[00:00:00] Speaker ?: Thank you. [00:00:01] Speaker 02: Good morning, your honors. [00:00:02] Speaker 02: My name is Thomas Sines, and I represent the plaintiff, Ana Ayala, in this action. [00:00:08] Speaker 02: I would like to reserve four minutes for potential rebuttal. [00:00:11] Speaker 04: Mr. Sines, if you could try to watch the clock and save some time of your argument for rebuttal. [00:00:22] Speaker 02: I will do my best. [00:00:23] Speaker 02: I'll try to help. [00:00:25] Speaker 04: I'll try to help you out if necessary. [00:00:27] Speaker 02: Thank you. [00:00:27] Speaker 02: I appreciate that, your honor. [00:00:29] Speaker 02: This action arises because of Ms. [00:00:31] Speaker 02: Ayala's experience of discrimination in seeking to finance the purchase of a car. [00:00:39] Speaker 02: She experienced that discrimination in the form of a blanket, facially discriminatory policy by the defendant Spokane Teacher's Credit Union that barred the credit union from considering at all [00:00:54] Speaker 02: any non-citizen except a green card holder for any loan. [00:01:01] Speaker 02: We are before this court because the district court granted defendants motion under rule 12b6 to dismiss on the pleadings. [00:01:11] Speaker 02: The court did so on two apparent grounds. [00:01:15] Speaker 02: First, the court seems to have concluded that Ms. [00:01:19] Speaker 02: Ayala was not denied credit services because she was granted credit for the car purchase, first by the auto dealer and second by GISA credit union, which took over the installment contract she had signed with the auto dealer. [00:01:38] Speaker 02: Of course, the granting of credit services by a third party [00:01:43] Speaker 02: in this case, the auto dealer and then GISA credit union, does not immunize a denier of credit from its own discrimination and the consequences in this case. [00:01:55] Speaker 03: Well, that's true in principle, but there is a gap or a link here. [00:02:00] Speaker 03: And so maybe you can explain to me from a legal point of view, how is it because she doesn't contract with the credit union here, correct? [00:02:11] Speaker 02: She would ultimately. [00:02:12] Speaker 03: No, would she? [00:02:13] Speaker 03: Yes. [00:02:14] Speaker 03: Or would the dealer? [00:02:15] Speaker 03: The dealer would sell the paper in effect. [00:02:18] Speaker 02: There would be two contracts. [00:02:19] Speaker 02: First, Your Honor, a deal between the auto dealer and the credit union transferring [00:02:26] Speaker 02: the contract between Ayala and the dealer, and then there would be a contract ultimately between Ayala who would make her payments to the credit union. [00:02:36] Speaker 02: So what's at issue here is the second potential contract between STCU, the defendant, and Ms. [00:02:43] Speaker 02: Ayala. [00:02:44] Speaker 02: So not the first contract, which the district court seemed to believe was at issue. [00:02:49] Speaker 02: Not at all are we contesting what occurred or didn't occur between the credit union and the auto dealer. [00:02:56] Speaker 02: Rather, it's the failure for discriminatory reasons to form the second contract, a contract between Ayala herself, who would make payments, to the credit union on the basis. [00:03:08] Speaker 03: But that contract is contingent upon [00:03:12] Speaker 03: the credit union moving forward with the car dealer's contract, right? [00:03:17] Speaker 02: That's correct, but that's of no particular moment to liability. [00:03:20] Speaker 03: It is a moment if they decide they're not going to do it. [00:03:23] Speaker 02: Well, they can't decide not to do it for discriminatory reasons, and that's what occurred here. [00:03:28] Speaker 02: This is a quintessential contract formation case under Section 1981 where Ms. [00:03:34] Speaker 02: Ayala sought [00:03:35] Speaker 02: to achieve a contract with the credit union and could not do so because of a discriminatory policy that denied any consideration of all non-citizens except green card holders. [00:03:49] Speaker 01: So when you say she sought the contract, how did she seek the contract? [00:03:56] Speaker 02: Well, Your Honor, she bought the car and her understanding was that a contract [00:04:02] Speaker 02: with STCU was possible because of an application she believed was made on her behalf by the auto dealer. [00:04:11] Speaker 02: So the auto dealer conveyed to her, hey, we're in conversations and have given your information to STCU and they need more information. [00:04:20] Speaker 01: Right. [00:04:20] Speaker 01: So in the complaint though, it's pled differently. [00:04:23] Speaker 01: I mean, I read paragraph 16 does not say what you just said. [00:04:28] Speaker 01: It was played differently because Ms. [00:04:29] Speaker 02: Ayala, who is not as sophisticated in financial matters, believed an application was made on her behalf, in her name, to STCU. [00:04:41] Speaker 02: She had that belief for two reasons. [00:04:42] Speaker 02: One, as I mentioned, the auto dealer conveyed to her, we've sought a loan for you with STCU, but they need additional information, which was her social security card, and she provided it. [00:04:59] Speaker 02: The second reason that she believed she had had an application made on her behalf to STCU was she received a notice of action from STCU saying that credit had been denied to her. [00:05:11] Speaker 02: So in her view, an application had been made. [00:05:16] Speaker 02: It turns out that was not the case, as I've explained. [00:05:19] Speaker 02: But again, that's not a particular moment because she had no reason [00:05:24] Speaker 02: to consider actually applying herself directly because she knew there was a facially discriminatory policy. [00:05:30] Speaker 01: So I'm just trying to understand how far your theory would go. [00:05:33] Speaker 01: So I'm going to offer you a hypothetical. [00:05:35] Speaker 01: So let's say I enter into a contract with eBay or Amazon to sell goods. [00:05:42] Speaker 01: And they say, look, we're going to try to get into a contract with someone else to buy your goods. [00:05:46] Speaker 01: And then that third party says, you know what, I only want to buy American. [00:05:50] Speaker 01: I only want to buy from US citizens. [00:05:52] Speaker 01: I want to buy from people who have served in our military. [00:05:54] Speaker 01: And your client doesn't fit into any of those categories. [00:05:58] Speaker 01: But Amazon and eBay told me that they were really going to try to market my goods to this third party. [00:06:05] Speaker 01: Under your theory, could I then sue that third party under 1981? [00:06:09] Speaker 02: Yes. [00:06:10] Speaker 02: Unfortunately, there's no immunity granted simply because you act through essentially an intermediary. [00:06:15] Speaker 01: So I mean, that seems to be a pretty big expansion of liability. [00:06:20] Speaker 01: If any time someone on eBay doesn't want to buy my product, I can sue them under 1981? [00:06:27] Speaker 02: Again, it would have to be for a discriminatory reason. [00:06:30] Speaker 01: You have to be aware of that. [00:06:31] Speaker 01: Someone says, look, I only want to buy from U.S. [00:06:34] Speaker 01: citizens. [00:06:34] Speaker 02: I don't think that's an expansion, Your Honor. [00:06:36] Speaker 02: I think that's what Section 1981 says. [00:06:37] Speaker 01: So you think the law right now, if someone says, when I shop on eBay, I only want to buy from U.S. [00:06:43] Speaker 01: citizens, and I'm trying to sell on eBay, I have a cause of action against all of those people. [00:06:49] Speaker 02: If they have a policy that says, we only buy from US citizens, yes. [00:06:53] Speaker 01: Or just an individual. [00:06:53] Speaker 02: I mean, just an individual says, I only want to buy from US citizens. [00:06:56] Speaker 02: Again, if that's that individual's ongoing policy and you can prove it, yes. [00:07:00] Speaker 02: That's a Section 1981 violation. [00:07:01] Speaker 03: But yes, the question, Section 1981 is a contract section in effect, right? [00:07:07] Speaker 03: Yes. [00:07:08] Speaker 03: And it's here. [00:07:11] Speaker 03: under 1981, she attempted to contract for certain services. [00:07:15] Speaker 03: But the question is, did she? [00:07:18] Speaker 03: Because although she was mistaken in her complaint, the reality was she didn't contract for anything. [00:07:26] Speaker 02: Well, no, she did attempt to contract. [00:07:28] Speaker 02: This is a contract formation case. [00:07:30] Speaker 02: So yes, she did not get a contract, as in any contract formation case. [00:07:34] Speaker 03: Let me just say that the contract formation is with the car dealer. [00:07:40] Speaker 02: No, Your Honor. [00:07:41] Speaker 02: Contract formation cases under 1981 involve contracts that are not made for discriminatory reasons. [00:07:47] Speaker 03: But her contract, I mean, as I said, I started out in the questioning. [00:07:51] Speaker 03: 1981 boils down to contract situations. [00:07:54] Speaker 03: It's a very unusual statute, as you know. [00:07:57] Speaker 03: So the question is, did she contract for anything? [00:08:01] Speaker 03: And as I understand your answer is, well, no, she didn't contract. [00:08:05] Speaker 03: with the, she contracted with the car dealer, but that ultimately it would flow through to the credit union. [00:08:12] Speaker 03: Is that right? [00:08:12] Speaker 02: No, Your Honor. [00:08:13] Speaker 02: Our argument is that as in all contract formation cases under Section 1981, she was not able to form the contract for discriminatory reasons with STCU, full stop period. [00:08:27] Speaker 02: The other contract is simply context that we don't believe has any legal impact here [00:08:34] Speaker 03: Well, you wouldn't get to number two if you didn't have the first contract, right? [00:08:39] Speaker 02: Well, no. [00:08:40] Speaker 02: She could have gone. [00:08:41] Speaker 03: Well, OK, then that raises another question. [00:08:44] Speaker 03: You said it would be a feudal gesture for her to have gone to the teachers' union directly. [00:08:52] Speaker 03: But I don't think that argument was raised in the district court. [00:08:56] Speaker 02: Your honor, feudal gesture is just another way of arguing that she was denied discriminatorily contract formation, even without a formal application. [00:09:07] Speaker 02: It's not a new claim. [00:09:09] Speaker 02: It's not a new contention. [00:09:10] Speaker 02: And as you know, this court considers this matter de novo because it is a 12b6 motion to dismiss. [00:09:17] Speaker 02: So I don't think there's much to do with the contention that somehow [00:09:21] Speaker 02: We didn't use the magic words feudal gesture, and that somehow bars us from doing it. [00:09:26] Speaker 02: The point is, this is like all 1981 contract formation cases, the refusal to enter a contract for discriminatory reasons. [00:09:35] Speaker 02: There is, first of all, no dispute at this point in the case that there is a discriminatory policy. [00:09:42] Speaker 02: It is a blanket, facially discriminatory policy. [00:09:46] Speaker 02: The only question is whether Ms. [00:09:49] Speaker 02: Ayala was really interested, sincerely, and able to enter a potential contract with the credit union and was barred by that discriminatory policy. [00:10:01] Speaker 02: She clearly was sincerely interested. [00:10:04] Speaker 02: She had the car. [00:10:05] Speaker 02: She needed financing to keep the car. [00:10:08] Speaker 02: So she was sincere and genuine, able and ready to enter a contract. [00:10:13] Speaker 02: And in fact, she ultimately [00:10:15] Speaker 02: did fine one with Kisa Credit Union. [00:10:17] Speaker 02: That, of course, doesn't absolve SBCU of liability because it was on different terms, as we alleged in the complaint, less favorable terms, and she's entitled under Section 1981 to equal treatment with all others, including all the terms of the contract. [00:10:33] Speaker 02: And even if it was on equal terms, the Supreme Court has recognized multiple times that there is a sting from discrimination that exists regardless of whether there are other damages involved. [00:10:48] Speaker 02: So we have, clearly, a facially discriminatory policy that discriminates on the basis of alienage. [00:10:55] Speaker 02: We have a willing potential contracting party, and Ms. [00:10:59] Speaker 02: Ayala, she needed to finance the purchase of that car. [00:11:03] Speaker 02: And we have a refusal. [00:11:05] Speaker 02: to enter that contract, though conveyed through a third party from STCU as a result of their discriminatory policy. [00:11:14] Speaker 02: That is a quintessential Section 1980. [00:11:17] Speaker 04: Council, I have a question, if I may. [00:11:22] Speaker 04: Could the teachers union consider its credit risk and whether someone who wasn't a citizen or green card holder could pose more risk on them? [00:11:44] Speaker 02: So Your Honor, I see that my time for rebuttal, I'm getting into it, but let me answer. [00:11:48] Speaker 02: That's why I've emphasized that this is a blanket policy that refuses to consider at all any non-citizen except a green card holder. [00:11:57] Speaker 02: Yes, the answer to your question is they can, in the course of doing underwriting, making a specific determination about credit worthiness, they can consider immigration status. [00:12:10] Speaker 02: Federal law and regulation says that. [00:12:12] Speaker 02: But what's going on here is a blanket refusal to delve into any of those matters of underwriting or credit worthiness on the basis of the fact that Ms. [00:12:23] Speaker 02: Ayala is not a citizen and not a green card holder. [00:12:26] Speaker 02: So that's why it's different than considering it as a part of the overall equation. [00:12:30] Speaker 04: Thanks, counsel. [00:12:32] Speaker 04: You've answered my question. [00:12:33] Speaker 02: Thank you. [00:12:34] Speaker 04: And do you want to reserve the rest of your time? [00:12:36] Speaker 02: I will reserve the rest of my time, very well. [00:12:38] Speaker 04: Thank you. [00:12:46] Speaker 04: Again, that's Ms. [00:12:50] Speaker 04: McGair. [00:12:52] Speaker 04: Is that better? [00:12:53] Speaker 00: Yes. [00:12:54] Speaker 04: It's always hard to know the right pronunciation. [00:12:57] Speaker 00: I get a lot of different variations, so thank you. [00:13:02] Speaker 00: Good morning. [00:13:02] Speaker 00: May it please the court? [00:13:03] Speaker 00: My name is Kimberly McGair. [00:13:05] Speaker 00: I'm counsel for Defendants' Bocan Teachers' Credit Union, which I will refer to as STCU this morning. [00:13:11] Speaker 00: As the court has already recognized, this is a 1981 case, and it involves a very narrow question, which is the right to make and enforce contracts. [00:13:20] Speaker 00: And the question before you is very narrow as well, which is whether the plaintiff has sufficiently alleged [00:13:26] Speaker 00: that STCU denied plaintiff the right to contract for credit services. [00:13:32] Speaker 00: The trial court properly found that STCU did not deny plaintiff the right to contract for credit services. [00:13:40] Speaker 00: In an effort to create, I think, the illusion of a denial by STCU, the plaintiff has really confused and mischaracterized the operative facts. [00:13:49] Speaker 00: There would be no new contract. [00:13:54] Speaker 00: There would be no second contract. [00:13:56] Speaker 00: The contract itself makes this very clear. [00:13:59] Speaker 00: It's at ER 13 to 17 and on page 17 is the assignment. [00:14:06] Speaker 00: It is a single line at the end of the retail installment contract and it says, the dealer hereby assigns its rights to so-and-so. [00:14:15] Speaker 00: And in the reply brief, plaintiff makes for the first time an argument that this is a novation. [00:14:20] Speaker 00: It is not a novation. [00:14:22] Speaker 00: And this case isn't in my brief because it was raised in the reply brief, but it is a, I'm going to get to it, sorry, Boutonnet versus second. [00:14:31] Speaker 03: Is that not, that's not in your brief because it's in the reply? [00:14:34] Speaker 03: Yes. [00:14:34] Speaker 03: You know what might be helpful is if you would also send us a 28-J letter, just so we have it in writing, but go ahead with your argument. [00:14:41] Speaker 00: Thank you. [00:14:42] Speaker 00: Essentially, this case, 12 Wash App Second 1029, makes the distinction between assignment and novation. [00:14:48] Speaker 00: And a novation is the mutual agreement among all parties to discharge a valid existing obligation by substitution of a new valid obligation or of a new party. [00:14:59] Speaker 00: Assignment occurs when a party to a contract transfers their rights or benefits under the contract to another person. [00:15:06] Speaker 00: That's what's at issue in this case. [00:15:08] Speaker 00: Plaintiff goes to the car dealer. [00:15:10] Speaker 00: She applies for credit from the car dealer. [00:15:12] Speaker 00: She gets credit from the car dealer in the form of the retail installment contract. [00:15:16] Speaker 00: The contract from the dealer's standpoint is complete when it delivers the vehicle to her, which it did. [00:15:22] Speaker 00: It then goes out in the market and just tries to sell the payment stream. [00:15:26] Speaker 00: That's all that was left under this retail installment contract. [00:15:30] Speaker 00: And STCU declined to buy the contract. [00:15:32] Speaker 00: It declined to buy the payment stream. [00:15:34] Speaker 03: For discriminatory reasons. [00:15:37] Speaker 00: That's the allegation, obviously. [00:15:38] Speaker 00: Well, that's the allegation. [00:15:40] Speaker 00: The purposes of today's motion, yes. [00:15:42] Speaker 00: But it did not deny her credit. [00:15:45] Speaker 00: And what's important if you look at, we don't have a ton of Ninth Circuit case law on this issue, but Lindsay versus SLT Los Angeles, which is in my brief, sets out. [00:15:54] Speaker 00: And importantly, the gravamen of a 1981 claim is that the plaintiff did not get the contract. [00:16:03] Speaker 00: She did not get the services. [00:16:04] Speaker 00: And it's more developed in your district court case law, the Brown case, the Clark versus Safeway, where they look at the other circuits who have had to look at this in more detail, particularly in the retail. [00:16:15] Speaker 00: context. [00:16:16] Speaker 00: And they talk about, well, it's just being in the store enough. [00:16:18] Speaker 00: No, that's not enough. [00:16:20] Speaker 00: You have to have tried to form a contract, and the defendant must have denied you the right to contract, denied the service, denied the good. [00:16:28] Speaker 00: That didn't happen here. [00:16:29] Speaker 03: Let's just follow Mr. Sands' argument, though. [00:16:31] Speaker 03: The assignment would put her in [00:16:37] Speaker 03: direct obligation to the credit union, correct? [00:16:40] Speaker 00: That's true, but it's also not legally relevant, because it isn't just that the credit union, whether or not the credit union declined to buy the contract, she had to not have gotten the service. [00:16:53] Speaker 00: And she got the service. [00:16:54] Speaker 00: She got the credit. [00:16:56] Speaker 00: She got it from the dealer. [00:16:57] Speaker 00: She had it before the credit union ever entered the picture. [00:17:00] Speaker 00: So there was no denial of credit services. [00:17:03] Speaker 00: She might kind of disagree, because she [00:17:05] Speaker 03: If she got it, she didn't get the car. [00:17:08] Speaker 03: She did. [00:17:09] Speaker 00: She got the car. [00:17:09] Speaker 00: She drove it off the lot that day. [00:17:11] Speaker 00: She never gave it back. [00:17:13] Speaker 00: She had that credit. [00:17:14] Speaker 00: Yeah. [00:17:15] Speaker 00: With that credit, no new contract. [00:17:17] Speaker 00: It's unclear what happened with the second credit union. [00:17:20] Speaker 00: None of that's in the record. [00:17:22] Speaker 00: Well, but that's because the [00:17:26] Speaker 03: The reason she drove it off is they were able to assign it to somebody else, right? [00:17:29] Speaker 03: Probably, yes. [00:17:31] Speaker 03: All we know is they don't let you drive the car away till they get all the papers in order. [00:17:36] Speaker 03: We all know that. [00:17:37] Speaker 00: Yes. [00:17:38] Speaker 03: And we know she didn't get it with your credit union, so we presume she got it somewhere else. [00:17:44] Speaker 03: But does that fix the problem that arguably your credit union discriminated against her? [00:17:54] Speaker 00: it does fix, well I don't think it's a problem, but it fixes it from a legal standpoint because I think there's a conflation of what happened here that is really important to separate legally. [00:18:05] Speaker 00: I think we all think about this being an application to a credit union and then a second credit union, but it really isn't as a legal matter. [00:18:13] Speaker 00: As a legal matter, this dealer [00:18:16] Speaker 00: gave this plaintiff credit. [00:18:18] Speaker 00: And then the dealer decides, I don't want to carry this paper. [00:18:22] Speaker 00: And I'll acknowledge that this happens in a regular course all the time. [00:18:26] Speaker 00: But regardless, from a legal matter, her contract with the dealer is finished when they sign the retail installment contract. [00:18:34] Speaker 00: Dealer then goes out separately in the world and says, I don't want to carry this paper. [00:18:38] Speaker 00: I'd rather have cash. [00:18:39] Speaker 00: And they go to the lenders and say, could you please buy this from me? [00:18:42] Speaker 00: But the dealer couldn't go to her and say, give me the car back. [00:18:46] Speaker 00: They've entered into a binding final contract whereby she received credit. [00:18:51] Speaker 00: And that's the problem with plaintiff's claim is that she was never denied credit, whether not by STCU and not by anyone else. [00:19:00] Speaker 00: And that is an essential element of [00:19:04] Speaker 00: a 1981 claim is that the plaintiff was unable to make a contract. [00:19:09] Speaker 00: And that's not what happened here. [00:19:11] Speaker 00: And plaintiff makes a good analogy in their brief to an employment contract and says, well, just because I can get a job with employer B doesn't mean that employer A's discrimination doesn't matter. [00:19:21] Speaker 00: I agree. [00:19:22] Speaker 00: But in that circumstance, employer A denied the job, and then employer B granted the job. [00:19:27] Speaker 00: That's not what happened here. [00:19:29] Speaker 00: Plaintiff went to the dealer, not to STCU, not to GISA, not to anyone else. [00:19:33] Speaker 00: She went to the dealer. [00:19:34] Speaker 00: She said, I'd like to buy a car on credit. [00:19:36] Speaker 00: Archibald said, sure. [00:19:38] Speaker 00: Here's our deal. [00:19:39] Speaker 00: You sign it. [00:19:39] Speaker 00: I sign it. [00:19:40] Speaker 00: You take the car. [00:19:41] Speaker 00: There was no employer B. She didn't go to anyone else. [00:19:44] Speaker 00: It's not a mitigation issue. [00:19:46] Speaker 00: She received credit from the dealer. [00:19:48] Speaker 00: And the credit union simply chose not to enter into a contract with the dealer. [00:19:54] Speaker 00: And that's not a discrimination against the plaintiff. [00:19:57] Speaker 00: And again, if we just look at those specific elements in Lindsay V. SLT, the plaintiff hasn't pled them. [00:20:05] Speaker 00: in this case and I think plaintiff has to try to sort of conflate this and convince you that she would have gotten this new contract I think even in the reply brief plaintiff says well the new contract would have had different terms and it would have perhaps had a different interest rate that's just not true and the contract itself makes that very clear you can read it for yourself it would have been an assignment of this contract and again it [00:20:30] Speaker 00: I think it's even a stretch to say the plaintiff would have then been in contract with the credit union because the plaintiff's finished. [00:20:37] Speaker 00: She's, or the dealer's finished. [00:20:39] Speaker 00: The credit union's not delivering her any service. [00:20:42] Speaker 00: It just bought a payment stream. [00:20:43] Speaker 00: It's as if I entered your, hypothetical is better than mine, but mine is I loan someone $5,000. [00:20:51] Speaker 00: I take a promissory note. [00:20:53] Speaker 00: I decide I don't want to take the payments. [00:20:54] Speaker 00: I want my five grand back. [00:20:56] Speaker 00: I sell it to somebody else. [00:20:58] Speaker 00: There's not a new promissory note in that circumstance. [00:21:01] Speaker 00: It's the same existing promissory note. [00:21:03] Speaker 00: And so I think if I'm the plaintiff, sure, I want to focus on this allegation that STCU had a facially discriminatory policy. [00:21:12] Speaker 00: But that's not what the district court looked at. [00:21:14] Speaker 00: And it's not the right analysis. [00:21:16] Speaker 00: Because the right analysis is whether this plaintiff experienced a loss of services, whether this plaintiff was denied the right to enter into a contract. [00:21:28] Speaker 00: Let me see where I, what I haven't covered. [00:21:38] Speaker 00: And I think it's important to look at as well, again, this is a unique case, and the plaintiff hasn't cited a single section 1981 case anywhere in the nation where a consumer received the only services that they sought from the only party from whom they sought them, but a court found the plaintiff could still make a 1981 claim against somebody else, against a third party, or to use Judge Owens, your analogy, absolutely. [00:22:06] Speaker 00: We've got that I'll use Amazon because eBay is a little more complicated Amazon buys the product Amazon goes to sell it to the consumer that consumer says I only want to buy us products I'm not going to buy that if Amazon refused to buy from the seller because I don't want to buy from a [00:22:22] Speaker 00: Sure, that's a violation. [00:22:24] Speaker 00: But if that consumer just chooses not to buy the product from Amazon, that consumer's not discriminating against that individual seller. [00:22:31] Speaker 00: That consumer's refusing to enter into a contract with Amazon. [00:22:34] Speaker 00: And that's not the same thing. [00:22:36] Speaker 00: And that seller, to take the analogy further in this case, that seller wasn't denied the right to sell to Amazon. [00:22:44] Speaker 00: So the seller hasn't experienced an 1991 violation whatsoever because they weren't denied any kind of right to service. [00:22:52] Speaker 00: I don't know if I need to address the feudal gesture argument I would argue two things one is it definitely wasn't raised below and I think it's it's relevant and it is an argument under our Ninth Circuit authority that it should have been raised below and the district court should have had an opportunity to address it but more importantly I don't think it makes any difference because again it doesn't fit here in a feudal gesture case again is [00:23:16] Speaker 00: so-and-so says we don't contract with people of this race. [00:23:21] Speaker 00: And the courts say you don't have to file an application and have it denied in order to make that sort of claim. [00:23:27] Speaker 00: But that's not the case here. [00:23:29] Speaker 00: Again, in the feudal gesture case, the plaintiff still doesn't have the job, the service, the benefit, whatever it was. [00:23:36] Speaker 00: They didn't get it. [00:23:37] Speaker 00: And that's, again, in this case, before STCU ever enters the picture, plaintiff has the service that she wants. [00:23:44] Speaker 00: And so the feudal gesture just doesn't fit [00:23:46] Speaker 00: If, for example, plaintiff didn't go to the dealer, didn't receive credit from the dealer, didn't seek credit for the dealer, walked into STCU and said, I'd like a loan, and STC said no because of DACA, that would be a very different case. [00:24:00] Speaker 00: But that's not the case that we have here. [00:24:02] Speaker 00: And we have to apply the Section 1981 authority that we have to the case in front of us to determine whether those elements are established. [00:24:13] Speaker 00: I do want to just briefly touch on the issue of the Judge Gould that you raised, which is just, and the district court didn't touch it, but if the court were to get that far, we maintain that the allegations in this complaint also do not state a claim for alienated discrimination. [00:24:32] Speaker 00: They state a claim for discrimination on the grounds of immigration status, and there's a lot of case law down in the district courts, in the Perez case, [00:24:42] Speaker 00: I don't think we have to get there what we have here is an allegation and yes there are allegations in the complaint I will concede. [00:24:59] Speaker 00: That plaintiff says I was discriminated against on basis of my alienage and perhaps you have to accept that at a 12 B 6 standard. [00:25:06] Speaker 00: But if you read the complaint as a whole, it is I was discriminated against because I am a docker recipient and that is immigration status and section 1981. [00:25:16] Speaker 00: does not outlaw discrimination based on immigration status. [00:25:20] Speaker 00: And at COA and the CFPB, and these authorities are all in our brief, make very clear that lenders are permitted to consider immigration status for precisely the reason that you said, Judge Gould, which is that it is an underwriting question. [00:25:32] Speaker 00: And even as we were drafting the briefs in this case, the CFPB was still affirming that lenders may consider immigration status when deciding to make a loan. [00:25:42] Speaker 00: Now again, [00:25:43] Speaker 00: Credit union didn't make a credit denial here. [00:25:45] Speaker 00: But that is the allegation and the complaint. [00:25:47] Speaker 00: And I think that a determination that the credit union did not discriminate against Ms. [00:25:52] Speaker 00: Ayala based on alienage discrimination, given the full context of her claim, which is clearly based on DACA, is a separate grounds by which the trial court's decision could be affirmed. [00:26:03] Speaker 00: I don't have any. [00:26:04] Speaker 00: I'm happy to answer any other questions that you have, but I don't have anything further. [00:26:08] Speaker 04: Any questions? [00:26:10] Speaker 00: Thank you. [00:26:11] Speaker 04: You're none. [00:26:11] Speaker 04: Thank you. [00:26:16] Speaker 02: As Your Honors all know, Section 1981 is a post-Civil War statute. [00:26:21] Speaker 02: It has contract in its broadest sense possible, whether it's an assignment or an ovation or a wholly new contract. [00:26:28] Speaker 02: A contract under Section 1981 is agreement with consideration between two parties. [00:26:33] Speaker 02: In this case, that contract in essence would have been Ms. [00:26:36] Speaker 02: Ayala will pay on a monthly basis to the credit union, and in return, the credit union will ensure she gets to keep the car, that it's not repossessed. [00:26:45] Speaker 02: That's the contract that would have been formed but for the discriminatory policy. [00:26:50] Speaker 02: That policy is a blanket policy that says we will not consider you. [00:26:54] Speaker 02: We will not do any underwriting. [00:26:55] Speaker 02: We will not evaluate your ability to pay unless you are a U.S. [00:27:00] Speaker 02: citizen or a green card holder. [00:27:02] Speaker 02: That is not considering. [00:27:04] Speaker 02: That is making [00:27:05] Speaker 02: alienage a dispositive determination when it comes to whether or not to form the contract. [00:27:12] Speaker 02: That's what at issue here, not considering it in the course of underwriting. [00:27:15] Speaker 02: If that were going on, it would be an entirely different case, maybe not a case at all. [00:27:20] Speaker 02: This is a blanket policy that says we will not consider in any way [00:27:24] Speaker 02: anyone who is not a U.S. [00:27:25] Speaker 02: citizen or the limited exception for non-U.S. [00:27:28] Speaker 02: citizens who are green card holders. [00:27:32] Speaker 02: There's a lot of discussion in the briefs by the defendant about these retail cases. [00:27:37] Speaker 02: The retail cases do have a lot to do with whether there is a clear enough nexus to a contract because those, of course, are oral implied contracts. [00:27:47] Speaker 02: I'm going to buy this shirt. [00:27:49] Speaker 02: I'm going to give him money to buy this shirt. [00:27:50] Speaker 02: That's the contract. [00:27:51] Speaker 02: It's oral. [00:27:52] Speaker 02: It's implied. [00:27:52] Speaker 02: This obviously would be a written contract. [00:27:54] Speaker 02: It was not formed between the union and Ms. [00:27:57] Speaker 02: Ayala, a very different context. [00:28:00] Speaker 02: In many cases, those retail cases involve conditions of the contract. [00:28:04] Speaker 02: Already made the purchase. [00:28:06] Speaker 02: What happened afterwards is have a sufficient nexus to be a condition of the contract. [00:28:12] Speaker 02: This is a contract formation case. [00:28:14] Speaker 02: But the best analogy I can come up with [00:28:16] Speaker 02: to the retail context is this. [00:28:19] Speaker 02: If Ms. [00:28:19] Speaker 02: Ayala and a friend walked into a store, maybe it's a store that sells clothes, or in this case, a store that sells loans, and the friend says to a sales clerk, my friend over there would like to buy this. [00:28:33] Speaker 02: Do you have it in her size? [00:28:35] Speaker 02: And the sales clerk says to the friend, I'm sorry, we don't sell to her kind. [00:28:41] Speaker 02: Full stop. [00:28:43] Speaker 02: Now, does the fact that Ms. [00:28:45] Speaker 02: Ayala didn't, despite hearing that from her friend, take the article of clothing, go to the clerk and try to purchase it, make a difference? [00:28:54] Speaker 02: The answer is no. [00:28:55] Speaker 02: You read those retail cases. [00:28:56] Speaker 02: If that was the situation, sales clerk clearly said to a friend, no, we don't sell to that kind of person. [00:29:04] Speaker 02: That clearly would be an actionable discrimination under Section 1981 involving [00:29:12] Speaker 02: the oral and implied sales contract. [00:29:15] Speaker 02: Best analogy to those retail cases that are aligned upon so heavily. [00:29:19] Speaker 04: The councilman, the clock is run out. [00:29:22] Speaker 02: Thank you very much. [00:29:23] Speaker 04: Unless my colleagues have questions. [00:29:28] Speaker 04: I want to thank both council for their excellent arguments. [00:29:34] Speaker 04: And that case shall now be submitted in the parties. [00:29:42] Speaker 04: We'll hear from us in due course. [00:29:44] Speaker 04: So thank you.