00:
Was that a class action?

[00:05:53] Speaker 04:
It was not.

[00:05:57] Speaker 04:
There's a possible answer to the questions that we've been discussing here that that's what makes this different, that it's an extraordinary circumstance.

[00:06:07] Speaker 04:
It's not just to get benefits from a trust, it's to prevent the trust from being lost altogether and that those extraordinary circumstances only happen once.

[00:06:19] Speaker 00:
That's exactly right, Your Honor.

[00:06:20] Speaker 00:
In fact, if we hadn't been able to show that, we wouldn't have special interest.

[00:06:24] Speaker 00:
You're talking a little louder.

[00:06:25] Speaker 00:
I'm sorry.

[00:06:25] Speaker 00:
If we hadn't been able to show the extraordinary circumstance, we wouldn't be able to plead special interest in the first place.

[00:06:31] Speaker 00:
I think it's telling, Your Honor, that defendants have never challenged that we've met that problem.

[00:06:36] Speaker 00:
They've conceded that this is an extraordinary circumstance.

[00:06:41] Speaker 00:
Now, on Family Federation.

[00:06:42] Speaker 00:
I interrupted Judge Wilkins.

[00:06:45] Speaker 02:
No, thank you for that.

[00:06:48] Speaker 02:
What are we to make of the significance of the trust that was created in 2009?

[00:06:55] Speaker 00:
Well, Your Honor, I think it actually proves that the document in 2007 manifested trust intent for two reasons.

[00:07:10] Speaker 00:
So by its own terms, the documents creating the 2009 trust said that it was being created pursuant to the settlement.

[00:07:19] Speaker 00:
Now, how could a trust be created pursuant to a document that, as my colleagues say, disclaims trust intent?

[00:07:28] Speaker 00:
So that's one reason.

[00:07:30] Speaker 00:
The second reason is that think about where the money for the 2009 trust came from.

[00:07:36] Speaker 00:
It came from bank accounts in the LRF's control.

[00:07:41] Speaker 00:
And yet, the donor of that trust was deemed to be Yahoo.

[00:07:46] Speaker 00:
Now, there's only one explanation for this, which is that money might have been in the LRF's bank account, but it didn't belong to the LRF.

[00:07:53] Speaker 00:
And that's because the LRF was holding it as a trustee.

[00:07:57] Speaker 00:
It didn't have full title for the money.

[00:07:59] Speaker 00:
And the lack of full title, divided title, is the defining feature of all trusts, including charitable trusts.

[00:08:07] Speaker 00:
So I don't think the 2009 document helps defendants at all.

[00:08:11] Speaker 00:
In fact, I think it veritably proves that there was trust intent in 2007.

[00:08:18] Speaker 02:
How do we know that the donor was Yahoo for that trust?

[00:08:21] Speaker 02:
It says it explicitly, Your Honor.

[00:08:25] Speaker 02:
Is that at, what is that, JA 192?

[00:08:33] Speaker 01:
129.

[00:08:33] Speaker 01:
132 says.

[00:08:36] Speaker 01:
J-132 says disagreement of declaration of trust between Yahoo and parenthetical of the donor.

[00:08:43] Speaker 00:
That's right.

[00:08:43] Speaker 01:
Is that?

[00:08:44] Speaker 01:
Yes.

[00:08:44] Speaker 01:
That's the relevant part?

[00:08:45] Speaker 00:
Yes.

[00:08:52] Speaker 00:
Now turning to the other reasons that we believe that we've clearly met our pleading standard here for trust intent.

[00:09:05] Speaker 00:
The law is clear that this is a broad and fact-specific inquiry.

[00:09:09] Speaker 00:
Trust intent is a fact-specific inquiry.

[00:09:11] Speaker 00:
As the Family Federation Court put it, and by the way, the Family Federation case is also about a charitable trust.

[00:09:20] Speaker 00:
Trust intent may be established by written or spoken language or by conduct in light of all surrounding circumstances.

[00:09:29] Speaker 00:
Now remember, Your Honors, there, the lone allegation in support of trust intent was that 30 years earlier, the donor had orally instructed someone to open a bank account for the church's benefit.

[00:09:44] Speaker 00:
Over strenuous objections, the court there, citing the standard I just described, held that that was enough to meet the plaintiff's pleading group.

[00:09:54] Speaker 00:
By comparison, Your Honors, our allegations here are frankly an embarrassment of riches.

[00:10:00] Speaker 00:
And to list just a few examples, here we've alleged that there was a written directive that all relevant payments were to be, and I quote, made in trust to the LRF.

[00:10:12] Speaker 00:
We have a written set of instructions using mandatory language, which this court, in the Beckett case, held as a hallmark of trust intent.

[00:10:21] Speaker 00:
that the LRF could spend the money on, quote, three purposes only, the first of which was humanitarian assistance.

[00:10:30] Speaker 00:
We have an undisputed allegation that Yahoo was motivated, at least in part, by humanitarian and charitable impulses, which isn't necessary for charitable trust intent, but certainly supports it.

[00:10:43] Speaker 00:
We have a written prohibition on commingling, which courts routinely cite as evidence of trust intent.

[00:10:51] Speaker 00:
We have an allegation that the LRF in fact did not commingle, which the case law also says supports trust intent.

[00:10:59] Speaker 00:
And we have paragraphs upon paragraphs of written instructions restricting how the LRF could use the money, which further undermines the notion that it was somehow some kind of gift to the LRF, which the district court's holding would seem to imply.

[00:11:17] Speaker 01:
Can I ask this question, which is how does the pleading standard, you've referenced the pleading standard a couple times, how does it interact with the subsequent courts of events under the way you're looking at the case?

[00:11:26] Speaker 01:
In other words, you think the district court got it wrong under the pleading standards on the threshold question of whether there's an intent to create a charitable trust.

[00:11:36] Speaker 01:
And then there's also the second question of whether there's standing because the hooker criteria are met.

[00:11:43] Speaker 01:
and then there's a plausibility overlay that accompanies the fact that the resolution was made under 12.6.

[00:11:50] Speaker 01:
And so if we were to rule in the way that you wanted us to rule, if the court was to rule the way you wanted the court to rule, which is to say, actually both of those get past the plausibility standard, then what's left to be done on those issues?

[00:12:05] Speaker 00:
You mean as the case proceeds?

[00:12:07] Speaker 01:
Yeah, because it's one thing to say that it's plausible

[00:12:12] Speaker 01:
to say that you've done enough under the intent to create a trust and then under the hooker question.

[00:12:18] Speaker 01:
And then by hypothesis then something more would be done to determine whether it's not just plausible but actually you get all the way home.

[00:12:27] Speaker 01:
And what else is there that would happen in the proceedings that we don't already know about?

[00:12:33] Speaker 00:
Well, on trust intent, Your Honors, our position is that we've basically proved it.

[00:12:38] Speaker 00:
But I mean, some of the discovery that might go into this issue from the defendant's perspective, for example, or from everyone's perspective is, for example, emails.

[00:12:48] Speaker 00:
Emails that if the defendants are using the words trustees to describe themselves, I think that would be probative.

[00:12:58] Speaker 01:
How about on the second question, on the hooker one?

[00:13:01] Speaker 01:
So on the trust one, I take your point.

[00:13:03] Speaker 01:
How about on the standing question?

[00:13:05] Speaker 00:
Well, to play devil's advocate, if I were a defendant, I would probably take discovery on whether my clients, in fact, are Chinese.

[00:13:13] Speaker 00:
This has been in prison.

[00:13:15] Speaker 00:
for freedom of expression, for exercising their freedom of expression, issues like that, I would take discovery on what is the actual size of this beneficiary class.

[00:13:26] Speaker 04:
What about the question you refer to subsequent guidelines and refinements as to who the class is?

[00:13:35] Speaker 04:
So I take it that kind of discovery would reinforce your view that it's limited only to

[00:13:42] Speaker 04:
Chinese who have been imprisoned for statements on the internet.

[00:13:48] Speaker 04:
So a few things, Your Honor.

[00:13:49] Speaker 04:
It would clarify that it's narrowed in that way.

[00:13:54] Speaker 00:
So just backing up a bit, we don't say that the class is exclusively limited to Chinese dissidents, but discovery- The purposes of this case where you only have to be sufficiently representative with a special interest

[00:14:11] Speaker 04:
to raise that issue.

[00:14:13] Speaker 04:
That's a separate issue from who's in the whole class, isn't it?

[00:14:18] Speaker 04:
You want to stop an extraordinary event.

[00:14:21] Speaker 04:
That's right.

[00:14:21] Speaker 04:
That purpose, the DC law, is you don't have to be the same as everybody in the class.

[00:14:28] Speaker 04:
I don't mean in the class of the sense of a class action, but in the class of beneficiaries.

[00:14:33] Speaker 04:
That's right.

[00:14:35] Speaker 04:
So, for example,

[00:14:37] Speaker 04:
It wasn't, even though all people who might someday move into the hospital might someday become old enough, but right now our young women, people who are not in that situation but in fact have lived in the hospital and were old enough, in the house, I'm sorry, would be sufficient.

[00:15:00] Speaker 00:
That's right.

[00:15:01] Speaker 00:
Under Hooker, basically take a snapshot at the time of the lawsuit and don't worry about

[00:15:06] Speaker 00:
you know, people who might become beneficiaries in the future, and under hooker you also focus on preferred beneficiaries.

[00:15:16] Speaker 00:
So some discovery on the guidelines, for example, might include that

[00:15:22] Speaker 00:
For example, emails like the Samway email we attached to our second amended complaint, where defendants are saying, this fund is really meant for Chinese online dissidents.

[00:15:35] Speaker 00:
And Harry Wu, the LRF, you guys are deviating from that.

[00:15:42] Speaker 00:
I see my time has expired, John.

[00:15:44] Speaker 04:
There's a few statements in your amended complaint

[00:15:53] Speaker 04:
Paragraph 33 and Paragraph 49, the first about a meeting in an anteroom, and 49 about draft guidelines, and 49 and 50.

[00:16:19] Speaker 04:
Presumably you have witnesses who verify those statements.

[00:16:23] Speaker 04:
Certainly, Your Honor.

[00:16:24] Speaker 04:
So that would, I take it, be the subject of deposition at least for summary judgment.

[00:16:31] Speaker 04:
Is that right?

[00:16:33] Speaker 04:
Absolutely.

[00:16:35] Speaker 04:
The guidelines that you refer to at 4950, we don't have those, is that right?

[00:16:39] Speaker 04:
These are guidelines that

[00:16:42] Speaker 00:
Right.

[00:16:43] Speaker 00:
Those are not the guidelines that defendants attached to their motion.

[00:16:47] Speaker 00:
The guidelines that are cited in the complaint predate those guidelines.

[00:16:51] Speaker 00:
So these are something you would be looking for in discovery?

[00:16:53] Speaker 04:
Absolutely.

[00:16:57] Speaker 04:
Questions?

[00:17:11] Speaker 03:
May it please the court, Matt Fitzgerald for the appellees.

[00:17:16] Speaker 03:
For two separate independent reasons, the judgment of the district court should be affirmed in this case.

[00:17:22] Speaker 03:
First, the simpler of the two is no standing.

[00:17:26] Speaker 03:
That is, the plaintiffs in this case lack standing under Hooker versus Edith's home to enforce this charitable trust.

[00:17:35] Speaker 03:
Hooker created a narrow exception to the general rule that only the Attorney General may sue to enforce a charitable trust.

[00:17:46] Speaker 03:
That narrow exception requires a special interest, and that's defined as a small class that is limited in number and sharply defined.

[00:17:56] Speaker 03:
In applying that rule in Hooker, the court found standing for a class that was limited to female, elderly, indigent widows in certified good health who were residing or willing to reside in the Georgetown neighborhood of Washington D.C.

[00:18:13] Speaker 03:
The case was fundamentally about an 18-room boarding house that through 80 years had never been full.

[00:18:20] Speaker 03:
The size and scope of the class in that case is fundamentally different than the one the plaintiffs claim here.

[00:18:29] Speaker 03:
The class here, straight from the alleged trust document, is, quote, primarily to persons in or from.

[00:18:36] Speaker 01:
So can I ask, on the hooker, in discussing a prior case YMCA, the court said, for our purposes, YMCA merely underscores that the essence of a special interest in a charitable trust is a particularized interest distinct from that of members of the general public.

[00:18:52] Speaker 01:
So it's conceiving of the work being done by this filter as distinguishing the circumstances from ones in which you're just talking about the generalized interest of members of the public.

[00:19:06] Speaker 01:
And at that level of generality,

[00:19:08] Speaker 01:
Do you think that there's something narrower going on here?

[00:19:12] Speaker 03:
Well, Your Honor, yes, something narrower is going on here because in some sense every beneficiary class is somewhat narrower than the entire public.

[00:19:22] Speaker 03:
A classic charitable trust would be safe for a church or a certain religious purpose.

[00:19:28] Speaker 03:
But we have examples of the application of the Hooker Rule to churches that find the standing still too broad.

[00:19:36] Speaker 03:
So for instance, the Williams case, Williams versus Board of Trustees, the court was looking at a class that was composed of people who regularly attended or donated money to a single church in a single place and still found it uncertain and limitless.

[00:19:51] Speaker 03:
And so I think what's really being gotten at there is it needs to be a small class, sharply defined, limited in number, so that the court can feel like the whole issue is in front of it when these people have come forward.

[00:20:06] Speaker 03:
And so what we have here is six or seven people.

[00:20:10] Speaker 02:
What do you mean the whole issue is in front of it?

[00:20:13] Speaker 02:
Meaning that there will be collateral estoppel

[00:20:20] Speaker 02:
If someone else comes forward on that same issue, I'm not sure I understand what you mean.

[00:20:29] Speaker 03:
explain where this rule that requires sharply defined and limited in number comes from.

[00:20:35] Speaker 03:
And when we look at Hooker and we look at Williams, what it appears that the court is worried about is that when you have a small number of a much larger class coming forward, there could be these sorts of problems.

[00:20:49] Speaker 03:
There could be repeated litigation.

[00:20:51] Speaker 03:
There could be other people part of the beneficiary class.

[00:20:54] Speaker 03:
who have different interests, who wish that the money were used for some other specific thing or would like more of it for themselves?

[00:21:02] Speaker 02:
Well, the thing that's kind of counterintuitive about that is that, I mean, it seems that the basic underpinning of Hooker is we don't want repetitious lawsuits.

[00:21:16] Speaker 02:
So one way to deal with that is to have a class action and everybody in the class is bound.

[00:21:22] Speaker 02:
So that would kind of counsel towards bigger classes.

[00:21:27] Speaker 02:
But you're saying, no, the class should be smaller and kind of more carefully carved out and narrowly identified so that the whole issue is before the court.

[00:21:40] Speaker 02:
But that's kind of, I mean, I'm just trying to get an understanding of where your argument takes you.

[00:21:49] Speaker 03:
Sure.

[00:21:52] Speaker 03:
One way to do it is to just compare this case to Hooker.

[00:21:56] Speaker 03:
So in Hooker, it's this carefully defined class.

[00:22:01] Speaker 03:
The trust in that case had been operating for like 80 years, and they had had very few applications.

[00:22:09] Speaker 03:
They were struggling to fill this 18-room house.

[00:22:11] Speaker 03:
And so when a handful of people came forward, and the court did, contrary to what the plaintiffs say,

[00:22:18] Speaker 03:
project forward in a way in Hooker because it pointed out that part of the reason there was such a problem getting more people to come forward and want to be in the class

[00:22:28] Speaker 03:
is that the house wouldn't let you live there anymore once your health declined in old age.

[00:22:34] Speaker 03:
And so they said it makes sense that they've had a really hard time finding anyone.

[00:22:39] Speaker 03:
So you're just looking at a scale that's so different than in this case.

[00:22:42] Speaker 03:
Because here, even according to what the plaintiffs say, they say it's 800 to 1,200 people spread around the world.

[00:22:50] Speaker 03:
And they seem to acknowledge, I think, that if the Chinese government or another government, but particularly the Chinese government, to take their narrowest view, were to crack down on dissidents tomorrow, there could be hundreds or thousands of new class members without warning who haven't been spoken for and don't have any say.

[00:23:09] Speaker 02:
In Hooker, didn't the court acknowledge that the class there

[00:23:14] Speaker 02:
could be in the hundreds or perhaps even in the thousands.

[00:23:17] Speaker 02:
Didn't they say that?

[00:23:19] Speaker 03:
I don't think that that was alleged in Hooker, Your Honor, but the actual analysis in Hooker where they defined the class and they looked at who the people were and they discussed the history of difficulty finding any applications, I don't think they acknowledged that the actual plausible class was of that size.

[00:23:38] Speaker 04:
Isn't the emphasis on Hooker, though, on the fact that

[00:23:45] Speaker 04:
The trust was at a crossroads and that if these representatives were not permitted to stop the transfer, that would be the end of that.

[00:23:53] Speaker 04:
entity altogether and isn't that really what's the real motivating factor behind permitting this kind of substitute for the Attorney General that if these representatives can't bring it then no one can and the argument that others may want something different, well once the fund is eliminated there won't be anything different for those people.

[00:24:17] Speaker 03:
Well, Your Honor, there are, there's of course the Attorney General who can enforce it.

[00:24:22] Speaker 03:
This situation could also have been enforced by Yahoo under their pleading as the alleged... The allegation is that Yahoo is the wrong door here, so that seems unlikely that they would be enforcing it.

[00:24:34] Speaker 04:
We have to accept that.

[00:24:36] Speaker 04:
I'm not saying they are the wrongdoer.

[00:24:38] Speaker 04:
I'm just saying that's the allegation.

[00:24:40] Speaker 04:
So the idea that Yahoo would be enforcing the prevention of a transfer that Yahoo wants seems very... it doesn't seem like you've got the right alternative representative.

[00:24:52] Speaker 03:
Well, Your Honor, there's no reason to believe that the Attorney General doesn't do its job.

[00:24:57] Speaker 04:
But the whole point of Hooker is the Attorney General has a big job with lots of different things to do.

[00:25:02] Speaker 04:
And by the way, he wasn't called the Attorney General then.

[00:25:05] Speaker 04:
There was no Attorney General who could in those days.

[00:25:08] Speaker 04:
There was only the Corporation Council.

[00:25:10] Speaker 04:
But the Attorney General has a big job.

[00:25:12] Speaker 04:
And the point here is there are lots of things and there are lots of charitable trusts.

[00:25:17] Speaker 04:
That's all the Attorney General did.

[00:25:19] Speaker 04:
The Attorney General wouldn't be able to do the rest of his job.

[00:25:22] Speaker 04:
So where you can define a class of representatives who have a sharp interest in a major change in the structure of a fund, assuming again that there is a fund, assuming that we're on 12b6, so for the purpose of this, let's assume it.

[00:25:43] Speaker 04:
Why don't these people seem like logical representatives of that claim?

[00:25:47] Speaker 03:
Well, I think, Your Honor, one thing that's getting lost here is Hooker required both the fundamental challenge and the small, limited, sharply defined class.

[00:25:59] Speaker 03:
And so what plaintiffs have argued here is a fundamental challenge in some sense.

[00:26:04] Speaker 03:
But embedded in it is also their claim that they wish to have funds from the alleged trust themselves.

[00:26:11] Speaker 03:
And so what you can see in here is the seeds of the problem for that element as well.

[00:26:17] Speaker 03:
But the bottom line is, I think, Hooker requires both.

[00:26:20] Speaker 03:
And what they don't have here is this small, sharply defined class.

[00:26:25] Speaker 03:
They have enormous.

[00:26:26] Speaker 01:
You haven't contested the other element, right?

[00:26:27] Speaker 01:
You haven't contested the other element.

[00:26:30] Speaker 03:
We haven't contested that element, but you can see it's not that the sole challenge is this fundamental challenge.

[00:26:36] Speaker 03:
They want for themselves a piece of the trust, and they say that in a few places, including page two of their opening brief.

[00:26:46] Speaker 03:
We just don't have this small, limited class.

[00:26:49] Speaker 03:
I mean, even on the face of their complaint.

[00:26:51] Speaker 01:
So on the small, limited class part of it, so Hooker also says this at the end, all such members, meaning the members of the plaintiff's group that they're talking about, have a present opportunity to enjoy direct benefit

[00:27:02] Speaker 01:
differing markedly from the incidental and indirect benefit the public realizes from the housing of indigent elderly widows.

[00:27:09] Speaker 01:
And so getting back to the question of drawing a distinction between the general public and the particular folks whose putatively concrete interests are at stake.

[00:27:18] Speaker 01:
It seems like the concern is about the incidental and indirect benefits that could hypothetically be realized by the public at large, which you can often see in charitable trust situations, because if it's in fact a charitable trust, then it's serving a broader interest that indirectly and incidentally benefits the public at large, even if you're not one of the more direct beneficiaries.

[00:27:42] Speaker 01:
And if you're looking at it on that axis, then here you're not talking about incidental and indirect beneficiaries vis-a-vis the public writ large from achieving humanitarian goals, but you're talking about subpopulation of individuals who are more directly benefited by the alleged purpose of the charitable trust.

[00:28:05] Speaker 03:
Yes, Your Honor, except when we're talking about, it can't be that anytime you can identify a subpopulation, that that's good enough to allow those people to come forward and enforce the trust, because that's true pretty much all of the time.

[00:28:20] Speaker 03:
So in other words, here you could say, well, the whole world benefits from support for freedom of speech for everyone.

[00:28:27] Speaker 01:
No, I take that point, but it's degree of directness.

[00:28:30] Speaker 01:
And it seems like the particular,

[00:28:33] Speaker 01:
group of individuals who are in play in this case have a degree of directness.

[00:28:41] Speaker 01:
They're kind of at the core of what the purpose of the transfer was all about.

[00:28:48] Speaker 03:
They allege that, Your Honor, but I think that the problem here is that that core is still incredibly broad.

[00:28:56] Speaker 03:
And there are many people out there who could have different interests than these plaintiffs who we don't have.

[00:29:02] Speaker 03:
And there are hundreds of new people every year in China, according to their complaint alone, who are suffering this imprisonment.

[00:29:08] Speaker 03:
And so the core purpose of Hooker in keeping it small is not satisfied here.

[00:29:18] Speaker 03:
The second issue is that there's no charitable trust at all here for lack of charitable trust intent.

[00:29:26] Speaker 03:
There are several elements in this settlement agreement that is alleged to have created the trust itself that show a lack of charitable trust intent.

[00:29:34] Speaker 04:
What's our standard here, though, once again?

[00:29:37] Speaker 04:
It's only that it's plausible, right?

[00:29:39] Speaker 03:
Correct.

[00:29:40] Speaker 03:
But the substantive standard here is a clear manifestation of charitable trust.

[00:29:44] Speaker 04:
Well, the question is whether it's plausible that there's a clear manifestation.

[00:29:47] Speaker 04:
Exactly.

[00:29:48] Speaker 04:
That's a phrase that was used only once, I think, and didn't have any effect on the result in that case.

[00:29:53] Speaker 04:
But even so, the overriding issue is whether their claim is plausible.

[00:29:59] Speaker 04:
You have a document

[00:30:03] Speaker 04:
that says that money is to be held in trust.

[00:30:10] Speaker 04:
Isn't that right?

[00:30:11] Speaker 04:
All payments made in trust a foundation.

[00:30:14] Speaker 03:
Yes, it says that in one place.

[00:30:16] Speaker 04:
Doesn't that make it at least plausible that it's a trust?

[00:30:20] Speaker 03:
No, it doesn't because of the other aspects of the agreement here.

[00:30:24] Speaker 03:
So for instance, the fact that virtually all of the money could have been used to protect Yahoo from further litigation.

[00:30:32] Speaker 03:
And in fact, when we look at the three purposes laid out for the money, the only one of those that the fund is under an obligation to spend it on is the indemnification of Yahoo.

[00:30:44] Speaker 03:
We also have these disclaimers of third-party beneficiaries, which are in fact even a little broader than that, because they say, quote, this agreement shall iner only to the benefit of the parties.

[00:30:55] Speaker 01:
Can I ask a question about the first point you made just a second ago before the third-party beneficiary, which is that you focused on the second objective of the fund, which is to resolve the claims?

[00:31:05] Speaker 01:
Yes.

[00:31:06] Speaker 01:
Yes, so with respect to that, that's not inherently antithetical to creation of a trust.

[00:31:12] Speaker 01:
Is it?

[00:31:13] Speaker 03:
It's inherently antithetical to the creation of a charitable trust.

[00:31:16] Speaker 03:
And if it's not a charitable trust, then the plaintiffs lose here.

[00:31:21] Speaker 01:
And so if it's not inherently antithetical to the creation of a trust as opposed to a charitable trust, and there was the creation of a trust,

[00:31:30] Speaker 01:
then why wouldn't it be the case that the words in trust say that, yeah, there's a creation of a trust with respect to the claims resolution, plausibly.

[00:31:39] Speaker 01:
Plausibly, with respect to the claims resolution, it's not a charitable trust.

[00:31:42] Speaker 01:
But with respect to the humanitarian goals, it sounds in a charitable trust.

[00:31:48] Speaker 03:
Because that's the entire body of the money, Your Honor.

[00:31:52] Speaker 03:
So in other words, it's worth it.

[00:31:53] Speaker 01:
You can't have a trust that is

[00:31:57] Speaker 03:
You're not going to have, you shouldn't have a, you cannot have a charitable trust when the entire body of the money can be used for a non-charitable purpose.

[00:32:07] Speaker 03:
And beyond can be, but is primarily obligated to be had more claimants come forward.

[00:32:13] Speaker 03:
So I think it's worth just briefly, if I may, saying what was going on here.

[00:32:19] Speaker 03:
So there had been this congressional testimony

[00:32:23] Speaker 03:
It was discussed in front of Congress, this litigation.

[00:32:28] Speaker 03:
The members of Congress essentially told Yahoo to get it settled publicly.

[00:32:33] Speaker 03:
And so Yahoo makes sense as concerned that there will be many more people coming forward like these original plaintiffs.

[00:32:40] Speaker 03:
And so with Harry Wu, who was speaking for his organization and for the Chinese families as their power of attorney, they settled.

[00:32:48] Speaker 03:
And they paid $3 million each to the families and $17 million to Wu's organization.

[00:32:54] Speaker 03:
And so what they got in return is this indemnification.

[00:32:59] Speaker 03:
So the fund, the foundation, had to use that money to indemnify Yahoo against claims from anyone else should they have come forward.

[00:33:08] Speaker 03:
And so there just is not in all of that charitable trust intent.

[00:33:13] Speaker 03:
And the plaintiffs need there to be this charitable trust in order to bring this case.

[00:33:18] Speaker 04:
So I'm looking at the...

[00:33:21] Speaker 04:
It gets Bogert's trusts and trustees, which everybody has cited on both sides, including the D.C.

[00:33:28] Speaker 04:
Court of Appeals, on mixed trusts, says that a mixed trust can be one which is administered concurrently for both charitable and non-charitable purposes.

[00:33:38] Speaker 04:
What case held that ... I think you're trying to define this as, okay, that's all right as long as all of it couldn't be used for one or the other.

[00:33:47] Speaker 04:
Is that what you're saying?

[00:33:48] Speaker 03:
all of it for a clearly non-charitable purpose.

[00:33:51] Speaker 04:
And what says that?

[00:33:54] Speaker 04:
I think that that... What case or treatise says that?

[00:33:57] Speaker 04:
That's the first question.

[00:33:59] Speaker 03:
So I think in Bogert it refers to when mixed trusts have been upheld that the non-charitable purpose is normally minimal by comparison to the charitable one.

[00:34:10] Speaker 03:
I think it might be in that same section, which I think is

[00:34:14] Speaker 03:
372 or one of the nearby sections.

[00:34:16] Speaker 03:
That's right, that's the right section.

[00:34:18] Speaker 04:
Go ahead.

[00:34:18] Speaker 04:
It says what?

[00:34:19] Speaker 03:
So it says, normally when this is okay, the non-charitable purpose is very small by comparison to the charitable purpose.

[00:34:27] Speaker 03:
And I don't think that's here.

[00:34:28] Speaker 03:
I think that because these first two families had settled for three million, that even just a handful more people coming forward based on this publicity could have exhausted this whole fund for the purpose of Yahoo's purchase of the piece.

[00:34:43] Speaker 03:
And that is not a charitable, it doesn't show a charitable action.

[00:34:49] Speaker 04:
Clear about this.

[00:34:50] Speaker 04:
So a trustee has a fiduciary responsibility, right?

[00:34:54] Speaker 04:
Yes.

[00:34:54] Speaker 04:
And if the trust has mixed purposes, doesn't the trustee violate their fiduciary responsibility by giving all of it to one purpose and not to the other?

[00:35:06] Speaker 03:
No, not in this case, Your Honor, because the second purpose, the purpose of protecting Yahoo is contractually agreed.

[00:35:14] Speaker 03:
They're obligated in a way that they're not obligated for either of the two.

[00:35:17] Speaker 04:
What if there were an internal email from the founders of Yahoo saying, we intend this to be a trust, we intend for this money to be spent for Chinese dissidents who were imprisoned because of use of the internet, and we do not intend for it all to be spent for some other purpose?

[00:35:35] Speaker 04:
Would that not be enough to make a trust here?

[00:35:39] Speaker 03:
No, Your Honor, because that would be extrinsic evidence that we wouldn't, I don't think we need to get to that far.

[00:35:46] Speaker 04:
Whether we need to is a different question.

[00:35:47] Speaker 04:
All the case law and all the treatises say this can be oral.

[00:35:53] Speaker 04:
It doesn't have to be written.

[00:35:54] Speaker 04:
So why can't the oral statements indicate a trust?

[00:35:59] Speaker 03:
Well, the plaintiffs have not alleged the oral creation of a trust.

[00:36:02] Speaker 04:
Maybe I should add to that.

[00:36:06] Speaker 04:
That conduct and spoken words, I think that's exactly the phrase, can be used to determine the intent of the donor, right?

[00:36:14] Speaker 03:
Yes, Your Honor.

[00:36:15] Speaker 04:
So what if the donor, which I take it as Yahoo here, in some way, has statements saying this is our whole purpose, this is why we're doing this, and we want credit for it, this is the way we're going to get credit, we're going to create a foundation in trust for dissidents with these characteristics.

[00:36:35] Speaker 04:
This is not a contract in that sense.

[00:36:39] Speaker 04:
The law about trust is that spoken words, what you say, extrinsic evidence, can help define the intent of the donor.

[00:36:47] Speaker 03:
Well, but so here the allegation is that the settlement agreement itself created the trust.

[00:36:53] Speaker 03:
And so what I'm saying is in the settlement agreement, we have enough language, the clear meaning on the face of the settlement agreement to see that there is no charitable trust intent.

[00:37:05] Speaker 03:
And so we don't get to that stage.

[00:37:08] Speaker 04:
What case says that if there is extrinsic evidence with respect to a trust,

[00:37:17] Speaker 03:
That is with respect to the intent of the donor that we can't look at that I'm not sure your honor I think it just comes from the fact that we're at the motion to dismiss stage and the allegation is that a particular document has created a trust and so we're saying well when you look at this document you can see the absence of one of the elements.

[00:37:37] Speaker 04:
I mean you think they said we think the document itself and that we are foreclosing any

[00:37:46] Speaker 04:
reference to external evidence about the intent.

[00:37:49] Speaker 04:
I mean, the complaint includes external evidence about the intent of the donor.

[00:37:54] Speaker 03:
Yes, but if the document itself shows that there is no intent, then I don't think we get to an analysis of that, Your Honor.

[00:38:02] Speaker 04:
But you can't cite a case for that proposition.

[00:38:04] Speaker 03:
No, it's just the, I believe it's the motion to dismiss standard and the statement that the Wang settlement is the foundational document that creates the trust here.

[00:38:14] Speaker 01:
I have one follow-on question to this, which is suppose that, suppose, I know this is not your argument, but suppose that it's appropriate to take account of extrinsic evidence.

[00:38:22] Speaker 01:
Just assume that for a second.

[00:38:23] Speaker 01:
And the extrinsic evidence consists of the kinds of things that Chief Judge Garland was just taking off.

[00:38:29] Speaker 01:
And if that's the case, then would you say that you're

[00:38:33] Speaker 01:
your principle about how mixed trusts operate would still mean that even in that instance, the thing that was created wouldn't constitute a charitable trust because there's too much of the claims resolution part of it, even in the existence of extrinsic evidence of the kind that's

[00:38:52] Speaker 03:
Yes, Your Honor, because the claims resolution part of it is a contractual obligation on the foundation, and that's not true for the other purposes.

[00:39:01] Speaker 01:
It just occupies the field.

[00:39:04] Speaker 01:
The way you look at it is, once you have a claims resolution aspect, it doesn't matter how much extrinsic or even intrinsic evidence there is of a charitable component.

[00:39:14] Speaker 01:
The claims resolution part just occupies the field.

[00:39:16] Speaker 03:
You just don't have a charitable trust, yes.

[00:39:19] Speaker 03:
You have a trust where the primary, even if you're saying there's a trust, it's a fund or a trust where the primary object is the commitment to protect Yahoo in litigation.

[00:39:30] Speaker 03:
And so there is no charitable trust there for the plaintiff.

[00:39:32] Speaker 01:
Even if it says, suppose it's worded so that it says the primary object is the humanitarian part and the secondary object is claims resolution.

[00:39:40] Speaker 03:
If it says the secondary object is claims resolution, and by the way, you're obligated to indemnify Yahoo against any claimants that Yahoo sends to you, then yes.

[00:39:50] Speaker 04:
You would still say occupy the field?

[00:39:52] Speaker 04:
Yes.

[00:39:53] Speaker 04:
OK.

[00:39:53] Speaker 04:
It doesn't say you're obligated to use the money to resolve claims.

[00:39:58] Speaker 04:
It just says it may be used for fee purposes.

[00:40:01] Speaker 03:
Your Honor, I'm on A-176, and it says, the Foundation hereby agrees to use the fund to indemnify and hold Yahoo!

[00:40:12] Speaker 03:
harmless from and against any claims, liabilities, damages.

[00:40:16] Speaker 04:
I'm sorry, what?

[00:40:18] Speaker 01:
It's a long page.

[00:40:19] Speaker 03:
A-176.

[00:40:20] Speaker 03:
Yes.

[00:40:20] Speaker 01:
Under Romanat 2, you're talking about?

[00:40:23] Speaker 03:
Yes, the lower part of that paragraph.

[00:40:28] Speaker 03:
And so essentially it envisions that if there are any other claimants, Yahoo is going to refer them to the fund, and the fund is agreeing to use it to indemnify and hold them harmless against any and all such claims.

[00:40:43] Speaker 04:
I'm sorry.

[00:40:44] Speaker 04:
That says in their implementation of 2B, that's the to resolve claims part.

[00:40:52] Speaker 04:
Yes.

[00:40:53] Speaker 04:
And in Romanette 1, I like that word, Romanette.

[00:40:57] Speaker 04:
Thank you.

[00:40:58] Speaker 04:
It says, in the implementation of Part 2a, the Foundation agrees to use best efforts to maximize the benefits achieved through the use of a portion of the YHR fund for humanitarian and legal assistance.

[00:41:13] Speaker 04:
So maybe you have a confused trust.

[00:41:16] Speaker 04:
I suppose maybe there's some term for that.

[00:41:18] Speaker 04:
But 2 only comes into play with respect to how to resolve

[00:41:24] Speaker 04:
from 2B doesn't go into what to do about 2A.

[00:41:29] Speaker 04:
And if you're supposed to use your best efforts to maximize the benefits achieved, that suggests that maybe one way to do that is to not pay out Yahoo claims.

[00:41:42] Speaker 03:
Well, no, Your Honor, because under two, I don't think they could do that.

[00:41:45] Speaker 03:
And I think actually the right way to view it is if many other claimants or other claimants had promptly come forward as the parties were concerned about based on this publicity, Yahoo would refer them to the fund.

[00:41:58] Speaker 03:
The fund was then hereby agrees to use the fund to indemnify and hold Yahoo harmless.

[00:42:04] Speaker 03:
And that use of the money essentially bleeds into one.

[00:42:08] Speaker 03:
I mean, it is, in some sense, humanitarian, though it certainly isn't charitable, to pay millions of dollars to the families of people imprisoned, even if those people are suing Yahoo.

[00:42:23] Speaker 03:
So for these reasons, I respectfully ask this Court to affirm.

[00:42:29] Speaker 03:
Any questions?

[00:42:29] Speaker 03:
Thank you very much.

[00:42:31] Speaker 04:
Is there time left?

[00:42:33] Speaker 04:
I'll give you an extra two minutes at the end.

[00:42:35] Speaker 04:
We apparently always do that.

[00:42:39] Speaker 04:
Eventually, litigants will get the idea.

[00:42:43] Speaker 04:
Nobody out there will pay attention to this.

[00:42:48] Speaker 00:
Go ahead.

[00:42:50] Speaker 00:
What about the mixed fund problem?

[00:42:52] Speaker 04:
Pardon?

[00:42:52] Speaker 04:
The mixed fund problem.

[00:42:54] Speaker 00:
Yes.

[00:42:54] Speaker 00:
So DC's uniform trust code is very clear.

[00:42:59] Speaker 00:
Charitable trust may be a portion of a larger non-charitable trust, and I think that's

[00:43:06] Speaker 00:
pretty dispositive of that argument.

[00:43:09] Speaker 00:
Also here, there actually is evidence that Yahoo didn't intend for all of this money to be used to resolve claims.

[00:43:22] Speaker 00:
I mean, they carved out, in 2009, less than a third of it, $3.55 million for that purpose.

[00:43:28] Speaker 00:
So I think that argument is also dead in the water.

[00:43:34] Speaker 00:
On the standing issue, recall that Hooker had two concerns, or explained that there were two concerns underlying the traditional rule.

[00:43:46] Speaker 00:
One was about size, which would invite recurring litigation, and the other one was about indefiniteness.

[00:43:54] Speaker 00:
So my colleague mentioned the phrase sharply defined many times here, but they've never challenged that the problem here is that there's an indefiniteness problem.

[00:44:06] Speaker 00:
create a just disability issue.

[00:44:09] Speaker 00:
So what they're really complaining about is just size.

[00:44:12] Speaker 00:
But the only way they can complain about size is to point at all the people outside of China and to point at all the people who might become beneficiaries.

[00:44:19] Speaker 00:
But those arguments are just flatly foreclosed by the facts of Hooker.

[00:44:22] Speaker 00:
So we think that that argument is... I'm sorry, by the foreclosed... By the facts of Hooker.

[00:44:26] Speaker 00:
So you can't look at... You can't complain that the class is too large by pointing at

[00:44:31] Speaker 00:
all the people who might benefit in the future and all the people who are outside the preferred status.

[00:44:38] Speaker 00:
That's the only way they can really distinguish hooker on the size issue.

[00:44:42] Speaker 00:
I submit these in no way to distinguish hooker.

[00:44:46] Speaker 00:
Thank you very much.

[00:44:49] Speaker 00:
We'll take the matter under submission.