[00:00:14] Speaker 04:
This is case number 18, 2014, Campbell against the United States.

[00:00:20] Speaker 04:
Mr. Jakubowski, when you're ready.

[00:00:44] Speaker 02:
it please the court steven jacobowski represent karen campbell the chadwick family the johnson family these are people who were severely injured as a result of accidents that they got into pre-petition before the filing of the gm bankruptcy case your honor i got involved in the case because i believe it was wrong who do you allege was coerced by the government here the bankruptcy court and the district court

[00:01:12] Speaker 02:
of all three because we left out the the government the GM itself so the coercion was on GM as an Andy and the coercion was on the bankruptcy court in connection with the requirement that the sale order included injunction and it was on the district court because the same arguments were made and that was the only issue that was up on appeal.

[00:01:39] Speaker 03:
Where in the complaint do you allege that

[00:01:42] Speaker 03:
GM was coerced, old GM was coerced by the government.

[00:01:46] Speaker 03:
In connection with the board meeting, your honor.

[00:01:49] Speaker 03:
No, but I mean, where?

[00:01:51] Speaker 03:
What paragraph?

[00:01:52] Speaker 03:
Because I didn't see that it was very clear from the complaint that any such allegation was made.

[00:01:58] Speaker 03:
You do allege that the district court and the bankruptcy court were coerced, but I'm not clear that you actually made an allegation that old GM was coerced.

[00:02:10] Speaker 02:
I agree with you, honor.

[00:02:11] Speaker 02:
It's not as clear as it should be.

[00:02:13] Speaker 02:
And were this case to be remanded, I would certainly ask for the opportunity not only to file the second amended complaint, which I think is critical to the jurisdictional points, but also to add and make it clear that the government told GM, and you can certainly infer it from a number of the paragraphs in terms of getting rid of Wagner, putting in Henderson, telling Henderson what they were going to do,

[00:02:37] Speaker 02:
and and basically saying you're going to file bankruptcy or we're cutting off the fund she ran or in the complaints described it in his book as a financial equivalent upholding a gun to the head of the bankruptcy judge and g

[00:02:54] Speaker 03:
To the extent that the allegations are that the bankruptcy judge was coerced or the district court was coerced, how is that something over which the Court of Federal Claims has jurisdiction?

[00:03:08] Speaker 03:
Because our Alistair and whole run of cases after that have said that if you're complaining about improper action,

[00:03:21] Speaker 03:
or action by a federal court, you have to exhaust your remedies by going through the regular court system and raising your complaint about a taking in that context, which you started to do, but the district court held that you didn't do it properly because you didn't ask for a stay, and you ultimately got dismissed as boot.

[00:03:44] Speaker 03:
So how is it that with respect to allegations that the bankruptcy court and the district court

[00:03:51] Speaker 03:
acted improperly or were coerced.

[00:03:54] Speaker 03:
Why isn't that something that under our cases has to be taken through the federal court system, the bankruptcy court, the district court, the court of appeals, rather than as a takings claim in the court of federal claims?

[00:04:08] Speaker 02:
The reason is your decision, the panel's decision in A&D Auto.

[00:04:12] Speaker 02:
Because A&D Auto made it very clear that when

[00:04:15] Speaker 02:
the government conditions the financial assistance on a third party taking away property rights, then that can be, if coercive, a taking.

[00:04:30] Speaker 02:
Yeah, but the bankruptcy court is not a third party.

[00:04:34] Speaker 02:
Well, in a way it is, because representations are being made to it, and GM was conditioning the deal upon

[00:04:44] Speaker 02:
a provision in the sale order that said it's free and clear.

[00:04:48] Speaker 02:
And so the argument and the fact to her that GM, that the government didn't care.

[00:04:55] Speaker 02:
It was financially indifferent to that issue.

[00:04:58] Speaker 02:
But it was telling the court that it wasn't going to close.

[00:05:02] Speaker 02:
And in fact, it wouldn't have closed.

[00:05:03] Speaker 02:
I think it probably, even if it wouldn't have closed.

[00:05:06] Speaker 02:
But the fact is that they were indifferent to the result.

[00:05:09] Speaker 02:
And so when you force a judge to sign something because what judge is going to risk the national economy on this, which is what Judge Gerber said he was doing, who's going to do that?

[00:05:21] Speaker 02:
They're going to sign it and ultimately, and so then you say, okay, well, why didn't you continue the appeal?

[00:05:27] Speaker 02:
Where did it go?

[00:05:27] Speaker 02:
Okay, well, here's where the appeal went.

[00:05:30] Speaker 02:
This is why the trial court is so wrong, because

[00:05:34] Speaker 02:
The four days between July 5th and July 9th was not some four-day interlude, as she called it.

[00:05:40] Speaker 02:
I went back and looked at my time.

[00:05:42] Speaker 02:
I had 26 hours in the first two days after the decision came down.

[00:05:48] Speaker 02:
And to say that my clients were sufficiently convinced that the order was going effective, that there was nothing that could be done, it couldn't be farther from the truth.

[00:05:58] Speaker 02:
My clients had really no idea other than what I told them.

[00:06:01] Speaker 02:
And I represent a punitive class of anybody who stands in their shoes.

[00:06:05] Speaker 03:
But your position now is that the bankruptcy court didn't have authority to enter this order under section 363.

[00:06:12] Speaker 03:
That's not true.

[00:06:13] Speaker 02:
No, that's what I argued to the district court because I did take the appeal.

[00:06:18] Speaker 02:
And in fact, Judge Kaplan heard me on July 9th by video conference from Chicago and put my name in the opinion as having an appearance

[00:06:28] Speaker 02:
But it was the day before, I wasn't a member of the New York bar and the federal court.

[00:06:33] Speaker 02:
I couldn't, there was no way I could use the resources.

[00:06:36] Speaker 02:
But the asbestos claims were making the exact same point we were, which is you can't get rid of these successor liability claims because we were saying they're not property interests, they're claims.

[00:06:47] Speaker 02:
The judge said, no, they are property interests.

[00:06:49] Speaker 02:
And now we're saying, well, that's judicial assault.

[00:06:51] Speaker 02:
How can the government argue that these are property interests?

[00:06:54] Speaker 03:
You seem to be addressing a different point than the one I was asking about.

[00:06:58] Speaker 02:
OK.

[00:06:58] Speaker 02:
Let me go back.

[00:06:59] Speaker 03:
Your position is, and you talk about a potential conflict in the circuits,

[00:07:03] Speaker 03:
As I understand, your position is that 363 doesn't authorize the bankruptcy court to enjoin these successor liability claims.

[00:07:13] Speaker 02:
I apologize, Your Honor.

[00:07:15] Speaker 02:
I made that argument, and the day before my oral argument, Espinosa came down.

[00:07:20] Speaker 02:
Espinosa was a Supreme Court case that basically said Rule 60 before is not a jurisdictional.

[00:07:26] Speaker 02:
It is a rule and the court had, and even though the plan was improperly entered, rule 60 before doesn't take away the jurisdiction of the court to enter that order in the first place.

[00:07:39] Speaker 02:
So they had the right to enter the order.

[00:07:41] Speaker 03:
But what got me so... So section 363 in your view now does authorize

[00:07:49] Speaker 03:
a bankruptcy court to enjoin successor liability.

[00:07:52] Speaker 02:
Yes, of course it does.

[00:07:53] Speaker 02:
That was the whole point of the government's position, that they have the right to do.

[00:07:58] Speaker 02:
We're a commercial buyer.

[00:07:59] Speaker 02:
And you agree with that?

[00:08:00] Speaker 02:
Yes.

[00:08:00] Speaker 02:
They were a commercial buyer.

[00:08:01] Speaker 02:
They had the right.

[00:08:01] Speaker 02:
But the question is, and the question written in A&D is, just because it's a 363 sale doesn't mean that it's not a taking.

[00:08:11] Speaker 02:
And that's why I brought this case.

[00:08:14] Speaker 01:
Tell us when the claim accrued.

[00:08:17] Speaker 02:
So the claim accrued on July 10.

[00:08:20] Speaker 02:
And I think that couldn't be clearer from all the precedent.

[00:08:23] Speaker 02:
The problem with the trial court is she took the coercion language and somehow made the statute of limitations tied to coercion when you said in A&D that coercion is a necessary but not a sufficient condition.

[00:08:35] Speaker 02:
So something else is necessary.

[00:08:38] Speaker 02:
And what's that else?

[00:08:39] Speaker 02:
Well, Francona makes it very clear there has to be a loss.

[00:08:42] Speaker 02:
It's almost like double-entry bookkeeping.

[00:08:44] Speaker 02:
You have to have a taking, you have to have a loss.

[00:08:46] Speaker 02:
They have to occur together.

[00:08:48] Speaker 02:
And so when did the loss occur?

[00:08:49] Speaker 02:
And Turney couldn't make it any clearer.

[00:08:52] Speaker 02:
Turney says, and I quote, it's when they officially took possession.

[00:08:57] Speaker 03:
But that's a physical taking.

[00:08:59] Speaker 02:
But I don't agree with that it was physical, because it was the government giving an order to the Philippines

[00:09:08] Speaker 02:
to do something.

[00:09:10] Speaker 02:
And then they came in and took possession, and everybody said, OK, but how is that any different than when the coercion was not physical?

[00:09:17] Speaker 02:
The taking was physical because they took the equipment, but so is it.

[00:09:21] Speaker 02:
What does it matter, according to Horne, if it's physical or not physical?

[00:09:25] Speaker 02:
If you have a right and you've lost it, then you're entitled to compensation.

[00:09:29] Speaker 02:
So if I could, I'd like to talk about the right a little bit.

[00:09:39] Speaker 02:
The trial court said that the right is so highly contingent because it is the product of two discretionary acts, which are basically one discretionary act, which is the bailout.

[00:09:53] Speaker 02:
But for the bailout, you'd have nothing.

[00:09:56] Speaker 02:
That's her claim, I think.

[00:09:58] Speaker 02:
That's the way I read it.

[00:09:59] Speaker 02:
And my answer to that is,

[00:10:03] Speaker 02:
How can you say that there's no property interest in a successor liability claim?

[00:10:08] Speaker 02:
And what we were arguing about, and what we were going back and forth on, on the standing issue, below, with appendix 952, I think it's around 952 to 1007, there was a whole series of briefing on standing.

[00:10:23] Speaker 02:
And the question was, what is this cognizable property interest you're bringing?

[00:10:29] Speaker 02:
So we said, well, it's a cause of action.

[00:10:31] Speaker 02:
Causes of action can come in all different shapes and sizes.

[00:10:35] Speaker 02:
Some are entitlement causes of action.

[00:10:37] Speaker 02:
Some are real causes of action, which is yours.

[00:10:40] Speaker 02:
And well, yours is so contingent upon a bailout, it's nothing.

[00:10:44] Speaker 02:
But that's your but for analysis for loss causation applied to the existence of the property right.

[00:10:51] Speaker 02:
And so we said, well, it has to protect something.

[00:10:55] Speaker 02:
It can't just protect your right to an entitlement.

[00:10:57] Speaker 02:
It can't do some unexpected benefit that you talked about.

[00:11:00] Speaker 02:
No, it has to protect my life.

[00:11:03] Speaker 02:
I visited my parents' gravesite yesterday, and they rested in peace.

[00:11:07] Speaker 02:
And, you know, that land is the only land that matters.

[00:11:11] Speaker 02:
And the only time it matters is when you don't have your life.

[00:11:15] Speaker 02:
These people's lives were at stake.

[00:11:18] Speaker 02:
That's more important than any land, than any personal part, than anything out there.

[00:11:22] Speaker 02:
And so to take away the right that is inherent in your injury to go after alter egos, to go after successors, to go after anybody who's trying to hide behind a corporate fiction and pursue the, and say that they're not responsible doesn't work.

[00:11:43] Speaker 04:
And so- All right.

[00:11:46] Speaker 04:
There is a good deal of strength to what you say, but of concern is

[00:11:52] Speaker 04:
the path of remedy?

[00:11:54] Speaker 04:
Isn't the path then through the district court and the regional circuit the standard path for appeal of bankruptcy rulings?

[00:12:03] Speaker 02:
I don't think it is, Your Honor, because as was said in A&D, and that is what caused me to file this complaint, is that 363 doesn't inhere in these claims.

[00:12:13] Speaker 02:
Just like 365, the executory contract section, that didn't inhere in the dealer's claims.

[00:12:20] Speaker 02:
He said they have a taking.

[00:12:22] Speaker 02:
If they're doing in a proprietary capacity and if they're acting in a coercive manner, then you may have a case.

[00:12:29] Speaker 02:
And what was the coercion in that case?

[00:12:32] Speaker 02:
So the trial court says, well, we're following A&D.

[00:12:36] Speaker 02:
Well, A&D didn't say anything about coercion.

[00:12:38] Speaker 04:
So would your argument be the same if the bailout had been not the government, but some private entity?

[00:12:46] Speaker 02:
No, of course not.

[00:12:48] Speaker 02:
When you say, would my answer be the same?

[00:12:50] Speaker 04:
In other words... So what changes the well-established path of appeal of bankruptcy rulings?

[00:12:58] Speaker 02:
Because this court has said that the fact that something is permissible under law in bankruptcy doesn't mean that it's not a taking.

[00:13:14] Speaker 02:
That's it.

[00:13:15] Speaker 03:
But we also have cases that say if the taking is an action by federal court, that your remedy is to go up on appeal and challenge that ruling.

[00:13:27] Speaker 02:
But I'm not saying that it's a judicial taking.

[00:13:31] Speaker 02:
It's not a judicial taking.

[00:13:34] Speaker 02:
That's where the cases go.

[00:13:35] Speaker 03:
Isn't it close to it in the sense that you're saying that the bankruptcy court was coerced by the government.

[00:13:40] Speaker 03:
So it is an action of the bankruptcy court, which is in question.

[00:13:46] Speaker 02:
I think the difficulty with that analysis is that in the judicial takings cases, they looked at the statute and they said, did the court, by following the law, effectuate a judicial taking?

[00:14:05] Speaker 02:
There were exemption cases.

[00:14:07] Speaker 02:
And there was a bankruptcy case on a judicial taking case.

[00:14:11] Speaker 02:
And the question was, does enforcement constitute a taking?

[00:14:15] Speaker 02:
And the answer was no.

[00:14:17] Speaker 02:
The answer was yes.

[00:14:19] Speaker 02:
The answer was no.

[00:14:20] Speaker 02:
It does not constitute a judicial taking.

[00:14:22] Speaker 02:
But that's not what you're talking about.

[00:14:24] Speaker 02:
Here you're talking about a coercive act by the government where they're just going too far in the context of a financial bailout.

[00:14:34] Speaker 02:
These are unique circumstances.

[00:14:36] Speaker 01:
And the fact that they... Is there a point that the government affected at taking or the bankruptcy court affected at taking?

[00:14:44] Speaker 02:
The government affected at taking because who benefited from it?

[00:14:47] Speaker 02:
The judge doesn't benefit from a taking.

[00:14:49] Speaker 02:
So the idea of a judicial taking doesn't make sense because the bench isn't benefiting from this.

[00:14:55] Speaker 02:
But here the government did benefit.

[00:14:57] Speaker 02:
They got a dollar-for-dollar benefit.

[00:14:59] Speaker 02:
Because unlike every other claim, the dealer claim, the bond claims, there were no other claims that had successor liability rates the way this transaction was structured, other than the products claimants.

[00:15:11] Speaker 02:
They were targeted.

[00:15:13] Speaker 02:
These were the politically sensitive liabilities.

[00:15:15] Speaker 02:
We may take it, we may not.

[00:15:16] Speaker 02:
When they went to the board, when the government went to the board in, I have 30 seconds left, when the government went to the board in May 29th and said, prove this deal.

[00:15:27] Speaker 02:
Chrysler hadn't been decided by the Second Circuit yet.

[00:15:30] Speaker 02:
They didn't know what was going to happen.

[00:15:32] Speaker 02:
And so they said, this has got to be done.

[00:15:35] Speaker 02:
It's got to be done in 40 days.

[00:15:36] Speaker 02:
Steve Reitner said, it's the financial equivalent of holding the gun to the head of the court.

[00:15:41] Speaker 02:
That's what he said.

[00:15:43] Speaker 02:
And that's what the complaint says.

[00:15:44] Speaker 02:
It's the financial equivalent of holding the... That's economic dragooning.

[00:15:49] Speaker 02:
That's what Sebelius says.

[00:15:50] Speaker 02:
When the government engages that contact, I don't care who it is.

[00:15:53] Speaker 02:
And that's what your case says.

[00:15:57] Speaker 02:
And that's why I think, Your Honor, the matter should be overturned.

[00:16:00] Speaker 02:
And if I could just save my time for rebuttal, I'd appreciate it.

[00:16:03] Speaker 04:
Unless you have a question.

[00:16:03] Speaker 04:
Okay.

[00:16:03] Speaker 04:
Now let's hear from the other side, and we'll save you rebuttal time.

[00:16:06] Speaker 04:
Thank you.

[00:16:19] Speaker 00:
Thank you, may it please the court.

[00:16:23] Speaker 00:
The question of... Player's appeal poses the court's decision was based on two grounds.

[00:16:35] Speaker 03:
One was... Was that the jurisdictional question?

[00:16:37] Speaker 03:
No.

[00:16:38] Speaker 03:
That their remedy was to...

[00:16:41] Speaker 03:
appeal the bankruptcy court order to the district court and the second circuit and so on and so forth, and that our cases suggest that where the taking is alleged to result from an action by a federal court, that the Court of Federal Claims doesn't have jurisdiction.

[00:16:58] Speaker 03:
The remedy is within the court system to appeal.

[00:17:02] Speaker 00:
Yes, and the court recognized that, especially this court's decision in Alice Tiart.

[00:17:07] Speaker 00:
that a judicial taking theory that would involve review of the bankruptcy courts, this court doesn't do that.

[00:17:14] Speaker 00:
The court said that the only plausible set of facts that could be discerned from plaintiff's complaints in numerous attempts to recast their claim was based on coercion of third parties per this court's decision in A and D auto sales.

[00:17:28] Speaker 00:
And the court ruled that the only

[00:17:31] Speaker 00:
allegedly coercive action would have been toward GM.

[00:17:34] Speaker 00:
The court also said the bankruptcy court would think it could only be toward GM under the A&D auto sales framework.

[00:17:40] Speaker 00:
But since the bankruptcy court sale order was entered on July 5th of 2009, by definition, any coercive act by the government, especially with regard to GM.

[00:17:50] Speaker 03:
I don't think you're addressing my question.

[00:17:51] Speaker 03:
Does that line of case Alastair apply here so that there's a jurisdictional question as to whether the Court of Federal Claims has jurisdiction over a claim of coercion of the bankruptcy court?

[00:18:05] Speaker 00:
If the claim were deemed coercion of the bankruptcy court, then yes.

[00:18:09] Speaker 00:
If it came as coercion of GM, it would be interpreted under the A&E auto sales framework.

[00:18:18] Speaker 00:
But here the question is, when did the alleged coercion occur?

[00:18:22] Speaker 03:
Well, did they allege coercion of GM or just allege coercion of the bankruptcy court?

[00:18:27] Speaker 00:
The court concluded, based on reading the complaints, the court said it's not bound by the exact words of the complaint.

[00:18:33] Speaker 00:
The only plausible set of facts based on the complaint over which the court would have jurisdiction, i.e.

[00:18:39] Speaker 00:
not a judicial taking under Alistair, would be under the AMD auto sales coercion of GM scenario.

[00:18:46] Speaker 00:
But did they allege that in the complaint?

[00:18:51] Speaker 00:
versus an argument that they sufficiently allege that.

[00:18:54] Speaker 00:
But the question is, did they?

[00:18:58] Speaker 03:
What's the government's position?

[00:18:59] Speaker 03:
Did they sufficiently allege coercion of GM in the complaint, or didn't they?

[00:19:04] Speaker 00:
We believe that it does, but it does so in a way that it makes clear that the events occurred prior to July 5th.

[00:19:11] Speaker 00:
Just now an oral argument.

[00:19:13] Speaker 03:
OK, so you agree that the complaint alleges coercion of GM.

[00:19:16] Speaker 00:
Yes, as a third party under the A&D auto sales framework.

[00:19:21] Speaker 00:
However, the timing of that is crucial.

[00:19:24] Speaker 00:
So plaintiffs just said at oral argument, well, look what happened on May 29, 2009, there was a GM board meeting.

[00:19:31] Speaker 00:
That's well prior to July 5.

[00:19:34] Speaker 00:
The hearing of the bankruptcy court between June 29 and July 2, 2009, again, well prior to July 5.

[00:19:41] Speaker 00:
Any alleged arm-twisting of GM had to have occurred before GM submitted the 363 sale proposal to the bankruptcy court before it was approved.

[00:19:51] Speaker 00:
Was that a motion by old GM?

[00:19:54] Speaker 00:
Our understanding is GM would put up the 363 sale as the debtor.

[00:19:58] Speaker 00:
And then that had to be approved by the bankruptcy court.

[00:20:01] Speaker 00:
And then the government and other presidents do that.

[00:20:03] Speaker 00:
Who asked for the injunction?

[00:20:07] Speaker 00:
I believe the 363 sale

[00:20:11] Speaker 00:
order was the result of GM submitting the 363 sale proposal, but it would be on the bankruptcy court docket in terms of who was moving for what.

[00:20:20] Speaker 00:
But the terms of the 363 sale, one of those was under 363f, certain interests and property for purposes.

[00:20:31] Speaker 00:
The bankruptcy code, including plaintiff's personal injury claim, were excluded.

[00:20:37] Speaker 00:
for the purposes of being successor liability claims against the new GM.

[00:20:41] Speaker 00:
Again, all of those decisions happened prior to the bankruptcy court approving the sale.

[00:20:46] Speaker 03:
Well, I think they admit that, that the coercion occurred earlier.

[00:20:50] Speaker 03:
But they say that the damages wasn't felt until the order became final.

[00:20:59] Speaker 00:
So in terms of that, there's

[00:21:03] Speaker 00:
reasons why that's incorrect.

[00:21:04] Speaker 00:
So one, what is the government action alleged to have resulted in the taking?

[00:21:09] Speaker 00:
It was alleged coercion of the third party, GM.

[00:21:11] Speaker 00:
That had to have happened prior to the taking.

[00:21:14] Speaker 00:
Then they're saying, well, there has to be an economic impact.

[00:21:16] Speaker 00:
Well, the district court entered the sale order that said, OK, there's a contract now, new GM, old GM.

[00:21:23] Speaker 00:
That's going to change your legal relations.

[00:21:24] Speaker 00:
That gave them sufficient basis to file an appeal.

[00:21:27] Speaker 00:
So there's some view that the legal relations had changed as of July 5th, since they were permitted to file an appeal.

[00:21:35] Speaker 00:
Furthermore, if you were looking at the economic value of what their claims would be expected to be worth, after that sale order was entered, one would expect if there were a fictional futures market in their claims, the value would have gone down quite a bit.

[00:21:50] Speaker 04:
Are you telling us that they could have actually filed suit?

[00:21:54] Speaker 04:
in that four-day period filed this suit against the United States?

[00:21:59] Speaker 04:
So in terms of the... Without being told that, well, your claim isn't ripe and all of the other things that hadn't yet come to pass?

[00:22:08] Speaker 00:
There'd be a question of what the concreteness of the damages would be, but as the cases we cited show, the one rightness is a prudential concern, but also the exact amount of damages does not to be

[00:22:22] Speaker 00:
be concrete in order for you to be on sufficient notice that something has happened to you that causes your claim to accrue.

[00:22:30] Speaker 04:
So you're saying that they could actually have filed suit against the United States, a takings claim, on July 6th?

[00:22:37] Speaker 00:
On July 6th, yes.

[00:22:39] Speaker 04:
Insofar as— It cannot be thrown out for an unripe, incomplete

[00:22:44] Speaker 04:
We might change our mind, or it's not final.

[00:22:47] Speaker 04:
It doesn't come into effect by its own terms.

[00:22:50] Speaker 04:
All of the things that are just straightforward and standard and filing a premature suit, you're saying it would not have been premature.

[00:23:03] Speaker 00:
Is that your position?

[00:23:04] Speaker 00:
The calculation of damages may have had to wait for the exact thing to play out, but that didn't mean they wouldn't have their claim not approved.

[00:23:10] Speaker 04:
That they claim their clothes would have vested?

[00:23:13] Speaker 00:
It would have vested as of July 6th.

[00:23:14] Speaker 04:
It would have vested even though the effective date had not yet come to pass.

[00:23:19] Speaker 00:
So insofar as they were given notice of the government's alleged coercion of a third party, yes, since that would be the basis for their claim, not the actions of the bankruptcy court and the district court going forward, the coercion of a third party.

[00:23:32] Speaker 04:
I haven't heard this position.

[00:23:33] Speaker 04:
The government constantly tells us this case wasn't yet right.

[00:23:37] Speaker 04:
By its terms, it wasn't right.

[00:23:39] Speaker 04:
And yet you're saying that the suit could have been filed during that period while they were appealing to the district court.

[00:23:48] Speaker 00:
for the specific issue of the takings.

[00:23:52] Speaker 00:
Now, if later the district court overturned it on appeal, then obviously we would have brought that to the Court of Federal Claims' attention.

[00:23:59] Speaker 04:
Are you saying if the district court said it was unripe, it would have reversed, withdrawn the claim against the United States?

[00:24:08] Speaker 00:
Under the framework the court is describing, I think that's correct, yes.

[00:24:14] Speaker 04:
This sounds extraordinary to me.

[00:24:18] Speaker 04:
I mean, there are other questions about the passage of six years, but to say that actually an actionable claim had vested before the effective date of the sale is curious.

[00:24:33] Speaker 00:
In terms of the specific

[00:24:36] Speaker 00:
claim defined by the Court of Federal Claims, which was based on the AMD Auto's sales framework of alleged coercion of a third party.

[00:24:45] Speaker 00:
Since the alleged coercion of GM was complete by that point, the economic impact would have been felt by the fact that you had the change in legal relations based on the entry of the sale order.

[00:24:57] Speaker 04:
And so you're telling us that while it was still pending before the bankruptcy court,

[00:25:03] Speaker 04:
and the district court and whatever the path of appeal might have been from the district court, there was an actionable, a cause of action against the United States because of their leaning so heavily on the terms of the bankruptcy?

[00:25:22] Speaker 00:
Based upon the alleged economic coercion of third parties based on the terms of the bankruptcy under the A&D auto sales framework, yes.

[00:25:32] Speaker 00:
However,

[00:25:33] Speaker 00:
Given the way that their claim is defined, that's the only claim that the court of federal claims found to have been plausible based upon the complaints.

[00:25:41] Speaker 00:
And in terms of the economic impact of that, that would have been, even though not realized down to the last dollar and cent.

[00:25:49] Speaker 04:
In that case, the statute would not have run.

[00:25:53] Speaker 00:
Although the cases we cite show that the exact economic calculation does not have to be complete for the claim to have accrued.

[00:26:04] Speaker 00:
The case here, the coercion would have had to have happened prior to the sale order, and at least the reasonable notice to plaintiffs that there was an economic impact would have occurred as of the sale order, even if the eventual possibility of appeal, which wasn't going to stop the sale since they didn't ask where to stay, or the closing date had not occurred yet for the five days.

[00:26:30] Speaker 00:
If I may turn to the property interest question,

[00:26:33] Speaker 00:
The property interest plaintiff's advance here differs from the claim in A&D auto sales insofar as the claim here was specifically a successor liability claim against the new GM, which... Why isn't that property?

[00:26:47] Speaker 03:
It seems to me it's difficult to argue that that's not a property interest.

[00:26:52] Speaker 00:
It is not a property interest because it does not vindicate an underlying real personal or intellectual property claim under Adams.

[00:27:00] Speaker 00:
and because it was contingent upon the government's decision in how to structure the assistance in the GM bankruptcy, which the trial court correctly concluded was within the government's discretion.

[00:27:13] Speaker 03:
They had these monetary claims for personal injury against old GM.

[00:27:18] Speaker 03:
And part of that interest is the right to pursue successor liability, isn't it?

[00:27:24] Speaker 00:
Well, one, the court concluded that that could be excluded under Section 363.

[00:27:29] Speaker 00:
And because New GM wouldn't have existed at all, but for the structuring of the process, the court concluded that it was something that would have adhered in the claim in a way that the A&E auto sales dealer contracts did not have that as a background principle.

[00:27:48] Speaker 00:
When you're rejecting the contract,

[00:27:49] Speaker 00:
You basically have the breach damages of the bankruptcy court, but then you can't go forward against the new entity here.

[00:27:58] Speaker 03:
Yeah, I mean, you're correct.

[00:27:59] Speaker 03:
I think that the 363 possibility of preclusion was inherent in the right.

[00:28:05] Speaker 03:
But the 363 preclusion, the exercise of that authority conceivably could have been a taking, even if it's a right

[00:28:21] Speaker 03:
to exclude.

[00:28:23] Speaker 00:
Well, under the A&D auto sales scenario, the court ruled that the contracts in that case were property interests that gave standing.

[00:28:31] Speaker 00:
However, they differ from the claims here in that, one, there are contracts, altered legal relations here.

[00:28:36] Speaker 00:
There were unsecured tort claims.

[00:28:38] Speaker 00:
Also, the contracts would continue to exist.

[00:28:42] Speaker 00:
At the at some here, there needed to be the creation of a new entity for those successor liability claims to go to, as opposed to if the bankruptcy

[00:28:49] Speaker 00:
GM had been sold to some other entity would be a very different question.

[00:28:54] Speaker 00:
So that's a difference in a different type of structure that arose only as a function of the 363 sale that differs these property interests from May and the auto.

[00:29:04] Speaker 00:
Also, if the court were to conclude that these property interests conferred standing, plaintiffs still haven't answered the question that was posed by this court in the auto sales, which was, what is the economic loss absent government intervention?

[00:29:18] Speaker 00:
Plaintiffs have filed three complaints in this case each time.

[00:29:22] Speaker 00:
And we raised the issue of their not pleading loss absent government intervention right up front.

[00:29:27] Speaker 00:
They filed three complaints and each time they go further down the road of saying the government had no choice but to bail out GM, they make no argument and plead no facts.

[00:29:40] Speaker 00:
All after A&E Auto Sales was

[00:29:43] Speaker 00:
issued to say that their claims would have had some value absent government intervention, they're saying quite the opposite.

[00:29:49] Speaker 00:
And the bankruptcy court concluded the opposite.

[00:29:51] Speaker 03:
Did you make that argument in a motion to dismiss in this case?

[00:29:55] Speaker 00:
Yes.

[00:29:55] Speaker 00:
And that was our motion to dismiss.

[00:29:58] Speaker 00:
We put that issue up front.

[00:30:01] Speaker 03:
And the court of law plans didn't reach that issue?

[00:30:03] Speaker 00:
No, it didn't reach it because of the statute of limitations and property interest questions, but plaintiffs certainly have not met their pleading burden on that question.

[00:30:13] Speaker 00:
Even if you were to get beyond the statute of limitations and the property interest question, they have not pled economic loss under the framework that was required by this court in A&E auto sales.

[00:30:24] Speaker 01:
Was it you who raised the statute of limitations issue or did the court do that so respond to it?

[00:30:29] Speaker 00:
The court did that suesponte.

[00:30:31] Speaker 00:
However, we stated in our pleadings that plaintiffs, as the court's questions have indicated, have given various definitions of what their claim should be.

[00:30:42] Speaker 00:
So insofar as their claim was pleading a judicial taking, that would have been past the statute of limitations.

[00:30:47] Speaker 00:
We said in our pleading,

[00:30:48] Speaker 00:
that if what plaintiffs are talking about is coercion of GM along the lines of A&D auto sales, that would be time barred.

[00:30:55] Speaker 00:
If they're talking about a judicial taking, that would be time barred, but that has the LSTR and other problems.

[00:31:00] Speaker 00:
So we did not file a motion to dismiss based on the statute of limitations question.

[00:31:04] Speaker 00:
We did point out to the court that if the facts are pleading coercion of GM per A&D auto sales, that claim would be time barred.

[00:31:13] Speaker 00:
I see that I am running out of time.

[00:31:15] Speaker 00:
If the court has any further questions to answer otherwise, we respectfully request that the court affirm the judgment of the Court of Federal Claims.

[00:31:23] Speaker 04:
Okay.

[00:31:24] Speaker 04:
Thank you.

[00:31:34] Speaker 02:
So the government never argued that the case was time barred.

[00:31:40] Speaker 02:
said to Judge Wolski who was asking directly is this case time barred and it's not.

[00:31:47] Speaker 03:
What about the argument they did make that you haven't alleged as A&D requires that there was injury from the course of action that was taken.

[00:31:58] Speaker 03:
In other words, that you would have been worse off if there had been a liquidation.

[00:32:02] Speaker 02:
But that's a regulatory taking.

[00:32:05] Speaker 02:
The answer in A&D Auto was that when they're acting in a proprietary capacity, it can be non-regulatory.

[00:32:11] Speaker 02:
So all that but for analysis goes to the issue of a regulatory taking, which

[00:32:18] Speaker 02:
this is that secondary to the actions here the government and proprietary capacity where they made money off of our clients is remember when if if if the if the reduction of the two hundred million dollars it's owed is let's say fifty million dollars a year which the evidence was well their income goes up by fifty million dollars a year which means their stock goes up at sixty percent of that by four times that amount so they profited at the expense of my clients

[00:32:44] Speaker 03:
And this issue was briefed before the Court of Federal Claims?

[00:32:48] Speaker 03:
Pardon?

[00:32:48] Speaker 03:
This issue was briefed?

[00:32:50] Speaker 02:
Yes.

[00:32:51] Speaker 02:
Yes.

[00:32:52] Speaker 02:
Absolutely.

[00:32:54] Speaker 02:
And as to the property interest, I said I would explain what I thought the property interest was and why the bankruptcy court has basically held that this is a property interest within the meaning of the code and not some claim.

[00:33:09] Speaker 02:
Because the difference in bankruptcy is that claims are able to be discharged

[00:33:14] Speaker 02:
And a sale can be free and clear in a plan, but it can't be in a sale.

[00:33:19] Speaker 02:
That's the whole point of reorganization.

[00:33:21] Speaker 02:
It has to be claimed.

[00:33:22] Speaker 02:
So they say in a sale, in a 363-hail sale, it has to be

[00:33:26] Speaker 02:
property interests.

[00:33:27] Speaker 02:
And they go back to Butler.

[00:33:28] Speaker 02:
What's a property interest?

[00:33:30] Speaker 02:
It's all the same Supreme Court language of it being state law claims.

[00:33:34] Speaker 02:
That's what the property interests are.

[00:33:37] Speaker 02:
So I think it's important to keep that in mind.

[00:33:40] Speaker 02:
And it's basically the equivalent of what Professor Carlson in 1987 said when 363 sales started to proliferate, that

[00:33:49] Speaker 02:
And you had all these asbestos cases and you had all these mass tort cases where they were trying to get away from the liability.

[00:33:55] Speaker 02:
And they said to them, look, 363 with respect to those claims are like an equitable servitude.

[00:34:03] Speaker 02:
There's an element of successorship liability that goes with the asset and in an equitable way.

[00:34:10] Speaker 02:
And so therefore they can be extinguished.

[00:34:13] Speaker 02:
Now they come in and they say, no, it's just an unsecured tort claim.

[00:34:16] Speaker 02:
It has nothing to do.

[00:34:18] Speaker 02:
These are just, no, they're not unsecured tort claims.

[00:34:20] Speaker 02:
These are claims that went with the property.

[00:34:22] Speaker 02:
And that's why they are property interest in the bankruptcy code.

[00:34:25] Speaker 02:
And that's why if you look at concentric circles, if you look at the Venn diagram, are the bankruptcy property rights inside the takings rights?

[00:34:32] Speaker 02:
Are they outside the takings rights?

[00:34:34] Speaker 02:
Are there some takings rights that are not bankruptcy?

[00:34:36] Speaker 02:
Bankruptcy is an in-rem jurisdiction.

[00:34:39] Speaker 02:
How can you possibly say that the Constitution doesn't incorporate all of those rights that are adjudicated in a bankruptcy case?

[00:34:48] Speaker 02:
As to the six years you've asked for, why is it six years?

[00:34:52] Speaker 02:
That's a good question.

[00:34:53] Speaker 02:
But I didn't read A&D until April 2014.

[00:34:57] Speaker 02:
I'm not a takings lawyer.

[00:34:58] Speaker 02:
I had no idea what the takings claims are.

[00:35:00] Speaker 02:
It took a year to go through the whole record.

[00:35:02] Speaker 02:
I was involved in the bankruptcy case, 35 gigs of data, 4,000 documents from the Treasury, all that.

[00:35:08] Speaker 02:
So I was only aware of that.

[00:35:10] Speaker 02:
But this is a whole different issue.

[00:35:12] Speaker 02:
I wanted to make sure that this was done properly.

[00:35:14] Speaker 02:
And it seemed that without any question, under all of your case law, Cuban attorney,

[00:35:20] Speaker 02:
Goodrich, Hopland, Ariande, all of them say there has to be a manifestation of the right, of the taking.

[00:35:30] Speaker 02:
It has to be apparent.

[00:35:32] Speaker 02:
Not only does it have to be effective, not only does it have to actually have done something, it's not just the implementation of order, you have to have acted upon the order.

[00:35:39] Speaker 02:
And you have to have been apparent to people who were injured.

[00:35:43] Speaker 02:
That's really the close.

[00:35:45] Speaker 02:
Nobody would possibly know what's going on until the close.

[00:35:48] Speaker 02:
The government was exerting executive privilege all through the bankruptcy case.

[00:35:51] Speaker 02:
How's anybody supposed to know when their coercion ends?

[00:35:55] Speaker 02:
So, Your Honor, the question on the takings is, has the government gone too far?

[00:36:01] Speaker 02:
And the question is, has the government gone too far here?

[00:36:03] Speaker 02:
You're dealing with people that had no safety

[00:36:07] Speaker 02:
The dealers are 1%.

[00:36:08] Speaker 02:
Going to the order, the order says that the dealers got 99% of the dealers consented to the wind-downs.

[00:36:15] Speaker 02:
Only 1%.

[00:36:15] Speaker 02:
So the takings case of the dealers is of the 1%.

[00:36:18] Speaker 02:
And if they have a claim, how can my clients not have it?

[00:36:24] Speaker 02:
They weren't a condition to the deal.

[00:36:26] Speaker 02:
The restructuring of the dealer network was always a condition to the deal.

[00:36:29] Speaker 02:
The government didn't come to the bankruptcy court and say, reject these contracts.

[00:36:33] Speaker 02:
And why were they so nice to the dealers anyway?

[00:36:35] Speaker 02:
They were just rejected.

[00:36:36] Speaker 02:
These were just claims.

[00:36:37] Speaker 02:
What was so special about the dealers?

[00:36:40] Speaker 02:
I don't understand, because they didn't want all these claims to come out.

[00:36:42] Speaker 02:
You have 3,000 dealers, a million dollars, that's $3 billion.

[00:36:45] Speaker 02:
Now all of a sudden, you're into $35 billion of claims, and they have to issue 10% more stock.

[00:36:51] Speaker 02:
So there are all these calculations that are going on behind the scenes that we don't know about.

[00:36:55] Speaker 02:
And that's what the Second Circuit said in GM.

[00:36:57] Speaker 02:
It's a polycentric case.

[00:36:59] Speaker 02:
You don't know what would have happened.

[00:37:01] Speaker 02:
But one thing's for sure, this was not a judicial taking, and this was the government

[00:37:06] Speaker 02:
doing what it should not be, going too far, going to the judiciary, and going for...

[00:37:11] Speaker 02:
unrealizable reasons for no reason at all and taking the downtrodden and trampling on them.

[00:37:17] Speaker 02:
And that's not what our country's about.

[00:37:19] Speaker 02:
You don't go to a judge and say, I need this as a government.

[00:37:22] Speaker 02:
And then it turns out that you really don't.

[00:37:25] Speaker 02:
And you're doing it was all a ruse.

[00:37:26] Speaker 02:
And GM files a motion.

[00:37:28] Speaker 02:
You tell GM file the motion.

[00:37:29] Speaker 02:
And you tell GM to include this in the order.

[00:37:31] Speaker 02:
And you say, I'm not going to deal with you.

[00:37:33] Speaker 02:
I'm not going to finance this deal if you don't include this in the order.

[00:37:36] Speaker 02:
That's totally coercive.

[00:37:39] Speaker 04:
It's wrong.

[00:37:40] Speaker 04:
I think we need to wrap it up.

[00:37:42] Speaker 04:
I think we have the argument as a strange case.

[00:37:47] Speaker 04:
Thank you both.

[00:37:48] Speaker 04:
The case is taken under submission.