[00:00:50] Speaker 04:
The third case this morning is number 16-ish, 1470 Securist Technologies Inc.

[00:00:55] Speaker 04:
versus Global Talent Corporation.

[00:00:58] Speaker 04:
This is again a case where there's a problem with the Confidentiality Markings Council has written a letter, which I understand is an offer to correct this.

[00:01:08] Speaker 04:
And is there anything that either of you wants to say about that?

[00:01:14] Speaker 01:
Your Honor, J.C.

[00:01:15] Speaker 01:
Rosendahl for GTL.

[00:01:18] Speaker 01:
The purpose of our letter was to try to anticipate the problem that might arise about the extent to which the operative contracts can be discussed here today.

[00:01:26] Speaker 04:
You've been properly marked in the briefs.

[00:01:29] Speaker 04:
You've marked legal argument again.

[00:01:31] Speaker 04:
And you shouldn't be doing that.

[00:01:33] Speaker 04:
And the question is, can you fix it?

[00:01:36] Speaker 04:
Can you remove the confidentiality markings and file new public briefs?

[00:01:40] Speaker 04:
Yes, Your Honor, we can.

[00:01:42] Speaker 04:
Why don't you do that?

[00:01:42] Speaker 04:
We'll give you two weeks to do it.

[00:01:44] Speaker 04:
Thank you, Your Honor.

[00:01:46] Speaker 04:
Let's start with the merits, Mr. Rosendahl.

[00:01:51] Speaker 01:
May it please the court.

[00:01:54] Speaker 01:
Both the appeal and the cross-appeal in this case each raise just a single relatively self-contained issue.

[00:02:02] Speaker 01:
The issue in GTL's appeal is whether when a breach of contract action is tried in federal court and

[00:02:13] Speaker 01:
attorney's fees are claimed as an element of damages, is it fatal to the plaintiff's case that an expert was not designated under Rule 702 at the time that the exchange of expert reports usually happens?

[00:02:28] Speaker 04:
As I read the cases, I don't think you have to designate your counsel as an expert, but I think you do have to present evidence from your counsel as to the reasonableness of the attorney's fees or some other person who's an expert.

[00:02:43] Speaker 01:
Well, I disagree with that.

[00:02:46] Speaker 01:
I want to be sure I understood your Honor's question.

[00:02:48] Speaker 01:
We agree that at trial it would be appropriate to show the reasonableness of the fees with attorney testimony and for purposes of this... Necessary at trial.

[00:02:58] Speaker 01:
Yes, Your Honor.

[00:02:59] Speaker 01:
The reasonableness of the fees is an element of the cause of action.

[00:03:02] Speaker 01:
We agree with that.

[00:03:03] Speaker 04:
Okay, so your problem here, it seems to me, is that on summary judgment you didn't put in, in opposition to the summary judgment motion, proof of the reasonableness.

[00:03:14] Speaker 01:
But that was not the issue that was presented to the court at the time.

[00:03:18] Speaker 01:
The two issues that were raised on summary judgment by the other side were, number one, you haven't tabulated, you haven't totaled up your invoices to give us your calculation of damages, and number two,

[00:03:31] Speaker 01:
You blew the deadline for designating experts, and therefore you're dead.

[00:03:36] Speaker 01:
They did not say the evidence that you've given us in the form of all of your billing records is somehow insufficient or is not reasonable.

[00:03:45] Speaker 01:
It was a purely procedural point.

[00:03:47] Speaker 01:
And so we responded by saying, well, here's a revised interrogatory answer that totals up all the invoices that you admit that you have.

[00:03:54] Speaker 01:
And by the way, we don't have to designate an expert now.

[00:03:58] Speaker 01:
We can designate an attorney.

[00:04:00] Speaker 01:
as a trial witness when it comes time to designate trial witnesses much closer to trial.

[00:04:05] Speaker 01:
That was the nature of the argument.

[00:04:07] Speaker 05:
What would be the nature of the testimony of that trial witness?

[00:04:10] Speaker 05:
Wouldn't it be on the basis of an expert to testify to the reasonableness of the fees in the local community?

[00:04:17] Speaker 01:
Well, I think the Texas cases give examples of extremely scant testimony by attorneys to the effect that this is the

[00:04:28] Speaker 01:
The fees that I normally charge for this sort of work, for comparable work, this is the sort of fees, given the complexity of the action.

[00:04:35] Speaker 01:
These were sort of my reasonable, normal way of handling the issue.

[00:04:41] Speaker 01:
And I don't think, to call that expert testimony within the meaning of Rule 702 is something that can't be reconciled with the Fifth Circuit's case in the American Home Assurance decision.

[00:04:55] Speaker 01:
So there we had a situation where an attorney

[00:04:57] Speaker 01:
was ready to give testimony about reasonableness.

[00:05:00] Speaker 01:
There was a motion in Lemonay that prevented that particular aspect of the testimony coming in.

[00:05:06] Speaker 01:
But it's undisputed that the attorney in that case had not been designated as an expert under 702.

[00:05:12] Speaker 01:
And yet, so if the rule in this case had been applied in that case, then the case would have been over.

[00:05:18] Speaker 01:
But instead, the Fifth Circuit said, what you need to do is go back and put in testimony about reasonableness from your attorney.

[00:05:26] Speaker 01:
who's not been designated as an expert.

[00:05:29] Speaker 01:
And that's not all that unusual.

[00:05:30] Speaker 01:
I think, for example, if the court will consider the advisory committee's notes to Federal Rule of Evidence 701, it talks about lay opinion about things that might at first blush appear to require expert testimony.

[00:05:45] Speaker 01:
For example, a business owner or the officer of a corporation can talk about the value of the business or the expected profitability of the business

[00:05:52] Speaker 01:
without being an expert in valuation or forensic accounting.

[00:05:56] Speaker 00:
Are you, you're emphasizing right from the start, you said in a federal case, emphasizing that this is the federal court as opposed to a state court.

[00:06:05] Speaker 00:
But I understood the position that the parties took in the briefs to be that this is governed by Texas law.

[00:06:11] Speaker 00:
And that you were arguing that Texas law does not in fact require an attorney expert to testify.

[00:06:18] Speaker 00:
and relying on language in American home where the court said either an expert or the claimant's attorney, but leaving unresolved, at least on the face of it, the question of whether that claimant's attorney had to be an expert as understood under Texas law.

[00:06:35] Speaker 00:
Are you taking a different position now and saying that Texas law isn't really what governs, it really is a question of federal rules of evidence?

[00:06:44] Speaker 01:
Well, what I'm saying is that

[00:06:46] Speaker 01:
We accept that under Texas law, as I responded to the question earlier from Judge Dyke, there has to be testimony on reasonableness from an attorney.

[00:06:55] Speaker 00:
But do you also accept that under Texas law, setting aside Section 38.001 of the procedural code and remedies act, do you accept that proof of damages

[00:07:16] Speaker 00:
Attorneys fees as damages require experts, either in the form of an expert or an attorney expert designated as an expert.

[00:07:26] Speaker 00:
I understood from your brief, you did not accept that proposition.

[00:07:29] Speaker 01:
That is correct.

[00:07:29] Speaker 01:
I do not accept that proposition, but I don't know that it's necessary to resolve the question of what Texas courts think is an expert.

[00:07:38] Speaker 00:
Well, that's where I was going with my question because it sounds to me like you're walking away from

[00:07:43] Speaker 00:
being bound by the Texas law on this.

[00:07:47] Speaker 00:
In other words, if we were to decide, in this case, that Texas law is very clear, you need to have an attorney expert.

[00:07:56] Speaker 00:
And in Texas courts, if you don't disclose your attorney expert at the time that you're supposed to disclose experts, you lose.

[00:08:04] Speaker 00:
I think there's a case among the cases cited here, Lessicar, which has exactly those facts.

[00:08:10] Speaker 00:
Do you accept that that Texas law, if that's the Texas law, if we conclude, that you would lose this case?

[00:08:19] Speaker 01:
No, Your Honor.

[00:08:20] Speaker 01:
Why not?

[00:08:21] Speaker 01:
Because, and I think this is exactly the sort of the trick that the other side is trying to play here.

[00:08:28] Speaker 01:
They're trying to use Texas substantive law about breach of contract because the entire Texas rules of civil procedure have not been imported into the federal courts.

[00:08:38] Speaker 04:
Let me see if I can...

[00:08:39] Speaker 04:
Clarify this.

[00:08:40] Speaker 04:
What I think everybody's agreeing on is that there either has to be an expert or your own attorney.

[00:08:48] Speaker 04:
And that in Texas, they may treat your own attorney as an expert under those circumstances.

[00:08:53] Speaker 04:
But you're saying the fact that Texas may treat that attorney as an expert doesn't mean that for the federal rules, in terms of designating an expert, that that person is an expert.

[00:09:02] Speaker 01:
Yes.

[00:09:03] Speaker 01:
Thank you, Your Honor.

[00:09:03] Speaker 01:
So I think that we agree that there has to be attorney testimony on reasonableness.

[00:09:07] Speaker 01:
The question is,

[00:09:09] Speaker 01:
Is it appropriate to identify the attorney who's going to give that testimony at the time the trial witnesses are identified?

[00:09:16] Speaker 01:
Or is it necessary to designate them formally as an expert under Rule 702 at the time that expert reports are exchanged?

[00:09:23] Speaker 01:
And our point is that under the American Home Assurance case, that's not the rule.

[00:09:28] Speaker 01:
It's not the case that a failure to name an attorney as an expert under Rule 702 is fatal.

[00:09:35] Speaker 01:
The attorney can give testimony.

[00:09:37] Speaker 01:
on the reasonableness of the fees later at trial.

[00:09:41] Speaker 01:
So that's the nature of the argument.

[00:09:43] Speaker 01:
And I think one of the cases that your honor alluded to, the strongest statement of that rule in Texas is probably the EF Hutton against Youngblood case, where the Texas Supreme Court effectively said, as your honor had said, you didn't identify the expert in time and therefore you're precluded.

[00:10:03] Speaker 01:
But the facts of that case, of course,

[00:10:06] Speaker 01:
The witness had not been identified as an expert at all.

[00:10:08] Speaker 01:
And then the attorney stood up at trial and said, oh, and Your Honor, I'm going to tell you about why my fees are reasonable.

[00:10:13] Speaker 01:
And the Texas Supreme Court said, no, that's too late, right?

[00:10:16] Speaker 01:
That's not correct.

[00:10:16] Speaker 05:
What about Roth versus JP Morgan?

[00:10:18] Speaker 05:
Pardon me?

[00:10:19] Speaker 05:
What about the case of Roth versus JP Morgan?

[00:10:23] Speaker 01:
Your Honor, there have been a number of cases cited in that in the brief.

[00:10:27] Speaker 05:
But you're not specifically out.

[00:10:27] Speaker 05:
Well, there the court said that an attorney's affidavit constitutes expert testimony that will support an award of attorney's fees in a summary judgment proceeding.

[00:10:35] Speaker 05:
So if the courts are looking at an attorney's affidavit as expert testimony, it seems to me that what they're saying is that when your attorney testifies or testifies by way of declaration on affidavit, we look at this as expert testimony.

[00:10:49] Speaker 05:
So wouldn't they have to designate that lawyer as an expert?

[00:10:53] Speaker 01:
But I think, again, Your Honor, the point is that what we know from the American Home Assurance case is that it's not necessary to designate the lawyer as an expert.

[00:11:02] Speaker 05:
But that case is ambiguous at best, wouldn't you say?

[00:11:05] Speaker 05:
Because the case addresses both statutory fees and also fees as damages.

[00:11:13] Speaker 05:
But it doesn't make a clear declaration as to the question that we're looking at right now.

[00:11:19] Speaker 01:
Oh, on the contrary.

[00:11:20] Speaker 01:
The Fifth Circuit expressly and explicitly addressed the question we're talking about right now.

[00:11:23] Speaker 01:
The record is clear that the attorney in question was not designated as an expert under 702, and the

[00:11:30] Speaker 00:
The court didn't discuss that aspect of the issue.

[00:11:35] Speaker 00:
The court simply said either an expert or the claimant's attorney.

[00:11:39] Speaker 00:
I don't recall the court saying something further as you're suggesting that, and because the claimant's attorney was not designated as an expert, that's okay because he doesn't have to be designated as an expert.

[00:11:53] Speaker 00:
There wasn't anything like that in the court's opinion, was there?

[00:11:57] Speaker 01:
It is clear from the facts of the case that the attorney, and it's found on page 490 of the opinion, they offered the testimony of its chief counsel on the high share action, Michael Levin.

[00:12:12] Speaker 01:
It did not designate him as an expert, nor did it offer a designated expert to testify about the reasonableness and necessity of the attorney's fees.

[00:12:20] Speaker 01:
And if that were what were required, then the case would be over.

[00:12:25] Speaker 01:
But the court went on to say,

[00:12:27] Speaker 01:
that it's OK to have him testify on remand about it, even though he was not designated as an expert in the federal court.

[00:12:34] Speaker 01:
So I think although it is true that an attorney has to testify, I don't think that the failure to designate the attorney as an expert at the time that other expert reports are exchanged is fatal to the cause of action.

[00:12:49] Speaker 00:
And once again, to return, you may have already answered this, but I just want to make sure.

[00:12:53] Speaker 00:
You don't disagree.

[00:12:55] Speaker 00:
do you that under Texas law, if we were in Texas state court, then the failure to designate the attorney as an expert would be fatal?

[00:13:06] Speaker 01:
Your Honor, I think that the answer is a little more complicated than that for a couple of reasons.

[00:13:10] Speaker 01:
First of all, the Texas cases are not uniformly clear on

[00:13:14] Speaker 01:
exactly whether the attorney is treated as an expert or is not treated as an expert.

[00:13:18] Speaker 00:
What case isn't clear on that?

[00:13:19] Speaker 00:
I read a bunch of these cases and it seemed to me they were remarkably clear.

[00:13:23] Speaker 00:
If you look at the Woodhaven case, the Woolett case, the EF Hutton you mentioned, Gulf Paving, Twin City and Jiao.

[00:13:32] Speaker 00:
Twin City and Jiao were cited in an American poem and those two cases both seemed to me to be pretty clear in saying the attorney has to be an expert.

[00:13:42] Speaker 00:
It is treated as an expert.

[00:13:44] Speaker 01:
Well, again, in Twin City, that issue didn't really arise because there was an attorney who gave testimony about it.

[00:13:51] Speaker 01:
I think it's true that the court refers to that attorney as an expert, as giving expert testimony, but that wasn't necessary.

[00:13:58] Speaker 00:
I understand your argument about American home, but I don't see anything in the Texas cases that helps you.

[00:14:03] Speaker 00:
Is there a single Texas case?

[00:14:06] Speaker 00:
that you can point to and say, well, it really isn't necessary for the attorney to be characterized as an expert.

[00:14:11] Speaker 01:
Well, what I can say about the Texas cases is... Well, I guess let me get the answer to that first.

[00:14:15] Speaker 00:
Is there a single Texas case that stands for the proposition that the attorney can testify but isn't deemed to be an expert?

[00:14:22] Speaker 01:
We have cited at least one such case in our briefs, and I can take a moment to dig it up and give it to you.

[00:14:29] Speaker 01:
I believe it's a butter.

[00:14:31] Speaker 01:
I want to say butter baron case.

[00:14:34] Speaker 01:
But the point is, it's at least ambiguous as to whether the testimony was treated as expert testimony or lay opinion testimony.

[00:14:42] Speaker 01:
But even under the Texas rules, there's more flexibility than the rule that you stated would imply.

[00:14:48] Speaker 01:
Because after the EF Hutton versus Youngblood case was decided, the Texas Supreme Court issued a subsequent opinion in which it pointed out that there's always a good cause exception to the witness disclosure rule.

[00:15:01] Speaker 01:
And then even in cases where there's no good cause, the district court has the ability to allow undisclosed experts to testify subject to prejudice standards.

[00:15:10] Speaker 01:
So it's not game over in the way that the district court ruled here.

[00:15:14] Speaker 00:
Well, but the district court, I mean, I don't know that the district court was asked to invoke one of the exceptions to the requirement that you disclose experts at a certain point, but he decided not to.

[00:15:25] Speaker 00:
Well, fair enough.

[00:15:26] Speaker 01:
Again, our point was that the mere fact that we did not designate the attorney as an expert at the time that expert reports were exchanged should not have been fatal to the claim.

[00:15:37] Speaker 01:
I think I need to reserve a balance.

[00:15:38] Speaker 05:
Why wouldn't you have designated him as an expert?

[00:15:41] Speaker 05:
In your view, the laws and the flux about this, if that's the case, what would prevent you from making that designation?

[00:15:51] Speaker 01:
What would prevent us from making the designation?

[00:15:53] Speaker 01:
Well, what did you choose not to?

[00:15:55] Speaker 01:
Well, frankly, I thought it was... I think the perception was that it was a little odd and unseemly to designate trial counsel as an expert on the reasonableness of their own fees.

[00:16:05] Speaker 01:
That seemed like an odd thing to do, although we were certainly prepared to have

[00:16:09] Speaker 01:
counsel or counsel who work for the client talk about the work that was done, whether it was reasonable, whether it was the sort of thing that is ordinarily charged or ordinarily paid for.

[00:16:19] Speaker 00:
There are various aspects of Texas law that are odd, perhaps, but when in Rome, you typically do as the Romans, and you were in Rome.

[00:16:26] Speaker 01:
Well, except that, again, I think even the Texas cases

[00:16:31] Speaker 01:
The rule that the Texas cases are concerned about is avoiding trial by ambush and avoiding witnesses who are not designated as witnesses at all stand up and start giving testimony on reasonableness.

[00:16:44] Speaker 01:
And I think that, again, it may be that they call that expert testimony, but I think it's also clear that however that testimony gets put in, it doesn't require the designation of the expert

[00:17:01] Speaker 01:
under Rule 702 at the time that expert reports are exchanged.

[00:17:06] Speaker 04:
Okay.

[00:17:07] Speaker 04:
Thank you, Mr. Rosendahl.

[00:17:09] Speaker 04:
Mr. Straychan?

[00:17:12] Speaker 04:
Thank you, Your Honor.

[00:17:13] Speaker 04:
May it please the Court?

[00:17:15] Speaker 04:
Mr. Rosendahl said that you didn't argue at the summary judgment stage in the District Court that the failure to submit a declaration from the attorney was fatal.

[00:17:28] Speaker 04:
Is that correct?

[00:17:30] Speaker 03:
Your Honor, that is incorrect.

[00:17:32] Speaker 03:
I would cite to the court, appendix is page 658, 660.

[00:17:35] Speaker 04:
What's your best page, 658?

[00:17:40] Speaker 04:
658, 660, 662.

[00:17:43] Speaker 04:
Wait, wait, wait.

[00:17:47] Speaker 04:
Yes, sir.

[00:17:48] Speaker 04:
I'm sorry.

[00:17:50] Speaker 04:
Show me where you made this argument.

[00:17:55] Speaker 03:
Your Honor, perhaps we could start with 654.

[00:17:57] Speaker 03:
This is from our original motion for summary judgment.

[00:18:01] Speaker 03:
We did not make the motion to rule on the basis of failure to disclose.

[00:18:15] Speaker 03:
Rather, this was a Rule 56.

[00:18:16] Speaker 04:
No, I'm not talking about failure to disclose.

[00:18:18] Speaker 04:
I'm talking about the question of whether they had to submit a declaration from the lawyer.

[00:18:25] Speaker 04:
at the summary judgment stage with respect to reasonableness.

[00:18:30] Speaker 04:
And they say you didn't argue that the failure to submit a declaration was fatal.

[00:18:37] Speaker 04:
Did you argue that?

[00:18:39] Speaker 03:
Yes, Your Honor.

[00:18:39] Speaker 04:
Where?

[00:18:40] Speaker 03:
Well, the failure to submit a declaration would obviously have come after they filed their response and failed to approve the response.

[00:18:48] Speaker 03:
Where did you argue that the failure to submit a declaration was fatal?

[00:18:51] Speaker 03:
With regard to subsequently, I'm saying

[00:18:55] Speaker 03:
760 of the appendix, which was our response.

[00:19:18] Speaker 04:
I don't see where you argue that the Fed has submitted a declaration from the expert as fatal.

[00:19:23] Speaker 03:
Your Honor, we've argued that there is no evidence, does not seek leave to designate an expert, has not identified a witness, admitted disclosures, or authenticated its answers.

[00:19:35] Speaker 03:
We also said they failed to designate, well, I just reread, they have not disclosed or identified in any capacity, even in the response, a fact or an expert witness.

[00:19:49] Speaker 03:
Furthermore, Your Honor, I would like to draw the Court's attention, the background is,

[00:19:53] Speaker 03:
In the initial Rule 26 disclosures as to computation of damages, GTL said, we will provide that via an expert.

[00:20:03] Speaker 03:
At the very beginning, they said, our evidence as to damage was come from an expert.

[00:20:08] Speaker 03:
20 days later, they repeated the same statement in a supplemental Rule 26 disclosure.

[00:20:13] Speaker 03:
We will provide the computation of damages evidence via an expert.

[00:20:18] Speaker 03:
A year later, in September of 2014,

[00:20:21] Speaker 03:
These facts, by the way, are all set out in the Motion for Summary Judgment at Appendix 659.

[00:20:27] Speaker 03:
A year later, in September of 2014, in response to an interrogatory asking, provide... I'm not asking about what they said.

[00:20:35] Speaker 03:
I'm asking about what you said.

[00:20:37] Speaker 03:
My point is that until their response, they have always said, our evidence will be an expert.

[00:20:45] Speaker 03:
They did not provide an expert, and at the response we said,

[00:20:48] Speaker 03:
You told the court that you're going to provide an expert, and you didn't provide an expert or any other witness.

[00:20:54] Speaker 04:
So the basic question is whether everybody seems to agree that there had to be testimony as to the reasonableness of the fees.

[00:21:02] Speaker 04:
Everybody seems to agree that that could come from their own lawyer.

[00:21:06] Speaker 04:
The question is whether under federal procedure that person had to be designated as an expert.

[00:21:12] Speaker 03:
Your Honor, I respectfully disagree.

[00:21:14] Speaker 03:
That's not the question.

[00:21:15] Speaker 03:
The question is, was there any summary judgment evidence before the trial court as to reasonable and necessary attorney's fees?

[00:21:23] Speaker 03:
And there was not.

[00:21:25] Speaker 03:
That is what the judge ruled for.

[00:21:26] Speaker 03:
But passing that question... I'm sorry?

[00:21:28] Speaker 04:
Passing that question is an issue as to whether you argued that or not, okay?

[00:21:32] Speaker 04:
Let's put that aside.

[00:21:33] Speaker 04:
There also appears to be an argument as to whether the testimony of the lawyer, the company's own lawyer,

[00:21:43] Speaker 04:
was expert testimony that required an expert designation.

[00:21:48] Speaker 04:
Your Honor, regardless of whether it did require an expert designation or a disclosure.

[00:21:54] Speaker 04:
Address the question of whether it required an expert designation or not.

[00:21:58] Speaker 03:
Are you saying it didn't?

[00:22:00] Speaker 03:
Your Honor, I am saying it could be disclosed as a fact witness if the name is disclosed.

[00:22:07] Speaker 05:
Doesn't that cut your argument?

[00:22:09] Speaker 00:
What wouldn't?

[00:22:10] Speaker 00:
Yeah, go ahead.

[00:22:12] Speaker 00:
I thought your position was that under Texas law, which by your argument governs here, it had to be an expert for damages.

[00:22:22] Speaker 00:
It was not good enough to have a fact witness, even if the expert was the claimant's own attorney.

[00:22:27] Speaker 03:
Well, Your Honor, a lawyer for a party testifying on attorney's fees is an expert.

[00:22:32] Speaker 03:
Whether designated or listed otherwise, the Texas courts consistently treat him as an expert on attorney's fees.

[00:22:40] Speaker 03:
In fact, they say you have to have someone of that in

[00:22:43] Speaker 03:
to provide the evidence of reasonableness and necessity.

[00:22:47] Speaker 03:
So you've got to list someone, whether it's an attorney for the party or a retained third-party expert.

[00:22:55] Speaker 03:
And the home case just merely says, no, you don't have to go out and retain a different expert.

[00:22:59] Speaker 03:
You can actually use an attorney in the case.

[00:23:01] Speaker 00:
But you still have to provide the evidence.

[00:23:03] Speaker 00:
But in that case, the attorney, as Mr. Rosendahl points out, the attorney was not qualified as an expert, was not disclosed

[00:23:11] Speaker 00:
timely as an expert, but the court seemed to say that that wouldn't necessarily matter.

[00:23:17] Speaker 00:
That wouldn't necessarily be fatal in the language of the passage that we discussed where they say the claimant's own attorney.

[00:23:24] Speaker 00:
Why isn't that, at least for purposes of the Fifth Circuit's view of the matter, enough to say that the attorney would not have to have been disclosed as an expert at the time of disclosing experts?

[00:23:36] Speaker 03:
As I read home, the court was saying you don't have to require a disclosure of a third-party

[00:23:41] Speaker 03:
retained expert, but you have to at least disclose an attorney, albeit the attorney for a party who can testify as to the reasonableness of necessity.

[00:23:51] Speaker 04:
That is what we have to do.

[00:23:51] Speaker 04:
Does he have to be designated as an expert or can he testify as a fact witness?

[00:23:56] Speaker 03:
Well, Your Honor, given the fact that he is an expert, he should be disclosed as an expert.

[00:24:01] Speaker 00:
But he wasn't disclosed at the time required for experts in the American home case, but the court nonetheless seemed to say that

[00:24:10] Speaker 00:
it could be he could testify.

[00:24:13] Speaker 02:
Is that not a fair reading of the case?

[00:24:14] Speaker 02:
I think that is a fair reading.

[00:24:16] Speaker 03:
And without a doubt, the court and judge, if Mr. Rosendahl had presented a declaration or somehow asked leave of court to say, I now designate myself as an expert in attorney's fees and if allowed to testify, I would do say so and so, the court was certainly within their discretion to say, I'm going to extend

[00:24:36] Speaker 03:
the deadline or allow you leave to submit that.

[00:24:38] Speaker 02:
And then we would have summary judgment evidence on the issue.

[00:24:41] Speaker 00:
Well, on that point, let me make sure that I understand the way the procedure would work in the Northern District of Texas.

[00:24:47] Speaker 00:
Mr. Rosendahl says, well, when you raise this in your reply on the summary judgment motion, it was too late for them to put anything in.

[00:24:56] Speaker 00:
I don't know whether the Northern District uses the syrup bottle system or what, but what options, at the point that you raised this issue in reply,

[00:25:06] Speaker 00:
Having seen their evidence in the opposition and pointing out what you regarded as the insufficiency of it, what could they have done further that would have been acceptable to Judge Kincaid?

[00:25:20] Speaker 03:
Well, first, Your Honor, given my original motion which says there's no witness, they should have in their original response provided a witness declaration.

[00:25:29] Speaker 03:
Second, when they were solvent on that, and I pointed it out in my reply, you were silent, the practice in the Northern District

[00:25:36] Speaker 03:
is certainly to allow a motion for leave or to allow a surreply or to otherwise bring to the attention of the trial court, okay, now we get it.

[00:25:46] Speaker 03:
As they do in the brief here, we acknowledge we need a declaration of an attorney as to reasonable necessity.

[00:25:54] Speaker 03:
We essentially made a couple.

[00:25:56] Speaker 03:
We omitted it.

[00:25:57] Speaker 03:
We missed the deadline, whatever the reason is, and we asked for a leave.

[00:26:01] Speaker 03:
And that was available to them.

[00:26:03] Speaker 03:
And in fact, in the response, they said, we do not intend to name anyone.

[00:26:08] Speaker 03:
So I kind of wrap up.

[00:26:10] Speaker 03:
I do want to turn to the affiliate question, but to wrap, Your Honor, I would submit that in the motion for summary judgment, we said nothing has been disclosed, witness, expert, or otherwise.

[00:26:21] Speaker 03:
We put them all, notice you need somebody to raise the hand figuratively and say it's reasonable and necessary.

[00:26:28] Speaker 03:
And when they did not, we again repeated that challenge.

[00:26:30] Speaker 03:
You failed to do so.

[00:26:32] Speaker 04:
So the defect in your mind is the failure to submit a declaration, not a failure to designate the person as an expert?

[00:26:38] Speaker 03:
Absolutely, Your Honor.

[00:26:39] Speaker 03:
There was no evidence before the trial court, and therefore, under Rule 56, the court properly granted a summary judgment.

[00:26:46] Speaker 03:
That's the problem.

[00:26:47] Speaker 05:
Well, there was evidence before the trial court, but it's just sitting there, right?

[00:26:51] Speaker 05:
I mean, isn't it... I thought your position was that the failure to designate an expert made the evidence that was submitted immaterial.

[00:27:01] Speaker 03:
No, Your Honor.

[00:27:02] Speaker 03:
If that's the impression I've made, then I have made a wrong impression.

[00:27:06] Speaker 03:
Our point was there was no evidence from any source of reasonableness and necessity.

[00:27:11] Speaker 03:
The invoices didn't establish reasonableness.

[00:27:14] Speaker 03:
Precisely, Your Honor.

[00:27:15] Speaker 03:
That's the problem.

[00:27:17] Speaker 03:
There was nothing there for the trial court to say, here's a fine question on reasonableness and necessity.

[00:27:23] Speaker 03:
The court was compelled to grant a summary judgment.

[00:27:25] Speaker 05:
Well, this case seems to me to be similar to somebody submitting a

[00:27:30] Speaker 05:
an expert declaration on damages, sets out a methodology and a computation of damages, and yet doesn't call the expert to back up the report.

[00:27:44] Speaker 05:
I mean, there was evidence here.

[00:27:46] Speaker 05:
There was invoices, and there was material that had the court had the proper designation, the court could have made a decision as to the reasonableness.

[00:27:57] Speaker 03:
I respectfully note that we could not.

[00:27:58] Speaker 05:
Without evidence of... Okay, I'm saying that's the problem.

[00:28:02] Speaker 05:
You could not make the determination as reasonableness because there was no expert.

[00:28:08] Speaker 03:
The court could not make the determination of reasonableness because there was no evidence from a lawyer of any sort as to reasonableness of the fees.

[00:28:16] Speaker 03:
The invoices, which weren't even attached, they were spreadsheets.

[00:28:21] Speaker 03:
But regardless, you could take that.

[00:28:23] Speaker 03:
There's nothing in those papers that says this was a reasonable and necessary attorney's fee.

[00:28:26] Speaker 03:
That's the problem.

[00:28:28] Speaker 05:
It's a no evidence.

[00:28:28] Speaker 05:
Well, the problem is that it required an expert to come in and say, these papers, disorganized as they may be, is evidence of reasonableness.

[00:28:37] Speaker 03:
It would certainly require that, but even the company themselves didn't offer an interrogatory saying, I'm an officer of the company and I think this is reasonable necessary.

[00:28:48] Speaker 03:
There was no evidence from anyone, certainly not an expert,

[00:28:53] Speaker 03:
to be required.

[00:28:54] Speaker 03:
If I may, I'd like to turn to the question of affiliate.

[00:28:58] Speaker 03:
Your Honor, the issue, GTL is not a parent.

[00:29:05] Speaker 03:
That is undisputed.

[00:29:07] Speaker 03:
And the provision for the covenant not to sue noticeably omits the word parent.

[00:29:12] Speaker 03:
So to get around that, GTL has taken the position that they are an affiliate.

[00:29:19] Speaker 03:
And our position is simply that GTL for purposes and in the context of the settlement agreement and the license agreement is not an affiliate.

[00:29:27] Speaker 03:
There is context in those agreements essentially that is intrinsic evidence that the court can use to determine the intent of the parties and the meaning.

[00:29:37] Speaker 03:
And in this case, although the trial court acknowledged and said there is a settlement agreement and further there's a license agreement which gives meaning to it,

[00:29:48] Speaker 03:
The court went outside the documents to consult Blacks, one of many possible dictionary definitions, as to affiliate.

[00:29:56] Speaker 03:
And based upon this outside extrinsic evidence, determined as a matter of law that a parent, a subsequent parent, was an affiliate for purposes of this contract.

[00:30:07] Speaker 03:
And, Your Honor, it's very important to understand the context.

[00:30:09] Speaker 03:
This is a settlement in which Securus is granting a license

[00:30:16] Speaker 03:
to PCS and its affiliate and it calls the affiliate AGM on those products, those entities' products.

[00:30:24] Speaker 03:
And that's it.

[00:30:25] Speaker 03:
They're deemed the licensed products.

[00:30:29] Speaker 03:
And without a doubt, that license would not extend to GTL even after they acquired it because it was limited to the PCS and the AGM products.

[00:30:39] Speaker 03:
But what GTL is saying, although that's the scope of the license and it would certainly make sense that the scope of the covenant not to sue,

[00:30:46] Speaker 03:
would be parallel, they're now saying although we have many more products and much more activity, because we bought the company, we now can enjoy the protection from suit.

[00:30:58] Speaker 03:
Not because we're in the shoes of a PCS, but because as a parent, we enjoy the full covenant as to everything we own and practice.

[00:31:08] Speaker 03:
That, Your Honor, would frustrate the purpose of this clause.

[00:31:11] Speaker 03:
We've cited a lot of cases, and I would encourage you as you look at those

[00:31:15] Speaker 03:
The courts always look for the context.

[00:31:18] Speaker 03:
In some context, for example, in the effort to remove or to create diversity jurisdiction, there's a certain, we don't want to abuse, so we're going to take a certain view of what means an affiliate.

[00:31:29] Speaker 03:
In terms of fraud, transfers for fraud, it may mean something else.

[00:31:34] Speaker 03:
In terms of natural gases and common carrier pipelines, it may mean something else.

[00:31:39] Speaker 03:
Every time you look at when the court's dealing with the issue of what is a

[00:31:44] Speaker 03:
affiliate, it looks at the context and then determines, given what the context, the intent of the agreement or the statutory scheme is, it's either broad, as in blacks, or it's more narrow.

[00:31:59] Speaker 03:
We've listed those.

[00:32:00] Speaker 03:
I think a great discussion of the various and myriad meetings is in the Magicon case where the court goes through and says all of these cases, all of these are possible definitions.

[00:32:11] Speaker 03:
And from the

[00:32:13] Speaker 03:
Pleading's the four corners of the agreement itself.

[00:32:16] Speaker 03:
We can't tell what the parties meant.

[00:32:19] Speaker 04:
Thank you.

[00:32:20] Speaker 04:
I'd like to begin by just in response to

[00:32:35] Speaker 01:
Judge Bryson's question earlier about Texas cases that may or may not treat attorney testimony as expert testimony, I would direct the court to footnote 34 on pages 17 and 18 of our opening brief in which we have collected some cases that are at least ambiguous on that question.

[00:32:51] Speaker 00:
I read all those cases.

[00:32:52] Speaker 00:
I didn't find anything there that cut against the cases that I just listed.

[00:32:58] Speaker 00:
It seemed to me there wasn't a single one of them that actually came out and said not necessary to be expert.

[00:33:04] Speaker 00:
Is there?

[00:33:05] Speaker 01:
I don't know that there's a square holding that says, no, it doesn't have to be an expert.

[00:33:09] Speaker 01:
I think there are cases that seem to take what looked like not.

[00:33:15] Speaker 01:
They just didn't address the issue.

[00:33:17] Speaker 01:
Yes.

[00:33:21] Speaker 01:
But I think the key admission that we heard from Mr. Strong was that the attorney could be disclosed as a fact witness if the name was disclosed.

[00:33:30] Speaker 01:
But of course, the time to disclose fact witnesses was not until

[00:33:33] Speaker 01:
much later in the case.

[00:33:34] Speaker 01:
And I think following up on your point, Judge Dyke, you can search the record below in vain for a suggestion that we needed to put in an attorney declaration in order to overcome summary judgment.

[00:33:46] Speaker 01:
The district court's own opinion in addressing the summary judgment motions talks about the two questions it was asked to resolve.

[00:33:53] Speaker 01:
Those can be found in the joint appendix on pages six and seven.

[00:34:00] Speaker 01:
of the joint appendix, the court sets forth the questions it thought it was being asked to answer.

[00:34:04] Speaker 01:
And it was whether we had properly responded to discovery requests regarding the calculation and amount of damages, and second, did not designate an attorney expert to testify.

[00:34:17] Speaker 01:
So again, the problem that we have here is that we put in evidence of the calculation

[00:34:26] Speaker 01:
We were entitled later to designate an attorney at trial to talk about the reasonableness of the calculation.

[00:34:32] Speaker 01:
And then they came in and reply and said, you know, aha, you've given us a bunch of unauthenticated hearsay.

[00:34:38] Speaker 01:
Well, if they had said at the outset, you haven't given us your calculation and the only invoice you've given us are unauthenticated hearsay, we could have addressed that in our response.

[00:34:47] Speaker 01:
But for them to come back and reply and do it, it would be too late.

[00:34:51] Speaker 04:
We're out of time.

[00:34:53] Speaker 04:
Thank you.

[00:34:53] Speaker 01:
I thank both counsels.

[00:34:54] Speaker 01:
Please submit.