[00:00:00] Speaker 02:
Final case on calendar for argument today is Hotch versus Figgs.

[00:00:58] Speaker 02:
Good morning, counsel.

[00:00:58] Speaker 05:
Good morning, Your Honors. Steve Hubbitrack, Robin Skeller on behalf of the plaintiff's appellants. Your Honors, I'd like to reserve three minutes for rebuttal. Your Honors, this morning I'd like to devote my time to addressing the negligence and failure to reasonably investigate based Securities Act claims as to the misleading impression created in the offering documents in the initial public offering and the subsequent one that informed investors that that FIGS had advanced data analytics capabilities.

[00:01:33] Speaker 05:
And they did that by making statements such as they had the ability to reliably predict buying patterns, that, quote, they had product lifecycle data integration. Those statements were extremely important to the market as multiple analysts remarked upon them. One, in fact, even said that that was FIGS' biggest competitive advantage is its digital-only model and superior data collection and analytics.

[00:01:59] Speaker 01:
Counsel, can we start with a threshold question? Should we apply Rule 9B, heightened pleading standards, or Rule 8?

[00:02:07] Speaker 05:
Absolutely not. Rule 8 should apply here. And that was, in fact, one of the two sources of error that I was going to address this morning.

[00:02:17] Speaker 01:
Tell me why, because these Securities Act claims seem to dovetail almost exactly with the Exchange Act 1s.

[00:02:25] Speaker 01:
other than the fact that one set of allegations are about registration statements and the like from the offering documents, and the others are about a fraudulent course of conduct, but they both rely on this unified course of conduct of, you know, misstating deliberately the data analytics and low inventory risk and the like. I mean, they seem very similar, if not identical, when I look at them side by side. So why shouldn't Rule 9b apply?

[00:02:54] Speaker 05:
Rule 9B should apply because all of the Securities Act claims all allege only negligence and failure to investigate. That's the bottom line. In Dow, this court said basically that we usually apply Rule 9 to Securities Act claims when there's a wholesale adoption of all of the allegations. But there is no such wholesale adoption here. I mean, for instance, in many cases, there will be a Section 11, Section 12 claim based upon offering documents. and then a Section 10B claim based upon the exact same facts.

[00:03:26] Speaker 05:
We don't have that here. We have a temporal break, substantial temporal break, and then additional facts that occur as things progress during the period of time during which the class period runs.

[00:03:38] Speaker 02:
Counsel, what are the specific allegations regarding negligence?

[00:03:44] Speaker 05:
Your Honor, the negligence allegations are at paragraphs 37, 124, 136, 174, 189, 203, 180, 182, and 195. Okay. Could you summarize that for me?

[00:03:59] Speaker 02:
What is the negligence that's alleged?

[00:04:01] Speaker 05:
Well, the negligence is that these statements were made without adequate investigation, without reasonably investigating whether or not they were true. It's just basically standard negligence. There's no obligation for these particular offenses, excuse me, these particular claims that there be a showing of cyanide as there is for the later Section 10B claims. And even if we were to decide that, and I don't think that you should, but if you were to decide that Rule 9 should apply, what the district court didn't do is it skipped the next step of that analysis, which is set forth in the Vest decision.

[00:04:37] Speaker 05:
And it says that, quote, the only consequence of a holding that Rule 9B is violated with respect to a Section 11 claim would be that any allegations of fraud would be stripped from the claims. That's what Vest says at 317 Fed Third at 1105. The district court never identified any allegations of fraud that were applicable to the Section 11, Section 12 claims.

[00:05:03] Speaker 01:
I guess moving aside from the labels of it, our Roopke case talks about how where a complaint employs the exact same factual allegations to allege violations of Section 11 as it uses to allege fraudulent conduct under Section 10B, we can assume that that sounds like fraud. And when I look at your, because I had my law clerk print this out side by side, and they look almost exactly like, you know, what some of the Section 11 claims say are challenge the DTC strategy, giving access to valuable real-time customer data that allows us to better acquire and retain customers and reliably predict buying patterns.

[00:05:42] Speaker 01:
And then for the Exchange Act claims, you know, paragraph 252, DTC strategy also gives us access to valuable real-time customer data They would leverage in all aspects of our business, demand forecasting and inventory optimization leading to operational efficiencies. They just really seem to dovetail into the same theory of harm, basically, from both of these things.

[00:06:04] Speaker 05:
Well, the theory of harm, basically, is that the statements are misleading. But the fact that a statement is misleading isn't enough to suggest that it's fraudulent. This court's recent decision in Funko made a distinction between The fact that you have falsity on the one hand, which doesn't involve what's actually in the defendant's head, and then you have fraud on the other hand, which does involve what's in the defendant's head. The same point was made in the Refco decision that we cited in the opening brief that explains that you can't simply conflate falsity and cyanide.

[00:06:38] Speaker 05:
And in this case, we allege only falsity as to those statements. I'm not going to deny that the statements are similar. Your Honor certainly is correct about that. But there is no allegation that there was any sort of science or with respect to the earlier statements that are made in 2021.

[00:06:54] Speaker 01:
You know, by the time you don't need science or for rule nine B, though, that's just under the PSL array.

[00:07:02] Speaker 05:
Right. But the point is, is that we're I mean, the idea is, is that we're talking about applying rule nine B because this claim supposedly sounds in fraud.

[00:07:13] Speaker 01:
Let me ask you this. I was having a hard time understanding what are the actually false statements that you were alleging for the Securities Act claims. Is it that FIGS did not have a data system, data analytics system? Or is it that it had one, but it was an unsophisticated one? Or was it that it has one, but it wasn't proprietary because it borrowed from others? I was having a bit of a hard time understanding what exactly is the falsehood that's being alleged.

[00:07:46] Speaker 05:
Well, the falsehood that's being alleged is whatever it was that FIGS had, its complement of data analytics capabilities did not meet the standard of what they were.

[00:07:57] Speaker 01:
But which – I gave you three categories. Which of those three are you asserting was the false statement? I think I've covered them all. Maybe I'm missing one, but.

[00:08:07] Speaker 05:
I understand what Your Honor's point is. I guess what I'm trying to say is that the point that we're trying to make is they claimed certain attributes. Whatever system it was that they had did not have those attributes. And we have witnesses that have come forward and said that. They said that they never had sophisticated data analytics. One of the witnesses came forward and said that it's laughable to suggest that they had data integrated product lifecycle data, and that they could make, use that information in order to make accurate predictions as to their demand.

[00:08:43] Speaker 05:
So whatever their system.

[00:08:46] Speaker 01:
So it's that, I mean, taking that statement, then it was an unsophisticated system, even though FIGS represented there was a sophisticated system.

[00:08:55] Speaker 05:
Yes. And certainly, you know, we've used the PLM type system as an example. It didn't meet the standard of the PLM system. In fact, both of the, uh, of the witnesses said that that was essential for this type of company with the type of products that they were selling and manufacturing and transporting.

[00:09:14] Speaker 01:
I mean, FIGS never uses the word PLM in its offering statements.

[00:09:18] Speaker 05:
No.

[00:09:19] Speaker 01:
But you were using it throughout your briefing. So why would it be false for FIGS to have not used PLM?

[00:09:26] Speaker 05:
Well, we're not saying that it's false for not having used PLM. Okay. What we're saying is that that's basically an example of what the gold standard is they claimed that they had a system that allowed them to replicate those types of functions. We're not saying that they ever used the word PLM, that they said that they had a PLM. We're using that as basically as a yardstick. And the two witnesses that we have both say that that is eventually the gold standard as to this type of company.

[00:09:55] Speaker 01:
So CW1 was hired after the class period. and the district court discounted the reliability of CW1 statements because how could that witness testify to statements being made in public or offering statements when that witness wasn't around? What's wrong with that?

[00:10:17] Speaker 05:
I think that the error there is that the district court sort of read Zucco as creating a per se rule that if you're not employed at the time of the facts that you're relating, that your information cannot be considered. but that's not what Zucco said. I mean, Zucco was talking about two witnesses, one of whom, and it was a financial case, an accounting case. One of those witnesses who didn't work at the right period of time was in human resources, so knew nothing firsthand about any of the facts that were related.

[00:10:50] Speaker 05:
The other witness discussed in Zucco was for a short period of time in the right place, but offered nothing other than the anonymous hearsay statements. So again, no personal knowledge. CW1, however, was in the IT department. CW1 was responsible for integrating the various data systems that FIGS had. So necessarily had responsibilities to put together the legacy systems and the current systems because demand planning as it currently exists requires both that you integrate your historical data and your current data in order to figure out how much you should order, how much you should sell, how much you should manufacture.

[00:11:34] Speaker 05:
So that witnesses actual responsibilities, required knowledge of the previous situation. The other factor I think that supports the credibility of CW1 as to those facts is that we're not talking about what was being discussed around the water cooler in some period of time when you didn't work there. We're talking about systems that were in place. There's no reason to believe that the systems in place in 2023 when CW1 started would be worse than what they had in 2021.

[00:12:08] Speaker 05:
In fact, in 2022, they added for the first time a PLM, which never was actually adequately utilized or staffed. But there's no reason to believe that the systems that were in place in 2021 were better than in 2023.

[00:12:23] Speaker 05:
And in fact, as I mentioned, CW1 had every incentive to go back and determine what was in place then.

[00:12:30] Speaker 01:
Is it a problem that we're talking almost about a subjective opinion as to how sophisticated a system is? And I understood CW1 was saying, look, this is basic.

[00:12:41] Speaker 01:
Part of my impression from reading your briefing was that it seemed as if the argument was being made that modern apparel companies should operate in a certain way. and should have this PLM system and be sophisticated and do all these things. And FIGS wasn't doing it. But the district court, I think, faulted some of the witnesses, including CW2, for really presenting statements that were more in the range of opinion or subjective evaluation or lacking personal knowledge.

[00:13:12] Speaker 01:
Why should CW1 representation that this is not a sophisticated enough system prove falsity of the statements?

[00:13:21] Speaker 05:
Well, CW1 and CW2 both said that they didn't have the capacity to make these types of predictions. They were constantly playing catch-up, trying to respond to changing situations. So it's not just that you should have had a grade A system but you only had a C. It's about whether or not they had the ability to do the things that they said they were able to do, particularly their claim that they had the ability to predict their demand accurately. And CW1 and CW2 established that. I think CW2's allegations were also improperly discredited because CW2 worked in product development.

[00:13:59] Speaker 05:
But product development is directly impacted by the types of systems that we're talking about. And if you look at, I think it's paragraph 143, the defendant said, demographic, geographic, and psychographic data enables FIGS to reliably predict buying patterns, leading to operational deficiencies throughout our supply chain, inventory management, and new product development. So product developers are touched by these systems. That product developer was in a position to know these types of facts.

[00:14:30] Speaker 05:
Product developers also deal directly with the factory, and so CW2 would know that there weren't systems in place that allowed the factory to access FIGS' data, as would be the case with modern demand planning under a PLM. CW2 also had significant personal knowledge, having attended those big final meetings and seen all of the various changes in direction that took place at the last minute, changes in style, cancellations, and reported that those began before the IPO and intensified after the IPO.

[00:15:06] Speaker 05:
So both of those witnesses provide important information. One of the other things that's important in Zucco is corroboration practices. The two witnesses corroborate each other. They both say that a PLM is important. They both say that the PLM system that FIGS ultimately put into effect was deficient and inadequately staffed. They both say they lacked significant data analytics abilities. They both say that there was a catastrophic workflow. And they both say that at FIGS, they were actually using manual demand planning with Documents that were local documents created from Google and Microsoft.

[00:15:44] Speaker 05:
So everything that Zucco asks for, whether or not there's a coherent, plausible narrative in which you can satisfy the standard of probability that these people were probably in a position to know these facts, I think we've satisfied those. And I think they demonstrate that the facts are mistaken.

[00:16:06] Speaker 05:
I see that I've run out of time. All right.

[00:16:08] Speaker 02:
Thank you, counsel. We'll give you a minute for rebuttal.

[00:16:11] Speaker 05:
Thank you, Your Honor.

[00:16:17] Speaker 04:
Is it afternoon yet? Good afternoon. Koji Fukumura. Not quite.

[00:16:22] Speaker 02:
We have four minutes until afternoon.

[00:16:24] Speaker 04:
Well, good morning, then. On behalf of the FIGS and underwriter defendant, Appa Lees, I know we had said that we're going to take 11 minutes and four minutes, but Councilman Talco just said that since there was nothing addressed to them that I could take that they just want to reserve one minute, so I'll take 14 minutes.

[00:16:45] Speaker 04:
Let me go right to this negligence claim. So let me start off by saying he only addressed really Section 11, so we have to focus on the time period, right? And because, of course, Section 11 and Section 12 claims, they depend on the effective date of the registration statement and the prospectus, and I'll just throw those time periods out for you right now. The effective date of the IPO registration statement is May 26, 2021, and of the secondary public offering, that is September the 15th, 2021.

[00:17:21] Speaker 04:
So my friend talked about what he describes as a complete absence of demand planning, and he talked about a PLM, which they never describe really.

[00:17:35] Speaker 04:
After a couple of complaints, they never describe what a PLM really is. And so you have this sort of ambiguous term, and we pointed out in Cloudera, that if you're going to use a term like that, you have to define it in the complaint. And you really have to put some meat into it. But I'll come back to a PLM in a second. Because that's not, as Your Honor pointed out, that's not what the company talked about. They never used the word PLM. And, in fact, my friend conceded that the company didn't even purchase a PLM, whatever it does, until February 1st.

[00:18:07] Speaker 04:
2022, which is almost a year after the IPO and nine months after the SPO.

[00:18:15] Speaker 04:
What FIGS told investors in the registration statement was that as a direct-to-consumer company, it was trying to distinguish itself from its competitors. All of its competitors sold to distributors, and those distributors in turn sold to retailers, brick-and-mortar companies, and then so they didn't know their customers. So what FIGS did at the very beginning in the section titled Who We Are, they described who they are, which is that they're a digitally native company, that they sell products directly to end users, to consumers, that they know their customers.

[00:18:54] Speaker 04:
And these, they sell it through their website, enabled or integrated with Shopify, and that with Shopify, FIGS has access to a treasure trove of information, performance and sales metrics. They know what the hypothetical nurse smith wears, what size she wears, what color she prefers, what's her average order volume. Does she buy just scrubs or when she visits, does she buy limited edition styles or colors or non-core products?

[00:19:26] Speaker 04:
Does she access, importantly, the website and purchase in response to a text message? an email, a new product launch, all of that information, they don't deny Shopify provides. So if you think of that treasure trove of information, and my friend belittles the use of Excel, but Shopify administration will download all of that information in something called CSV files, which are Excel files. And Excel in turn can analyze all that data and make pivot tables and based on what's selling, what's not, when people are buying, when they're not, what colors people like, what colors people don't like.

[00:20:09] Speaker 04:
So did we have data? Yeah. Did we have a treasure trove of data? Did that help in demand planning? Obviously. They haven't pointed to anything that a PLM does. And let me just pause right here and think about this for a moment. This company has been around since 2013.

[00:20:29] Speaker 04:
In 2020, the year before the IPO, it had 1.1 million customers. It had 163 million in revenue. By the end of 2021, it had 1.9 million customers. They talk about a catastrophe and nothing happening.

[00:20:45] Speaker 04:
Well, lots of stuff was happening. We were selling an increasing amount of goods. My client was selling an increasing amount of goods. Revenue was doubling dramatically. between 2018 and 2019 by 110%, between 2019 and 2020, 140%, and it goes on. So I don't understand where they've pointed to specific facts showing that there was an inability to meet demand or to understand all these analytics that the company was getting from Shopify.

[00:21:19] Speaker 01:
Just to understand, so FIGS, in your view, has the data analytics, through Shopify and through other means.

[00:21:28] Speaker 01:
But what about CW1's contention that this is basic and ad hoc? And, you know, I did pose the question, you know, he is hired after the class period, but there is a fair point to be made. How would it be that the company would have a sophisticated system in 21 and 22 and then not have one in 2023? So why shouldn't there be some evidence or allegations to support that this was not a sophisticated data analytics system, and so therefore FIGS was making false statements in its offering documents.

[00:22:02] Speaker 04:
Where is there a well-plugged fact that a PLM is a data analytics system? The reason why, and so this is critical, they had a chance to amend their complaint. The judge dismissed Section 11 claims without prejudice, and they chose instead to seek a judgment and come before this court. So what is a PLM? Well, we have a little bit of an idea, given the allegations that are in there, a review of CW1's, she talks about color libraries and raw materials and purchase order information.

[00:22:37] Speaker 04:
CW2 talks about a tech pack to include a bill of materials, sketches, designs. So we get an idea. I know what a PLM is, and they don't describe it with any, and perhaps they don't because had they described it accurately, it wouldn't jibe with their allegations. A PLM is really on the front end.

[00:23:00] Speaker 04:
What CW2 would do would take a tech pack, get drawings from designers, and make an order. So all of the PLM functions are on the front end, ordering color and color dyes, ordering, you know, uh, materials and, or ordering complete clothes. Um, but it doesn't tell you about the backend, which is what the demand issue is. These data analytics are coming out on macro level.

[00:23:34] Speaker 04:
How are things selling and how do we know that? Well, we get it from Shopify, right? As I started out by saying, Shopify has this enormous amount of data, not only in a macro level about how many, you know, uh, Cade jogger pants we sold, but in what colors and in response to what stimulus? Was it something on Instagram? Was it on Facebook? Was it a TV ad?

[00:24:05] Speaker 04:
So all of this information has nothing to do with the PLM, which is sort of an order entry system to buy goods. Again, if this is not clear, it's not our fault. I could tell you all about a centric system, and what they call basic is core, and it's really just about the front end of how companies go about manufacturing goods.

[00:24:31] Speaker 01:
How much does this turn on applying Rule 8 versus Rule 9B?

[00:24:35] Speaker 04:
It doesn't at all.

[00:24:37] Speaker 01:
Do you think we should apply Rule 9B or no?

[00:24:41] Speaker 04:
I think Your Honor pointed out, and Your Honor pointed out, one half of the problem that they face. We put in as from SCR, two figs SCR 455 to SCR 466, a side-by-side chart of the statements they allege to be false. And as Your Honor pointed out, they look remarkably the same.

[00:25:11] Speaker 04:
The bigger problem for them is not that they challenge the same type of statements. It's the reasons why they're false.

[00:25:20] Speaker 04:
That's where we see a mirror, right? So if you think about from a fraud perspective, that statement is false because CW2 said that there were chaotic last minute changes made and, you know, Heather and Trina, the co-CEOs, imposed their own personal tastes. By the way, they should. They made the company. But impose their own personal taste and change things.

[00:25:48] Speaker 04:
Those are the same allegations in both the Exchange Act claims and the Securities Act claims. So it's not only the fact that similar statements are alleged to be false, but the reasons why they're false are the same. And that is, that's, so yes, 9b should apply. But the court applied Rule 8 for many of the defendants, and we agree that the court got that wrong too. So why is that? So let me talk a little bit more about CW1, because it's not only that there is this temporal disconnect.

[00:26:22] Speaker 04:
But when she says that she looked at the PLM system, what she doesn't say is I looked at historical data. She talked about Excel. She talked about Google Docs. She never said she looked at any of those documents because those documents, if in fact that's where this analysis occurs, this treasure trove of information that's sorted into pivot tables and tells you about consumer behavior, behavior metrics, psychographic information about what Koji likes to wear, what Nurse Smith likes to wear, or how people respond to certain type of ads.

[00:27:02] Speaker 04:
CW1 doesn't say anything about that. or that that was ineffective and therefore these statements are false.

[00:27:10] Speaker 04:
She never says that she looked at any 2021 error data or anything that's really sort of relevant to what we've been describing here. Please.

[00:27:21] Speaker 03:
Did the district court erect a per se rule that if a CW is outside of the time period that the CW is per se unreliable?

[00:27:30] Speaker 04:
I don't think so. I think the district court was looking at this factual scenario. The plaintiffs cite quality systems, and they didn't argue it, but quality systems is something they rely on to say that there's no per se rule. Look at CW6. The court relied so much on CW6 and quality systems. Well, in quality systems, CW6 was a former director of the company. He then became the chief operating officer of the company.

[00:28:01] Speaker 04:
He's someone who said, I personally looked at Salesforce. I saw that there was a shift away from these big licensing deals, which had been driving revenue for that company. And in CW6, I came to the conclusion that the market was saturated. Now, these new big licensing deals were the whole point.

[00:28:25] Speaker 04:
of the trajectory of the stock of that company. He leaves, yes, but his particular statements are corroborated by CW5, who says, yeah, I actually made the reports that showed that these greenfield opportunities were going away, and we're going to a recurring model. And importantly, CW2 was the chief information officer of the company, also corroborated CW6, who had left, and said, I was on an internal conference call with the CEO when he admitted that the market had become saturated for these big new licensing deals.

[00:29:04] Speaker 04:
So it's a very different situation. We have to look at what CW1 said, what CW2 said, and how that affects, you know, what is she talking about in particular? It's almost like speculation. And speaking of speculation, let's talk a little bit about CW2.

[00:29:23] Speaker 04:
The district court correctly said that most of her statements were hearsay. She said, I recall being told, right? I remember someone saying to me that. The only time she has a personal interaction is she said, she sat in on big meetings where, you know, Heather or Trina changed their mind about something or, you know, brought on their dress or, you know, these anecdotal statements.

[00:29:48] Speaker 04:
One thing she doesn't do, and I asked you to focus on the time period in the beginning, She doesn't ever say when.

[00:29:55] Speaker 04:
She started in 2020. She left in 2022.

[00:29:59] Speaker 04:
What product does this relate to? What quarter did it relate to? How does this render anything that the company said misleading? How does that relate in any way to demand planning? And by the way, I see my time is up. The last – what these plaintiffs do is they ignore the entirety of the pandemic during – Well, I see my time's up. Finish your sentence and then finish your sentence. I could go on and on about the macroeconomic pressures, but I'll go back to say that during 2021, you know, not only did you have the port closures, the third and fourth largest.

[00:30:38] Speaker 04:
Right.

[00:30:39] Speaker 02:
Thank you, counsel. One minute.

[00:30:44] Speaker 02:
We have one minute here first before your minute. Oh, I'm sorry.

[00:30:51] Speaker 00:
Good afternoon, Your Honors. May it please the Court, Raza Rashid on behalf of Tolko LLC.

[00:30:57] Speaker 00:
Tolko barely appears in the First Amendment complaint. It hasn't come up in argument today, and the plaintiffs don't actually allege that it did anything wrong. Instead, the theory against Tolko is that they've offered a variety of legal reasons why Tolko should be responsible for any alleged misstatements that were in these offering documents. We agree with Mr. Fukumura that there aren't any misstatements in the claims otherwise fail against FIGS, which is sufficient to dispose of the case against all defendants. Did want to point out very quickly, though, that even if that were not the case, the plaintiffs still don't have any claim against Tolko.

[00:31:29] Speaker 00:
All the security statutes at issue in this case carefully specify classes of defendants who can potentially be liable. Large investors like Tolko aren't on the list. The federal securities laws have been around since the 1930s, and courts have not embraced a rule essentially importing this automatic per se liability for investors. And for good reason, it contradicts the statutory text, as we explained in our briefing. Essentially what the plaintiffs have done in this case is they have alleged a handful of facts against Tolko that are common to all big investors, had a large stock ownership, it had the right to appoint one seat on the board.

[00:32:07] Speaker 00:
They've said, okay, well, that's enough to satisfy any number of legal theories they've posited for Telco's liability.

[00:32:14] Speaker 00:
The problem with that is essentially you would be rewriting the securities laws nearly 100 years later because those facts are true of all big investors.

[00:32:22] Speaker 02:
All right, counsel. Thank you.

[00:32:23] UNKNOWN:
Thank you.

[00:32:24] Speaker 02:
Rebuttal?

[00:32:29] Speaker 05:
Thank you, Your Honor. We're here on a 12b-6 motion, so we are limited to the complaint, not my friend's description of the shotify claim. I would point out that with respect to CW2, we specifically in our part of the argument emphasized the points that CW2 had specific knowledge of. There's a claim that CW2 wasn't specific as to time, but in fact, CW2 said that these meetings where there were constant last minute changes began before the IPO and intensified after.

[00:33:01] Speaker 05:
So there is a temporal element there. With respect to CW1 and paragraph 22, he basically, he or she basically says all the things that they claimed they were doing, they weren't actually able to accomplish.

[00:33:14] Speaker 05:
And then lastly, this is not a Cloudera Tesla situation where we're asking for our own idiosyncratic definition of PLM. It's actually in the complaint 94, but we're not saying that they said they had a PLM. We're saying that they could not do the things that they said that they could do. And the fact that the founders may want to change their Their designs, the last minute is entirely up to them. They just can't tell people they're relying on data rather than their own choices.

[00:33:41] Speaker 02:
All right. Thank you.

[00:33:42] Speaker 05:
Thank you, Your Honors.

[00:33:43] Speaker 02:
Thank you to all counsel for your helpful arguments. The case just argued is submitted for decision by the court that completes our calendar for today. We are in recess until 930 a.m. tomorrow morning.