[00:00:00] Speaker 01: Case number 23-7175. [00:00:04] Speaker 01: Clio AG, a stock corporation formed under the laws of the Principality of Liechtenstein at balance versus Rivetta Networks Inc, a Delaware limited liability company. [00:00:14] Speaker 01: Mr. Parker for the balance, Mr. Baboud for the appellee. [00:00:19] Speaker 03: Morning, Mr. Parker. [00:00:20] Speaker 03: You may proceed when you're ready. [00:00:21] Speaker 06: Thank you. [00:00:24] Speaker 06: Good morning, and may it please the court, David Parker of Hunt and Andrews-Kirth. [00:00:28] Speaker 06: I'm here representing the plaintiff appellant, Cleo AG. [00:00:31] Speaker 06: Now this case concerns defamatory remarks that attacked Cleo's business reputation as a satellite service provider. [00:00:37] Speaker 06: The alleged falsity of those remarks is not an issue here on appeal. [00:00:41] Speaker 06: Rather, the sole issue is whether Cleo adequately alleged injury from those remarks, and Cleo did so in two independent ways. [00:00:48] Speaker 06: First, Cleo adequately pled defamation per se, meaning the statements are inherently damaging based on their nature, and second, [00:00:56] Speaker 06: CLEO adequately led special damages as well, which is just actual injury from those statements. [00:01:02] Speaker 06: Now, the district court held that CLEO didn't adequately plead either path to injury, and that was error. [00:01:08] Speaker 06: It also had important ramifications that go beyond this case. [00:01:12] Speaker 06: I'll start with defamation per se. [00:01:14] Speaker 03: Before you get going, if we were to rule for you on the question of special damages, would there be any reason to still reach the issue of defamation per se? [00:01:26] Speaker 06: I don't think you would have to, Your Honor. [00:01:29] Speaker 06: I think that would be enough for the claim to go forward and to reverse the judgment of the district court. [00:01:35] Speaker 03: It would be enough for the claim to go forward. [00:01:36] Speaker 03: I'm imagining then you go back and are unable, as a matter of proof, to establish special damages. [00:01:44] Speaker 03: Then would you have lost the appeal of defamation per se, or would you have a preserved second appeal? [00:01:53] Speaker 06: That's a good point, Your Honor. [00:01:54] Speaker 06: Now that we're talking about it, I think you actually should rule on the defamation, per se, because that allows us a different category of damages, which are presumed damages. [00:02:04] Speaker 06: So I do think even if you rule in our favor on special damages question, you should also rule on the defamation, per se, question. [00:02:11] Speaker 03: Oh, we wouldn't have to. [00:02:14] Speaker 06: I don't think you would have to. [00:02:16] Speaker 06: You could, I guess. [00:02:18] Speaker 06: Well, I don't know. [00:02:19] Speaker 06: I think you might actually have to, because I think it does affect the case. [00:02:24] Speaker 06: So I'll start with defamation per se, which means that basically the statements are inherently damaging. [00:02:31] Speaker 06: The law recognizes four specific categories of statements that are defamatory per se. [00:02:36] Speaker 06: And one of those categories is that the statement attacks the plaintiff's fitness for trade or business. [00:02:42] Speaker 06: And that's because such statements inherently deter others from transacting with the party. [00:02:47] Speaker 06: And here, Rivada's statements fit into that category for two reasons. [00:02:51] Speaker 06: First, some of the statements conveyed that Clio had lost its frequency licenses. [00:02:56] Speaker 06: Now, these frequency licenses are absolutely critical to Clio's business. [00:03:00] Speaker 06: Clio operates a satellite network that uses radio frequencies to communicate with Earth. [00:03:05] Speaker 06: Clio cannot use those frequencies without a license. [00:03:08] Speaker 06: And as a German court recently put it, losing these licenses would, quote, destroy the existence of Clio. [00:03:15] Speaker 06: So the restatement speaks to this pretty directly. [00:03:18] Speaker 06: And the restatement has been adopted by the DC High Court [00:03:21] Speaker 06: And what it says is that you know a statement does attack a plaintiff's fitness for trade or business. [00:03:27] Speaker 06: If it accuses the plaintiff of lacking a quote peculiar skill or ability that is quote necessary for business or trade. [00:03:36] Speaker 06: And that's been borne out in the case law as well. [00:03:38] Speaker 06: As we explained in the briefs there. [00:03:40] Speaker 03: The question is, does it attack fitness for a trader business if they're just saying they had lost one set of frequency licenses and they aren't disabled from seeking more? [00:03:53] Speaker 03: There's no categorical bar. [00:03:56] Speaker 03: This particular thing of value apparently had been purchased by Tryon and [00:04:05] Speaker 03: I'm sorry, that Revita had purchased an ownership interest in Tryon, and Tryon terminated the frequency usage agreement with Clio. [00:04:15] Speaker 03: So it's a one transaction, not an overall kind of disbarment or delicensure. [00:04:21] Speaker 06: Yes. [00:04:22] Speaker 06: So I think at this stage of the case, the court has to accept the allegations in the complaint. [00:04:28] Speaker 06: And what we alleged is that losing these license would, again, quote, destroy the existence of Clio. [00:04:33] Speaker 06: And that was actually a court that said that. [00:04:35] Speaker 06: So whether, you know, if Rivada wants to, in discovery, try to prove that, you know, Clio could have reapplied for these licenses, you know, that's something that it would be entitled to do. [00:04:46] Speaker 05: The concern would be to destroy the business. [00:04:49] Speaker 05: Seems kind of conclusive. [00:04:50] Speaker 05: Why? [00:04:51] Speaker 05: Is this the only frequency right available? [00:04:54] Speaker 05: No possibility of securing different frequency rights or getting these back. [00:05:01] Speaker 06: Right. [00:05:01] Speaker 06: So I mean, I don't think that information is in the complainer in the record at this stage. [00:05:06] Speaker 06: Right. [00:05:06] Speaker 06: So but what we have alleged is that this would destroy the existence of Clio. [00:05:11] Speaker 06: Again, that's a court saying that. [00:05:12] Speaker 06: And Rivada hasn't contested that. [00:05:14] Speaker 06: Rivada hasn't. [00:05:15] Speaker 06: Why would it destroy the existence of Clio? [00:05:18] Speaker 06: Because Clio needs radio frequencies to communicate for satellites to communicate with Earth. [00:05:23] Speaker 06: And it's lost those particular frequencies that it had. [00:05:27] Speaker 06: And according to Rivada, that is. [00:05:28] Speaker 06: And according to Rivada, Rivada now has those frequencies. [00:05:32] Speaker 05: So what we have in the complaint is that- If somebody goes out and says, that attorney is losing his bar license, that's a defamation per se because it suggests he's done something wrong. [00:05:48] Speaker 05: If you say a business lost a contract, [00:05:51] Speaker 05: That suggests they lost a contract. [00:05:52] Speaker 05: It happens all the time. [00:05:54] Speaker 05: They can go get another one. [00:05:55] Speaker 05: They're now going to have litigation. [00:05:56] Speaker 05: It doesn't necessarily impugn the character of the business. [00:06:02] Speaker 06: Yeah, so what I would say to that, Judge Garcia, is I agree with you that a case of a professional is maybe a little bit different. [00:06:08] Speaker 06: But I don't think this case is more akin to losing just one contract, because Clio needs these licenses to do any amount of business. [00:06:16] Speaker 02: It needs the licenses, but the question is, if it lost the licenses, is that because of incompetence or criminal action, or what? [00:06:28] Speaker 06: Right, and I'm glad you asked that Judge Randolph, because I don't think that there has to be some suggestion that Clio did something criminal or horribly wrong to lose the licenses. [00:06:39] Speaker 06: If you look at the restatement, what it actually says is one example of challenging fitness for trade or business is a merchant that is insolvent. [00:06:49] Speaker 06: And so that kind of allegation doesn't necessarily suggest that the merchant did anything horribly wrong, maybe that [00:06:59] Speaker 06: the merchant's clients just didn't pay him or something like that. [00:07:01] Speaker 05: Let me ask about that. [00:07:02] Speaker 05: I mean, I've considered this, and it seems like that's why the kind of allegations that you said are not in the complaint would be important. [00:07:10] Speaker 05: If this complaint said, Clio was created for the one and only purpose of securing these frequency rights, and the investors will totally abandon us if we do not have these frequency rights, something like that to make this [00:07:26] Speaker 05: Cleo lost its license tantamount to saying Cleo is going bankrupt. [00:07:31] Speaker 05: So those kinds of bad context in this specialized kind of situation is just absent from the complaint, isn't it? [00:07:39] Speaker 06: Sure. [00:07:39] Speaker 06: So I have a few responses to that, Judge Garcia. [00:07:42] Speaker 06: My first is that I actually do think there is some additional information in the complaint that goes to this. [00:07:47] Speaker 06: And that's that you have the allegation that satellite manufacturers approached Clio and then refused to do business with Clio. [00:07:54] Speaker 06: And then we have three other relationships that were allegedly lost as a result of this as well. [00:07:58] Speaker 06: So I think all of that kind of supports the German court statement that this would destroy the existence of Clio and deter anyone from [00:08:06] Speaker 03: Yes, Judge, go ahead. [00:08:08] Speaker 03: So those were the allegations that you're relying on also for the special damages. [00:08:13] Speaker 03: That's correct. [00:08:13] Speaker 03: And it struck me that I don't know this business, but the use of the term partner. [00:08:20] Speaker 03: Satellite manufacturers heard this, and they refused to partner with Clio. [00:08:25] Speaker 03: What does that mean? [00:08:27] Speaker 03: What was the partnership before? [00:08:29] Speaker 03: And what was the injury in terms of the partnership loss? [00:08:35] Speaker 06: Yeah, so I think, you know, a fair inference from the complaint is that what we mean by partnership is that the satellite manufacturers are going to enter into a contract with Clio to help build satellites that Clio needs to send up into orbit. [00:08:50] Speaker 06: And we did allege specific money damages that we suffered as a result of losing the relationships with those manufacturers. [00:08:58] Speaker 03: It was basically [00:09:00] Speaker 03: traveling to hold a business meeting or some effort to reach out, but it's hard to say what the delta is between the satellite manufacturer's willingness for and after. [00:09:14] Speaker 03: So it's just, I mean, there's nothing alleged about we were on the brink of entering a contract or we had a contract. [00:09:25] Speaker 03: Satellite manufacturers were eager to work with Clio and were making better and better bids. [00:09:31] Speaker 03: And then after this, nobody would talk to us. [00:09:34] Speaker 03: We don't have any allegations that actually support a, or do we have any allegations that actually support [00:09:43] Speaker 03: the notion that there's a before and after scenario that's different. [00:09:48] Speaker 06: I do think there is some of that in the complaint. [00:09:51] Speaker 06: We did allege in the complaint that prior to these affamatory statements, Clio was succeeding quite well in its plan of establishing its satellite network. [00:10:01] Speaker 03: Succeeding in what way? [00:10:02] Speaker 06: It had launched multiple satellites, Your Honor. [00:10:04] Speaker 06: It had passed certain regulatory milestones. [00:10:07] Speaker 06: All that's detailed in our [00:10:08] Speaker 06: in our complaint. [00:10:09] Speaker 06: But the before and after, I think, is that before the statements, Clio was succeeding. [00:10:14] Speaker 06: It did have investors. [00:10:16] Speaker 06: And there's actually allegations of how much money we had raised by that point. [00:10:20] Speaker 06: We did have satellite manufacturers working with us. [00:10:22] Speaker 06: If we were sending satellites up into space, I think that's a fair inference. [00:10:27] Speaker 03: It would have been so much more crisp, though, to say we worked with satellite manufacturer X and Y and expected to continue to work with them. [00:10:36] Speaker 03: And when we circled back after the [00:10:38] Speaker 03: conference and after these defamatory statements, they said, we're not really interested in doing that anymore. [00:10:45] Speaker 03: And it's not inconsistent with what you've alleged, but boy, is it not spelled out. [00:10:52] Speaker 06: So I mean, I certainly agree that there could be more detail on this issue alleged. [00:10:56] Speaker 06: But I think the question is whether there is enough in the complaint right now to go forward. [00:11:00] Speaker 06: And I think that there is based on the case law. [00:11:02] Speaker 02: Your proposition that the loss of an important business asset [00:11:07] Speaker 02: impugns the integrity and the competence of the business itself. [00:11:16] Speaker 06: So I think it depends on what the asset is. [00:11:18] Speaker 06: In this case, it's a license. [00:11:20] Speaker 02: Depends on what the asset is? [00:11:21] Speaker 06: Yes. [00:11:22] Speaker 06: I mean, I think if it's an asset that would literally prevent the party from doing its business, like a license in this case, I do think that that rises to the level of defamation per se. [00:11:31] Speaker 06: And as to whether it impugns. [00:11:33] Speaker 02: What authority do you have for that? [00:11:36] Speaker 02: Statements like this float around constantly in all kinds of contexts, speeches and conversations and so on and so forth. [00:11:47] Speaker 02: I think back about, well, I'm not going to get into the various companies and everything else. [00:11:52] Speaker 02: I could give you a dozen examples. [00:11:55] Speaker 02: So the licensing cases [00:12:02] Speaker 02: fall into the category of a situation where the person can't operate their business because it's a unique business, like being a doctor or being a lawyer. [00:12:14] Speaker 02: If you lose that license, then you're not competent [00:12:18] Speaker 02: to be able to practice anymore. [00:12:22] Speaker 02: But a business that loses a major asset can still survive or try to survive by getting more assets or getting more capital or, you know, whatever else is necessary. [00:12:38] Speaker 02: So the case, I don't see those cases, those lawyer cases and the doctor cases having anything whatever to do with this case. [00:12:47] Speaker 06: Yes, judge ran off so I think that again the what matters in this case is the importance of these particular licenses to Cleo and you know, I think without these these licenses Cleo has a satellite network that is essentially just worthless. [00:13:01] Speaker 06: And so, you know, I acknowledge it's not exactly the same as the case of a professional. [00:13:07] Speaker 06: Those are the closest cases that we could find. [00:13:09] Speaker 06: But I do think it's similar in that Clio cannot operate its business just as a lawyer or a doctor could not legally practice their business without a license. [00:13:18] Speaker 02: Well, it's like a lawyer or a doctor losing their office, not their license. [00:13:24] Speaker 06: I'm sorry, losing their office? [00:13:26] Speaker 06: Yeah. [00:13:26] Speaker 06: Well, I think they could still practice law though. [00:13:29] Speaker 02: Let me ask you about the China. [00:13:31] Speaker 02: That was the other problem of the defamation per se, right? [00:13:36] Speaker 02: Yes. [00:13:37] Speaker 02: The comments about China. [00:13:39] Speaker 02: And why is doing business with China a defamation? [00:13:46] Speaker 06: So I don't think it's just doing business with China. [00:13:49] Speaker 06: I think the accusations were that Clio was a quote unquote front organization. [00:13:53] Speaker 06: And the implication was that they had deceived European regulators. [00:13:57] Speaker 06: They had set up essentially a European shell company [00:14:00] Speaker 06: to obtain these licenses under the pretext of using those for the benefit of Europe. [00:14:04] Speaker 02: That's the borders on criminal conduct. [00:14:06] Speaker 02: Is that the idea? [00:14:07] Speaker 06: I don't know if it has to be criminal conduct, but it's certainly dishonest, dishonest in business. [00:14:14] Speaker 02: But doesn't that depend on the law of litmuskiing? [00:14:17] Speaker 02: And we don't know what the law of litmuskiing is. [00:14:20] Speaker 06: Right. [00:14:20] Speaker 06: And to be clear, we have not alleged that it would be illegal in that case for Clio to request the licenses. [00:14:26] Speaker 02: Well, illegal or in violation [00:14:29] Speaker 02: whatever regulations Lichtenstein has. [00:14:32] Speaker 02: Correct. [00:14:33] Speaker 02: I didn't allege that either. [00:14:34] Speaker 06: We have not, no. [00:14:35] Speaker 06: I think really the crux of this is the dishonesty in business and also the threat that if these licenses are transferred to China or the control of the networks is transferred to China, that the Chinese government could take over the project. [00:14:48] Speaker 06: I think those are kind of the two elements of that. [00:14:51] Speaker 03: So are you saying that [00:14:54] Speaker 03: So Ganley refers to some very strict rules with regard to moving or de facto moving constellation rights from one place to another. [00:15:04] Speaker 03: And then as you mentioned, refers to Clio intending to have a sort of front organization in Germany while actual control of the satellites would be with China. [00:15:16] Speaker 03: And I take it to you to be saying in response to [00:15:21] Speaker 03: to Randolph's question that it actually doesn't matter whether there are very strict rules concerning moving consolation rights, but that his statement makes it sound to the average listener that there is a violation of very strict rules about foreign control that Clio has, [00:15:48] Speaker 06: Yes, Judge Pillar. [00:15:50] Speaker 06: I think that's a very good point. [00:15:52] Speaker 06: And I think that with respect to that point, it would not matter whether this was actually illegal if what Robata is communicating is that it would be illegal. [00:16:05] Speaker 03: And wouldn't it have to be such that, I mean, if somebody says, oh, you gave [00:16:16] Speaker 03: the bigger piece of cake that's illegal under the equal protection clause or something. [00:16:21] Speaker 03: And it would have to be that a reasonable listener in the position of the people that Clio thinks are the audience for this defamation would think that, would credit Ganley's statement that this is [00:16:37] Speaker 03: deeply unethical or maybe illegal, maybe even criminal. [00:16:40] Speaker 03: But I guess my question is, if there's this insider crowd at the satellite convention, wouldn't they know the content of any such rules and how likely if it's? [00:16:53] Speaker 03: I mean, I'm just probing whether it matters that you haven't actually told us what the real rules are on transfer. [00:17:05] Speaker 03: Because if there were real rules that prevented this transfer, it seems like it's easier for you to show defamation per se. [00:17:11] Speaker 06: Yeah. [00:17:11] Speaker 06: No, I think that's a good point, Judge Pillard. [00:17:13] Speaker 06: And again, this is not a theory that we focused on necessarily below. [00:17:17] Speaker 06: We were more focused on the dishonesty piece of this and the fact that, you know, [00:17:22] Speaker 06: if it's going to be taken over by China, that the Chinese government could step in and take over the project. [00:17:29] Speaker 06: But I do think that it would be fair to rule on this record, on this illegality point, if your honors thought that was compelling as well. [00:17:36] Speaker 02: What was the result of the... I mean, you mentioned this German court. [00:17:40] Speaker 02: I saw that sprinkled in the papers here. [00:17:44] Speaker 02: What was that all about? [00:17:46] Speaker 06: So there have been multiple litigations and arbitrations abroad concerning Ravada's attempted illegal takeover of Clio. [00:17:56] Speaker 06: So that's been challenged in multiple foreign tribunals. [00:17:59] Speaker 06: And as we explained in the complaint, we've already received some positive preliminary rulings, the equivalent of a preliminary injunction restoring our people to the board. [00:18:11] Speaker 06: So that's what those are about. [00:18:12] Speaker 06: And that German court, in the course of explaining this dispute, [00:18:16] Speaker 06: was reiterating how important these licenses are to Clio by saying they would literally destroy the existence. [00:18:24] Speaker 06: So there are multiple, I think there are maybe even three different foreign litigations and arbitrations happening. [00:18:35] Speaker 06: Well, no, so we definitely dispute that. [00:18:37] Speaker 06: And as we said, we've actually gotten some positive rulings in those foreign tribunals that we did not ever lose the licenses because that's a matter. [00:18:46] Speaker 02: That's a matter of this being litigated. [00:18:48] Speaker 06: Yes. [00:18:50] Speaker 06: That's correct. [00:18:52] Speaker 06: And certainly at the time of great because we're talking about the time of of Robata statements. [00:18:59] Speaker 06: So, you know, I think there's an argument that later [00:19:01] Speaker 06: The Lichtenstein authorities did terminate Clio's licenses when they issued the order, but that was after the statements. [00:19:08] Speaker 06: And what Rivada was saying is that at the time of those statements, Clio had lost its licenses. [00:19:15] Speaker 05: So why doesn't that May 20th order from the Lichtenstein authorities defeat any causation argument? [00:19:24] Speaker 05: I suspect that's gonna be one of the things Rivada says. [00:19:27] Speaker 06: It could argue that your honor, I mean I think that there's there's a time period between the statements and then that may you know whatever it was order and during that time Cleo lost a lot of relationships Cleo had to expend a lot of money to get those relationships back or to attempt to. [00:19:43] Speaker 03: But doesn't the Liechtenstein order go to the effectiveness of conduct that happened before, that you were during the period of the statements disputing? [00:19:52] Speaker 03: But it's kind of a non-protonc point, right, that Liechtenstein rules actually did effectively get the licenses. [00:20:02] Speaker 06: So I guess that would be, if Rivada were to try to use that, I think that would be an argument that the statements weren't false, right? [00:20:09] Speaker 06: That Clio actually did lose their licenses, and that was confirmed by the Clinton sign order later. [00:20:14] Speaker 06: That is not an issue on appeal, though. [00:20:16] Speaker 06: They have not argued that as an alternative ground for affirmance. [00:20:19] Speaker 06: The district court assumed that the statements were true. [00:20:22] Speaker 06: So again, the only issue here on appeal is damages and injuries. [00:20:27] Speaker 06: So with respect to the first defamatory message, yes, your honor. [00:20:31] Speaker 02: You mean, you mean assume that statements were false. [00:20:35] Speaker 06: Yes, I'm sorry. [00:20:36] Speaker 06: Assume the statements were false. [00:20:37] Speaker 06: Yes, exactly. [00:20:40] Speaker 06: So with respect to the first defamatory message, it was per se about lacking the licenses. [00:20:45] Speaker 06: The restatement speaks pretty directly to this. [00:20:47] Speaker 06: It says that accusing someone of lacking a peculiar skill or ability that is necessary for trade or business [00:20:53] Speaker 06: is defamatory per se. [00:20:55] Speaker 06: And then we do have the cases in our briefing discussing professionals that lost their licenses. [00:21:02] Speaker 03: Now, Clio doesn't dispute- You said that goes to truth or falsity, but haven't you pointed to Liechtenstein stripping the rights as in part evidence of damage? [00:21:17] Speaker 06: Yes, your honor. [00:21:17] Speaker 06: So that is one of the four relationships that we say that we lost and that we say satisfies special damages. [00:21:24] Speaker 03: But that one has to now fall away. [00:21:26] Speaker 06: I don't think that one has to fall away. [00:21:29] Speaker 06: No. [00:21:29] Speaker 06: I mean, Rivada has picked on that one because I think they think it's our weakest case for causation, which I would agree with out of the four. [00:21:36] Speaker 06: But I don't think it has to fall away because, you know, [00:21:40] Speaker 06: because of the language and the order. [00:21:42] Speaker 06: And I think they may even use that as a demonstrative later. [00:21:45] Speaker 06: But just because the Lichtenstein authorities didn't say in their order, we heard Robata statements, and that's why we're doing this, doesn't necessarily mean that we haven't proved causation. [00:21:56] Speaker 05: But really, that is the causation for the claim that you focused on, which is the loss of manufacturer relationships. [00:22:03] Speaker 06: Correct. [00:22:04] Speaker 06: That's what we think is our strongest case of special damages and causation. [00:22:07] Speaker 06: And we only need one to go forward. [00:22:14] Speaker 05: It occurs to me that this category of damages is 4,000 euros of travel expenses. [00:22:22] Speaker 05: You don't say when that occurred. [00:22:24] Speaker 05: If those were incurred in June after the Liechtenstein order comes out, then that could seem like some kind of an intervening cause that cuts off a chain of causation. [00:22:40] Speaker 05: If it happened before May 10, [00:22:43] Speaker 05: then we would say it's irrelevant. [00:22:45] Speaker 05: Right. [00:22:45] Speaker 05: So do we know the answer to that question? [00:22:47] Speaker 06: We don't have a specific date on that. [00:22:49] Speaker 06: I think it's a fair and reasonable inference from the complaint that it would have been before May. [00:22:54] Speaker 06: I mean, you know, Cleo was scrambling to keep the business alive. [00:22:59] Speaker 06: Exactly. [00:23:00] Speaker 06: And you would have stopped after. [00:23:02] Speaker 06: Right. [00:23:03] Speaker 06: Yeah, I think it would be a lot harder to get satellite manufacturers after that order came out. [00:23:09] Speaker 06: Exactly. [00:23:10] Speaker 06: And so, again, with respect to the second message that was defamatory per se about Clio being a front organization, I mean, that really conveys two different things, that Clio isn't really a real company, it's just a shell company, and also that Clio have lied to regulators and others by pretending to be a European company, pretending to get this license on behalf of a European company. [00:23:30] Speaker 06: And again, the restatement, which has been adopted by DC, says, [00:23:33] Speaker 06: statements challenging someone's, quote, honesty in business are defamatory per se. [00:23:38] Speaker 06: And the district court itself actually acknowledged this. [00:23:40] Speaker 06: It said that the statements accused Cleo of fraud and deception. [00:23:44] Speaker 06: And I should also say that with respect to the first defamatory message about lacking the licenses, I think the district court acknowledged that as well by saying it challenged, the statements challenged Cleo's viability. [00:23:55] Speaker 06: So I think the district court really made findings that supported and necessitated [00:24:00] Speaker 06: a ruling of defamation per se, but then didn't actually go through with ruling that. [00:24:06] Speaker 06: So I'd like to turn now to special damages. [00:24:08] Speaker 06: And this is the second independent ground for reversal of the district court. [00:24:12] Speaker 06: The special damages are not actually that special. [00:24:14] Speaker 06: They're really just actual damages from the defamatory statements. [00:24:18] Speaker 06: And they must be pled and proven in any defamation case where there's not defamation per se. [00:24:24] Speaker 06: So I think that makes this issue in particular important to other courts. [00:24:30] Speaker 06: What Rule 9G says is that these damages must be specifically stated. [00:24:34] Speaker 06: And this court has interpreted that to require two things. [00:24:37] Speaker 06: First, that the plaintiff described the nature of the losses. [00:24:41] Speaker 06: The district court held that we satisfied that element. [00:24:43] Speaker 06: Ravada doesn't dispute that on appeal. [00:24:45] Speaker 06: So really, the heart of the dispute is causation and the way in which the special damages resulted. [00:24:49] Speaker 06: And we've touched on that already. [00:24:51] Speaker 06: I think we had four different relationships that we said we lost in the complaint. [00:24:56] Speaker 06: As I said earlier, I think our allegations about the satellite manufacturers are the strongest. [00:25:01] Speaker 06: And what we allege there was that within several days of Rivada's statements, multiple satellite manufacturers approached Clio and expressed concerns that Clio was going to fail or was likely to fail. [00:25:14] Speaker 06: And then they refused to partner with Clio. [00:25:17] Speaker 06: So they were essentially repeating back the bottom line message that Rivada had just conveyed about Clio failing or being likely to fail because of the loss of these licenses. [00:25:26] Speaker 06: I think that's a pretty close causal link to have in a complaint. [00:25:29] Speaker 06: I think it's more than enough to establish plausibility in this case. [00:25:33] Speaker 06: And it's more than the allegations in other cases that this court has held to be sufficient, as we've explained in our brief. [00:25:40] Speaker 03: Wasn't the try-on vote to shift the licenses away from Clio [00:25:49] Speaker 03: before the challenge statements? [00:25:52] Speaker 03: And isn't that something that disrupts the alleged causal relationship to any of the damage relationships that you've identified among your four sources of special damages? [00:26:07] Speaker 06: Yes. [00:26:08] Speaker 06: I'm glad you raised that, Judge Pillard, because that, I think, is an error that the district court made. [00:26:12] Speaker 06: So what the district court held, I think this was in a footnote, was that there's [00:26:19] Speaker 06: the allegations would support a reasonable inference that these earlier actions of try on, et cetera, are what caused the satellite manufacturers to have concerns and not Revata's defamatory statements. [00:26:30] Speaker 06: And what I would say is that is certainly possible. [00:26:33] Speaker 06: That's a theory that Revata could prove on appeal. [00:26:36] Speaker 06: But at this stage of the case, we're on the pleadings, and the court has to draw all reasonable inferences in our favor. [00:26:42] Speaker 06: So if there's a reasonable inference that the statements [00:26:45] Speaker 06: that Revata statements caused these damages, but there's also a reasonable inference that Revata's earlier illegal, what we say is illegal conduct caused that. [00:26:54] Speaker 06: I think that inference has to be drawn in favor of us at this stage. [00:26:58] Speaker 06: And the district court also drew reasonable inferences against Clio when it reasoned that it wasn't clear when these manufacturers approached Clio. [00:27:07] Speaker 06: So what the court said was, I see that Revata made these statements on the second day of this four-day conference. [00:27:13] Speaker 06: I see that the manufacturers allegedly approached Clio during the same conference. [00:27:18] Speaker 06: But essentially, it's possible that the manufacturers approached Clio on the first day of the conference, which would have been before Ravada's statements. [00:27:26] Speaker 06: And I think this is really a classic example where the court should have drawn a reasonable inference in favor of Clio. [00:27:32] Speaker 06: If you look at the complaint, the entire thrust of the complaint is describing the impact of the statements at that specific convention. [00:27:40] Speaker 06: It says, quote, the immediate impacts were felt there. [00:27:43] Speaker 06: The purpose and result of the statements was to discredit Clio there. [00:27:47] Speaker 06: Even the paragraph that discusses the manufacturers approaching Clio with concern starts with after the defamatory statements. [00:27:54] Speaker 06: So I think the court absolutely should have drawn a reasonable inference in favor of Clio. [00:27:59] Speaker 06: And that footnote where it says, I think there is a reasonable inference the other way, I think it's particularly concerning to leave out there. [00:28:07] Speaker 06: Now, Rivata doesn't really challenge this, which I think is also telling. [00:28:11] Speaker 06: They don't defend the district court's reasoning [00:28:13] Speaker 06: They don't say it's unclear from the complaint when the manufacturers approached Clio. [00:28:18] Speaker 06: And so I think they don't defend it because it's extremely difficult to defend. [00:28:23] Speaker 03: We've given you a lot of time. [00:28:25] Speaker 03: We've taken up a lot of time with our questions if you could wrap it up. [00:28:28] Speaker 06: Yes, thank you. [00:28:29] Speaker 06: I'll wrap it up really quickly. [00:28:30] Speaker 06: So the second mistake, I think, was the district court, I think, effectively raised the burden for alleging causation on the pleadings, which should be plausibility, but the district court [00:28:40] Speaker 06: effectively held that even that close temporal link was not enough. [00:28:45] Speaker 06: And I think if that ruling stands, other district courts may be encouraged to similarly raise the burden from plausibility at this stage. [00:28:58] Speaker 06: So with that, I'd like to respectfully ask that you reverse the judgment of the district court and allow Clio to pursue the discovery. [00:29:39] Speaker 04: Your honors, on behalf of the Appellee, Ravada Networks, my name is Daryush Babood. [00:29:44] Speaker 04: And before jumping in, your honors, let me just say that it is an absolute honor and privilege to be here. [00:29:50] Speaker 04: This is my first argument before this court. [00:29:52] Speaker 04: It's an absolute honor. [00:29:53] Speaker 04: Thank you so much for hearing me today. [00:29:55] Speaker 04: Now, your honors, before I jump in, I will address defamation per se and the special damages going in the same order as my friend, Mr. Parker. [00:30:01] Speaker 04: However, before getting into that, your honor, Judge Pillard, I want to specifically address first the question that you asked my friend, Mr. Parker, [00:30:09] Speaker 04: Your Honor, I think this court does need to resolve the defamation per se point, because in the alternative, as I think you were suggesting, Judge Pillard, we go back down to the trial court, file another motion to dismiss, or even go through trial. [00:30:25] Speaker 04: They end up losing, and then have they preserved the defamation per se argument? [00:30:29] Speaker 04: We come all the way back here again and start another appeal. [00:30:31] Speaker 04: So I do think the court has to resolve the defamation per se point as well. [00:30:37] Speaker 04: Now, I also want to specifically address a couple of points that Judge Pillard and Judge Garcia that you mentioned regarding the per se point. [00:30:47] Speaker 04: CLIO can obtain other licenses. [00:30:50] Speaker 04: Now, it's not specifically alleged, or they didn't specifically allege, as you pointed out. [00:30:54] Speaker 04: I think, Judge Garcia, there's only one license. [00:30:57] Speaker 04: In fact, they actually specifically said the opposite. [00:31:00] Speaker 04: In paragraph 14, Your Honor, they say radio frequencies used by satellites are limited [00:31:06] Speaker 04: and valuable resource. [00:31:08] Speaker 04: So Clio itself is admitting that there are frequency licenses that can be obtained. [00:31:15] Speaker 04: Now, regarding defamation per se, Your Honors, as we know, they have to concern extreme subjects like criminal behavior, whereas relevant in this case, person's suitability for their chosen profession. [00:31:28] Speaker 04: Now, as Mr. Parker argued here today, they allege that these statements are defamatory per se because they convey two messages. [00:31:34] Speaker 04: Number one, [00:31:36] Speaker 04: that Clio lost the frequency licenses, and so they didn't have the legal ability to conduct their business. [00:31:41] Speaker 04: And then number two, the Clio was planning to move its network to China. [00:31:46] Speaker 04: First, Your Honor, there's a couple of points that I would like to make in regards to the licenses. [00:31:51] Speaker 04: So in its briefing and in here today, they falsely state that Ravada's statements falsely convey that Clio lacked the legal ability to conduct its business. [00:32:01] Speaker 04: However, Your Honor, it's really important to look at the complaint because that is, after all, what they're confined to on this motion to dismiss. [00:32:08] Speaker 04: If we look at pages 111 to 114 of the Joint Appendix, Cleo alleges that in regards to the statements concerning these licenses, which are statements two, five, and six, Your Honors, the statements Cleo alleges nearly discredited Cleo in the eyes of the satellite community by giving the false impression that Cleo's rights to commercialize the relevant frequencies, and this is the important part, Your Honors, [00:32:31] Speaker 04: were more attenuated or uncertain than they actually were." [00:32:36] Speaker 04: Close quote. [00:32:37] Speaker 04: So, Your Honor, nowhere does Clio allege that these statements convey, as it now argues in its appellate briefing and as it argued here today, that Clio lacks the legal ability to conduct its business. [00:32:47] Speaker 03: Well, this is on a pleading, a motion on the pleadings. [00:32:52] Speaker 03: And at the same time that [00:32:56] Speaker 03: Clio is claiming that it's suffering this defamation. [00:32:59] Speaker 03: It's also contesting whether it lost its licenses. [00:33:04] Speaker 03: It's saying that the move by Rivada to get them was itself unlawful. [00:33:11] Speaker 03: So it seems like that might be an explanation for saying it's more attenuated, that its underlying position on the status of those licenses is that it's still [00:33:23] Speaker 03: rightly owns them. [00:33:25] Speaker 03: So why isn't that just the explanation? [00:33:27] Speaker 03: And the statement is still defamatory because the statement has clearly lost its licenses. [00:33:32] Speaker 03: That's the statement. [00:33:33] Speaker 03: It speaks for itself. [00:33:35] Speaker 03: And they're saying lacking the legal ability is like they have no license. [00:33:39] Speaker 03: They got no legal basis. [00:33:41] Speaker 04: Right. [00:33:41] Speaker 04: So, Your Honor, even if we assume that they did allege that, Your Honor, that the key is we have to focus on what the word suitability and fitness even means. [00:33:48] Speaker 04: I think all three of you, Your Honors, raised this point with my friend, Mr. Parker, [00:33:53] Speaker 04: is these licenses, well, let me back up for a second. [00:33:57] Speaker 04: Ravada's statements did not convey that Cleo lacked the license to be a satellite network provider generally in the same way that an attorney needs a bar license or a doctor needs a medical license to practice law, like many of the cases that they cite to. [00:34:10] Speaker 04: And Judge Randolph, you made, I think, the crucial point here, which is when it comes to professional licenses, when you're talking about individuals like a dentist, a doctor, a lawyer, [00:34:21] Speaker 04: When that person receives that license, what is the medical board or the bar telling that doctor or license? [00:34:29] Speaker 04: They're telling that doctor, that lawyer, that they have the qualifications necessary. [00:34:34] Speaker 04: They have the skills and competence and abilities necessary to provide medical services, to provide legal services. [00:34:41] Speaker 04: These frequency licenses are not the same thing at all, Your Honor. [00:34:45] Speaker 03: But they're also not the same thing as [00:34:48] Speaker 03: buying inventory that's widely available. [00:34:51] Speaker 03: I mean, if you're a franchiser that wants to set up a restaurant in a national park, and you think you've won the bid, but somebody falsely says that you haven't, and therefore you have no prospect to run the business in the park, and so nobody will give you the equipment. [00:35:12] Speaker 03: So it's a rare asset. [00:35:18] Speaker 03: It may not come around again. [00:35:20] Speaker 04: Right. [00:35:20] Speaker 04: So I'll go a step further than that. [00:35:22] Speaker 04: Let's say that Rivada alleged that Clio did not have a satellite. [00:35:26] Speaker 04: They're a satellite network provider. [00:35:28] Speaker 04: That is probably the most crucial asset for Clio. [00:35:33] Speaker 04: So if Rivada had said, Clio doesn't even have a satellite, Your Honor, as I think all of you have mentioned, that's just a crucial asset. [00:35:41] Speaker 04: It doesn't go to their skills or competence. [00:35:44] Speaker 03: No, but it seems to actually make their point more than yours in the sense that there is a legal precondition to doing this business, which is that you have a license. [00:35:55] Speaker 03: And everything else is, you know, the whole industry is eager to get a satellite network up and running. [00:36:01] Speaker 03: The folks that are lucky enough to do it are the people that have the legal rights. [00:36:06] Speaker 03: So it seems like maybe you're right that we don't have a satellite. [00:36:10] Speaker 03: That you don't even have a satellite wouldn't be defamation per se. [00:36:14] Speaker 03: I'm not sure that that establishes. [00:36:16] Speaker 03: It's saying you have no license. [00:36:18] Speaker 03: It doesn't establish defamation per se. [00:36:21] Speaker 04: Right, you're right. [00:36:22] Speaker 04: But I think, again, what we really have to focus on is what the word suitability and fitness really means. [00:36:28] Speaker 03: What about the front? [00:36:29] Speaker 03: You're just a front company. [00:36:31] Speaker 03: You're not a real company. [00:36:32] Speaker 04: Right. [00:36:32] Speaker 04: So, so your honor, that's a, that's a really good point. [00:36:34] Speaker 04: And it's something that I wanted to specifically address. [00:36:38] Speaker 04: So regarding the front organization in their briefing and here today, Mr. Parker argued that Declan Ganley, the CEO of Ravada stated that, that Cleo was a front organization, but that's not actually what Ravada stated. [00:36:53] Speaker 04: If we turn to your honors, I believe it is, so it's page, page 10. [00:36:58] Speaker 04: of the Second Amendment Complaint or Joint Appendix, page 108. [00:37:03] Speaker 04: What Ravada actually says, allegedly here, Your Honor, is it's the third paragraph down on page 108 of the Joint Appendix, Your Honor. [00:37:12] Speaker 04: Ravada allegedly say, it says, these are European filings. [00:37:16] Speaker 04: And it was pretty obvious, not just obvious, but categorically stated that the plan was to move these to China. [00:37:22] Speaker 04: I'll focus on that specific portion of that statement a little bit later, Your Honor. [00:37:27] Speaker 04: Rivata continues, and while there would have been, if you like, a sort of front organization left in Germany, everything else would have been moved. [00:37:37] Speaker 04: So Rivata was not saying that Clio is a front organization or was a front organization. [00:37:42] Speaker 04: It's a little bit more attenuated than that. [00:37:45] Speaker 04: What Ravada was saying is they're moving to China, categorically stated they're moving to China. [00:37:49] Speaker 04: Now, in their briefing, they alleged that, or they argue, the Clio, that Ravada said there was a secret plan to move to China, but it's actually exact opposite. [00:37:58] Speaker 04: It was actually categorically stated. [00:38:00] Speaker 04: But just to focus again on the front organization, Ravada was just saying that there's a sort of front organization left in Germany. [00:38:06] Speaker 04: So what they're saying is, allegedly, [00:38:08] Speaker 04: Ravada is going to move, sorry, Clio is going to move to China, which there's nothing wrong with that. [00:38:13] Speaker 04: It doesn't go to suitability or fitness. [00:38:15] Speaker 04: And that would be left in Germany is this sort of customer facing company left. [00:38:22] Speaker 04: It doesn't really concern, it doesn't go to that extreme subjects that defamation per se is reserved for you. [00:38:31] Speaker 03: Why is that? [00:38:31] Speaker 03: I'm not sure I followed that point. [00:38:34] Speaker 04: Right. [00:38:34] Speaker 04: So again, it doesn't go to the suitability or fitness, your honor. [00:38:37] Speaker 04: Certainly doesn't go to solvency. [00:38:39] Speaker 04: And I'm not even really sure it goes to dishonesty. [00:38:41] Speaker 04: Cleo, I think, has done well in focusing on the word front, because you immediately think, oh my gosh, this is a fake company. [00:38:48] Speaker 04: But that's not where Rovato is actually saying. [00:38:50] Speaker 04: Again, we're not saying that Cleo is a front organization. [00:38:55] Speaker 02: What he was saying is... I think he meant shell. [00:38:58] Speaker 04: I'm sorry, Your Honor. [00:38:59] Speaker 02: I think he meant Shell. [00:39:01] Speaker 04: Right. [00:39:01] Speaker 04: But again, so even if we assume that's the case, I really don't think that goes to sort of this honesty that the restatement is speaking of that Mr. Parker refers to. [00:39:11] Speaker 02: It's not like they're moving their company into the mafia. [00:39:15] Speaker 04: Exactly, Your Honor. [00:39:16] Speaker 04: Exactly. [00:39:17] Speaker 02: They're simply stating that we have United States companies in China. [00:39:21] Speaker 02: Exactly, Your Honor. [00:39:22] Speaker 02: Exactly. [00:39:23] Speaker 02: Countries from all over the world. [00:39:25] Speaker 04: Exactly. [00:39:25] Speaker 04: I don't think it's any different. [00:39:27] Speaker 04: than if Revaud had said that Clio was planning to move to Russia or some other country. [00:39:31] Speaker 04: It just does not involve the sort of extreme subjects, dishonesty, or again, to go back to the suitability of fitness for your chosen profession. [00:39:39] Speaker 05: Council, can I take you to the special damages and causation? [00:39:42] Speaker 05: Absolutely, Your Honor. [00:39:43] Speaker 05: Clio realizes that strongest cloning is that the statements deprived it of potential business with other manufacturers. [00:39:53] Speaker 05: And I just want to hear what your best response to that argument is. [00:39:57] Speaker 04: Yeah, so your honor, there's a couple of points that I'd like to make in regards to that. [00:40:02] Speaker 04: All Clio has alleged, well, first of all, let me back up a little bit. [00:40:06] Speaker 04: As we know, Clio had to satisfy the Rule 9G heightened pleading requirement. [00:40:10] Speaker 04: They have to connect the dots. [00:40:11] Speaker 04: They have to make that causation requirement. [00:40:13] Speaker 04: And I do think the manufacturer's point. [00:40:15] Speaker 04: This is an interesting legal question. [00:40:17] Speaker 05: Are you submitting that the Rule 9G, it certainly requires damages to be specifically stated? [00:40:23] Speaker 05: Yes, Your Honor. [00:40:24] Speaker 05: Do you think and why does it impose a heightened pleading standard for causation? [00:40:31] Speaker 05: Or are we just using the Twombly Iqbal standard, which is no slouch in the first place? [00:40:37] Speaker 04: No, Your Honor. [00:40:37] Speaker 04: So it does apply to the causation standard. [00:40:39] Speaker 04: And if I could point the court to this court's Fowler decision, which we referenced at page 24 of our brief, therein specifically, this court states where special damages must be alleged before a cause of action can be stated, the courts require a good deal of particularity, especially [00:40:59] Speaker 04: in the slander and libel cases, the complaint must set forth. [00:41:03] Speaker 04: And this is really going to the causation point. [00:41:04] Speaker 04: I think the first sentence also goes to it. [00:41:06] Speaker 04: But the complaint must set forth precisely in what way the special damages resulted from the spoken or written words. [00:41:13] Speaker 02: Doesn't the Smith case say that as well? [00:41:16] Speaker 04: I'm sorry, Your Honor. [00:41:17] Speaker 04: Doesn't the Smith case say that as well? [00:41:20] Speaker 04: Yes. [00:41:20] Speaker 04: Yes, it does, Your Honor. [00:41:21] Speaker 04: And I wanted to focus on the Fowler case in particular. [00:41:24] Speaker 04: Judge Pillard, I understand that you authored this Smith case, but I wanted to focus on the Fowler decision in particular because of that first sentence that I just mentioned. [00:41:33] Speaker 04: When was Fowler decided? [00:41:35] Speaker 04: That was decided in 1950, Your Honor, but still very good law in other cases, of course, expanded upon that. [00:41:41] Speaker 05: This sounds like it's saying you have to do something more than noticeably. [00:41:47] Speaker 05: We had a post-Wombly case saying, I genuinely, I could not find a case [00:41:54] Speaker 05: could at rest weather. [00:41:55] Speaker 05: Causation, post-twamblism, has to be established with modernity. [00:42:02] Speaker 05: what Twombly requires. [00:42:03] Speaker 05: And there's certainly a strong argument. [00:42:05] Speaker 05: Because as Judge Easterbrook points out in the Pippin case, Rule 9G does not say you have to plead special damages with particularity the same way you have to plead fraud. [00:42:15] Speaker 05: It just says the damages have to be specifically stated. [00:42:18] Speaker 05: And that's just distinguishing from general damages. [00:42:21] Speaker 05: So it doesn't necessarily carry a heightened burden on causation. [00:42:26] Speaker 04: So I would respectfully disagree, Your Honor. [00:42:28] Speaker 04: I think the verbiage used in these cases stating that in order to satisfy a rule in Nigeria, even taking that out, in order to satisfy the causation requirement in order to plead special damages, specifically stating that defamation plaintiffs have to establish the natural and direct result of defendant's conduct and how that resulted in the harms, I think that goes above just simple Iqbal, Twombly, or notice pleading [00:42:55] Speaker 05: OK, so then let's go to what the actual allegations are. [00:42:58] Speaker 05: Because it seems like the favorable reading of this complaint is we were proceeding apace. [00:43:05] Speaker 05: We had put satellites into orbit. [00:43:08] Speaker 05: And on the second day of this big conference, Anley says, we don't have our licenses. [00:43:14] Speaker 05: For the next two days, manufacturers come and speak to us and express those same concerns. [00:43:19] Speaker 05: And now they won't work with us. [00:43:21] Speaker 05: sort of very close in time, as your friend on the other side put it. [00:43:25] Speaker 05: And so what specifically is the gap in the causal chain? [00:43:29] Speaker 04: Yes, Your Honor. [00:43:30] Speaker 04: So I'll address that by bringing up a point that Judge Pillard brought up, Your Honor. [00:43:34] Speaker 04: So I think the court below specifically addressed this, Your Honor. [00:43:39] Speaker 04: And so it states, citing this court's heading judge decision, that the court need not accept inferences drawn by the plaintiff if those inferences are not supported by the facts set out in the complaint. [00:43:50] Speaker 04: And at the joint appendix page 108 footnote three, on top of, you know, the court determining that after shortly after is not enough to satisfy rule nine G. The court also then goes to add on additional layer as to why Cleo has not quite satisfied. [00:44:04] Speaker 04: What is the point? [00:44:05] Speaker 04: Exactly, Your Honor. [00:44:08] Speaker 04: So in their own complaint, they say that in the second half of 2021, so before the statements, Rovada launched a plan to take control of Trion's board by secretly purchasing ownership interests. [00:44:18] Speaker 04: Is that paragraph 27 of his complaint page 105 the joint appendix and then on top of that on March 2nd 2022 so also before the March 22nd 2022 statements. [00:44:29] Speaker 04: The tree on board, then that Revata attempted to install then declared the termination of the frequency usage agreement so it cuts off, I believe, is the verbiage that judge pillared. [00:44:39] Speaker 04: I'm not sure. [00:44:41] Speaker 05: I'm not sure. [00:44:42] Speaker 05: I'm not sure. [00:44:43] Speaker 05: I'm not sure. [00:44:44] Speaker 05: I'm not sure. [00:44:48] Speaker 05: I'm not sure. [00:44:50] Speaker 05: I'm not sure. [00:44:53] Speaker 05: I'm not sure. [00:44:58] Speaker 05: let's say the biggest platform in this industry, he goes on the podcast, he makes the statement, the next day everybody knows and the next day everyone expresses concerns. [00:45:08] Speaker 05: You have certainly a plausible counter argument and you might get there after discovery, but it's hard to see why another plausible explanation that manufacturers had doubts because of the March 2 vote, [00:45:24] Speaker 05: means it's implausible that it was also, at least in some measure, caused by the statements during the conference. [00:45:31] Speaker 05: How would you bolster that? [00:45:34] Speaker 04: Absolutely, Your Honor. [00:45:34] Speaker 04: So I think, so Cleo, first of all, Cleo had three attempts to try and establish this more perfectly. [00:45:39] Speaker 04: The court below provided Cleo with three attempts to get to causation, get to causation, get to causation. [00:45:45] Speaker 04: And as Cleo has alleged in their own complaint, this is a close-knit community. [00:45:49] Speaker 04: So presumably, they could have easily stated, Your Honor, that, and they did not, [00:45:53] Speaker 04: that any of these individuals attended the conference, heard the statements, or even knew about the statements, or when they told Clio, we're leaving, and they have business relationships with these individuals, told Clio, look, I heard the statements, I believed them, that's why we're leaving. [00:46:08] Speaker 04: But they haven't stated that at all. [00:46:10] Speaker 03: The best that Clio has been able to come up with- I thought they did allege that satellite manufacturers expressed to them that they were concerned about. [00:46:21] Speaker 04: So what they do, Your Honor, is that during the conference, they express this belief. [00:46:26] Speaker 03: So bracketing the district court saying, oh, we don't know whether it was before or after. [00:46:31] Speaker 03: This is, again, it's a complaint. [00:46:33] Speaker 03: We draw all inferences in favor of the plaintiff. [00:46:35] Speaker 03: It's much more of the conference went on afterwards. [00:46:38] Speaker 03: Their whole focus is on these defamatory statements. [00:46:43] Speaker 03: The fact that as a technical matter, they haven't said after the podcast, to me, that's I'm not going to rely on that as as fatal under the pleading standards. [00:46:52] Speaker 03: So given that. [00:46:54] Speaker 04: But but I think it's important that when Cleo could allege that something was specifically after or shortly after they did, [00:47:00] Speaker 03: OK, is that your best argument? [00:47:02] Speaker 03: You're hanging on that. [00:47:03] Speaker 04: I think that's the best argument that we have, Your Honor. [00:47:06] Speaker 04: Because if it really was after, then they would have alleged that, especially after three attempts. [00:47:11] Speaker 04: So if something was specifically after or shortly after, and they could provide a specific date, it did so. [00:47:17] Speaker 04: But the best that they can come up with here is that during the conference, this happened. [00:47:22] Speaker 04: But a second point, Your Honor, is there was no parroting, quote unquote, of the manufacturer's statements, Your Honor. [00:47:31] Speaker 04: The manufacturer is claiming that Clio is likely to fail. [00:47:34] Speaker 04: That could have very well come from before, as again, this is a close-knit community, before Trion terminated the usage agreement, which, as Mr. Parker stated himself, is absolutely crucial. [00:47:45] Speaker 04: So given that this is a close-knit community, I think it's also reasonable inference that these manufacturers heard about this terminated frequency usage agreement. [00:47:54] Speaker 04: And that would absolutely mean that Clio was going to fail or likely to fail. [00:48:00] Speaker 04: simply stating that they're going to move to China or again saying that they're going to lose their licenses, which already happened after let's sign office communication made this determination. [00:48:10] Speaker 04: Your honor, it's just it's not enough here. [00:48:13] Speaker 04: I don't think I think the district court was correct in assuming that it's even giving clear all reasonable inferences. [00:48:22] Speaker 04: If [00:48:23] Speaker 04: Here is 9G, and they haven't sufficiently alleged 9G. [00:48:27] Speaker 04: They're just, they're over here. [00:48:29] Speaker 04: They haven't alleged enough to get past rule 9G, Your Honors. [00:48:32] Speaker 03: Let me ask you, Mr. Baiboud, on the question about the accusation that Clio intended to evade well-understood regulatory requirements. [00:48:46] Speaker 03: by transferring control of the satellite constellation to China. [00:48:49] Speaker 03: Why isn't that enough to raise a question or to besmirch Clio's honesty in business, which is a standard basis for defamation per se? [00:49:02] Speaker 04: I'm sorry, can you say the first part again? [00:49:05] Speaker 03: So the podcast, Ganley says, Clio intends to evade well-understood regulatory requirements by transferring [00:49:15] Speaker 03: control of its satellites to China. [00:49:21] Speaker 03: And an accusation that someone plans to evade well-understood regulatory requirements would seem to me to question their honesty in business. [00:49:33] Speaker 03: And questioning a party's honesty in business is one of the categories of recognized defamation per se. [00:49:42] Speaker 04: So I don't believe that's one of the categories of recognized defamation per se, Your Honor. [00:49:47] Speaker 04: So there are a couple of district court opinions from the 50s or 60s, and there is through a statement. [00:49:52] Speaker 04: But in trying to find circuit court opinions that specifically address this honesty in business, there is no such thing. [00:50:00] Speaker 03: So you would say that our court should reject that as a category and say there might be circumstances in which some questioning of honesty might amount to defamation per se, but not this. [00:50:10] Speaker 04: Not this, Your Honor. [00:50:11] Speaker 03: Even though the restatement does identify it. [00:50:14] Speaker 04: I think even though the restatement identifies this, Your Honor, the restatement is not controlling on this court. [00:50:19] Speaker 04: I think we have to look at what our circuit states. [00:50:21] Speaker 04: And there's nothing like that suggesting that this is the turning point. [00:50:26] Speaker 03: This is despicable. [00:50:27] Speaker 03: If someone were to say publicly that everyone knows that you're not honest in your legal practice, you would think, well, that's not [00:50:39] Speaker 03: That's not defamation per se? [00:50:41] Speaker 04: So Your Honor, I think there's an important distinction to be made between corporations and individuals. [00:50:47] Speaker 04: So saying that a lawyer is not honest, very much like I think it's the Ingber decision, where the court determined, where I believe the statements were either unprofessional, unethical, that goes to the suitability or fitness of one's chosen profession in that regard. [00:51:06] Speaker 04: But corporations stating that there's [00:51:08] Speaker 04: an intention to perhaps not follow these particular rules of Lichtenstein, I don't think that's enough. [00:51:15] Speaker 03: Really? [00:51:15] Speaker 03: Here they're basically, the point is that they're not following the rules and in fact a front or shell corporation that is facilitating what, you know, whether this is true as a matter of positive law or not, they're arguing that there's some ban on foreign control and that this company is structuring its business, its whole only business project that we're aware of. [00:51:37] Speaker 03: in order to evade those and to give control to China at a time when many regions of the world are feeling threatened by competition from China? [00:51:49] Speaker 04: I just don't think it's enough, Your Honor. [00:51:51] Speaker 04: Given what our established precedent has to go to the suitability or fitness for the chosen profession, I just don't think that gets to and meets what our established and well-established law is in the circuit, Your Honor. [00:52:07] Speaker 04: So if I may, Your Honor, there's another one last point that I would like to make in regards to special damages. [00:52:17] Speaker 04: And we submitted this to Your Honors via Circuit Rule 34i. [00:52:22] Speaker 04: On paragraph 45, CLEO references this May 20th, 20th, 22 order from which signed Office of Communication in its complaint. [00:52:32] Speaker 04: but doesn't attach it. [00:52:34] Speaker 04: So as part of our preparation, we submitted it to his court last week. [00:52:38] Speaker 04: And in this nine-page opinion, Your Honor, this decision from the Lichtenstein Office of Communication, nowhere does the Lichtenstein Office of Communication mention the DC conference, let alone Ravada's alleged statements that were made during the conference. [00:52:54] Speaker 04: There's not a single line, not a single word, not a single page that would indicate that this office, the Lichtenstein Office of Communication, [00:53:02] Speaker 04: was somehow influenced by, as the alleged paragraph 45. [00:53:06] Speaker 05: So that would show that the statements didn't affect the actual loss of license rights. [00:53:10] Speaker 05: Exactly. [00:53:10] Speaker 05: Do you think it's relevant to any other claim case? [00:53:15] Speaker 04: I think it's particularly- Can we take the point? [00:53:17] Speaker 05: Yeah. [00:53:17] Speaker 05: Yeah. [00:53:17] Speaker 05: OK. [00:53:19] Speaker 05: But you, sorry, I cut you off. [00:53:20] Speaker 05: You're not submitting that it's somehow relevant to another claim in the [00:53:25] Speaker 04: I think it's relevant in the sense that only relevant in the sense that the Lichtenstein Office of Communication approved the transfer of the frequency of rights. [00:53:34] Speaker 04: So again, to go to Judge Piller's point, it sort of cuts off the causation. [00:53:41] Speaker 00: All right. [00:53:41] Speaker 04: Thank you, Your Honors. [00:53:46] Speaker 03: And did Mr. Parker have any? [00:53:49] Speaker 03: We'll give you a couple of minutes to make a rebuttal if you want it. [00:54:02] Speaker 06: Thank you, your honors. [00:54:03] Speaker 06: I just have a few points to make in rebuttal here. [00:54:06] Speaker 06: So my friend on the other side said at one point that, you know, all the all Revata said was that there would be a front organization left in Germany. [00:54:15] Speaker 06: I mean, the front organization is Clio, according to that statement. [00:54:19] Speaker 06: What they're saying is Clio is a front organization is going to obtain these, move it to the real company. [00:54:24] Speaker 06: And then all that's left is Clio holding nothing in Germany. [00:54:27] Speaker 06: Second thing is, they say that honesty in business should not be a category of defamation, per se, and that that's not been accepted in any circuit court. [00:54:36] Speaker 06: It has been accepted by the DC High Court, and this is an issue of substantive law where that's going to govern. [00:54:41] Speaker 06: That's the Ingber case, and it's at 1268. [00:54:45] Speaker 06: And it says the statements were, quote, clearly slander, per se, because they imputed a lack of honesty, character, or integrity. [00:54:54] Speaker 06: My next point is there was a question about whether rule 9 G imposes some heightened standard for causation. [00:55:01] Speaker 06: I think the answer to that Judge Garcia is no. [00:55:04] Speaker 06: It arguably imposes some specificity requirement for causation, but the ultimate threshold there is still plausibility. [00:55:12] Speaker 06: There's no case that says [00:55:14] Speaker 06: you have to establish by a preponderance or something like that on the complaint. [00:55:18] Speaker 06: And that would be kind of big news in light of Iqbal and Twombly. [00:55:23] Speaker 03: So the specificity is about the amount of damages and the character of them. [00:55:31] Speaker 03: And are you saying that it's also specificity about causation, or just that once you've identified these are the damages we suffered, this is the amount incurred, what it relates to, and then the causation is twamly? [00:55:46] Speaker 03: Or are you saying the causation is more like particularity under the fraud or mistake aspect? [00:55:53] Speaker 06: Right. [00:55:54] Speaker 06: So, I mean, honestly, as I read Rule 9G just on its face, it seems to be talking just about the character of the damages. [00:56:01] Speaker 06: But this court, I think in the Smith versus Clinton case, [00:56:05] Speaker 06: said that it also relates to causation. [00:56:07] Speaker 06: But I think you have to read what this court was saying there in light of Twombly and Iqbal. [00:56:13] Speaker 06: I don't think the court was saying. [00:56:15] Speaker 06: I think at most what the court was saying is you have to allege specific facts to show causation. [00:56:22] Speaker 06: You can't just allege it in a conclusory manner when we're talking about special damages. [00:56:27] Speaker 06: But I don't think that actually raised the bar above plausibility. [00:56:30] Speaker 02: So it's enough to just show correlation [00:56:34] Speaker 02: not causation. [00:56:36] Speaker 02: On January 1st, Mr. X said, why? [00:56:42] Speaker 02: On January 30th, we lost money. [00:56:45] Speaker 02: That's enough. [00:56:47] Speaker 06: I think it's a fact dependent issue, right? [00:56:50] Speaker 06: And I think it depends on whether that gap in time, given all the circumstances, allows a plausible inference of causation. [00:56:57] Speaker 06: So there might be circumstances where that gap in time wouldn't [00:57:00] Speaker 06: But in this case, I think it does, because it's only a few days, and they're basically parroting back the bottom line of Rivada's message. [00:57:08] Speaker 03: I mean, that kind of sequence is a classic form of circumstantial evidence of causation. [00:57:13] Speaker 06: Yes, I would say so, Your Honor. [00:57:15] Speaker 06: Then my last point, I know I'm over my time, is just that what my friend on the other side said was that it would certainly be a reasonable inference to say that these concerns of the satellite manufacturers were caused by Rivada's prior actions. [00:57:30] Speaker 06: And the court said that as well. [00:57:31] Speaker 06: I think that's actually almost fatal to their case, because if they're acknowledging that that's a reasonable inference, I think it's an even more reasonable inference that they got those concerns from a podcast that is directed towards the industry. [00:57:45] Speaker 06: It's a close-knit industry that's well aware of this type of media. [00:57:48] Speaker 06: I think that's an even more reasonable inference. [00:57:50] Speaker 06: And again, if you have reasonable inferences going both ways, you have to choose the one that supports us. [00:57:56] Speaker 03: Thank you. [00:57:57] Speaker 06: Yes, thank you. [00:58:00] Speaker 03: Alright, the case is submitted.