CHAPTER FOUR: FRAUD AND CONFUSION: FRAUD BY PROXY

Having practiced law for almost 50 years, I now spend considerable time trying to interpret court decisions that I do not understand. I have in the past taken courts to task for applying stare decisis to words instead of concepts. The law is, after all, an amalgamation of multiple concepts transformed into words that can be understood and applied to everyday issues. The law is not a listing of words strung together to resolve those issues. An example of my confusion is the phrase Aespecially likely.” That phrase is used in the Restatement (Second) of Torts in the comments to ' 531 comment d, to describe the proof required to successfully maintain a claim of indirect fraud or, as I call it, fraud by proxy. Our Supreme Court (of Texas) in 2001 declined to adopt this section of the Restatement but determined that the Texas law already recognized a cause of action for indirect fraud and found that the phrase correctly described the type of proof necessary to establish that a fraudfeasor intended that a non‑privity third party rely on the particular misrepresentation at issue. See Ernst & Young, LLP v. Pacific Mutual Life Ins. Co., 51 S.W. 3d 573 (Tex 2001) Thus the phrase Aintended or had reason to expect reliance” contained in the Restatement section (as opposed to the comments) is said to mean more than foreseeable. Id. at 579‑580. It is said to mean that the fraudfeasor knows that the injured party is especially likely to rely to his detriment on the misrepresentation. Id. at 581. The problem, as I see it, is that the phrase Aespecially likely” has appeared in numerous court decisions unrelated to fraud by proxy, and none of those decisions attach any mysterious meaning to the phrase. Indeed, the courts have used it to mean only that the likelihood that one event will follow another is greater than probable ‑‑ but less than certain.

Eight years ago I authored an article that dealt with the Fraud by Proxy concept. The issue considered was whether the manufacturers of silicone breast implants could be held liable for misrepresenting to the physician community that their product would last a lifetime. Lawyers for these manufacturers argued that their clients made no misrepresentation directly to the patient and therefore could not be guilty of fraud. The article states: AThe argument I believe is specious for at least two reasons. First, the representations made by the manufacturer to the doctor were certainly intended to be passed on to the patient as a sales tool. Second, the doctor was clearly the agent of the manufacturer in making these representations to the patient although some courts characterize the doctor as the agent for the patient. In Barrow, Judge Fawsett states with absolute clarity: "The fact that MEC made the misrepresentations, and omitted material information in its representations, to Plaintiff's physician and not directly to plaintiff does not preclude recovery by the plaintiff against MEC for such misrepresentations and omissions." Barrow v. BMS and MEC, 1998 U.S. Dist. Lexis 23187 (M.D. Fla 1998). The court cites Albertson v. Richardson ‑ Merrell, Inc., 441 So.2d 1146 (Fla. Dist. Ct. App. 1983), in support of its conclusions, and Albertson is directly in point. There a detail man represented the safety of the product (Bendectin) to the doctor, not the patient, and the court stated that the manufacturer and the detail man could be held liable to the patient since the purpose of the misrepresentations was to encourage the physician to prescribe the drug for his pregnant patients. Id. at 1150. The Florida court in Albertson, in turn, cited with approval, Wechsler v, Hoffman ‑ La Roche, 99 N.Y.S. 2d 588 (N.Y. Sup. Ct. 1950), affirmed as modified, 108 N.Y.S. 2d 990 (N.Y. Ct of App. 1951). In that case the trial court adopted two reasons for imposing liability. First, the court said as a matter of policy the manufacturer should be liable in fraud. Second, the court said that liability would be imposed because the doctor was acting for the patient and, therefore, a fraud upon the doctor was a fraud upon the patient. The Albertson court also relied upon two Texas cases in imposing liability for fraud. Crocker v. Winthrop Laboratories, 514 S.W. 2d 429 (Tex. 1974); Bristol‑Myers Co. v. Gonzales, 561 S.W. 2d 801(Tex. 1978). Crocker, however, involved only product liability under 402A and indirect misrepresentations under 402B. Gonzales, is the same. Nevertheless, the analogy between 402B and fraud is pretty compelling. Indeed, as far back as 1890, the Supreme Court of Texas adopted the commissioners' statements: "As a general proposition, it may be correct, as contended by appellant, that a misrepresentation made to one person, and not with a view of revealing another, cannot be available to another who may have acted on it***. But it is sound doctrine that a third person to whom they were not directly made, can maintain an action for deceit, and seek cancellation of the contract made by him, if it appears that the defendant's false representations were made with a direct intent that he should act upon them in a manner which occasioned the injury." Gainesville Nat. Bank v. Bamberger, 13 S.W. 959 (Tex. 1890). While this case is cited in Tex. Jur. 3rd, it does not appear in any reported case I can find where this particular issue was involved. (**CORRECTION ** There were subsequent cases citing Bramberger for the purpose of establishing liability of a fraudfeasor to creditors for providing a false information to a credit reporting companies like Dun & Bradstreet. See Thomas v. Fitts‑Smith Dry Goods Co., 151 S.W.2d 243 (Tex Civ. App. Amarillo 1941, no writ); Schwartz v. Mittenthal, 50 S.W. 182 (Tex Civ. App. 1899, no writ); In Re J. S. Patterson & Co., 125 F. 562 (N.D. Tex. 1903). There was, however, a case involving an accounting firm providing a fraudulent audit to a county agency which was relied on by a bonding company in issuing a surety bond to that agency. See American Indemnity Co. v. Ernst & Ernst, 106 S.W. 763 (Tex Civ. App. Waco 1937, writ ref’d). But the case was decided on limitations, not on the merits. And see Hawkins v. The Upjohn Co., 890 F.Supp. 601 (E.D. Tex 1994) where false information provided the FDA was relied on by a doctor in prescribing a drug that caused harm to a patient of the doctor. Obviously, the search engine I utilized in shepardizing Bramberger was inadequate or else I was.) The spirit of the case, can be found in Cook Consultants, Inc. v. Larson, 700 S.W. 2d 231(Tex, Civ. App. ‑ Dallas 1985), where a surveyor who negligently misrepresented certain boundaries was held liable to a down the line purchaser. The court's extensive analysis of this cause of action is certainly instructive. Id. at 234 ‑ 236. Westcliff Co. v. Wall, 267 S.W.2d 544 (Tex 1954) does not hold to the contrary. There an eavesdropper brought suit for fraud, and no recovery was permitted. The court cited Cooley on Torts: "No one has a right to accept and rely upon the representations of others but those to influence whose actions they were made." Id. at 546. By implication, at least, if the misrepresentations were made for the purpose of influencing a doctor and his patient to act upon them, a cause of action will stand. On the other hand, the Dallas Court of Appeals quoted the same section of Cooley on Torts to find that a misrepresentation by an insured to obtain a life insurance policy was not a wrongful act as to an insurer which reinstated the policy after the first company was put into receivership. See First State Life Co. v. Stroud, 120 S.W. 2d 491(Tex. Civ. App.‑ Dallas 1938). That was a venue case in which no act of any kind, much less a wrongful one, occurred in the county where suit was sought to be transferred. So, I suppose, the holding was dicta, or at least an alternative holding not necessary to a decision in the case. On what finger the current Texas Supreme Court may balance the issue is debatable. But if 402B embodies a cause of action irrespective of` fault for indirect representations, it is not a leap in logic to permit the imposition of liability for grossly negligent or fraudulent conduct.” Ravkind, SCIENCE ON TRIAL ‑ THE SILICONE SYMPHONY, Toxic Reporter (Fall 1999) (Reprinted MedVersant.Com: http://www.pahealthsystems.com/archive349 2005 8 513218.html (2005))

So, let’s take a look at what finger the Supreme Court balanced the issue. The facts in Ernst & Young are a bit convoluted. In 1987 Ernst & Young audited RepublicBank’s financial statement for year ending December 31, 1986, and issued an unqualified opinion which was incorporated in RepublicBank’s 10‑K filed with the SEC. Then in June 1987 RepublicBank merged with Interfirst. The Plaintiff, Pacific Mutual, after the merger purchased, from third‑parties, $8.5M of the notes Interfirst had issued in 1982 relying on the financial strength of RepublicBank as shown in the audited financial statement. Shortly thereafter RepublicBank (now First RepublicBank) filed for bankruptcy, and the notes became virtually worthless. Pacific Mutual sued Ernst & Young asserting that the accountant intentionally and/or negligently misstated the financial position of Republic in the audit and violated GAAP by failing to reveal that it was not an independent auditor (several partners in Ernst & Young had outstanding loans from RepulicBank). The Court first holds that Texas law does not require privity between the fraudfeasor and the damaged party to support a fraud claim, citing Bramberger and American Indemnity Co v. Ernst & Ernst, 106 S.W.2d 763 (Tex.Civ.App ‑ Waco 1937, writ ref’d). So far so good. But this holding concerning privity could well open the flood gates of litigation and drown persons or companies in Ernst & Young’s position, and the Court felt it necessary to stick a finger in this hole in the dike. Thus the Court adopted the restrictive language contained in the Restatement B the fraudfeasor must intend or have reason to expect that a non‑privity party will rely on the misrepresentation and Areason to expect” means that the fraudfeasor has information that would lead a reasonable person to conclude that there is an especial likelihood that the misrepresentation will reach those persons and will influence their conduct. Ernst & Young, 51 S.W. 3d at 580. Further, the Court held that reliance must be justified and that the plaintiff must sustain a loss in a transaction the fraudfeasor intends to influence or have reason to expect such influence will occur; although the transaction need not be identical to the one contemplated by the fraudfeasor. Ibid. The Court then examined the summary judgment evidence and concluded that plaintiff’s experts provided evidence of industry knowledge or expectation but that evidence established only foreseeability which was insufficient to prove Areason to expect” in the context of fraudulent conduct. Ibid.

It is difficult to fault the Court’s reasoning except in one respect discussed later. But the question remains what type of evidence is sufficient to meet the standard. Certainly, the phrase Aespecially likely” doesn’t provide much of a clue.

Obviously the act of the accountant in intentionally misstating a company’s financial condition, as in Ernst & Young, is different from the acts of a manufacturer in misstating the characteristics of its product as in Crocker and Gonzales, but it is not all that much different from an individual giving false financial information to a credit agency as in Bramberger, and is virtually the same as an accountant providing a fraudulent audit to its client that caused a bonding company to issue a surety bond to that client as in American Indemnity Co. v. Ernst & Ernst. The issue is one of “legal cause,” which Judge Cardoza’s opinion in Palsgraf v. Long Island R.R. Co., 162 N.E. 99 (N.Y. Ct of App 1928), established as the tether holding ”negligence in the air” within reasonable boundries. The concept raises a question of law that the courts resolve in many cases, and it sets the outer limits for causation when dealing with negligent acts. “Legal cause” has seldom been an issue of interest, however, when the courts have dealt with intentional acts. Three years after Palsgraf, Cardoza authored Ultramares Corp. v. George A Touche & Co., 255 N.Y. 170 (N.Y. Ct of App), a case quite similar to American Indemnity. There the accountant had signed off on a financial statement that was relied on by a factor in extending credit to the company. Plaintiff, the factor, alleged that the audit had been conducted negligently and/or fraudulently and sought to recover the loss it suffered when the company became insolvent. The court refused to authorize the negligence claim:

The assault upon the citadel of privity is proceeding in these days apace. How far the inroads shall extend is now a favorite subject of juridical discussion (Williston, LIABILITY FOR HONEST MISREPRESENTATION, 24 Harv. L. Rev. 415, 433; Bohlen, Studies in the Law of Torts, pp. 150, 151; Bohlen, MISREPRESENTATION AS DECEIT, NEGLIGENCE OR WARRANTY, 42 Harv. L. Rev. 733; Smith, LIABILITY FOR NEGLIGENT LANGUAGE, 14 Harv. L. Rev. 184; Green, Judge and Jury, chapter Deceit, p. 280; 16 Va. Law Rev. 749). In the field of the law of contract there has been a gradual widening of the [***20] doctrine of Lawrence v. Fox (20 N. Y. 268), until today the beneficiary of a promise, clearly [*181] designated as such, is seldom left without a remedy (Seaver v. Ransom, 224 N. Y. 233, 238). Even in that field, however, the remedy is narrower where the beneficiaries of the promise are indeterminate or general. Something more must then appear than an intention that the promise shall redound to the benefit of the public or to that of a class of indefinite extension. The promise must be such as to "bespeak the assumption of a duty to make reparation directly to the individual members of the public if the benefit is lost" (Moch Co. v. Rensselaer Water Co., 247 N. Y. 160, 164; American Law Institute, Restatement of the Law of Contracts, ' 145). In the field of the law of torts a manufacturer who is negligent in the manufacture of a chattel in circumstances pointing to an unreasonable risk of serious bodily harm to those using it thereafter may be liable for negligence though privity is lacking between manufacturer and user (MacPherson v. Buick Motor Co., 217 N. Y. 382; American Law Institute, Restatement of the Law of Torts, ' 262). A force or [***21] instrument of harm having been launched with potentialities of danger manifest to the eye of prudence, the one who launches it is under a duty to keep it within bounds (Moch Co. v. Rensselaer Water Co., supra, at p. 168). Even so, the question is still open whether the potentialities of danger that will charge with liability are confined to harm to the person, or include injury to property (Pine Grove Poultry Farm v. Newton B. P. Mfg. Co., 248 N. Y. 293, 296; Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303; American Law Institute, Restatement of the Law of Torts, supra). In either view, however, what is released or set in motion is a physical force. We are now asked to say that a like liability attaches to the circulation of a thought or a release of the explosive power resident in words.

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Liability for negligence if adjudged in this case will extend to many callings other than an auditor's. Lawyers who certify their opinion as to the validity of municipal or corporate bonds with knowledge that the opinion will be brought to the notice of the public, will become liable to the investors, if they have overlooked a statute or a decision, to the same extent as if the controversy were one between client and adviser. Title companies insuring titles to a tract of land, with knowledge that at an approaching auction the fact that they have insured will be stated to the bidders, will become liable to purchasers who may wish the benefit of a policy without payment of a premium. These illustrations may seem to be extreme, but they go little, if any, farther than we are invited to go now. Negligence, moreover, will have one standard when viewed in relation to the employer, and another and at times a stricter standard when viewed in relation to the public. Explanations that might seem plausible, omissions that [***34] might be reasonable, if the duty is confined to the employer, conducting a business that presumably at least is not a fraud upon his creditors, might wear another aspect if an independent duty to be suspicious [*189] even of one's principal is owing to investors. "Every one making a promise having the quality of a contract will be under a duty to the promisee by virtue of the promise, but under another duty, apart from contract, to an indefinite number of potential beneficiaries when performance has begun. The assumption of one relation will mean the involuntary assumption of a series of new relations, inescapably hooked together" ( Moch Co. v. Rensselaer Water Co., supra, at p. 168). "The law does not spread its protection so far" (Robins Dry Dock & Repair Co. v. Flint, supra, at p. 309).” Id at 180‑189

But the court had no difficulty in authorizing the fraud claim:

Our holding does not emancipate accountants from the consequences of fraud. It does not relieve them if their audit has been so negligent as to justify a finding that they had no genuine belief in its adequacy, for this again is fraud. It does no more than say that if less than this is proved, if there has been neither reckless misstatement nor insincere profession of an [***35] opinion, but only honest blunder, the ensuing liability for negligence is one that is bounded by the contract, and is to be enforced between the parties by whom the contract has been made. We doubt whether the average business man receiving a certificate without paying for it and receiving it merely as one among a multitude of possible investors, would look for anything more.
(2) The second cause of action is yet to be considered.The defendants certified as a fact, true to their own knowledge, that the balance sheet was in accordance with the books of account. If their statement was false, they are not to be exonerated because they believed it to be true. Hadcock v. Osmer, supra; Lehigh Zinc & Iron Co. v. Bamford, 150 U.S. 665, 673; Chatham Furnace Co. v. Moffatt, 147 Mass. 403; Arnold v. Richardson, 74 App. Div. 581). We think the triers of the facts might hold it to be false. **** In this connection we are to bear in mind the principle already stated in the course of this opinion that negligence or blindness, even when not equivalent to fraud, [*191] is none the less evidence to sustain an inference of fraud.” Id at 189‑193.

As so eloquently explained by Judge Cardoza, a fraud remedy should lie if an accountant makes a fraudulent misrepresentation he knows will reach a segment of the public and affect financial decisions. Thus, while a negligent word‑tort ceases to be the Alegal cause” of damages that were remote to the initial area of impact (those in privity or nearly so), the same was not true of damages from intentional word‑torts. That was clearly the enlightened law in 1932. How the Restatement and modern decisions found it necessary to protect fraudfeasors from the foreseeable effect of their conduct is certainly beyond the scope of this article.

Even less understandable is the concept advocated by numerous scholars and adopted by many courts that damages from negligent misrepresentations should be widely available to non‑privity parties. See Comment, THE CITADEL FALLS? ‑‑ LIABILITY FOR ACCOUNTANTS IN NEGLIGENCE TO THIRD PARTIES ABSENT PRIVITY: Credit Alliance Corp. v. Arthur Anderson & Co., 59 St. John's L. Rev. 348 (1985); Pace, NEGLIGENT MISREPRESENTATION AND THE CERTIFIED PUBLIC ACCOUNTANT: AN OVERVIEW OF COMMON LAW LIABILITY TO THIRD PARTIES, 18 Suffolk U. L. Rev. 431 (1984); Wiener, COMMON LAW LIABILITY OF THE CERTIFIED PUBLIC ACCOUNTANT FOR NEGLIGENT MISREPRESENTATION, 20 San Diego L. Rev. 233 (1983); Septimus, ACCOUNTANT'S LIABILITY FOR NEGLIGENCE ‑‑ A CONTEMPORARY APPROACH FOR A MODERN PROFESSION, 48 Fordham L. Rev. 401 (1979); Miller, PUBLIC ACCOUNTANTS AND ATTORNEYS, NEGLIGENCE AND THE THIRD PARTY, 47 Notre Dame Law. 588 (1972); Marinelli, Jr., THE EXPANDING SCOPE OF ACCOUNTANT'S LIABILITY TO THIRD PARTIES, 23 Case W. Res. 113 (1971); Comment, AUDITOR'S RESPONSIBILITY, 44 Wash. L. Rev. 139 (1968); Note, POTENTIAL LIABILITY OF ACCOUNTANTS TO THIRD PARTIES FOR NEGLIGENCE, 41 St. John's L. Rev. 588 (1967); Accounting Uniformity, 30 Law & Contemp. Probs. 898 (1965). Why a negligent act should result in broader liability than a fraudulent act is also beyond the scope of this article.

Texas courts, after initially embracing this pervasive concept for negligence misrepresentations (see Blue Bell, Inc. v. Peat, Marwick, Mitchell & Co., 715 S.W.2d 408 (Tex App Dallas 1986, writ ref’d, n.r.e.) , have apparently now adopted the requirement contained in Restatement (Second) of Torts ' 552, that the fraudfeasor have actual knowledge of the limited class of recipients which will rely on the misrepresentation. See McCamish v. F. E. Appling Interests, 991 S.W.2d 787 (Tex 1999); Abrams Ctr. Nat'l Bank v. Farmer, Fuqua & Huff, P.C., 225 S.W.3d 171 (Tex App El Paso 2005, no petition).

At all events, the courts have experienced some difficulty in applying the Aespecially likely” standard.

In Prospect High Income Fund, et al v. Grant Thornton, LLP, 203 S.W.3d 602 (Tex App B Dallas 2006, petition pending), the court found it especially likely that bond investors would rely on Grant Thornton’s audit of Epic Resorts’ financial statement in which it also certified that Epic’s bank accounts, from which interest on the bonds was paid, was fully funded. According to the Dallas court Ernst & Young was distinguishable because the plaintiffs were already investors when the audit was issued. Id. at 612.

In Exxon Corp. v. Miesch, 180 S.W.3d 299 (Tex App B C.C. 2005, petition granted), the court found it especially likely that royalty owners and a lessee, Emerald Oil & Gas Co., L.P., would rely upon false filings made by Exxon with the Railroad Commission which related to the continued economic viability of certain oil wells. The court concluded that it was irrelevant that Emerald Oil & Gas Inc. did not exist at the time the false filings were made because it was especially likely that a subsequent lessee like Emerald would rely on the filings. If Prospect High Income Fund is correctly decided then this case seems likely to avoid reversal by the Supreme Court.

In Ameristar Jet Charter, Inc. v. Signal Composites, Inc., 2001 U.S. Dist Lexis 14020 (N.D. Tex 2001), a fraud remedy was authorized where the original manufacturer of certain airline parts were misrepresented in a sale to a parts supplier which resold them to the plaintiff, a subsequent user. There was, said the Magistrate, an especial likelihood that the user would rely to its detriment on the misrepresentations from the initial sale to the parts supplier. While this might be characterized as an Aindirect reliance” case, the nature of the misrepresentations was such that they continued after the initial sale.

In Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F3d 305 (5th Cir 2002), Morgan Stanley was retained by Allwaste, Inc., to provide it with a fairness evaluation of a merger with Philip Services Corp.. The retention agreement stated that the purpose of the evaluation was to inform Allwaste’s board of directors of the financial implications (fairness) of the proposed transaction. Plaintiffs were Allwaste debenture holders who were adversely affected by the merger. The Fifth Circuit had no difficulty in affirming a dismissal of the case. First, the Plaintiffs failed to put forward any compelling reason why the contractual limitations contained in the fairness opinion concerning its restricted use should not be enforced. Second, there was nothing to suggest that it was especially likely that the debenture holders would receive and rely on the fairness opinion. The fact that it may have been foreseeable that the Plaintiffs might receive the opinion and rely upon it was insufficient to satisfy the requirements of Ernst & Young.

In Mid States Development, LLC v. Fidelity National Title Insurance Co., 2001 U.S. Dist Lexis 15448 (N.D. Tex 2001), Fidelity provide several banks (interim finance lenders) with assurances about the financial where with all of Alliance Mining, Inc., to provide permanent financing for projects being constructed by their interim borrowers like Mid States. When Alliance was unable to fund the necessary permanent financing, Mid States was forced to obtain alternative permanent financing and sustained damages in the switch. There was some evidence that Fidelity knew that interim borrowers from the banks would receive and rely on those assurances, and the court concluded that this was sufficient to satisfy the especially likely standard. This case was cited by Judge Fish in the Admiral case, discussed below, but found inapposite.

In Marshall v. Kusch, 84 S.W. 3d 781(Tex App -- Dallas 2002, petition denied), the seller of property failed to advise the purchaser that the land was infested with anthrax virus. The original purchaser then conveyed the property to the plaintiff. The original seller knew that his purchaser would resell the property, but the subsequent purchaser was not afforded a fraud remedy when anthrax infected his livestock because he did not know of or rely on the misrepresentation. This is another “indirect reliance” case that did not pass muster.

In Admiral Ins. Co v. Heath Holdings USA, Inc., 2004 U.S. Dist Lexis 9211 (N.D. Tex 2004), Heath Holdings made misrepresentations to Caliber One Indemnity Company that caused it to issue an insurance policy. Admiral was an excess carrier which issued its policy of insurance based upon the fact that Caliber One had issued a basic policy to Heath. Summary judgment was granted on the ground that Admiral did not rely on the misrepresentation itself. Of course, this was a correct result under Texas fraud law as Aindirect reliance” does not create an actionable scenario. Judge Fish nevertheless points out the difficulty a plaintiff has in satisfying the especially likely standard in a direct reliance case. Quoting from Ernst & Young, 51 S.W. 3d at 581, he observes that Aeven an obvious risk that a third person will rely on a misrepresentation is not enough to impose liability.”(Slip opinion p. 22).

The phraseology referred to by Judge Fish was adopted verbatim by our Supreme Court from the Restatement comments, and it is this element that renders Ernst & Young an enigma wrapped in a mystery. How does it impact the requirement that it be especially likely that a non‑privity party will rely on a misrepresentation from the fraudfeasor? Frankly, this language can be applied to real life situations in one of two ways. It can mean that an objective risk that anyone would recognize (a foreseeability certainty) can never satisfy the especially likely requirement, or it can mean that even a subjective risk is insufficient unless the fraudfeasor knows (not just thinks) that reliance will occur. On the other hand it may well mean that fraud by proxy is an illusion except in situations where the fraudfeasor knows the ultimate recipient, knows he will rely on the misrepresentation, and intends such a result (although intent may be inferred).

From all appearances, Ernst & Young was a compromise decision. Justice O’Neill’s opinion is thorough and well reasoned, except for the “even an obvious risk” language. It seems probable (but not necessarily especially likely) that majority support for the opinion could not be mustered without this limitation. The Court declined to adopt ' 531 but did adopt the limiting language appended to that section. Certainly, no prior Texas case used this Restatement language to define the cause of action. The Supreme Court has granted the petition in Miesch and will likely grant the petition in Prospect High Income. Can we foresee an explanation? Maybe.