[00:00:00] Speaker 00: Thank you. [00:00:01] Speaker 00: All the cases taken under submission. [00:00:29] Speaker 01: I'm glad you put that chair back, Council. [00:00:31] Speaker 00: No, that's okay. [00:00:38] Speaker 01: All housekeeping questions. [00:01:06] Speaker 00: Okay, the next argued case is number 182116, Nationwide Sales and Services against Steel City Vacuum Company. [00:01:16] Speaker 00: Mr. Donegan. [00:01:21] Speaker 04: May it please the court, compared to what you've heard this morning, this is a relatively simple case. [00:01:26] Speaker 04: It's very simple. [00:01:27] Speaker 04: Inducement for breach of contract. [00:01:30] Speaker 04: It arises because we had a customer. [00:01:32] Speaker 01: Was there any evidence in the record regarding intentional procurement? [00:01:37] Speaker 04: Procurement, yes. [00:01:40] Speaker 04: In order to obtain a document from a Chinese supplier, you're going to need to submit a purchase order to the Chinese supplier. [00:01:51] Speaker 04: They're not going to willy-nilly walk into your place of business and offer it to you. [00:01:57] Speaker 04: Now, the purchase offers are part of the record. [00:02:01] Speaker 04: The documents that went from, well, not the purchase orders, but the invoices, [00:02:06] Speaker 04: from the Chinese manufacturer to Steel City are in the record. [00:02:13] Speaker 04: Those invoices would not have come into existence unless there were a purchase order from Steel City to the Chinese manufacturer. [00:02:24] Speaker 04: That is the inducement. [00:02:25] Speaker 04: That is procurement, in your words. [00:02:27] Speaker 02: Okay, but the problem I'm having is I understand that now we're talking about four parts, right? [00:02:34] Speaker 04: Well, Your Honor, four parts are the subject of the evidence we put in here. [00:02:39] Speaker 04: Because the discovery was limited, there may be a lot more parts. [00:02:42] Speaker 02: In any event, for the moment, we're talking about truth. [00:02:45] Speaker 02: Correct, Your Honor. [00:02:48] Speaker 02: And I have the same question that Judge Waldo had, and that is, in opposing summary judgment, where did you present evidence that they knew that these four parts were subject [00:03:07] Speaker 02: had. [00:03:09] Speaker 02: And I looked pretty carefully at this. [00:03:11] Speaker 02: I've had my clerks look pretty carefully at this. [00:03:13] Speaker 02: I'm not seeing where, in opposing summary judgment, you presented any evidence that they knew that these four parts that they were purchasing were subject to the nationwide China agreement. [00:03:27] Speaker 02: OK? [00:03:27] Speaker 04: Yes. [00:03:28] Speaker 04: Well, if we look at the evidence, I want to go back to 15. [00:03:33] Speaker 01: But if we go back to the evidence from- Cytus to the pages in the appendix that support your position. [00:03:43] Speaker 04: Let's look at the January declaration at about page [00:03:51] Speaker 04: 1360 of the appendix, which incorporates the manufacturer's agreement, which begins at page 1364. [00:03:59] Speaker 04: Now, what I want to call your attention to, Your Honors, is if you look at 1365, under the definition of tooling toward the top of the page in paragraph two, [00:04:16] Speaker 04: The way that should be read and the way I think- This is not responsive to my question. [00:04:21] Speaker 02: My question is, where in the record do we find evidence that you submitted that there was an awareness that these four parts were subject to the agreement? [00:04:33] Speaker 04: I need a couple chains of logic to get there. [00:04:36] Speaker 04: One is one is your honor this agreement says that anything which is made for us is our tooling as it's defined in the agreement This agreement according to the declaration of our client was submitted to steel city on Well the agreement yes [00:04:58] Speaker 02: The agreement does not mention the four parts. [00:05:00] Speaker 04: Specifically, no. [00:05:01] Speaker 04: But generally, it provides that all parts which are made for us. [00:05:05] Speaker 02: So where is the evidence that they were aware that the four parts were subject to this agreement? [00:05:11] Speaker 04: The fact that they saw the agreement and the agreement provides that anything made for us would be subject to this agreement and exclusively ours. [00:05:23] Speaker 04: So if they previously bought it from us, [00:05:26] Speaker 04: They saw the agreement demonstrating that anything that was made for us was part of the exclusivity involving the Chinese manufacturer. [00:05:36] Speaker 04: Then they would have known that if they are buying the same part that they bought from us, from the Chinese manufacturer, then they are buying our tooling, which is subject to exclusivity under this contract. [00:05:51] Speaker 02: We are in the Supposing Summary Judgment. [00:05:59] Speaker 02: Where's the declaration that says that? [00:06:03] Speaker 02: You made an argument here, I understand what the argument is, but did you make it in causing summary judgment? [00:06:11] Speaker 04: Yes. [00:06:12] Speaker 04: I believe it was made in part. [00:06:14] Speaker 04: Okay. [00:06:14] Speaker 04: I'm looking at 1360, Your Honor, which says the agreement was given to them. [00:06:19] Speaker 04: The agreement was part of the record. [00:06:23] Speaker 04: And we talked about the fact, and this is at 1361, with Mr. Levine of Seal City. [00:06:31] Speaker 01: Where were the undisclosed products raised before the district court? [00:06:38] Speaker 04: When you say undisclosed products, Your Honor? [00:06:41] Speaker 01: The four products. [00:06:42] Speaker 04: The four parts. [00:06:44] Speaker 04: If we look at pages 10 and 11 of our brief. [00:06:49] Speaker 01: Record. [00:06:51] Speaker 04: It provides the record sites for each of the four parts. [00:06:55] Speaker 01: And where would that be? [00:06:57] Speaker 01: In the record, where? [00:07:00] Speaker 04: For example, [00:07:06] Speaker 04: For the part that ends in 85-1009, it was the subject of purchase order. [00:07:13] Speaker 04: It ends in 4-2 at page 367 of the record. [00:07:21] Speaker 00: Is it correct that this summary judgment was on the pleadings without any embellishment? [00:07:30] Speaker 04: It is a regular procedure as you will find, Your Honor. [00:07:34] Speaker 04: What happened was there were pleadings and then the magistrate judge had phase one discovery. [00:07:42] Speaker 04: And in phase one discovery, you do what you need in order to try to settle the case. [00:07:46] Speaker 04: At the conference on June 15 of 17, he said, don't go beyond trying to identify what parts were sold by the Chinese manufacturer to Steel City. [00:08:00] Speaker 04: There was no other discovery that was allowed at the conference. [00:08:04] Speaker 04: He explicitly said, hold everything else. [00:08:08] Speaker 04: So that's the reason why there were no depositions of the Steel City people. [00:08:13] Speaker 04: asking them, how did you know? [00:08:15] Speaker 04: What did you know? [00:08:16] Speaker 04: When did you know it? [00:08:17] Speaker 04: Because the magistrate judge would not let us get that far. [00:08:21] Speaker 04: Now, I think there's clearly enough evidence to establish a question of fact with respect to each of those elements of the inducement claim. [00:08:29] Speaker 04: But if you're asking why isn't there more, it's because, as Your Honor said, this was largely a decision made on the pleadings and not a decision after full-blown discovery. [00:08:37] Speaker 02: But you never raise that issue in your brief. [00:08:41] Speaker 02: You don't say, [00:08:44] Speaker 02: because we didn't get enough discovery, did you? [00:08:46] Speaker 04: That is correct, Your Honor. [00:08:47] Speaker 04: And our position now is the declarations of the Genovese, which explicitly say that we showed disagreement to Steel City in March 16, and they saw the full-blown agreement, and they knew or should have known, they knew, that the parts that they were buying from the Chinese manufacturer were exactly the parts that they were buying from us. [00:09:12] Speaker 01: What are pages 1326 and 27 of the appendix? [00:09:22] Speaker 04: 1326. [00:09:37] Speaker 04: Page 1326 and 32. [00:09:41] Speaker 04: 1327, it's the declaration of Mr. Dunn, who was the attorney for my client below. [00:10:00] Speaker 01: It's a fugitive document. [00:10:03] Speaker 01: It doesn't have any foundation. [00:10:04] Speaker 01: It doesn't have anything. [00:10:07] Speaker 01: I thought that's where you were going to go when I asked you those questions. [00:10:10] Speaker 04: Well, when you were asking me the questions about procurements, I don't think the answer is Mr. Dunn's declaration. [00:10:17] Speaker 04: I think the answer is the declaration of a client saying that he had discussions with Mr. Levine of Steel City, that he gave the contract to Mr. Levine of Steel City in March of 16, [00:10:31] Speaker 04: And that if he had read the contract, he would have seen that anything that was purchased, anything that Steel City purchased from us, from nationwide, would have been purchased from our Chinese manufacturer, which would have been subject to the agreement, because all the things that we bought from our agreement were tooling. [00:10:53] Speaker 04: And tooling, parts made from tooling, could only be purchased from us [00:10:58] Speaker 04: And the fact that there were invoices from the Chinese manufacturers showing that Steel City bought parts, at least one of which was after that agreement was shown to Steel City, which showed that they were buying from Steel City the same parts that they were buying from us. [00:11:18] Speaker 04: I'm into my rebuttal time, so I will sit down. [00:11:22] Speaker ?: Thank you. [00:11:31] Speaker 00: Mr. Donovan. [00:11:34] Speaker 03: Good morning. [00:11:35] Speaker 03: May it please the court, Gerard Donovan for Steel City. [00:11:38] Speaker 03: Here nationwide did not present evidence that the four parts are covered by the contract. [00:11:45] Speaker 03: They didn't present evidence that Steel City knew that these parts were covered by the contract when they were purchased. [00:11:50] Speaker 03: And they have not shown evidence that Steel City intentionally procured these parts for purposes of breaching the contract. [00:11:57] Speaker 03: Any one of these issues is sufficient to affirm the summary judgment that was granted here. [00:12:01] Speaker 02: Yeah, I'm glad that you're not arguing some of the other issues because there seem to be some grounds for the decision below, which are questionable, such as the failure of the complaint to mention the four parts is somehow preclusive. [00:12:14] Speaker 02: That's a pretty hard argument. [00:12:16] Speaker 03: And at this point the court had a record for summary judgment and the court allowed discovery. [00:12:21] Speaker 03: It asked the parties at an early discovery hearing what discovery was necessary to determine if the parts were made with tooling and if they're in this case. [00:12:31] Speaker 03: That discovery was taken. [00:12:32] Speaker 03: That discovery did not provide evidence either that Steel City knew what parts were covered by the contract or that these four parts identified in fact are covered by the contract. [00:12:42] Speaker 03: And so when faced with the record at the summary judgment stage, the court ruled that there's no evidence sufficient to go forward. [00:12:49] Speaker 00: But on summary judgment, disputed facts need to be resolved against the movement. [00:12:55] Speaker 00: And there were significant allegations of facts that would have been resolved at some sort of contested trial, would it not? [00:13:10] Speaker 03: Well, at the summary judgment phase, they would have to present evidence that a reasonable jury could look at to resolve the facts in favor of the non-movement. [00:13:18] Speaker 03: Here, Nationwide presented no evidence that the contract covers the parts at issue. [00:13:24] Speaker 03: They presented no evidence that Steel City was aware of a contract covering those parts. [00:13:29] Speaker 00: Nothing significant. [00:13:30] Speaker 00: There were declarations. [00:13:32] Speaker 00: There were statements by potential witnesses. [00:13:37] Speaker 03: That's correct your honor, so if we turn to the appendix regarding steel cities Whether or not still see I acknowledge that these parts might be covered by the contract the contract we were just looking at is a page 1365 and 1366 and Section 2 of that contract that appendix 1365 says that parts that are made with steel with sorry nationwide tooling are covered by the contract and [00:14:03] Speaker 03: But there's no evidence in the record that indicates that Nationwide ever communicated to our client what parts were covered by their tooling. [00:14:11] Speaker 00: We're talking about summary judgment. [00:14:12] Speaker 00: There's been no trial. [00:14:14] Speaker 00: So there is no evidence. [00:14:16] Speaker 00: There are representations. [00:14:17] Speaker 00: There's a complaint, allegations supported by sworn statements. [00:14:24] Speaker 00: I don't understand how these facts could have been resolved adversely on summary judgment. [00:14:33] Speaker 00: It could be that they wouldn't be supported after there's been full discovery. [00:14:41] Speaker 03: I'm sorry. [00:14:45] Speaker 03: First, our client requested to move to dismiss on just the pleadings. [00:14:48] Speaker 03: And the court permitted the parties to take discovery, permitted Nationwide to take discovery to determine whether or not there were facts to support its claim. [00:14:57] Speaker 03: Nationwide took discovery and provided evidence. [00:15:00] Speaker 03: Documents were produced. [00:15:02] Speaker 03: In opposition to our summary judgment brief, Nationwide presented the evidence that they said created a fact dispute. [00:15:10] Speaker 03: That evidence, however, did not show that the parts at issue, the parts that our client purchased, were covered by the contract. [00:15:18] Speaker 03: They also did not show that our client was aware of any parts being covered by the contract. [00:15:24] Speaker 01: Well, they say your opposing counsel says that you saw the contract. [00:15:30] Speaker 01: I think he said you were showed it. [00:15:32] Speaker 03: Right, so there's a dispute there. [00:15:35] Speaker 03: The declaration is worded so that it never actually says the contract was sent. [00:15:40] Speaker 03: It says that we attach as a letter that attaches the contract that's from myself to the president of Steel City. [00:15:49] Speaker 03: That declaration... [00:15:58] Speaker 03: That's not an issue here because the contract itself does not identify the relevant parts and I think that's the more significant issue. [00:16:09] Speaker 03: I'm not sure the record requires that because on the one side the declarations don't actually say it was sent and our client's declaration says it was not received and the question is whether our client had knowledge of it but even if we assume that it was sent and our client received it or that's a disputed fact [00:16:27] Speaker 03: The contract does not specify the parts that are covered by the contract. [00:16:31] Speaker 03: It specifies that parts made with Nationwide's tooling are covered by the contract. [00:16:35] Speaker 03: And there's nothing in the record that says that Nationwide ever communicated what parts are covered with their tooling. [00:16:42] Speaker 03: So the declaration- There was no record. [00:16:44] Speaker 00: There was no trial. [00:16:47] Speaker 00: There's no record. [00:16:49] Speaker 03: In opposition to summary judgment, declarations were provided that all factual- Is there anywhere in [00:16:57] Speaker 01: I speak fairly now. [00:16:59] Speaker 01: Is there anywhere in the other side's declaration that might reasonably be read as saying that those four parts are made with nationwide tooling? [00:17:11] Speaker 03: No, there are not. [00:17:13] Speaker 03: So there are four pieces of evidence in the record that go to the communications between Nationwide and my client, if those communications are sent, assuming they were for purposes of this argument. [00:17:26] Speaker 03: There is a letter that supposedly attached the agreement that letters at page [00:17:35] Speaker 03: Appendix 1368. [00:17:38] Speaker 03: That letter does not specify any products that are made under this agreement. [00:17:43] Speaker 03: It says here's an agreement and this agreement covers parts made with our tooling, but it does not provide our client with any information about what parts are made with their tooling. [00:17:52] Speaker 03: And for perspective on this, our client's been purchasing, it's undisputed, products from this Chinese supplier since 2005. [00:17:59] Speaker 03: And it purchases many products from this distributor. [00:18:05] Speaker 03: So there's no way for our client to know which products are made with their tooling. [00:18:09] Speaker 03: That letter is at 1368. [00:18:12] Speaker 03: That letter supposedly attaches the contract to page 1364. [00:18:21] Speaker 03: Section 2 of that contract, page 1365, is the relevant section that addresses the tooling. [00:18:27] Speaker 03: It also does not specify what products are made with that tooling. [00:18:31] Speaker 03: The two Genoa brothers' declarations, the first one, Mark Genoa's at 1356, refers to having conversations with our client regarding their concern about this Chinese supplier and whether or not this Chinese supplier was making parts with its tooling for other people. [00:18:47] Speaker 03: But it does not indicate that they ever provided notice to our client about what products are covered by this agreement or what tooling is used. [00:18:56] Speaker 03: The other Genoa brother, Scott, declaration is at page appendix 1369. [00:19:03] Speaker 03: He also does not communicate to Seal City or make any representation that he ever communicated what products are covered by this. [00:19:10] Speaker 03: Finally, there's an email that was sent shortly before this litigation and that's at appendix 1391 from Scott Genoa to Steel City. [00:19:20] Speaker 03: That also does not identify what parts are covered by this contract. [00:19:23] Speaker 03: For perspective, the invoices that they provide as evidence of [00:19:28] Speaker 03: What products are supposedly under this contract started Appendix 1331. [00:19:31] Speaker 03: And these show hundreds of products that our client purchases from the supplier. [00:19:39] Speaker 03: And only very few have product numbers that nationwide contends could be their products. [00:19:47] Speaker 03: Now, these product identifiers are Steel City product identifiers. [00:19:51] Speaker 03: These product identifiers identify what vacuum these parts are compatible with. [00:19:55] Speaker 03: They do not identify who made the part, what tooling the part was made for. [00:20:00] Speaker 03: And these are often standard parts. [00:20:02] Speaker 03: In the blue brief, Nationwide's opening brief, they admitted that from those numbers, you cannot tell if the parts were made with their tooling. [00:20:11] Speaker 03: This is at page 12 of their brief. [00:20:13] Speaker 03: Nationwide said they did not inspect the actual parts Steel City purchased from Nationwide's Chinese manufacturer to determine if they were proprietary parts. [00:20:21] Speaker 03: They went on to explain that such an inspection would be necessary to uncover Steel City's purchase of Nationwide's proprietary parts from Nationwide's Chinese manufacturer. [00:20:33] Speaker 03: So we do not have evidence from these part numbers that any parts that were actually made with Nationwide's tooling were purchased from the Chinese manufacturer. [00:20:43] Speaker 03: Additionally, if we look at the earlier invoices for when Steel City did purchase these parts nationwide, I guess this is a purchase order rather, but at page appendix 401, there's a description of these parts, and there's the part number 2363605. [00:20:59] Speaker 03: That's a Steel City part number. [00:21:01] Speaker 03: It shows that that matches up with nationwide part number 39. [00:21:05] Speaker 03: We do not see in the invoices from the Chinese supplier this is part number 39 or any nationwide part. [00:21:11] Speaker 03: We only know that it has the same Steel City part number. [00:21:13] Speaker 03: And if Steel City bought the same type of part from any manufacturer, it would have the same Steel City part number because it's compatible with the same vacuums. [00:21:23] Speaker 03: This part, as shown on Appendix 401, is a brush roll end cap for a eureka vacuum. [00:21:29] Speaker 03: So it's a standard part for eureka vacuums that resell or sell. [00:21:33] Speaker 03: It's not in the record here, but my client's been purchasing this part since at least 2000 from other suppliers. [00:21:41] Speaker 03: The invoice that we have on page [00:21:48] Speaker 03: 1337 shows that 1,000 of these $0.08 parts were purchased from the Chinese supplier. [00:21:56] Speaker 03: But it doesn't say that these parts were made with their tooling. [00:21:59] Speaker 03: And we have their admission that you have to inspect. [00:22:01] Speaker 00: I'm trying to understand the relationship of these 1,000 parts to this complaint. [00:22:08] Speaker 03: So the complaint is vague and doesn't specify what parts are particularly covered. [00:22:15] Speaker 03: It offers 14 specific parts. [00:22:17] Speaker 00: So the complaint mentioned some parts, and others came up in the ensuing discussion. [00:22:24] Speaker 00: Why is it relevant that there are other parts that are not involved in dispute? [00:22:31] Speaker 03: What's relevant is that for all of the parts that have been identified at any point so far, the parts that were... They haven't accused the entire device. [00:22:40] Speaker 00: Is that right? [00:22:41] Speaker 03: Right. [00:22:41] Speaker 03: This case isn't about the devices they go into. [00:22:44] Speaker 03: The question is whether or not the parts that Steel City purchased were purchased to intentionally breach a contract between Nationwide and a supplier. [00:22:54] Speaker 00: But was your position that the other 1,000 parts were also purchased from the same supplier through the same relationship? [00:23:07] Speaker 03: To back up, our client's been purchasing from the supplier since 2005, and that's undisputed in the record. [00:23:14] Speaker 03: And we purchased from them for all sorts of different vacuum cleaner replacement parts. [00:23:19] Speaker 00: So the answer to the question is no. [00:23:23] Speaker 03: I'm sorry, maybe I don't understand the question. [00:23:25] Speaker 00: I'm trying to understand. [00:23:27] Speaker 00: You're telling us that there were 1,000 parts. [00:23:30] Speaker 00: What's all the fuss about? [00:23:31] Speaker 03: So there are only four parts that they raised in this appeal and that were raised in opposition to summary judgment. [00:23:38] Speaker 03: Those four parts, we have no evidence that our client was ever aware they were subject to a contract. [00:23:45] Speaker 03: And because our client wasn't aware that they were subject to a contract. [00:23:48] Speaker 00: And the client received a letter stating that this particular relationship from this supplier was a serious question. [00:24:00] Speaker 00: I don't think you can tell us that the client was not aware. [00:24:04] Speaker 00: You might say the client disagreed, but you're telling us the client was not aware that there was an issue? [00:24:11] Speaker 03: So our client's position is that it never received this letter, but even if their client received the letter, the letter does not specify what parts are covered by this contract. [00:24:20] Speaker 03: Our client had been buying parts from the supplier for over a decade. [00:24:22] Speaker 00: That's why we have the lawsuit to [00:24:25] Speaker 00: bring out the evidence. [00:24:27] Speaker 00: We didn't get to that stage. [00:24:29] Speaker 00: Isn't that the question before us? [00:24:31] Speaker 03: No, Your Honor, we did get to that stage. [00:24:32] Speaker 03: We had discovery, and they had the opportunity to take discovery. [00:24:36] Speaker 01: Isn't your position, essentially, that what was provided by the other side is incompetent and noncognizable by the court below? [00:24:46] Speaker 03: Well, that's correct, but that's not all. [00:24:49] Speaker 03: The evidence they provided also does not show that our client was aware of a contract covering these parts, or more importantly, that our client didn't intentionally breach the contract. [00:24:59] Speaker 01: That's what I'm saying. [00:25:01] Speaker 01: The evidence provided lacks foundation, lacks specificity, and doesn't provide sufficient evidence to demonstrate the communication it is. [00:25:15] Speaker 03: That's, I agree with everything you just said, but I do think to go even further, and this doesn't, this agrees with that, but the invoices they cite to even everyone but one of them is before the letter we received. [00:25:27] Speaker 01: I'm talking about the affidavits that are supposedly the foundational basis for the other documentation. [00:25:33] Speaker 03: Yes, the affidavits do not state the letter was sent. [00:25:36] Speaker 03: They do not explain which parts are covered by the letter or the contract. [00:25:39] Speaker 03: We don't have evidence of what tooling nationwide supposedly provided to the supplier. [00:25:44] Speaker 03: And we don't know what parts would be made from that tooling. [00:25:46] Speaker 03: So even if our client had knowledge of everything that they alleged our client had knowledge of, [00:25:51] Speaker 03: That would not give our client the relevant knowledge to potentially induce breach of this contract because they just simply didn't know what parts are covered by this contract. [00:26:04] Speaker 03: But separately, our client was also purchasing these parts from the Chinese supplier before our client received this letter. [00:26:10] Speaker 03: So even when this letter gave them that, our client was already purchasing these parts. [00:26:15] Speaker 03: And that's evidenced by the invoices at pages 1331 to 1336. [00:26:20] Speaker 03: those invoices are from before the date of the letter. [00:26:24] Speaker 03: So even if our client became aware of this letter, our client was already purchasing these parts from this same supplier. [00:26:30] Speaker 03: And so I don't think there's any evidence to support that our client intentionally purchased these products to induce the breach of a contract when they're only continuing purchasing the products they were already purchasing. [00:26:43] Speaker 02: That's not a very good argument. [00:26:49] Speaker 03: Go ahead. [00:26:51] Speaker 03: Does the panel have any other questions? [00:26:55] Speaker 03: Otherwise, I see I'm out of time. [00:26:57] Speaker 00: Okay. [00:26:57] Speaker 00: No, thank you. [00:27:02] Speaker 00: Mr. Donegan, I think we have six minutes. [00:27:06] Speaker 04: Thank you, Your Honor. [00:27:07] Speaker 04: We're beyond the issue of whether the district court erred in what he decided and on to the issue of whether or not there's any other basis in the record to affirm the result that was reached and the overarching [00:27:22] Speaker 04: lens, which I'd like the court to look at this from, is although there was not a 50-60 declaration and although they're not saying that there wasn't sufficient discovery, I think you have to analyze the extent of the evidence of procurement or inducement based upon the amount of discovery that the district court allowed. [00:27:41] Speaker 04: And the district court didn't allow discovery on that issue. [00:27:44] Speaker 01: Well, discovery allowed or not, the affidavits by the two brothers [00:27:52] Speaker 01: lack, the first one's better, its conclusions are more forceful, but they're conclusory. [00:28:00] Speaker 01: And they lack foundation for any communication, any statement. [00:28:07] Speaker 01: How do we get past that? [00:28:10] Speaker 04: Well, I think on a motion for summary judgment, the evidence has to be construed in favor of... Rule 26 applies to the determination of motions for summary judgment. [00:28:21] Speaker 01: Is that not correct? [00:28:22] Speaker 01: Rule 56, Your Honor. [00:28:25] Speaker 01: Rule 56 incorporates the discovery rules, starting with 26. [00:28:31] Speaker 04: OK. [00:28:32] Speaker 01: And the evidence that's provided in opposition, you can do a 56F saying, I don't have the capacity. [00:28:42] Speaker 01: But there was no 56F. [00:28:44] Speaker 04: I agree. [00:28:44] Speaker 01: I agree. [00:28:46] Speaker 01: And consequently, under Rule 26, you have to provide competent evidence. [00:28:54] Speaker 01: And this evidence is not competent. [00:28:56] Speaker 04: I completely agree. [00:28:58] Speaker 04: But when one of the Genoa brothers says, [00:29:02] Speaker 04: and I'll get the precise site. [00:29:13] Speaker 04: I'm on page 1361. [00:29:16] Speaker 04: Paragraph 18, as far back as 2015, we, including him, have had conversations with Howard Levine of Steel City. [00:29:25] Speaker 01: Really? [00:29:26] Speaker 01: We? [00:29:27] Speaker 01: What does we mean? [00:29:28] Speaker 01: You know what foundational evidence requires? [00:29:32] Speaker 04: Absolutely. [00:29:33] Speaker 04: Absolutely. [00:29:33] Speaker 04: And I think this meets it. [00:29:36] Speaker 04: I don't think there's any dispute that this meets foundation. [00:29:38] Speaker 04: I mean, this is admissible. [00:29:40] Speaker 04: Somebody stands. [00:29:40] Speaker 04: I mean, somebody takes a witness stand and testifies. [00:29:43] Speaker 04: Let's take the word I. I had a conversation with Howard Levine back in 2015, and we discussed whether or not. [00:29:49] Speaker 01: Who, what, when, where, why, how? [00:29:52] Speaker 01: Who was present? [00:29:54] Speaker 01: What was said? [00:29:55] Speaker 01: What were the words spoken? [00:29:57] Speaker 04: Come on. [00:29:58] Speaker 04: I think that's fine cross-examination in trial. [00:30:00] Speaker 01: This is conclusory. [00:30:01] Speaker 04: No, this is conclusory. [00:30:03] Speaker 04: I disagree with you, Your Honor. [00:30:05] Speaker 04: I disagree with you. [00:30:06] Speaker 04: I disagree with you. [00:30:07] Speaker 04: That's it. [00:30:07] Speaker 04: I think whether or not this comes in is going to be discretionary on the part of the district judge. [00:30:11] Speaker 04: There was no motion to strike this. [00:30:14] Speaker 04: And there's no motion to say this is incompetent. [00:30:17] Speaker 04: I mean, in my experience, at least in the Southern District of New York, this would come in. [00:30:22] Speaker 01: Not when I sat there. [00:30:26] Speaker 01: As a visiting judge, it wouldn't. [00:30:30] Speaker 04: But in any event, what I wanted to do is I wanted to trace backwards the chronology of how you can infer easily from this agreement that there was inducement. [00:30:40] Speaker 04: If we begin at page 1336, we will see an invoice from the Chinese manufacturer, which is dated [00:30:50] Speaker 04: strike that 1337, an invoice from the Chinese manufacturer which is dated April 6th of 2016. [00:30:57] Speaker 04: That's after the letter which Judge Dyke says for purposes of summary judgment we need to assume was sent and received. [00:31:05] Speaker 04: Now, that refers to part ending in 92054. [00:31:12] Speaker 04: Then we go back and we find at why do we need to? [00:31:17] Speaker 02: Who did this at the summary judgment stage? [00:31:20] Speaker 02: You're making an argument here which isn't reflected in the declarations and I don't even think was made as an argument in your summary judgment brief. [00:31:30] Speaker 02: You know, you've got a problem with four parts. [00:31:34] Speaker 02: who says they knew the four parts were subject to the agreement. [00:31:38] Speaker 02: We don't have any evidence. [00:31:39] Speaker 04: That's the next issue, Your Honor. [00:31:41] Speaker 04: What we're showing through these invoices is one, they bought this part number from the Chinese manufacturer. [00:31:47] Speaker 04: Two, from 1336, they bought it previously from us. [00:31:53] Speaker 02: Where did you make that argument in opposing summer judgment? [00:31:58] Speaker 02: by attaching the agreement saying that it was given to the [00:32:09] Speaker 04: That's an interesting question. [00:32:10] Speaker 04: If the evidence is in the record, how specific does the argument in your memorandum have to be? [00:32:16] Speaker 04: And I apologize. [00:32:17] Speaker 04: I have not reread the memorandum so that I can specifically address that question. [00:32:21] Speaker 04: Because I think the obligation of the party in imposing summary judgment is to put in evidence. [00:32:26] Speaker 04: And if the evidence is there, then at least the district court should hold oral argument, which didn't happen in this case, and say, where's your evidence? [00:32:34] Speaker 04: You've given me a pile of paper. [00:32:35] Speaker 01: This is mind boggling. [00:32:37] Speaker 01: I'm sorry. [00:32:39] Speaker 01: surreal. [00:32:41] Speaker 01: In the first place, you're relying on Judge Dyke, which I don't think he said, that we have to assume at a summary judgment stage that documents were sent and received without foundational evidence? [00:32:55] Speaker 01: It throws the federal rules of civil procedure out the window. [00:33:01] Speaker 04: I don't think it throws the rules of evidence out the window, Your Honor. [00:33:05] Speaker 04: It fenestrates them. [00:33:07] Speaker 04: The witness says, we sent this letter to the other side. [00:33:13] Speaker 04: The other side said they didn't get it. [00:33:15] Speaker 04: That's a question of fact. [00:33:17] Speaker 04: The letter itself says, attached is a copy of the agreement dated such and such. [00:33:22] Speaker 04: Now, I think a reasonable inference is it attached what it said it attached. [00:33:28] Speaker 04: If it didn't, there would be a communication you would expect back saying, hey, you said there was an attachment, and there wasn't an attachment. [00:33:34] Speaker 01: They said they didn't receive the letter. [00:33:38] Speaker 04: That's a question of fact. [00:33:40] Speaker 04: If they're saying they didn't get the agreement that was attached to it, well, that can be no less of a question of fact, Your Honor. [00:33:50] Speaker 00: Was the invoice that's in the record you provided, was that before the district court? [00:33:58] Speaker 04: Oh, yes. [00:33:59] Speaker 04: All of these invoices were before the district court. [00:34:02] Speaker 04: And could the presentation have been clear? [00:34:04] Speaker 04: Yes. [00:34:05] Speaker 04: In hindsight, the presentation could have been clearer. [00:34:07] Speaker 04: I'm glad you agree with that. [00:34:10] Speaker 04: OK. [00:34:10] Speaker 04: Yes, I can always agree that something should be clear. [00:34:14] Speaker 04: Arguably, I would have done a better job. [00:34:16] Speaker 04: Arguably, I wouldn't have. [00:34:18] Speaker 04: But I don't want to criticize it, because the evidence was there. [00:34:21] Speaker 04: And if you look at this evidence in the totality, there's a question of fact on even the procurement issue on which discovery wasn't even allowed. [00:34:32] Speaker 00: Any more questions? [00:34:32] Speaker 00: No, that's enough. [00:34:33] Speaker 00: Any more questions? [00:34:34] Speaker 00: Thank you. [00:34:34] Speaker 00: Thank you both. [00:34:35] Speaker 00: The case is taken under submission.