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

[00:00:03] Speaker 00:
Erin McCampbell-Parris on behalf of Appellants.

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May it please the Court?

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I'd like to reserve five minutes for rebuttal.

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The statutes should be enjoined for three key reasons.

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First, Section 19.858 does not allow a person who was a part of California's card room market to participate in the lawful gambling markets of any other states.

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Economic balkanization like this is and always has been a violation of the Commerce Clause.

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The Commerce Clause was designed to foster trade among the states and to ensure that each merchant had the right to bring his or her wares to each state.

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Section 19, 858, tramples that right.

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Second, this court has controlling precedent that says that California cannot do what it is doing here.

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I'm talking about the Daniels and the Christie's cases.

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In those cases, this court has already told California that it cannot restrict in-state licensees or residents from engaging in lawful economic opportunities in other states.

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But that is exactly what the Section 19.858 is doing here.

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It's like saying, if you want to do this here, then you can't go over there to that other state and do that there.

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A burden like this is and always has violated the Commerce Clause.

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Third, the face of Section 19.858 discriminates against interstate commerce by discriminating between A, firms engaged in intrastate commerce,

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and B, firms engaged in interstate commerce or those who would like to engage in interstate commerce.

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It works like this.

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If you are involved in the markets of any of the other states or if you want to be in those states, then section 19.858 says that's a hard no.

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You can't do it.

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But if you are content to only be within California's market or to only be within a market of another state, you get the green light.

[00:02:11] Speaker 03:
But doesn't this fall on both in-state and out-of-state businesses similarly?

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Are you referring to tribal casinos?

[00:02:20] Speaker 03:
Well, I'm more asking about the limitations that the statute imposes on card room owners and what they may invest in otherwise.

[00:02:29] Speaker 03:
It seems that whether you're an in-state card room owner or an out-of-state person who has an interest here, it falls similarly, does it not?

[00:02:39] Speaker 00:
If you are talking about discrimination based on residency, which is kind of like the thing we all learned about in law school where, you know, a citizen of one state can't enter another, we have conceded that the face of the statute does not do that.

[00:02:53] Speaker 00:
What it does here, it only comes into play when we're talking about firms who want to engage in the markets of two or more states, interstate firms.

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If you are a firm that wants to be in any state plus California, you can't do that.

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So it's discriminating against firms who want to do that or, like our card room licensees, firms who are in the state.

[00:03:14] Speaker 04:
But let's just, too, to Judge Bresla's question, I think it may have the effect of doing that because other states don't have

[00:03:23] Speaker 04:
the same kind of card, the same kind of games that California has.

[00:03:28] Speaker 04:
But it doesn't directly do that, right?

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Because if every other state just had exactly the same kind of games California had, then you agree that nothing would prohibit an in-state person that owned a card, these kind of games, to own a place out of the state.

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So it has that effect, but it doesn't do it directly.

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Would you agree with that?

[00:03:49] Speaker 00:
Well, it says within or without the state.

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And we know that within the state, casino style or banked gambling is prohibited under Penal Code Section 330.

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So it can only reference

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what's happening outside the state, because what's happening inside the state, that activity is already prohibited.

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And so that's the problem.

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That's why we say on its face it's doing that.

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And secondly, when you look at Doran Commerce Clause precedent, the courts are always looking at the state of play.

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They're looking at not just what's happening in the home state or the enacting state.

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and what they're doing, but what the impact is on the market as a whole.

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And when we look at the state of play here, every other market has casino style or banked style gaming.

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And so by the statute on its face, implicating what's happening over there in those other states, it's targeting firms engaged in interstate commerce.

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But to what extent does it benefit in-state

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interests at the expense of out-of-state interests.

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That would seem to be more the core concern of the dormant commerce clause cases.

[00:04:51] Speaker 00:
That is one of the factors the court has talked about as being a factor indicative of discrimination.

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They've also talked about firm statutes to skate, pardon me, discriminate against firms engaged in interstate commerce as well as statutes that isolate a state's market.

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So here we have that present here as well.

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California's market is completely isolated from the markets of the rest of the state.

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If you look at, for example, in our amicus council's briefing, card room licensees can't even get highly skilled managers from other states and other markets because, like many industries, casinos compensate highly skilled employees with stock options.

[00:05:32] Speaker 04:
And so it's something that completely... So California does this...

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In a lot of different areas, it seems to me, we have the pork producers case, but the foie gras case that I was involved with in California says you can't have this.

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I think if I remember right, California was, in theory, you could have foie gras, but you couldn't have foie gras that was made in a way that foie gras.

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produced, right?

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So that's just what they do.

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And it seems like our court and the Supreme Court has said that if it has those extraterritorial effects, which I understand your argument to be that basically it does here, but it did in those cases too.

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In those cases,

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So those statutes are an entirely different category of statute than what we have here.

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In those statutes, California was regulating economic activity occurring within its borders, whether it was the sale of pork, foie gras, transportation of shark fins, any of those cases, we're looking at what's happening inside California.

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So if we want to take, for example, pork producers, the analogy here would be if California's statute said,

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you can't sell created pork within California.

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And if you do it, or if you invest one percent, pardon me, more than one percent in any company that does it, whether within or without California, meaning anywhere, you can't come to California and sell your created pork here.

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The Constitution guarantees merchants to have the right to go to each state and to follow those rules of that state.

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So the pork producers had a freedom

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that the card room licensees here do not have.

[00:07:07] Speaker 04:
So using foie gras because I'm just more familiar with that.

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It said you can't sell foie gras that's been produced a certain way in our state.

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Yes.

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that foie gras wasn't produced in California, but it was produced in other states, and so their argument was you're actually regulating how foie gras is made in other states by doing this, and that argument didn't have any traction.

[00:07:28] Speaker 04:
I'm having trouble seeing the difference between that and there's obvious extraterritorial effects, but I'm having trouble seeing how, my instinct might be that even if I'm inclined to agree with you on that, it seems like we're pretty,

[00:07:44] Speaker 04:
pretty tied up by Ninth Circuit case law and by the Supreme Court's case law in doing anything about that.

[00:07:50] Speaker 00:
So I want to first address the Foie Gras case, and then I want to talk about this court's precedent that I think is helpful to us here.

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In terms of the Foie Gras case, there, California was limiting what could happen within its borders.

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I mean, you can't sell or provide this food item here.

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If people outside of California

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chose to react to that, that was the effect, right?

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That was the indirect effect.

[00:08:15] Speaker 04:
Couldn't you characterize this the same way?

[00:08:17] Speaker 04:
It's saying you can't be involved in this other type of businesses if you want to be involved in this business in our state.

[00:08:25] Speaker 00:
So why is that not, I mean... If I can just circle back to the foie gras, the difference here would be if California said on top of the fact that you can't sell it here, if you sell it anywhere,

[00:08:35] Speaker 00:
then you can't enter our market, right?

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So the people who produced foie gras had the economic freedom and the right to sell foie gras anywhere else in the United States.

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They just couldn't do it in California if it was made under that method.

[00:08:48] Speaker 04:
So under your argument, would you, you know, there are states, states will sometimes

[00:08:52] Speaker 04:
have laws against vertical integration, you know, like they'll say you can't own a gas station if you also produce oil, right?

[00:09:00] Speaker 04:
Yeah, excellent.

[00:09:01] Speaker 04:
And I'm having trouble seeing why your argument wouldn't mean that those, because that's what you're doing in that instance.

[00:09:07] Speaker 04:
You're saying you can't engage, especially if you're like in the Exxon instance, let's say a state did not have any

[00:09:17] Speaker 04:
oil producers in its border.

[00:09:19] Speaker 04:
So by default, I guess, it is regulating.

[00:09:23] Speaker 04:
It is trying to control what you can do outside of its border.

[00:09:27] Speaker 04:
So why under your argument would those cases not come out differently?

[00:09:33] Speaker 00:
So in that case, and I wanted to discuss that because there's three key differences between the regulation in Exxon and this one.

[00:09:39] Speaker 00:
But in that case, again, we're talking about the regulation of an in-state economic activity.

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that if people outside the state choose to react to it, they can, but they don't have to, and they can continue doing business as they would like elsewhere.

[00:09:52] Speaker 00:
So in Exxon, there's three big differences from what we have here.

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First, the court did not find any discrimination.

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And they didn't find that because of the fact that the retailers who were selling the gasoline

[00:10:04] Speaker 00:
were a mix of in-state local retailers, firms engaged in interstate commerce, companies located outside the state that had stations within the state of Maryland.

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Furthermore, the finished product of the oil producers still made it into the state.

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They just couldn't sell it directly to

[00:10:22] Speaker 00:
the consumers.

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The reason that this statute came about was an in-state problem, which was that the oil producers, when they had their own stations, when there were times of shortages, would sell only to or favor their stations first, and there were broad swaths of the state that either had no or low amounts of gasoline.

[00:10:42] Speaker 00:
So this idea that vertical integration was causing this problem within the boundaries of Maryland was what the statute sought to tackle.

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We don't have that here.

[00:10:52] Speaker 00:
Everything the statute is targeting is happening outside the state of California, and it's targeting it on the face of the statute.

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It's not an indirect effect that permeates out of California based on, say, its market size.

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It is something that is expressly targeting firms engaged in interstate activities.

[00:11:10] Speaker 04:
And third, another key point- When you say targeting, it feels like an effect to me because

[00:11:17] Speaker 04:
It would be easier, it would be more clear there was targeting out of California if it only banned ownership of casino type games, you know, out of the state, but not in the state.

[00:11:29] Speaker 04:
And I understand they don't allow them in the state, but that's not, it seems, why is it not true, why is it targeting if it's possible that California is just saying we don't want to have people that own these other type, in or out of state, to own

[00:11:43] Speaker 04:
on these types.

[00:11:44] Speaker 04:
Let me just use a real simple example.

[00:11:47] Speaker 04:
California, for some goofy reason, decides they don't want people selling both eggs and milk, right?

[00:11:52] Speaker 04:
So they say, if you sell eggs, if you sell milk, you can't sell eggs, right?

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It's kind of our situation here.

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And we feel so strongly about the no selling both that you can't sell, if your company sells milk out of state, too.

[00:12:07] Speaker 04:
We don't care whether you sell it in or out of state.

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That's the situation.

[00:12:11] Speaker 04:
Why is that targeting out of state, out of state, why is that targeting as opposed to having an effect?

[00:12:18] Speaker 04:
It definitely has an effect, no question.

[00:12:19] Speaker 00:
So I just wanna push back slightly because in that hypothetical, you know, we're talking about two different industries, one dairy, one poultry, and here we're talking about something that targets an entire industry, the gaming industry nationwide.

[00:12:31] Speaker 00:
But separately, in that scenario, both the eggs and the milk, they still make it into the state,

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The parties still are able to sell it.

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They just can't sell both.

[00:12:41] Speaker 00:
We have something very different here.

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You cannot enter this market.

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And if you're a card room licensee, the right that the Supreme Court has announced and articulated in Dennis versus Higgins, which is the right to go to every state and to follow those states rules and engage in lawful economic transactions,

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You can't do it.

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So it's a big, big difference from what we've seen in most of the other cases.

[00:13:01] Speaker 03:
You can't do it regardless of your state of residence.

[00:13:05] Speaker 03:
It doesn't discriminate against people based on where they are.

[00:13:09] Speaker 00:
Correct.

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And we have conceded that that particular form of discrimination, which is just one of the forms the Supreme Court has recognized, is not present here on the face of the statute.

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But the other one that is just as pernicious, discrimination against firms engaged in interstate commerce,

[00:13:26] Speaker 00:
is present here.

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Third, another key point is that this statute completely isolates California's market from the rest of the country.

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And that is something as well you see over and over again, including in the Dennis versus Higgins case, where it has been known since the foundation of this country that if a state was to do that, if we allow the states to engage in that type of economic balkanization, then we are not going to have the unified economy that our founders wanted us to have.

[00:13:53] Speaker 00:
It's a direct violation of the Commerce Clause.

[00:13:56] Speaker 03:
Don't worry about the clock, because this is an important case, and I want to make sure all the questions are asked.

[00:14:00] Speaker 03:
I do have some follow-ups.

[00:14:01] Speaker 03:
Certainly.

[00:14:02] Speaker 03:
One thing about this case is that it involves gambling, which I think the Supreme Court has said is more of a state concern.

[00:14:09] Speaker 03:
How does that factor into the Commerce Clause analysis, if at all?

[00:14:13] Speaker 00:
I don't think that this would be something that, say, would be akin to, like, alcohol, where the states have a superpower designated to them in the Constitution.

[00:14:21] Speaker 00:
But more importantly, California has the tools it needs to protect the integrity of its markets.

[00:14:28] Speaker 00:
There are over 200 statutes dealing with gaming.

[00:14:30] Speaker 00:
We're challenging just the two, the two instances where California used the improper means.

[00:14:34] Speaker 00:
California has statutes that vest the commissioner

[00:14:38] Speaker 00:
with the discretion to deny an application or revoke a license based on a whole bunch of factors like the applicant's character, their reputation, their integrity, their business associations, their economic activities, whether they're involved with or profiteering from criminality, those statutes are already on the books and we don't challenge those means because they are, you know,

[00:14:59] Speaker 00:
fully inconsistent with the Commerce Clause.

[00:15:02] Speaker 00:
The two sections we're challenging are where California is using a means.

[00:15:06] Speaker 00:
The Supreme Court and this court, for instance, in Daniels and in Christie's has told California it cannot do.

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The market will be protected.

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Its integrity will be protected by statutes already on the books.

[00:15:17] Speaker 03:
California is not telling people they can't invest in these businesses, casinos.

[00:15:23] Speaker 03:
It's saying if you want to have a license to run a card room here, you can't do that.

[00:15:28] Speaker 03:
Doesn't that seem like a little bit different?

[00:15:30] Speaker 00:
The way it is, it's simply this.

[00:15:33] Speaker 00:
If you are a member of this in-state industry,

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You do not have the right to be a part of the market in any other state.

[00:15:39] Speaker 00:
And that's just a straight up violation of the Constitution.

[00:15:42] Speaker 00:
And in Christie's, if I could just speak a moment about that.

[00:15:45] Speaker 00:
There, California had a regulation that said that all of its medical waste had to be disposed of by incineration.

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And one of its licensees was removing waste from the state, and for a while had been disposing it somewhere in, I think, Maryland, actually, via incineration, but then decided to move somewhere close to home and dispose under another method in a state where that was lawful, that wasn't incineration.

[00:16:09] Speaker 00:
And California revoked the license and said, no, it's our waste.

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You're going to follow our rules.

[00:16:14] Speaker 00:
And this court stepped in and told California, you cannot condition in-state licensing

[00:16:20] Speaker 00:
forcing a party to forego its lawful economic opportunities in other states.

[00:16:25] Speaker 00:
You just can't do it.

[00:16:26] Speaker 03:
But how about when the idea is to protect in-state conduct?

[00:16:29] Speaker 03:
Because here the theory of the law is that we need this to protect the in-state transactions and dealings in card rooms.

[00:16:38] Speaker 03:
That's an in-state issue.

[00:16:39] Speaker 03:
It's not purely out of state.

[00:16:41] Speaker 00:
So we don't dispute that California has the right to protect the integrity of its markets.

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In fact, if they didn't do that, and if the casinos and card rooms were not

[00:16:51] Speaker 00:
perceived as being lawfully operated, customers wouldn't go there.

[00:16:56] Speaker 00:
But the bottom line is California has the statutes on the books to do this.

[00:17:00] Speaker 00:
It just appears that it doesn't want to bother to enforce them.

[00:17:03] Speaker 00:
It would be like if California said we're not going to allow any products that were manufactured out of state to come into the state versus saying we're going to have laws that regulate the caliber and the quality of products that are imported and we're going to inspect them.

[00:17:17] Speaker 00:
That's the distinction here.

[00:17:18] Speaker 00:
You can't have that blanket ban.

[00:17:20] Speaker 00:
We're asking California to follow its rules, which are already on the books, that allow them broad discretion to vet every applicant and every licensee seeking renewal based on a whole host of activities that are more actually fulsome than the simple issue in section 19.858.

[00:17:38] Speaker 00:
They can deny an applicant based on character.

[00:17:42] Speaker 03:
integrity or perceived lack of integrity business so why can't they say that somebody who's operating or investing in a casino lacks the character to run a card room

[00:17:54] Speaker 00:
If this statute wasn't validated, they may on an individual case by case basis do that.

[00:18:00] Speaker 03:
But because of the means- If you can see that, why can't they do it en masse?

[00:18:05] Speaker 00:
Because the means used here is what's at issue.

[00:18:08] Speaker 00:
It's not the goal.

[00:18:09] Speaker 00:
It's the means used.

[00:18:10] Speaker 00:
And the means used here isolates California's market from the rest of the country.

[00:18:14] Speaker 00:
It deprives anyone who's a part of this market from their constitutional right to engage in lawful interstate commerce in every other state,

[00:18:22] Speaker 00:
And it also targets and discriminates against firms who are engaged in or who desire to engage in interstate commerce.

[00:18:30] Speaker 03:
What are examples of dormant commerce clause cases that involve this kind of licensing?

[00:18:35] Speaker 03:
Because one concern someone could have with this position is that states all the time impose licensing requirements for various different kinds of occupations or businesses.

[00:18:47] Speaker 03:
Many of those restrictions or conditions of licensing might in turn have an effect on interstate commerce in the way that this seemingly does too.

[00:18:57] Speaker 03:
But have we thought that those kinds of licensing regimes implicate the dormant commerce clause in the way that you're arguing?

[00:19:04] Speaker 00:
No.

[00:19:05] Speaker 00:
And we can talk a little bit about Lenscraft, because that's an example of a profession being regulated.

[00:19:09] Speaker 00:
No, those are examples of the state regulating what is occurring within its borders.

[00:19:15] Speaker 00:
And that is a distinction from this.

[00:19:16] Speaker 00:
And for example, in Lenscrafters, they looked at the different educational and on-the-job training experiences that different professions had, optometrists, ophthalmologists, and opticians.

[00:19:29] Speaker 00:
And they said, opticians can't engage in one-stop shopping here.

[00:19:34] Speaker 00:
You can't pair up with an optometrist or ophthalmologist

[00:19:37] Speaker 00:
to sell your eyewear where these eye exams are happening.

[00:19:41] Speaker 00:
The difference, okay, so the opticians had to come to California and they had to follow California's rules.

[00:19:47] Speaker 00:
But when they left California, they were free to engage in the economic activity of offering one-stop shopping in every other state where that was lawful.

[00:19:56] Speaker 00:
So that's a distinction.

[00:19:58] Speaker 00:
And we do not challenge California's ability to restrict what's happening within its borders.

[00:20:03] Speaker 00:
The problem with the statute is it does not come into play

[00:20:07] Speaker 00:
unless we're talking about what's happening over there in that other state.

[00:20:11] Speaker 00:
And that's the issue.

[00:20:12] Speaker 03:
Is that only because gambling is otherwise illegal in California?

[00:20:16] Speaker 00:
Yes, so gambling is illegal.

[00:20:18] Speaker 04:
I can ask you a follow-up to that because it seems like your argument, the way you're presenting it, is if California allowed the same kind of gambling that Nevada has,

[00:20:28] Speaker 04:
but then said you can't own, you can't, had the same rule, right, that you can't own a card room, you can't have any ownership in a card room and gambling that overlap, no company can have overlap ownership.

[00:20:40] Speaker 04:
then you would say that does not have a problem.

[00:20:44] Speaker 04:
But it just happens to be that California doesn't have gambling that makes this a Commerce Clause problem?

[00:20:50] Speaker 00:
So your hypothetical will be a little bit of a different scenario.

[00:20:53] Speaker 00:
And one of the key differences is that California's market wouldn't be cut off the way it is.

[00:20:58] Speaker 00:
I mean, I guess in this scenario, it would be like most of the other states, I think 42 that have authorized casino-style gambling.

[00:21:04] Speaker 00:
Here, the statute, the way it's structured,

[00:21:06] Speaker 00:
It cuts off California.

[00:21:08] Speaker 04:
But this is what I'm really struggling with here, and I know we've taken you over, but that seems to be a common effect any time California or some other state says, we want to do something.

[00:21:20] Speaker 04:
So like if food, let's say California, we want a certain size for chickens to be raised in it.

[00:21:27] Speaker 04:
And say it's different than every other state.

[00:21:29] Speaker 04:
That will isolate their market.

[00:21:30] Speaker 04:
That will have the effect of isolating their market.

[00:21:32] Speaker 04:
And so, I don't think we've said there's a commerce cause problem there, the port case.

[00:21:39] Speaker 04:
So I'm trying to figure out, what they've said here is we don't want card rooms to have overlapping ownership with Nevada-style casinos.

[00:21:48] Speaker 04:
And that is regulating in-state conduct that has, it may have the effect of only banning people from out of state because they don't have casinos in-state, but they could have casinos in-state,

[00:22:03] Speaker 04:
I'm really struggling to see how yours is different than these other examples and certain cage sizes for chickens.

[00:22:12] Speaker 00:
So it's very different from those.

[00:22:13] Speaker 00:
And I want to try to walk through that and make sure I can get you comfortable with that before I sit down.

[00:22:18] Speaker 00:
Which is that in those cases, California is saying the rule of play for our market here in California is like you can't have created chicken or pork producers created pork or you can't sell foie gras made by this manufacturer through this method that we don't approve of.

[00:22:34] Speaker 00:
The people who, let's assume in this scenario, all of the people who provide these food source, they're located outside the state of California.

[00:22:45] Speaker 00:
Those people have a choice, okay, and a liberty and a freedom that our clients do not have here, which is that they can make a couple different choices, right?

[00:22:53] Speaker 00:
They can choose to say, you know what, it's gonna cost too much money, I'm not gonna mess with California's market anymore.

[00:22:58] Speaker 00:
Or they can say, you know what, we'll segregate part of our farm and we'll do this way for California, and then the other states who let us do it the way we'd like to do it, which is to raise foie gras on the traditional method, we'll continue to sell that there.

[00:23:10] Speaker 00:
That right there, our clients don't have that freedom.

[00:23:14] Speaker 00:
Mrs. Flint.

[00:23:17] Speaker 04:
I mean, I could change the hypothetical a little bit now.

[00:23:19] Speaker 04:
Let me say, California says, you know, just chickens sitting in two smaller cages, or even big cages, looking at chickens in small cages, we don't want them to have that emotional distress.

[00:23:28] Speaker 04:
And so you can't bring in chicken that was raised at any farm where other chickens were.

[00:23:37] Speaker 04:
So California seems like California could do that.

[00:23:41] Speaker 00:
It's still talking about what's going to be on the grocery shelves in California.

[00:23:45] Speaker 04:
This statute is talking about what the ownership of our card tables in California is going to look like.

[00:23:56] Speaker 00:
It doesn't because it doesn't come into play.

[00:23:58] Speaker 00:
There are no casinos in California, so it only comes into play.

[00:24:02] Speaker 00:
when we're talking about what's happening in another state.

[00:24:04] Speaker 00:
And we have other statutes on the books that address this very issue that give the Commissioner such broad discretion that a factor like character or lack of character is enough to deny an application.

[00:24:16] Speaker 00:
This statute, the means used here, violates the Commerce Clause for three key reasons, in that it discriminates against firms engaged in interstate commerce,

[00:24:26] Speaker 00:
It forms an absolute barrier, an economic barrier, around the state of California.

[00:24:31] Speaker 00:
And both those issues were discussed in Dennis versus Higgins and recognized as violating the Constitution.

[00:24:36] Speaker 00:
And third, it is California using its in-state licensing, just like it did in the Daniels case, to force licensees

[00:24:45] Speaker 00:
to forgo lawful economic opportunities in other states.

[00:24:48] Speaker 00:
It's actually worse than that, because at least in Daniels, the waste management company could go to other states and take those states' waste and dispose of them however they wanted to.

[00:24:59] Speaker 00:
We don't have that freedom here.

[00:25:01] Speaker 00:
So this case is actually worse than that.

[00:25:03] Speaker 00:
The only reason this statute comes into play is because one person to a transaction happening in Nevada, happening in New York, happening wherever, happens to also have a card room license.

[00:25:14] Speaker 00:
And Christie's is another example.

[00:25:16] Speaker 00:
Christie's says you can't do that.

[00:25:18] Speaker 00:
That was the art case.

[00:25:19] Speaker 03:
A lot of what you're arguing seems to be about extraterritoriality.

[00:25:23] Speaker 03:
And we haven't talked about pork producers, but we held this case for pork producers.

[00:25:28] Speaker 03:
And pork producers seems to cast a lot of doubt on how much of the dormant commerce clause really is about extraterritoriality.

[00:25:35] Speaker 03:
So can you respond to that specifically?

[00:25:37] Speaker 00:
Yes.

[00:25:38] Speaker 00:
We're fully consistent with pork producers.

[00:25:41] Speaker 00:
So in that case,

[00:25:42] Speaker 00:
It looked to me, what the court was saying is that, you know, if folks got the impression that there were extraterritorial effects and that was a per se automatic violation, no.

[00:25:52] Speaker 00:
We're looking more carefully at what's happening with the statute.

[00:25:54] Speaker 00:
It's not an automatic violation.

[00:25:56] Speaker 00:
And what they said was that when there's discrimination like what's present here, and around page 370 or so they talk about discrimination against firms engaged in interstate commerce, even though that wasn't the focus of the opinion, they talk about it.

[00:26:08] Speaker 00:
They said that is just as bad as discrimination based on residency.

[00:26:12] Speaker 00:
And third, the third factor that we have here that wasn't present in pork producers at all is the fact that the statute isolates California's market from the rest of the country.

[00:26:22] Speaker 00:
It also prohibits licensees from their constitutional right to engage in trade in other states.

[00:26:28] Speaker 00:
So those pork producers had a freedom our clients do not have.

[00:26:32] Speaker 00:
They had the ability to go to the other states and to sell created pork, as ugly as it may be,

[00:26:38] Speaker 00:
and to do it wherever it was lawful to do that, and then still come to California and meet California standards here.

[00:26:43] Speaker 00:
And that's what we're asking to do.

[00:26:45] Speaker 03:
We're saying let... How much of the isolationism, though, is driven by the background policy choice not to allow

[00:26:54] Speaker 03:
slot machines and casino-style gambling in California, except in the case of Indian tribes.

[00:27:00] Speaker 03:
How much of the isolationism that we're talking about is really rooted in that?

[00:27:04] Speaker 03:
Because we could look at this regime and say California is very isolated from the interstate gambling market in the sense that we don't allow it here.

[00:27:11] Speaker 00:
Well, I understand that casinos operated on tribal land are not part of California, but I mean, there's dozens and dozens of them, right?

[00:27:17] Speaker 00:
So they're not isolated, I suppose, in that sense.

[00:27:20] Speaker 00:
There's gambling happening here.

[00:27:21] Speaker 00:
This isn't a state like Hawaii or Utah that has no gambling whatsoever of any kind.

[00:27:26] Speaker 00:
They have card rooms.

[00:27:27] Speaker 00:
And California's card room licensees want to follow the rules here.

[00:27:32] Speaker 00:
They want to have card rooms that are well thought of.

[00:27:37] Speaker 00:
But they want to be able to go to other states and to do what is lawful in those states.

[00:27:41] Speaker 00:
And to give an example, like in my home state, New York,

[00:27:46] Speaker 00:
A win for California here means that New York gets to say, okay, AR-15s, they're still illegal here, and gun manufacturers and retailers

[00:27:59] Speaker 00:
if you sell them anywhere in the United States, or if you have more than a 1% interest in any company anywhere in the United States that sells those rifles, you can't come to California's market.

[00:28:12] Speaker 00:
And we can keep doing this.

[00:28:13] Speaker 00:
And the subject matter, no matter what it is, a state is going to have the right to do that.

[00:28:17] Speaker 00:
And that is a tremendous power that has never been recognized in any case, Supreme Court or this court.

[00:28:23] Speaker 00:
It's at odds with what the founders wanted, which was a unified nationwide economy.

[00:28:28] Speaker 00:
And it's going to really redefine the economy in the United States.

[00:28:33] Speaker 03:
I think we've obviously taken you over your time.

[00:28:35] Speaker 03:
But I think we'll ask you to take a seat.

[00:28:38] Speaker 03:
We'll put five minutes on the clock for rebuttal, optimistically.

[00:28:41] Speaker 03:
Thank you.

[00:28:42] Speaker 03:
And we'll hear from Mr. Klein.

[00:28:43] Speaker 02:
Thank you very much.

[00:28:44] Speaker ?:
Thanks.

[00:28:53] Speaker 01:
Joshua Klein for the appellees, may it please the court.

[00:28:57] Speaker 01:
Under the Supreme Court's and this court's precedents, all three of the plaintiff's claims fail.

[00:29:03] Speaker 01:
Their claim that the statute is virtually, per se, invalid, which is really what they're arguing as an extraterritorial regulation, is foreclosed by part three of the Supreme Court's national pork decision, which is a part which speaks for the court, not a plurality,

[00:29:21] Speaker 01:
and held there is no separate extraterritoriality test for dormant commerce.

[00:29:28] Speaker 01:
Their claim that it's per se invalid because it affects interstate investment, which also I think they're now characterizing as a discrimination against interstate investment, also fails.

[00:29:41] Speaker 01:
And the questions got it right, I think.

[00:29:44] Speaker 01:
What these plaintiffs want is essentially what the plaintiffs wanted in Exxon, to engage in an in-state business

[00:29:50] Speaker 01:
Here, it's card rooms.

[00:29:51] Speaker 01:
In Exxon, it was owning 36 retail gas stations that the state wants to insulate from the ownership of another kind of business.

[00:30:02] Speaker 01:
Here, it's casinos.

[00:30:03] Speaker 01:
In Exxon, it was refineries and producers.

[00:30:07] Speaker 01:
And under Exxon, the fact that the second activity would be entirely out of state does not mean that the state's regulation of the in-state conduct is invalid.

[00:30:19] Speaker 01:
That leaves a pike claim, which precedent makes extremely hard to establish.

[00:30:25] Speaker 01:
And at the first step, the plaintiffs haven't shown a substantial effect on interstate commerce because burdens like inefficiency and foreclosing preferred ownership structures or methods of operation don't count under Exxon and this court's national pork decision.

[00:30:40] Speaker 01:
And if there are burdens, the plaintiffs couldn't show they're sufficiently excessive to justify this very rare kind of invalidation under an implied power.

[00:30:49] Speaker 01:
Worries about casino susceptibility to crime and corruption have been repeatedly and recently acknowledged by the Supreme Court, which has characterized also gambling as an area where Congress envisions the benefits of local regulation, which may be different state to state.

[00:31:09] Speaker 01:
So to invalidate this statute on the basis of what's only an implied authority of the Dormant Commerce Clause

[00:31:16] Speaker 01:
would go beyond what Supreme Court president or this court's precedent allow.

[00:31:20] Speaker 01:
And with the court's permission, I'll just start with extraterritoriality.

[00:31:26] Speaker 01:
Part three of the Supreme Court's national court decision, the court held that there's no special kind of claim for extraterritoriality under the Dormant Commerce Clause.

[00:31:36] Speaker 01:
The court went on, obviously, to consider a pike claim, whether extraterritorial effects constituted a substantial burden.

[00:31:46] Speaker 01:
They didn't apply any kind of special test.

[00:31:51] Speaker 01:
In fact, they said that such a special test has no place.

[00:31:56] Speaker 03:
Your friend in the neuroscience seems to be arguing, well, there's not really much regulation of in-state conduct here.

[00:32:02] Speaker 03:
It really more falls out of state.

[00:32:03] Speaker 03:
So how do you address that?

[00:32:06] Speaker 01:
Your honor, what we're regulating, what the state is regulating, is the ownership and operation of card rooms, all of which are located entirely in the state of California.

[00:32:17] Speaker 01:
Now, even if you compare this to Daniel Sharp Smart and Sam Francis, this court's earlier decisions, you can see how different this is.

[00:32:27] Speaker 01:
In Sam Francis,

[00:32:29] Speaker 01:
The problem this court noted was that there could be regulation of sales, which occurred entirely out of state, transactions entirely out of state based on nothing more than the in-state residents of one party.

[00:32:44] Speaker 01:
We're not doing anything of that sort here.

[00:32:46] Speaker 01:
As this court has noted, California residents are free to buy and sell shares in casinos across the country.

[00:32:57] Speaker 01:
What's being regulated is whether they do that simultaneously as an exon with the in-state continuing operation of an in-California card room.

[00:33:10] Speaker 01:
And if you compare it to Daniel Sharp Smart, for instance, what had happened there, the problem was that the medical waste had completely exited California's borders.

[00:33:20] Speaker 01:
The California, the state was trying to regulate what could be done with it outside those borders.

[00:33:26] Speaker 01:
And there was no, there wasn't, they weren't doing it on the basis

[00:33:32] Speaker 01:
of a state interest in continuing regulation of in-state activity.

[00:33:37] Speaker 01:
I don't think that case can be read as meaning that for where there is regulation of in-state activity, that the state is not allowed to regulate things that have some out-of-state effects.

[00:33:51] Speaker 01:
And just to give an example, if a California lawyer in a representation of a California client takes those client's confidential files, drives them to the state border

[00:34:03] Speaker 01:
And then breaks what would be the California rules of confidentiality with those files.

[00:34:09] Speaker 01:
I don't think that Daniel sharp smart would go so far as to as to say that it's impermissible for California as part of its licensing and regulation of the in state conduct of that representation.

[00:34:22] Speaker 01:
can't be interested in preventing that breach.

[00:34:25] Speaker 03:
Are any of our cases, particularly Daniel Sharp Smart, is there any tension between some of these and what pork producers now has to say about extraterritoriality, or do you think these are all reconcilable?

[00:34:38] Speaker 01:
I'd go further than saying that there's just tension.

[00:34:40] Speaker 01:
Daniel Sharp Smart uses the words

[00:34:43] Speaker 01:
virtually per se invalidity of extraterritorial regulation.

[00:34:49] Speaker 01:
And part three of the Supreme Court's national court said, considered that very rule and said it does not apply, and certainly doesn't apply outside the very narrow category of price matching statutes.

[00:35:04] Speaker 03:
OK, so you think there's parts of Daniel Sharpsmore, at least, statements in it that are not correct.

[00:35:09] Speaker 01:
Yes, Your Honor.

[00:35:10] Speaker 01:
But, I mean, I would say also that even under this Court's earlier precedent, this Court's precedent in the national pork case, that these plaintiffs' extraterritoriality claims would also fail.

[00:35:24] Speaker 01:
Because, as this Court said, that principle

[00:35:29] Speaker 01:
before the Supreme Court decision still only applied where it was entirely out of state conduct being regulated.

[00:35:34] Speaker 03:
But what I hear you saying, I think, is that the result in Daniel Sharpsmart may still be correct under pork producers.

[00:35:42] Speaker 01:
Your Honor, I don't think I have a reason to disagree with that.

[00:35:47] Speaker 01:
But I think that would probably happen through some different mechanisms and different kinds of claims, right?

[00:35:54] Speaker 01:
The Supreme Court and pork producers said,

[00:35:57] Speaker 01:
Well, you could consider a due process claim about whether there's a rational basis for the state to extend its legislative authority into another state.

[00:36:07] Speaker 01:
The Supreme Court also noted the presence of fair faith and credit claims.

[00:36:10] Speaker 01:
There could be other claims.

[00:36:11] Speaker 01:
And many of these cases, frankly, may end up decided on preemption grounds where Congress has actually acted in a way a court can apply instead of under the implied authority of the Dormant Commerce Clause.

[00:36:24] Speaker 01:
You know, there was an element of that in the Foie Gras case, for instance.

[00:36:29] Speaker 01:
So I think that that's a long way of saying that I don't think the result in Daniel Sharp Smart would necessarily change, but the doctrinal basis for it would be quite different.

[00:36:40] Speaker 01:
And it's certainly different from what the plaintiffs are arguing here.

[00:36:45] Speaker 01:
If I may, I want to also address the plaintiffs' claims about direct regulation of interstate investment or discrimination against interstate investment

[00:36:54] Speaker 01:
And I just want to emphasize how closely this matches what was going on in the Exxon case.

[00:37:03] Speaker 01:
Challengers want to own one kind of business in state, 36 gas stations in Exxon and California card rooms here.

[00:37:13] Speaker 01:
They also want to own simultaneously

[00:37:17] Speaker 01:
another kind of business, refineries and gas production in Exxon, here, casinos.

[00:37:25] Speaker 01:
The state legislature has determined that the ownership, the co-ownership of these two kinds of businesses is a problem and has enacted, therefore, a law which essentially puts people to the choice.

[00:37:42] Speaker 01:
You can engage in one kind of business or the other.

[00:37:45] Speaker 01:
Choose which one is more valuable to you.

[00:37:47] Speaker 01:
And in Exxon, as here, the fact that one type of that business happens to be entirely out of state does not mean that the state is barred from exercising its legislative power in that way.

[00:38:02] Speaker 01:
You know, if you think about how different, when during the briefing of this case, the plaintiffs were relying for their interstate investment and discrimination against interstate commerce claims on cases like Lewis and Edgar versus Might, which just show how far afield from actual precedent this kind of claim is, right?

[00:38:23] Speaker 01:
And Lewis was frankly a straight up discrimination case where there was explicit discrimination against out of state,

[00:38:32] Speaker 01:
bank holding companies with a principal place of business outside Florida, so they could not offer certain services in Florida.

[00:38:39] Speaker 01:
And even then, the court ruled on the basis of pike balancing, not the special regulation of investment claim that the plaintiffs are claiming.

[00:38:51] Speaker 01:
And might similarly, the opinion for the court was a pike balancing opinion.

[00:38:57] Speaker 01:
There was some plurality discussion of the

[00:39:01] Speaker 01:
interstate effects of the regulation.

[00:39:04] Speaker 01:
But, you know, there I think that the most pertinent thing was that, you know, to put this in more of the extraterritorial, extraterritoriality box, that the court noted that the terms of the statute would allow a regulation of entirely out-of-state transactions based on nothing more than the in-state incorporation equivalent to residency.

[00:39:27] Speaker 01:
of the company.

[00:39:28] Speaker 01:
And again, California is not doing anything like that here.

[00:39:32] Speaker 01:
Californians, just like anyone else in the country, can make the choice of investing in the California card room regulated industry or investing in

[00:39:45] Speaker 01:
casinos wherever they may occur.

[00:39:47] Speaker 02:
And is it strictly a legislative decision to say, you know, gambling 100 years ago was completely different than it is now?

[00:39:57] Speaker 02:
You can't watch a sporting event without being bombarded with advertisements for online gambling, et cetera, et cetera.

[00:40:06] Speaker 02:
And we just

[00:40:08] Speaker 02:
there may come a time when the legislature says, you know, we don't really need to do this anymore, and there's nothing we do in the meantime?

[00:40:15] Speaker 02:
Or is there some point where the regulation becomes so ridiculous that a court should step in and say, there is no logical nexus here?

[00:40:26] Speaker 01:
Well, Your Honor, I think there can be such a point in a dormant commerce clause case.

[00:40:33] Speaker 01:
That occurs under pike balancing.

[00:40:35] Speaker 01:
But of course, it's subject

[00:40:37] Speaker 01:
to the explicit limitations that the Supreme Court and this court have placed on the Pike balancing inquiry.

[00:40:46] Speaker 01:
And so the first step would be to establish something that counts as a substantial burden on interstate commerce.

[00:40:53] Speaker 01:
And the second step would be to establish, under the very high standards of this test, that those burdens clearly exceed the local benefits.

[00:41:06] Speaker 01:
In your honor's words, if something is entirely irrational, then I suppose there's always some kind of a constitutional remedy for that.

[00:41:15] Speaker 01:
That's true even under the due process clause or the equal protection clause, right?

[00:41:19] Speaker 01:
But I don't think that the implied authority of the dormant commerce clause where the Supreme Court

[00:41:28] Speaker 01:
The end of the national pork opinion, which again, the last part is written for the court, not just a plurality, says this is a very delicate business.

[00:41:38] Speaker 01:
It should be very unusual to strike something down on that basis.

[00:41:45] Speaker 01:
You know, and just to just to continue on the pike point, the things that they're talking about as substantial burdens are things which I think are effectively precluded under Exxon and national pork from counting.

[00:41:59] Speaker 01:
The increased burden that happens to fall on out-of-state firms that precludes a more profitable or more effective way of operating, having to divest or avoid investments in a particular state, or some perceived disadvantage to in-state customers or firms.

[00:42:15] Speaker 01:
And let me just say it's relevant to both Pike and their discrimination arguments.

[00:42:23] Speaker 01:
They have noted that the California cardroom industry is a California industry with California employees, California businesses that pay taxes in California.

[00:42:33] Speaker 01:
As this court noted in, I think it's an international franchise, that's surely relevant to the claim that they are so, to any argument that they are so shut out of the political process that they need some extraordinary judicial intervention where Congress has not

[00:42:49] Speaker 03:
I want to ask Ms.

[00:42:50] Speaker 03:
Paris this too, but for your side, in terms of the best cases that you think support your position, I've heard Pork Producers, Exxon, anything else you would add to that list as sort of your strongest authorities?

[00:43:01] Speaker 01:
I'd point the court to International Franchise because I think that's highly relevant to the discrimination argument.

[00:43:06] Speaker 01:
International Franchise says when there's a charge of discrimination, you almost always look, I mean the inquiry, they don't quite use these words, but it starts with and will usually end with

[00:43:18] Speaker 01:
the explicit purposes of the statute here to keep a clean gambling industry in California so that the public, the customers, all are secure in its insulation from corruption and crime.

[00:43:36] Speaker 01:
if there's some isolated statement somewhere, which could be interpreted as meaning another, meaning there's another motive perhaps, that that doesn't get very much weight.

[00:43:48] Speaker 01:
And it points out that where in-state businesses are taking some of the brunt, that there's, that's going to count against any allegation of discrimination.

[00:43:59] Speaker 01:
I see my time has expired.

[00:44:00] Speaker 01:
If there are more questions, I'm happy to answer them.

[00:44:04] Speaker 03:
I think not.

[00:44:05] Speaker 03:
Thank you, sir.

[00:44:06] Speaker 03:
We'd ask the court to affirm.

[00:44:19] Speaker 00:
I want to begin by one key topic, which is that the dormant commerce clause is not dead.

[00:44:25] Speaker 00:
This court has many cases that can rely on here and ruling in plaintiff's favor.

[00:44:30] Speaker 00:
I would ask you to consider Dennis versus Higgins, where the Supreme Court said

[00:44:34] Speaker 00:
merchants have the right to go to every state and to follow the rules of those states.

[00:44:39] Speaker 00:
That is something under the Commerce Clause that is given to every citizen in this country.

[00:44:44] Speaker 00:
Second, the court in that case said, when a state puts up an economic barrier around its in-state market, that is a violation of the Commerce Clause.

[00:44:54] Speaker 00:
On those two reasons alone, you could rule in plaintiff's favor.

[00:44:58] Speaker 00:
But third, we have the discrimination that was talked about in pork producers, discrimination on the face of the statute against firms engaged in interstate commerce.

[00:45:08] Speaker 00:
Next, I want to talk about Daniels.

[00:45:12] Speaker 00:
Daniels has not been overturned.

[00:45:14] Speaker 00:
California didn't say that.

[00:45:16] Speaker 00:
What they said was maybe some of the language wasn't quite as strong as what it was.

[00:45:20] Speaker 00:
Daniels is still controlling here.

[00:45:22] Speaker 00:
This court, in its panel opinion in pork producers, distinguished the regulations at issue in Daniels and in Christie's, which were like this one, you know, on their face targeting out-of-state economic activity from the one in pork producers.

[00:45:38] Speaker 00:
When this court looked at pork producers, it saw that regulation as being an entirely different category

[00:45:43] Speaker 00:
of regulation, then what is at issue in Daniels and Christie's?

[00:45:49] Speaker 00:
Those cases are still good, and they're controlling here.

[00:45:52] Speaker 00:
And under those cases, we have the very same problem those parties faced, which is that they were out of the state of California attempting to engage in lawful economic activity, and California stepped in and said no.

[00:46:04] Speaker 00:
And thankfully, this court stepped in and said that's not permitted under the Commerce Clause.

[00:46:09] Speaker 00:
I also want to talk about Exxon.

[00:46:12] Speaker 00:
In Exxon,

[00:46:14] Speaker 00:
The court found no discrimination and it found no discrimination because the retail gas stations at issue were equally mixed between firms who were local to the state of Maryland and firms who were located outside the country and engaged in interstate commerce.

[00:46:29] Speaker 00:
So that was a key distinction from what we have here.

[00:46:32] Speaker 00:
Second, it was regulating an in-state problem, which was that there were large parts of the state that unfortunately went without gasoline for periods of time and that caused chaos.

[00:46:41] Speaker 00:
Vertical integration was seen as the problem there because the oil companies were only selling to their own stations or favoring those, and when they finally had enough gas, get it to the other parts of the state that weren't their own stations, give them to the independent stations.

[00:46:57] Speaker 00:
That's a huge problem within the border of Maryland.

[00:47:01] Speaker 00:
We don't have that here.

[00:47:02] Speaker 00:
The activity that we're talking about here occurs solely outside the state of California.

[00:47:08] Speaker 03:
California obviously sees that differently.

[00:47:10] Speaker 03:
It says, no, it is an in-state problem to have people running card rooms who have a corrupted influence by casinos.

[00:47:16] Speaker 03:
Now, it seems that people may disagree with that value judgment, but is that not an in-state problem?

[00:47:22] Speaker 00:
Policy wisdom is not something that ever really comes up in dormant commerce clause cases.

[00:47:27] Speaker 00:
It's not the controlling factor.

[00:47:29] Speaker 00:
What the courts are looking at are the means used.

[00:47:32] Speaker 00:
And California has rules on the books that comply and are consistent with the commerce clause, which give the commissioner the ability to look at the applicant, the specific person in front of the commission, and decide whether that person is worthy or suitable or not for a California card room license.

[00:47:48] Speaker 00:
We have no problem with that.

[00:47:50] Speaker 00:
We agree with California that it needs to protect the integrity of its gaming market.

[00:47:55] Speaker 00:
If that was absent, we wouldn't have a market.

[00:47:57] Speaker 00:
So we agree with that.

[00:47:58] Speaker 00:
It's the means used here that violates a number of problems that the Supreme Court and this court have recognized.

[00:48:06] Speaker 02:
Ms.

[00:48:06] Speaker 02:
Paris, you started in the last segment with Mrs. Flint, and then we interrupted you.

[00:48:13] Speaker 02:
Could you personalize it to this case?

[00:48:15] Speaker 00:
Yes.

[00:48:15] Speaker 00:
I'd like to talk about that.

[00:48:17] Speaker 00:
So Mrs. Flint owns dozens of retail stores outside of the state of California.

[00:48:22] Speaker 00:
Because of the statutes, she cannot take revenue from those stores and invest them, say, for example, by a 2% interest, a passive interest, in a publicly traded company.

[00:48:33] Speaker 00:
She can't do that if the company happens to be a gambling-related company.

[00:48:37] Speaker 00:
These are all lawful economic transactions, but she can't do it because she has a card room license in California.

[00:48:44] Speaker 00:
Mr. Collegian Jr., as well, another one of the plaintiffs,

[00:48:47] Speaker 00:
owns a restaurant in Nevada, and he can't use revenue that he's earned there, just like Mrs. Flint, revenue that has never passed through California to invest in lawful businesses in other states.

[00:49:00] Speaker 00:
I am not aware of a Supreme Court case or a case from this court where that type of restriction has ever been upheld.

[00:49:07] Speaker 00:
It certainly was not what was going on in pork producers.

[00:49:10] Speaker 00:
This court looked at Daniels and Christie's, which were not nearly as burdensome as this regulation,

[00:49:15] Speaker 00:
and saw them as a much different category of regulation from pork producers.

[00:49:20] Speaker 00:
I cannot imagine the Supreme Court, if it had an analogous statute here, where pork producers who were outside of the state of California, you know, if they decided to sell created pork, or if they decided to invest in a company that sold created pork in excess of a 1% interest, they couldn't enter California's market.

[00:49:36] Speaker 00:
I mean, that is something that just

[00:49:39] Speaker 00:
It violates a number of tenants that this court and the Supreme Court have have over and over again affirmed in case after case.

[00:49:47] Speaker 03:
Was there any was there any reason to think gambling should be looked at somewhat differently?

[00:49:52] Speaker 00:
Look, it's regulated in states, so what's happening in the state is fully regulated.

[00:49:59] Speaker 00:
I suppose you could say it's somewhat of a vice market, but it's lawful, right?

[00:50:05] Speaker 00:
We're not talking about, say for example, marijuana and say someone is selling, is a part of a marijuana dispensary in another state.

[00:50:13] Speaker 00:
Where there, it's illegal federally, right?

[00:50:15] Speaker 00:
And so people who are in that type of a business

[00:50:18] Speaker 00:
Can't get normal, regulated, transparent banking.

[00:50:20] Speaker 00:
There's large quantities of cash being exchanged.

[00:50:23] Speaker 00:
If that was the type of thing, I think there could be an issue where you would think, well, maybe that person's not suitable because of these large cash transactions that no one's able to follow.

[00:50:32] Speaker 00:
We don't have that here.

[00:50:33] Speaker 00:
We have a fully lawful economic activity in other states.

[00:50:37] Speaker 00:
And our clients are deprived of the right to engage in it.

[00:50:40] Speaker 00:
And from the very beginning of this country and every Supreme Court opinion, and it really is covered extensively in Dennis versus Higgins, that right can't be trampled by any state.

[00:50:49] Speaker 00:
No state has the power to do that.

[00:50:51] Speaker 00:
And California doesn't have the power here to do this.

[00:50:54] Speaker 03:
Thank you.

[00:50:55] Speaker 03:
Thank you very much.

[00:50:56] Speaker 00:
Thank you.

[00:50:59] Speaker 03:
We thank both counsel for the very helpful briefing and argument.

[00:51:02] Speaker 03:
This matter is submitted.