[00:00:00] Speaker 03:
Our next case is Andra Group LP versus Victoria Secret Stores LLC 20-2009.

[00:00:09] Speaker 03:
Counselor for the appellant, Ms.

[00:00:11] Speaker 03:
Whitehead, you reserve three minutes of time for rebuttal.

[00:00:15] Speaker 03:
Is that correct?

[00:00:17] Speaker 00:
Yes, Your Honor.

[00:00:19] Speaker 03:
OK.

[00:00:20] Speaker 03:
You may proceed, Counselor.

[00:00:23] Speaker 00:
May it please the court, I am Megan Whitehead on behalf of Andra Group LP.

[00:00:29] Speaker 00:
The central issues in this appeal are, one, whether under the patent venue statutes, each of four interrelated companies that are collectively responsible for the Victoria's Secret lifestyle brand has a regular and established place of business in the Eastern District of Texas.

[00:00:47] Speaker 00:
And second, whether the issue of corporate separateness has primacy over ratification in determining whether a location is a place of business of a defendant under the patent venue statutes.

[00:01:00] Speaker 00:
The four interrelated companies are, first, L Brands.

[00:01:04] Speaker 00:
It is the parent company that operates its business using company-owned stores.

[00:01:09] Speaker 00:
It provides extensive input on the operations of the retail stores.

[00:01:14] Speaker 00:
Second, Victoria's Secret Direct.

[00:01:16] Speaker 00:
It controls the website, victoriasecret.com, and the mobile application.

[00:01:21] Speaker 00:
And store associates have a separate interface that allows them to place orders for in-store customers

[00:01:28] Speaker 00:
directly with Victoria's Secret Direct.

[00:01:32] Speaker 00:
Third, Victoria's Secret Brand.

[00:01:34] Speaker 00:
It creates all Victoria's Secret merchandise sold in the retail stores and is responsible for the brand strategy, implementation, and management in the retail stores.

[00:01:45] Speaker 00:
And fourth, Victoria's Secret Stores.

[00:01:47] Speaker 00:
It operates the retail stores.

[00:01:49] Speaker 00:
The district court found venue was proper in the Eastern District Detective as to Victoria's Secret Stores, and so that company is not at issue in this appeal.

[00:01:59] Speaker 00:
The regular and established place of business of each of these four interrelated companies is every Victoria's Secret brick and mortar store in the Eastern District of Texas.

[00:02:10] Speaker 00:
For example, the brick and mortar stores in Plano and in Frisco.

[00:02:15] Speaker 00:
And the Victoria's Secret store associates who work at those brick and mortar stores in the district are agents of each of these interrelated companies, conducting business of each of these

[00:02:27] Speaker 00:
companies at the physical retail stores as contemplated by NRAE Google.

[00:02:32] Speaker 03:
Counselor, who controls the relationship between the employees that are working at the brick and mortar stores?

[00:02:41] Speaker 00:
Each one of these companies do.

[00:02:43] Speaker 00:
And I'll start with Victoria's Secret Direct and how it controls the sales associates at the brick and mortar stores.

[00:02:51] Speaker 00:
Victoria's Secret Direct

[00:02:54] Speaker 00:
In-store customers have the ability to purchase merchandise sold online and they place that order with the in-store associate at their point of sale device because that purchase is of online merchandise.

[00:03:12] Speaker 00:
Direct is responsible for that merchandise.

[00:03:15] Speaker 00:
Direct fulfills all the orders.

[00:03:17] Speaker 00:
Direct receives the revenue of those sales.

[00:03:20] Speaker 00:
That's the appendix at 328 and 330.

[00:03:23] Speaker 00:
And that's directed controlling the process of how those sales associates in the physical retail stores process those orders of online merchandise and how those returns can transpire.

[00:03:36] Speaker 00:
As such, direct has control over the sales associates for selling merchandise in stores and for returning that merchandise.

[00:03:45] Speaker 03:
Who hires those employees, those sales associates?

[00:03:50] Speaker 00:
Who hires them?

[00:03:53] Speaker 00:
Well, the process starts.

[00:03:55] Speaker 00:
L Brands, the parent company, hosts the website where job applications are filled out.

[00:04:01] Speaker 03:
Let me ask you differently.

[00:04:03] Speaker 03:
Do the defendants hire the sales associates?

[00:04:09] Speaker 00:
L Brands is involved in the hiring process.

[00:04:12] Speaker 00:
And it is not clear who grants the hiring.

[00:04:18] Speaker 00:
Miss Barcelona, the store manager,

[00:04:21] Speaker 00:
discussed that she was involved, that she conducted interviews, and that she could hire in four employees.

[00:04:27] Speaker 00:
But she also testified that L Brands is the website where applicants for those in four positions fill out their applications.

[00:04:37] Speaker 00:
Once hired, L Brands is absolutely assert control over those sales associates by requiring each and every sales associate to sign and abide by its code of conduct.

[00:04:50] Speaker 00:
And it's called the L Brands Code of Conduct.

[00:04:53] Speaker 00:
And in the briefing, the Victoria Secret Companies try to discuss the L Brands Code of Conduct as general guidelines.

[00:05:03] Speaker 00:
But the L Brands Code of Conduct is much more specific.

[00:05:07] Speaker 03:
How does all this relate to physical presence in the district?

[00:05:12] Speaker 00:
The physical presence is the brick and mortar store.

[00:05:16] Speaker 00:
There are sales associates who work at the brick and mortar store.

[00:05:22] Speaker 00:
Those sales associates act as agents for L Brand, for Victoria's Secret Direct, and for Victoria's Secret Brand in the district conducting their business in the physical retail stores.

[00:05:37] Speaker 00:
For example, as I discussed before, Victoria's Secret Direct through the sales associates in the physical stores sells online merchandise

[00:05:46] Speaker 00:
and facilitates the returns of merchandise sold online in-store and oversees the process by which the sales associates must return those items.

[00:05:58] Speaker 00:
There is a separate specific process.

[00:06:01] Speaker 02:
Counsel, this is Judge Hughes.

[00:06:03] Speaker 02:
I think the relationship you're talking about is the hardest one for me to think about.

[00:06:12] Speaker 02:
There's testimony from the store manager about all of this use of the internet site and returns and the like.

[00:06:19] Speaker 02:
Do you have any evidence showing that the web company direct has policies directing the stores to do this, that it's a requirement for this or anything showing that the stores are required to use the website like this or if it's just the store's own unilateral decision to use this?

[00:06:43] Speaker 00:
So at the appendix in 328 and 330, Direct declares that all business transacted through the Victoria's Secret website and the Victoria's Secret mobile app is controlled exclusively by Victoria's Secret Direct.

[00:07:02] Speaker 00:
because it has stated it exclusively controls the purchase of this merchandise?

[00:07:07] Speaker 00:
Well, yeah, I get that.

[00:07:09] Speaker 02:
But that argument goes too far.

[00:07:11] Speaker 02:
If that was the case, then any regular consumer out there using this would be acting as an agent.

[00:07:18] Speaker 02:
And that clearly is not the case.

[00:07:20] Speaker 02:
So I want something more than just their view that

[00:07:25] Speaker 02:
This direct entity is in charge of the website.

[00:07:28] Speaker 02:
Of course, it is.

[00:07:29] Speaker 02:
Is there something from direct telling the stores subsidiary that they have to use the internet for returns for sales if there's not

[00:07:41] Speaker 02:
items in store and all of that.

[00:07:44] Speaker 02:
Is there a policy in place you can put anywhere or put me to anywhere that shows direct has some kind of, and I don't mean a pun here, but it's the right word, direct control over the stores?

[00:07:57] Speaker 00:
So I appreciate the question and I think it's more, the declaration at appendix 328 and 330 says more than direct controls the website.

[00:08:11] Speaker 00:
They control all sales affiliated or associated with online merchandise.

[00:08:16] Speaker 00:
And so when, for example, I'm a customer in-store talking to the in-store sales associate that I want to make an online purchase, they, the sales associate does so through a separate interface.

[00:08:30] Speaker 00:
And that interface is a direct point of contact.

[00:08:33] Speaker 02:
You're still not answering my question, because that's all still bottom up from the store associate and them deciding to use the website to help out their customers.

[00:08:46] Speaker 02:
I don't know whether that's just directions from the store entity and good customer service, because clearly it is, or if there's some kind of official policy

[00:08:56] Speaker 02:
from the website NOD directing the stores that they should fulfill orders when they have no in-store stock through the website or from LBI itself?

[00:09:09] Speaker 02:
Is there anything beyond what you just pointed me to?

[00:09:14] Speaker 00:
So I think there's one clarification to make with respect to what you stated.

[00:09:19] Speaker 00:
The in-store sales associate doesn't necessarily use the website.

[00:09:23] Speaker 00:
In fact, Ms.

[00:09:24] Speaker 00:
Barcelona testified

[00:09:26] Speaker 00:
that she doesn't use VictoriaSecret.com to place orders directly with Direct.

[00:09:32] Speaker 00:
She uses a separate interface that is on her point of sale device.

[00:09:35] Speaker 00:
And that places the order directly with VictoriaSecret Direct.

[00:09:39] Speaker 00:
VictoriaSecret Direct fulfills that order.

[00:09:41] Speaker 00:
VictoriaSecret Direct receives the revenue from that order.

[00:09:44] Speaker 02:
Because of those... So basically you're asking me to draw from that, all that fact and inference that there's a policy at direct to tell the stores to use the, to go through the internet.

[00:10:01] Speaker 00:
It's a separate, yes your honor, it's a separate interface directly with Victoria Secret Direct from the sales associate.

[00:10:08] Speaker 00:
And because direct exclusively controls the purchasing of online merchandise, we believe that direct is controlling those in-store associates and how those direct sales take place and then subsequently how those returns happen.

[00:10:27] Speaker 02:
But you didn't come up and it seems to me that there was fairly extensive venue discovery.

[00:10:32] Speaker 02:
You didn't come up with anything more specific from direct or from the stores

[00:10:39] Speaker 02:
different business entities talking about this kind of policy in any kind of specific detail.

[00:10:45] Speaker 02:
You have this one point that they use a separate interface and you want me to draw an inference that that means they're the agent of the website.

[00:10:56] Speaker 00:
Also from direct testimony in its declaration that it exclusively controls those online purchases.

[00:11:08] Speaker 00:
And so, because of that exclusive control and its business being conducted in the physical store, it is fulfilling those sales, it is receiving revenue from those sales, then Victoria's Secret Direct is in control of those sales associates.

[00:11:24] Speaker 03:
My question here is, is it controlling the sales associates?

[00:11:32] Speaker 00:
Yes, Your Honor.

[00:11:33] Speaker 03:
The sales associate... Isn't there a bright line between what happens when the sales associate makes a sale?

[00:11:39] Speaker 03:
As you said, it goes to a separate internet platform, has to enter into another platform in order for the order to be placed.

[00:11:52] Speaker 03:
How is that controlling sales associates?

[00:11:58] Speaker 00:
Direct has declared that it exclusively controls the sales of the online merchandise.

[00:12:05] Speaker 03:
And so... That's the sales.

[00:12:07] Speaker 03:
I'm talking about the sales associates.

[00:12:11] Speaker 00:
The sales associates are the people in the physical store using that separate interface to place orders of online merchandise.

[00:12:21] Speaker 00:
Those sales are then fulfilled by Victoria's Secret Direct.

[00:12:24] Speaker 00:
Victoria's Secret Direct receives the revenue from those sales.

[00:12:28] Speaker 03:
And so... Go on, please.

[00:12:36] Speaker 00:
Because of that exclusive control over the online merchandise, Victoria's Secret Direct is also asserting control of the in-store sales associates as they place those orders.

[00:12:50] Speaker 03:
Okay.

[00:12:50] Speaker 03:
Any of my colleagues have any additional questions?

[00:12:55] Speaker 03:
Okay, Councilor, we'll restore your three minutes rebuttal time.

[00:12:58] Speaker 03:
Let's hear from Mr. Miller now.

[00:13:04] Speaker 01:
Thank you, Your Honor.

[00:13:05] Speaker 01:
May it please the Court, this is Rich Miller from Ballard Spar on behalf of Appellees.

[00:13:15] Speaker 01:
The way that the law has developed around the venue since TC Hardland, our view is that it adds up to the proposition that for a defendant to be subject to venue in a patent case, it has to manifest some actual presence in the venue, either by incorporating there or by having a physical location there where it places employees or agents.

[00:13:36] Speaker 01:
As to the facts on the record here, there are a number of just uncontroverted facts that are relevant to the analysis and I think form a baseline.

[00:13:43] Speaker 01:
We know that none of the venue defendants.

[00:13:45] Speaker 02:
Council, your time is short.

[00:13:47] Speaker 02:
And I think it was clear what issue at least I was concerned about.

[00:13:52] Speaker 02:
Can you just get to it?

[00:13:54] Speaker 02:
I think that the internet issue is a little bit difficult because it does seem clear that the employees use direct to order items.

[00:14:06] Speaker 02:
They also will return items that were ordered through direct.

[00:14:12] Speaker 02:
But then it's unclear to me whether that's enough to make them agents or not.

[00:14:17] Speaker 02:
Can you address that?

[00:14:20] Speaker 01:
Yes, Your Honor.

[00:14:21] Speaker 01:
With respect to, I'll take the two pieces in order.

[00:14:25] Speaker 01:
So with respect to sales online, first of all, there is no evidence in the record that direct controls or direct stores employees to make that sale.

[00:14:38] Speaker 01:
To refer to the specific discussion about the point of sale,

[00:14:41] Speaker 01:
Yes, it is correct that the associates, the SOAR associates have an interface on the point of sale that allows them to place orders with direct.

[00:14:53] Speaker 01:
But if we look at the record, the point of sale, this is in Mr. Kramer's declaration at appendix 327,

[00:15:06] Speaker 01:
specifically says that Storrs controls the point of sale.

[00:15:12] Speaker 01:
So that interface is in fact provided by Storrs and to the extent of the record says anything about who controls the behavior of the employees of Victoria Secret Storrs that comes from Victoria Secret Storrs itself.

[00:15:27] Speaker 01:
There's no evidence in the record that that's controlled by direct.

[00:15:31] Speaker 01:
An additional point on that.

[00:15:34] Speaker 02:
Sorry, you can go on in a minute, but let me just ask you a hypothetical.

[00:15:38] Speaker 02:
And I know this isn't in the record, but say we have a company-wide manual coming from LBI that talks about the relationship between the stores and direct and says store employees shall use this special interface to purchase items

[00:16:02] Speaker 02:
that aren't in stock for customers if they request.

[00:16:05] Speaker 02:
Would that change the agency relationship if it was something coming from LBI or even from Direct itself that explicitly told the brick and mortar store employees that in the event of a stock problem that they should resort to the website?

[00:16:25] Speaker 01:
I don't think so, Your Honor.

[00:16:27] Speaker 01:
And for that, I would turn to the Google decision.

[00:16:31] Speaker 01:
And in this instance, I would liken the activities of the stores employee entering the sale online, even if directed, even if there was some company policy which directed that, which I'm not aware of and is not on the record, of the ISP's employees

[00:16:52] Speaker 01:
in the NRAE Google case who were directed to, for example, perform certain maintenance tasks on the Google servers that were located in Texas to perform certain other tasks with respect to those.

[00:17:07] Speaker 01:
And they were contractually ordered to do that in that case with a contract with Google.

[00:17:12] Speaker 01:
And this court found was insufficient to create an agency relationship.

[00:17:17] Speaker 01:
And I would liken the activity

[00:17:20] Speaker 01:
making a purchase online at a customer's request.

[00:17:25] Speaker 02:
I understand your Google point, but does it make any difference that here we have related companies that are, I don't want to use any improper corporate law terms, but they're at least related companies all working towards selling similar things, whereas in Google, it was Google versus, I think, a relatively independent contractor.

[00:17:50] Speaker 02:
Shouldn't that make a difference there?

[00:17:52] Speaker 01:
So I don't believe, Your Honor, that unless there is an alter ego situation, that the agency analysis changes simply because companies are related to one another.

[00:18:05] Speaker 01:
And it's my basic understanding that in fact,

[00:18:12] Speaker 01:
Even with respect to employees of corporate subsidiaries, there's a presumption in place that they are not agents of a parent or related company unless there's an establishment of an alter ego or otherwise an establishment of an agency relationship.

[00:18:29] Speaker 02:
So let me ask you one more hypothetical, and I don't know whether the facts of this are true or not, but just assume they're true.

[00:18:36] Speaker 02:
Suppose you have, let's just take Walmart as an example, and suppose that Walmart and Walmart Online are run by the same corporate entity.

[00:18:47] Speaker 02:
and I buy something online that can be picked up in a store.

[00:18:53] Speaker 02:
Is that enough to make the online part of the company entity subject to venue anywhere there's a brick and mortar store?

[00:19:03] Speaker 01:
OK, so I want to make sure I understand.

[00:19:05] Speaker 01:
So we are the same corporate entity.

[00:19:07] Speaker 02:
Yeah, we don't have this.

[00:19:10] Speaker 02:
I guess I'm just trying to ask is, is the key factor here that the stores

[00:19:17] Speaker 02:
the LBI, direct are all separate corporate entities and would it make any difference if they weren't, even if what you were trying to sue was the internet portion of the company?

[00:19:31] Speaker 01:
I think the answer to your hypothetical would depend on

[00:19:35] Speaker 01:
on what the, in the case that you're describing, I think now you end up with that store employee being an employee of Walmart, if they're all the same corporate entity, and so that takes you back to the other half of the Google analysis, and they are now an employee, so there's no need to enter into the agency part of the analysis, I think is the way that I would look at that.

[00:20:00] Speaker 02:
Okay, I get you.

[00:20:03] Speaker 01:
So I think I was, unless Your Honor has any other questions on that specific point, we were talking about the points of sale.

[00:20:12] Speaker 03:
I had a question.

[00:20:13] Speaker 03:
What about the degree of control over the sales associate?

[00:20:17] Speaker 03:
What's the magnitude of the control that's being exerted?

[00:20:23] Speaker 01:
My understanding, Your Honor, is that there is no control exerted over sales associates by anyone other than

[00:20:33] Speaker 01:
their direct manager, at least that's what's in the testimony of the store manager who Andrew wanted to depose as part of the venue discovery.

[00:20:44] Speaker 03:
Let's go back to Judge Hughes' one of his questions.

[00:20:50] Speaker 03:
If I understood it correctly, or if not, I may look at this differently.

[00:20:55] Speaker 03:
If I go into a Victoria's Secret store and make a purchase and they tell me we don't have it in stock but I can get it ordered for you,

[00:21:02] Speaker 03:
And they pull up that separate platform to place the order.

[00:21:08] Speaker 03:
And then I can come and pick it up at the store.

[00:21:10] Speaker 03:
And not only that, the employee will carry the package and take it out to me outside of the store.

[00:21:16] Speaker 03:
Does something like that, would that make a difference?

[00:21:20] Speaker 01:
Well, that's, so first of all, your honor, that's the, we know that that's just want to make sure it's clear that that's not the fact here, right?

[00:21:26] Speaker 01:
That the employees cannot order.

[00:21:28] Speaker 01:
Okay.

[00:21:28] Speaker 01:
Okay.

[00:21:28] Speaker 01:
Just making, just making sure.

[00:21:30] Speaker 01:
So, uh, they have to order them for delivery to the customer's home.

[00:21:35] Speaker 01:
Um, that's the only way it's done.

[00:21:36] Speaker 01:
Uh, we cannot order online and pick up in stores, uh, in, in our, in the system, in, in, in this corporate structure with respect to your question.

[00:21:45] Speaker 03:
But say you did, would that be, would that be sufficient control?

[00:21:49] Speaker 01:
Does that change your argument?

[00:21:51] Speaker 01:
No, I don't think so, Your Honor, because I think what we're talking about here is essentially

[00:21:56] Speaker 01:
turning the store itself into basically a place where a customer could walk in and make an order and then receive it like a post office or UPS location or something like that.

[00:22:10] Speaker 01:
In the end, I don't believe that it is the failed associate if we're asking the question about agency who's being told anything about how to do their jobs.

[00:22:23] Speaker 01:
they're simply entering a sale and then in your hypothetical, if the package is received, then the customer is able to pick it up.

[00:22:35] Speaker 01:
So I don't believe that that would change the outcome here.

[00:22:40] Speaker 01:
Okay.

[00:22:44] Speaker 01:
So back to the question of point of sale, I wanted to finish out these two points.

[00:22:49] Speaker 01:
Another point about the ordering in stores online and the fact that it appears, first of all, I will acknowledge that there is no direct evidence

[00:23:00] Speaker 01:
in the record one way or the other as to whether direct directs that or whether stores direct that.

[00:23:07] Speaker 01:
But I think the inference we can take both from Ms.

[00:23:09] Speaker 01:
Barcelona's testimony is that that's controlled by, that how stores employees act is controlled in fact by stores and that's confirmed by Mr. Kramer's declaration which says that all operations with respect to the brick and mortar stores

[00:23:25] Speaker 01:
including employees is controlled by the stores entity.

[00:23:31] Speaker 01:
But further to that, the employees in stores who make sale, if they do make a sale online, in fact stores credits them with credit against their sales quota, right?

[00:23:49] Speaker 01:
Even though stores itself isn't making a sale.

[00:23:50] Speaker 01:
So it's stores that's encouraging them

[00:23:53] Speaker 01:
to do this, right?

[00:23:54] Speaker 01:
Stores that's telling them what to do and remunerating the employee for doing their job.

[00:24:02] Speaker 01:
So I think that that suggests that it is, in fact, Stores who is controlling that relationship.

[00:24:08] Speaker 01:
We also have the flip side question of accepting returns in Stores.

[00:24:13] Speaker 01:
And Your Honor had asked that question.

[00:24:16] Speaker 01:
as well.

[00:24:17] Speaker 01:
And I also think that that does not in any way support an agency relationship any more than having someone who works at the, you know, at the local UPS store taking a package and shipping it to someone would support an agency relationship.

[00:24:32] Speaker 01:
And in fact, what we would have, what we have here is essentially stores acting like a mailbox.

[00:24:40] Speaker 01:
So there's no evidence at all in the record that direct tells the employees

[00:24:45] Speaker 01:
of stores how to pack up and ship anything, right?

[00:24:50] Speaker 01:
And it's not something that they have discretion to.

[00:24:53] Speaker 01:
They receive it if it wasn't purchased at a store.

[00:24:56] Speaker 01:
they know they can't do anything with it because the products that were purchased online have different stock numbers and they're just from a different inventory system.

[00:25:04] Speaker 01:
So they put it in a bag and they send it out to mail and that's what they do.

[00:25:11] Speaker 01:
And I think that's analogous essentially to any kind of post office worker or shipping person and in fact would suggest if you were to create an agency relationship

[00:25:26] Speaker 01:
on that basis.

[00:25:27] Speaker 01:
We're talking about creating an agency relationship between anyone who is sending a package with the person to whom they are sending

[00:25:37] Speaker 01:
And I don't think that that is, I don't think that would be the kind of policy that we want, nor do I think that there's support for that creating an agency relationship.

[00:25:48] Speaker 02:
Council, can I just follow up on that point?

[00:25:51] Speaker 02:
I mean, I think the, you know, I understand the evidence that you have here on this, but what if there was an explicit statement somewhere in either direct or stores policy manuals about the precise,

[00:26:06] Speaker 02:
procedures a store employee should follow when returning merchandise bought on the internet and that there was a specific direction from direct to store employees that they must accept this and here's how they return it and the like.

[00:26:24] Speaker 02:
Would that change the scenario?

[00:26:26] Speaker 02:
I know you don't have that evidence here, but I'm just trying to test the boundaries of this.

[00:26:32] Speaker 01:
No, I understand, Your Honor.

[00:26:34] Speaker 01:
And I don't believe it would change it in a dispositive way, but it would be a relevant factor to consider, I believe, as to whether there is, in fact, an agency relationship.

[00:26:42] Speaker 01:
I think there are a number of cases, and they are factually heavy, about whether the amount of control exerted by one entity or another renders, you know, creates an agent-principle relationship.

[00:26:58] Speaker 01:
In this instance, I would posit that...

[00:27:01] Speaker 02:
So if there were a portion in the, say, training or employee manual for the store employee that had a whole section about direct sales and described how they're done on direct, and then described the store employee's roles, and it had a number of detailed things that they should do, not just returns, that they could use it to purchase merchandise for their in-store customers,

[00:27:30] Speaker 02:
and that they were supposed to use a special interface, all of that kind of stuff.

[00:27:34] Speaker 02:
If it was explicitly in an employee manual on part of their training to explain to them the interaction between stores and direct, that would make it a much harder case for you, would it not?

[00:27:48] Speaker 01:
I think it would create more facts that could tilt toward agency.

[00:27:53] Speaker 01:
I think it would depend on who's putting out that manual and who's enforcing the policy.

[00:27:58] Speaker 01:
But I understand, I take your point, Your Honor, I think that you're starting to move the facts down the continuum of when do we create an agency relationship and when do we not create an agency relationship.

[00:28:09] Speaker 01:
And I think that the analysis is usually how much control is being exerted.

[00:28:15] Speaker 01:
And as we get farther and farther along that line, then we get closer and closer to perhaps establishing an agency relationship.

[00:28:23] Speaker 01:
I heard my beep.

[00:28:26] Speaker 01:
Does that answer your question, Your Honor?

[00:28:29] Speaker 03:
Yes, that's fine.

[00:28:31] Speaker 03:
Do my colleagues have any other questions?

[00:28:35] Speaker 03:
No.

[00:28:35] Speaker 03:
Okay.

[00:28:35] Speaker 03:
Thank you, Mr. Miller.

[00:28:37] Speaker 03:
Thank you.

[00:28:39] Speaker 03:
Ms.

[00:28:39] Speaker 03:
Whitehead, you have three minutes.

[00:28:43] Speaker 00:
Thank you, Your Honor.

[00:28:44] Speaker 00:
I'm going to pick right back up.

[00:28:45] Speaker 00:
We were talking about this element of control and what the agency continuum.

[00:28:52] Speaker 00:
looking at L Brands as an example.

[00:28:55] Speaker 00:
Once a sales associate is hired for the retail store, L Brands requires each of those sales associates to execute and abide by the L Brands code of conduct.

[00:29:06] Speaker 00:
And sales associates must abide by that code of conduct or they are subject to termination.

[00:29:12] Speaker 00:
And that's an Appendix 773.

[00:29:13] Speaker 00:
Termination of employment is the ultimate control.

[00:29:18] Speaker 00:
And the code of conduct lists

[00:29:20] Speaker 00:
you know, day-to-day activities that the sales associates can and cannot do.

[00:29:25] Speaker 03:
And the store manager.

[00:29:26] Speaker 03:
Who enforces that code?

[00:29:32] Speaker 00:
It's L Brand's code of conduct.

[00:29:35] Speaker 00:
And the sales store manager testified when asked, are you free to, you know, ignore this code, she said no.

[00:29:44] Speaker 00:
She must abide by it.

[00:29:46] Speaker 03:
And she must enforce that.

[00:29:48] Speaker 03:
I understand who established the...or who wrote the code.

[00:29:53] Speaker 03:
I'm just asking who enforces it?

[00:29:57] Speaker 03:
Who tells the sales associate, you're not abiding by the code, you're fired?

[00:30:02] Speaker 00:
I think it depends on who in the organization has violated the specific term.

[00:30:11] Speaker 03:
But the evidence, doesn't the evidence show that it's a store manager that controls that?

[00:30:19] Speaker 00:
With respect to certain of the employees in the stores, yes.

[00:30:24] Speaker 00:
But then she must herself abide by the code of conduct and she is not self-policing.

[00:30:30] Speaker 00:
That's not in the record.

[00:30:31] Speaker 00:
And so with it being the L-brand code of conduct expected to be implemented organization-wide,

[00:30:40] Speaker 00:
I think that that is multi-faceted, depended on who is violating a specific provision of the code of conduct.

[00:30:52] Speaker 00:
And then would be subject determination.

[00:30:57] Speaker 00:
I also wanted to point out, as this court made clear in NRAE Google, a regular and established pace of business requires the regular physical presence of an event

[00:31:10] Speaker 00:
of the defendant conducting the defendant's business at the place of business.

[00:31:14] Speaker 00:
And here, particularly for Victoria's Secret Direct, Victoria's Secret Direct testifies that this business is transacted through the sales of online merchandise.

[00:31:28] Speaker 00:
That's exactly what those in-store sales associates are doing when they use that separate interface and abide by the process of facilitating those returns.

[00:31:39] Speaker 00:
they are conducting Victoria's Secret Direct business in the physical retail stores.

[00:31:48] Speaker 03:
You may go ahead.

[00:31:51] Speaker 00:
Being out of time, Andrew Group respectfully requests that this Court reverse the District Court's order dismissing L Brands, Victoria's Secret Direct, and Victoria's Secret Brands and remand the case to the District Court.

[00:32:03] Speaker 00:
Are there any other questions I may answer?

[00:32:05] Speaker 03:
Thank you, Counselor.

[00:32:09] Speaker 03:
We thank all counsel for the arguments.

[00:32:12] Speaker 03:
These cases are now taken into submission.

[00:32:14] Speaker 03:
The court stands in recess.

[00:32:18] Speaker 02:
The honorable court is adjourned until tomorrow morning at 10 a.m.