[00:00:07] Speaker 02:
Good morning, and welcome to the Richard Chambers Courthouse here in Pasadena.

[00:00:14] Speaker 02:
It's a pleasure to be here today.

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We have several cases, but a number have been submitted.

[00:00:20] Speaker 02:
Eduardo Chitay Cante versus Pam Bondi, Cesar Aldoberto Romero Cardoza versus Pamela Bondi, and Simon Antonio Orellana Aguilar versus

[00:00:36] Speaker 02:
Pamela Bondi have been submitted on the briefs.

[00:00:40] Speaker 02:
So the first case on our docket set for our argument this morning is City Group Incorporated and Banco Nacional de Mexico versus Salvador Villar.

[00:00:53] Speaker 02:
So if council is ready to proceed, you may come forward.

[00:01:07] Speaker 03:
Good morning.

[00:01:08] Speaker 03:
It's Brian Van Vlack on behalf of appellant Salvador Villar.

[00:01:16] Speaker 03:
Let me just start by saying I think the first and simplest way to resolve this matter is that it's indisputably true that the arbitrator's award of injunctive and declaratory relief in this case is barred

[00:01:35] Speaker 03:
due to the jurisdiction stripping statute of the National Bank Act, the remedies of the National Bank Act, section 1818 I-1, because it is explicitly, the basis of the arbitrator's injunction and declaratory relief is explicitly based on enforcing an alleged violation of the FDIC prohibition order.

[00:02:01] Speaker 04:
Well, how would, so you're relying on the language

[00:02:06] Speaker 03:
The review it would review modify suspend terminator set aside a prohibition order even more than that there's two that is one clause of the statute there's two clauses arguably three but the

[00:02:25] Speaker 03:
The significance, the plain language of the statute, when you parse it, the first part of the statute says that a federal court may have jurisdiction when the agency moves for an injunction to enforce its own order.

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And then the second clause says that except, as otherwise provided, meaning that one exception, there shall be no jurisdiction

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There shall be no jurisdiction to enforce effect, et cetera, et cetera.

[00:03:01] Speaker 03:
So in context, it's the plain language is saying- Well, is there a FDIC prohibition order?

[00:03:10] Speaker 04:
You're just saying that nobody outside of the FDIC can ever seek an injunction.

[00:03:16] Speaker 04:
That's correct.

[00:03:17] Speaker 04:
That's what Congress has held.

[00:03:19] Speaker 04:
Well, Congress hasn't held anything.

[00:03:21] Speaker 04:
They've said something.

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Is there a court that's agreed with you on that?

[00:03:25] Speaker 03:
Yes.

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Numerous courts.

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The most on-point cases, I would say, is the Doral Bank case.

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It was out of the District of Puerto Rico, which is actually very similar on the facts.

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That was a bank that came in

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And it applied to the district court for an injunction and declaratory relief that it did not have to follow another civil judgment against it because it said that that civil judgment would interfere with a consent decree, an order covered by 1818.

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That consent decree was in existence?

[00:04:08] Speaker 03:
It was.

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Is there a consent decree here in existence?

[00:04:11] Speaker 03:
Well, the prohibition order, they're all, it's a form of order issued, enforcement order issued by the agency under 1818.

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So it's the same status as a consent decree.

[00:04:26] Speaker 03:
And there is, in fact, another consent decree which the

[00:04:31] Speaker 04:
Arbitrator cited as a basis, which was just the earlier, but your argument is that there's just no authority outside of the FTC at all What what if we don't agree with you?

[00:04:43] Speaker 04:
Do you have a backup argument that the enforcement?

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Of the arbitral award Would be reviewed modified or that that enforcement of the arbitrary award would review modify suspend terminate or set aside the prohibition Yes, it would do that also.

[00:05:00] Speaker 03:
I don't believe we have to do that

[00:05:01] Speaker 03:
It would do that because the prohibition order drafted by the FDIC is very specific.

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What it says is that Mr. Villar is to be prohibited from participating in the affairs of a covered entity.

[00:05:17] Speaker 03:
There is actually several.

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This is one.

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But what the arbitrator, how he has interpreted it and then now enforced it through declaratory relief and injunctive relief, he has interpreted that participation in the affairs

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as covering receipt of monetary relief awarded in a separate judgment.

[00:05:39] Speaker 03:
It's quite a stretch, you know, and that's exactly the kind of interpretation that should be for the FDIC to make as to what the meaning of its own order.

[00:05:47] Speaker 04:
So you're not saying it doesn't fall under terminate or set aside or suspend, but you are arguing that it would review, and not even review, you're suggesting more modify.

[00:05:59] Speaker 03:
Modify is probably the best term

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It also modifies it in the sense that it's right in the order that it can be modified by the FDIC at any time.

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The FDIC is supposed to have the ability to, based on events or changes of policy or whatever, in the discretion of the FDIC, that it can, I forget the language from the order itself, but it can basically,

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rescind the order, modify the order.

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And for that matter, there's a provision that it can grant a waiver to the order based upon application by the subject party.

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And the arbitrator in his declaratory and injunctive relief has said, no.

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In fact, this is a permanent injunction that the judgment can never be enforced under the prohibition order.

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and that the time to do so in the ruling of the arbitrator has expired under latches, you know, is what he said.

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So that's another, it's basically withdrawing the FDIC's ability to modify and apply and interpret its own order in practice.

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It's just taking that out of the hands of the FDIC

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placed in the hands of, you know, a private party, in this case the arbitrator, and then confirmed by the court, as to the final meaning of the prohibition order.

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And, you know, we say that's just antithetical to the whole structure of the National Bank Act, which is to give, you know, absolute enforcement power and discretion to agencies and to, you know, absolutely, you know, bar potentially inconsistent judgments

[00:07:50] Speaker 03:
especially here by an interested party, a bank who's also subject to the regulation of the FDIC, goes off to, you know, court, or in this case, an arbitrator confirmed by a court, and gets a ruling that's, you know, potentially inconsistent.

[00:08:06] Speaker 03:
And here, you know, we argue it very much is inconsistent.

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Although I don't think that we don't need to show that it was wrong

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on the interpretation of the FDIC order, just the mere fact that they are obtaining and interpreting a final interpretation of the FDIC's own order through the court is completely usurping the FDIC's regulatory jurisdiction.

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But the nature of the statute is very closely guarded, hence the jurisdiction-stripping nature of anything that's inconsistent with that.

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And there's a lot of reasons for that.

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The FDIC are the experts.

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They know banking.

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They're supposed to be implementing policies that they are concerned about, about the soundness of banks.

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It's not for courts.

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It's not a case of cumulative remedies for a wrong that's been defined.

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It's more of a balancing of policy considerations that the FDIC is supposed to be implementing.

[00:09:05] Speaker 02:
And you're citing Doral to support your position on this?

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Is that right?

[00:09:08] Speaker 02:
Yes.

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In Doral, the parties affirmatively asked

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the district court for a declaratory judgment to interpret the prohibition award.

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Here, the parties already got an interpretive, or yeah, from an interpretive order of response from the FDIC in the letter that the agency sent.

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So I'm trying to figure out how there's an issue

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that the district court here would be exceeding its jurisdiction?

[00:09:45] Speaker 03:
Well, I mean, the opinion letter is, the award goes way beyond the opinion letter.

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Matter of fact, the meaning of the opinion letter was greatly disputed by the parties.

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We contend that it supports our position that he can obtain monetary relief by collecting a judgment.

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And in fact, the arbitrator in his award is looking at

[00:10:10] Speaker 03:
is giving his interpretation of the opinion letter and also an interpretation of a separate opinion letter by the Fed, the Federal Reserve, and saying that the Federal Reserve's opinion letter should take precedence in doing this whole kind of, you know, it's his interpretation of the opinion letter.

[00:10:31] Speaker 03:
And again, I think the nature and structure of the statute is such that it's not for the court or an arbitrator to decide what the meaning.

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As a matter of fact, I'd say the fact that the FDIC and the Federal Reserve had weighed in with their own opinion letters.

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I mean, if anything, I believe that supports our position because they're already aware of the issue.

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They're already taking positions on it.

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And whatever they want to do with their positions, how they assess the matter should be done.

[00:11:06] Speaker 03:
If they want to take a close look at the Mexico judgment, other issues, that should be their right under the statute, not the right of the federal court or the arbitrator.

[00:11:20] Speaker 02:
I was trying to figure out why your client didn't ask the FDIC

[00:11:28] Speaker 02:
for an interpretation or modification of the prohibition order before appealing the Mexico Labor Board's initial denial of relief?

[00:11:38] Speaker 03:
Well, he didn't feel that that was necessary.

[00:11:41] Speaker 03:
He'd been advising the FDIC all along of the – and this is in the record of the – recited in the award – of the progress in the Mexico action and providing copies of the documents in the Mexico action to the FDIC.

[00:11:58] Speaker 03:
asking if they had any objection to what was going on in light of the prohibition order.

[00:12:03] Speaker 03:
They were aware and never took a position.

[00:12:05] Speaker 03:
They consciously took no position, but they did not oppose.

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They did not tell him that, no, go no further or you're violating the prohibition order, which they would have the right to do.

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And they did not.

[00:12:19] Speaker 03:
So that's the short answer on that.

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And of course, it was the

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It was the plaintiffs who initiated the court action to enjoin the collection of the Mexico judgment.

[00:12:37] Speaker 03:
So that, you know, that arguably raised the issue, and then that's the circumstance that led to the opinion orders.

[00:12:44] Speaker 03:
The court asked us to obtain opinion letters from the agencies they provided, and they were, you know, they are what they are, but they're not conclusive at this point.

[00:12:55] Speaker 02:
It seems, though, that our court has already decided that there is jurisdiction in this case.

[00:13:00] Speaker 02:
I'm trying to figure out why law of the case doctrine shouldn't apply here.

[00:13:06] Speaker 03:
Well, law of the case, well, first of all, I don't believe law of the case should apply to basically a pure ruling of law on a full record.

[00:13:19] Speaker 03:
Going up to the Ninth Circuit in this case,

[00:13:23] Speaker 03:
the motion panel that was just on a TRO, preliminary injunction, to maintain the status quo until the merits of the underlying case could be decided.

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So the only issue in front of the motion panel was whether that TRO, without any final adjudication of the merits, was proper.

[00:13:46] Speaker 03:
They did not purport to make

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There's no final record.

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Of course, the award hadn't even been issued yet, so there was no award in front of them.

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And they did not make a conclusive ruling of law as to the meaning and the scope of 1818.

[00:14:02] Speaker 02:
But the briefing before that court asked or requested that the court find that the declaratory injunctive and contract claims stated in plaintiff's complaint all be dismissed

[00:14:17] Speaker 02:
as beyond the jurisdiction of the court.

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So it seems like the arguments in the first appeal and the court's decision in response to that specific request didn't narrowly apply to the preliminary injunction.

[00:14:42] Speaker 02:
But I wanted to give you an opportunity to respond to that.

[00:14:46] Speaker 03:
Sure.

[00:14:48] Speaker 03:
The thing about law of the case, I mean, it's not supposed to be this was a very different procedure on a very different record in front of the court at that time.

[00:14:56] Speaker 03:
And part of law of the case is I do not believe you're supposed to interpolate what the implied interpretation of the statute was from their ruling.

[00:15:15] Speaker 03:
The ruling itself doesn't say anything

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to indicate that, you know, final enforcement by, you know, of any future award by the arbitrator would necessarily be within subject matter jurisdiction.

[00:15:29] Speaker 03:
And I would just add that since this is a matter of subject matter jurisdiction, I mean, it has to be assessed at every turn.

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It's not a matter that can be waived or that should be decided.

[00:15:39] Speaker 03:
And there is case law on that fact that, on that point that,

[00:15:44] Speaker 02:
subject matter jurisdiction should not be a is not a proper subject of law of the case because it's it's jurisdictional so you use a lot of your time on this jurisdiction question i don't know if you wanted to make some uh... just a brief comment on the merits because uh... i'm not sure what your best case is to support your argument that the arbitration uh... agreement violated california civil cult section forty seven b or

[00:16:13] Speaker 02:
or the Section 1668?

[00:16:15] Speaker 02:
OK.

[00:16:17] Speaker 03:
Well, on that, it's because the court or the arbitration, well, first of all, the jurisdictional issue is on the merits because we're talking about vacating the award.

[00:16:32] Speaker 03:
And as we talk about in our brief, the way you call it, public policy exception or public policy doctrine or something else is longstanding case law.

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that where an arbitrator awards relief that is unlawful or unenforceable, you know, courts are not going to uphold it, you know, are required to vacate it.

[00:16:52] Speaker 03:
And the contract ruling that the arbitrator made is tied in with the 1818 because the subject matter jurisdiction, because the arbitrator held that the reason that,

[00:17:11] Speaker 03:
filing a post-termination action in Mexico supposedly violated the employee handbook was because that action would supposedly result in the violation of the FDIC prohibition order.

[00:17:28] Speaker 03:
So whether it's contract or whether he's allegedly enforcing the employee handbook,

[00:17:34] Speaker 03:
or enforcing the prohibition order itself.

[00:17:39] Speaker 03:
In both cases, the analysis is dependent on his finding that he's enforcing an alleged violation of the prohibition order.

[00:17:48] Speaker 02:
OK.

[00:17:48] Speaker 02:
Thank you.

[00:17:50] Speaker ?:
OK.

[00:18:03] Speaker 01:
May it please the court, Lawrence Rosenberg for Citigroup and Banco Nacional de Mexico.

[00:18:09] Speaker 01:
In this case, Mr. Villar simply is seeking to relitigate the merits of an arbitration award decided against him, which is beyond the standard scope of review under the Federal Arbitration Act.

[00:18:23] Speaker 01:
This court should affirm the confirmation of the arbitration award for three reasons.

[00:18:28] Speaker 01:
First,

[00:18:29] Speaker 01:
The arbitration award does not in any way violate the statutory basis to vacate an arbitration award and was well reasoned and was reviewed by the district court under the appropriate legal standards.

[00:18:41] Speaker 01:
Second, the arbitrator had jurisdiction, and I'll turn to that in just a minute.

[00:18:45] Speaker 01:
And third, no public policy would support overturning the arbitration award.

[00:18:51] Speaker 01:
Given the length of time spent on jurisdiction, I'll turn there first.

[00:18:56] Speaker 01:
So there are two fundamental reasons why

[00:18:59] Speaker 01:
Mr. VR's arguments on jurisdiction should be rejected first as the chief judge mentioned before The Ninth Circuit already decided this issue on the prior appeal

[00:19:09] Speaker 01:
and whether, under collateral estoppel or law of the case, this panel should follow that ruling.

[00:19:15] Speaker 04:
And while Mr. Van Vlack has argued that somehow it would address how that law of the case applies to jurisdictional determinations, does it apply in the same way that it would?

[00:19:27] Speaker 04:
I mean, I understand law of the case generally.

[00:19:32] Speaker 04:
If it's previously decided, we're bound by that.

[00:19:36] Speaker 04:
Is the same always true of jurisdictional determinations, or do we have an independent duty to look at that?

[00:19:45] Speaker 01:
I wouldn't say it's always true.

[00:19:47] Speaker 01:
And it is true that the court does assess jurisdiction as a case goes on.

[00:19:53] Speaker 01:
But where the issue is the same, it's identical, and has already been fully decided by a prior panel,

[00:20:01] Speaker 01:
In that circumstance, we believe, at least under law of the case, that the doctrine applies.

[00:20:06] Speaker 01:
I mean, we also think it applies under collateral.

[00:20:09] Speaker 01:
Have a case for that?

[00:20:10] Speaker 01:
We don't have a specific case in this circumstance, which is highly unusual, for a court to resolve a jurisdictional argument on a first appeal

[00:20:20] Speaker 01:
and then have a second appeal raise the exact same argument.

[00:20:22] Speaker 04:
Isn't that, Ferreres sort of says that, doesn't it?

[00:20:28] Speaker 04:
That law of the case doctrine applies to jurisdictional determination.

[00:20:30] Speaker 01:
It does, yeah.

[00:20:32] Speaker 04:
But you're just saying that it's not exactly analogous.

[00:20:35] Speaker 01:
It's not exactly analogous.

[00:20:36] Speaker 01:
I don't want to over-claim it.

[00:20:38] Speaker 01:
But I would say that if you look at the law of the case doctrine, the cases from this court say that law of the case should apply

[00:20:47] Speaker 01:
unless there's changed circumstances.

[00:20:49] Speaker 01:
The factors in the Alexander case are unless the first decision was clearly erroneous, an intervening change in the law has occurred, the evidence on remand is substantially different, other changed circumstances exist or a manifest injustice would otherwise result.

[00:21:06] Speaker 04:
If we agree with this panel, do we even need to go into this?

[00:21:10] Speaker 04:
No.

[00:21:11] Speaker 04:
Maybe it's better to avoid

[00:21:14] Speaker 04:
law of the case in a jurisdictional question and just decide it, assuming we agree with it.

[00:21:20] Speaker 01:
Yeah, that's fine.

[00:21:21] Speaker 01:
I think the court could just decide that the merits of the jurisdictional argument are the same way that the prior panel decided it on the merits and not rule and law the case.

[00:21:32] Speaker 04:
But your point is there's no new arguments here.

[00:21:36] Speaker 04:
It's all the same.

[00:21:38] Speaker 04:
A lot of the case presumably would still bind in a future case on a factual or legal issue, even if something new was brought to the court's attention.

[00:21:49] Speaker 04:
But in a jurisdictional, that exception might not apply, but it's not applicable here.

[00:21:55] Speaker 01:
That's basically what you're saying.

[00:21:56] Speaker 01:
Yeah, I think that's right, Your Honor.

[00:21:57] Speaker 01:
I think that's right.

[00:21:58] Speaker 01:
And I don't think this is a tough issue for the court to resolve on the merits.

[00:22:03] Speaker 01:
I mean, the rationale of the prior panel was that, look, the jurisdiction argument is not what the statute says.

[00:22:12] Speaker 01:
The statute says you can't directly modify or interpret the order.

[00:22:17] Speaker 01:
That's what happened in the Doral Bank case.

[00:22:18] Speaker 01:
That's why the case said that they couldn't proceed there.

[00:22:23] Speaker 01:
But here, it's a third party that isn't a party to the prohibition order city group.

[00:22:29] Speaker 01:
that is simply seeking a parallel remedy.

[00:22:31] Speaker 01:
And it is true that the prohibition order supports the parallel remedy, but it's not enforcing that order, right?

[00:22:38] Speaker 01:
We're not seeking civil penalties like the FDIC would.

[00:22:41] Speaker 01:
We're not seeking the kind of injunction that the FDIC would seek in an enforcement order.

[00:22:46] Speaker 01:
We're seeking completely parallel relief.

[00:22:48] Speaker 01:
And no case has said that that's impermissible, right?

[00:22:54] Speaker 01:
Well, yeah, we've cited the Rex versus Chase case, the Henry JPMorgan case, which are cases that say where you're seeking a parallel remedy that's consistent with an FDIC order, that's permissible.

[00:23:11] Speaker 01:
That's permissible.

[00:23:12] Speaker 01:
And those were cases where parties were seeking a parallel remedy.

[00:23:17] Speaker 01:
And those were cases that were cited to the prior Ninth Circuit panel and that were cited

[00:23:24] Speaker 01:
to the arbitrator.

[00:23:26] Speaker 01:
For example, I'll just quote a couple sentences from the arbitrator considering those cases specifically.

[00:23:32] Speaker 01:
He said, claimants are not a party to the prohibition order, and Section 1818 provides them with no judicial remedies in connection with the order.

[00:23:41] Speaker 01:
Claimants are asserting their separate remedies, and he's quoting the Rex case, including an anti-suit injunction under Ninth Circuit precedent

[00:23:49] Speaker 01:
These separate remedies are entirely independent of the prohibition order and the FDIC's ability to enforce it.

[00:23:55] Speaker 01:
Nor would it make sense to allow Mr. Villar to use a prohibition order, finding that he engaged in violations of the banking laws as a shield from liability against nonparties to that order.

[00:24:06] Speaker 01:
That's at 2 excerpts record 181.

[00:24:10] Speaker 01:
And I think that captures it in a nutshell.

[00:24:12] Speaker 01:
This is a separate, independent, but parallel remedy.

[00:24:16] Speaker 01:
And it is fully consistent with the letters obtained

[00:24:19] Speaker 01:
at the district court's request from the FDIC and the Federal Reserve, which say that no relief that reinstates Mr. VR would be permissible under the prohibition order, and says that any payments would have to be evaluated under the Golden Parachute Rules, and the Federal Reserve, which was the operative agency that controls Banamex, says that it may very well violate the Golden Parachute Rules.

[00:24:48] Speaker 02:
You gave three reasons.

[00:24:49] Speaker 02:
I want to make sure I got the third you said it does not violate any statute that they're seeking to really get really Relitigate the arbitration award yes, let him do it because doesn't violate any statutes there is jurisdiction for the reasons that you've just right And there's no public policy that would support it and I mean if there are any more questions on jurisdiction I'm happy to talk about that more but but if you want me to turn briefly to public policy and

[00:25:15] Speaker 01:
So first of all, this court does not have to definitively rule in this case whether the public policy ground to vacate still exists.

[00:25:25] Speaker 01:
We think it doesn't under Hall Street.

[00:25:28] Speaker 01:
And if you look at all the cases that have since Hall Street that have

[00:25:31] Speaker 01:
done a public policy rationale, none of them has fully engaged with Hall Street and says why there's still a public policy ground.

[00:25:40] Speaker 01:
I acknowledge there are cases, some from this court, just a few from this court, and then a few from courts in other circuits, but none of them really fully engages.

[00:25:49] Speaker 01:
And if you look at the Stolt-Nielsen case that followed Hall Street

[00:25:53] Speaker 01:
The Supreme Court was pretty clear that Hall Street is the law.

[00:25:56] Speaker 01:
And in Stolt Nielsen, there's a footnote.

[00:25:58] Speaker 04:
I tend to agree with you.

[00:26:01] Speaker 04:
We may not need to discuss this.

[00:26:03] Speaker 04:
But the problem that I find where this is an interesting issue, if we were to go down this road, is Hall Street is based on an interpretation of the statute.

[00:26:14] Speaker 04:
And the Supreme Court previously had been clear that the public policy exception was a common law issue.

[00:26:22] Speaker 04:
So it's not intuitive to me that Hall Street got rid of that public policy exception.

[00:26:29] Speaker 04:
I mean, you could debate whether the Supreme Court would in a future case, but I'm not sure they have yet.

[00:26:35] Speaker 01:
Right.

[00:26:35] Speaker 01:
And that's why I think if you look at Stolt Nielsen, they sort of engage with Hall Street and say, look,

[00:26:40] Speaker 01:
They didn't talk about public policy.

[00:26:41] Speaker 01:
They say in Stolt-Nielsen, the parties had argued manifest disregard of law, which is not quite public policy.

[00:26:49] Speaker 01:
And the court in a footnote said, we're not even sure that doctrine survives Hall Street.

[00:26:56] Speaker 01:
And then said, but in Stolt-Nielsen, it was a pure statutory interpretation question of the FEA as interpreted in a prior Supreme Court case.

[00:27:04] Speaker 01:
And said, we don't need to reach any of that because we're going to rule based on the statute.

[00:27:08] Speaker 01:
So I do think Stolt Nielsen calls it into question, but you don't need to resolve it because there is no public policy here that supports Mr. VR.

[00:27:16] Speaker 01:
Number one, he cites the California litigation privilege and section, I think it's 1668, right?

[00:27:25] Speaker 01:
The arbitrator fully considered all of this, tens of pages of briefing on both issues, fully resolved it against Mr. VR.

[00:27:34] Speaker 01:
The district court did review for manifest disregard of the law and said, I'm looking at this and there's nothing that even comes close to that in the record.

[00:27:42] Speaker 02:
Let me ask you this, because Mr. VR argues that the employee handbook and code of conduct was never supposed to be a contract between the parties.

[00:27:55] Speaker 02:
If we were to look at public policy, why shouldn't we take this into consideration?

[00:28:03] Speaker 01:
So let me try to answer the question precisely The employee handbook and the and the code of conduct were signed.

[00:28:15] Speaker 01:
They weren't just like handed out They were actually signed and acknowledged by employees particularly mr. Vr.

[00:28:21] Speaker 01:
Mr. Vr.

[00:28:22] Speaker 01:
Was the ceo of banamex USA he was supposed to be as familiar with any as anyone in the company with those doctrines and he signed it and

[00:28:32] Speaker 01:
It was binding.

[00:28:33] Speaker 01:
The question of whether it was binding was, again, fully litigated before the arbitrator.

[00:28:38] Speaker 01:
And he said that it was.

[00:28:39] Speaker 01:
And it can't be.

[00:28:41] Speaker 01:
I mean, there's no case that I'm aware of that says public policy doesn't allow an employer to have rules for employment that the employee agrees to as part of his employment contract.

[00:28:53] Speaker 01:
And so because it was a signed document that he was required to sign and agree to, and he acknowledged

[00:28:59] Speaker 01:
at the arbitration hearing, at his deposition, that he was bound by the provisions of those documents.

[00:29:04] Speaker 01:
That's undisputed, that he was bound by those provisions.

[00:29:08] Speaker 01:
So as a matter of public policy, even if you consider it, I just don't think there's anything there.

[00:29:12] Speaker 01:
Those are documents that he acknowledged he was bound by.

[00:29:16] Speaker 01:
And that's what the arbitrator relied on.

[00:29:19] Speaker 01:
And I also would note that they include statements like not having conflicts of interest, not doing anything that particularly

[00:29:26] Speaker 01:
subjugates the interests of the company to your personal private interests that the arbitrator found Mr. Villar had violated that are quasi-fiduciary responsibilities of the CEO of a bank.

[00:29:41] Speaker 01:
And the arbitrator carefully looked at that and said, Mr. Villar, after hearing voluminous testimony, days of testimony from Mr. Villar, said that he had violated those duties.

[00:29:52] Speaker 01:
And therefore, this contract showed that he had breached the covenant of good faith and fair dealing.

[00:29:58] Speaker 01:
And that was part of the basis for the arbitration award.

[00:30:01] Speaker 01:
And so there's no public policy that prevents that.

[00:30:04] Speaker 01:
The litigation privilege, as the Nivelli case that we've cited, doesn't prohibit contracts where a party waives certain kinds of claims.

[00:30:14] Speaker 01:
And here, Mr. Villar promised that he would not put

[00:30:18] Speaker 01:
the company in a conflict of interest situation.

[00:30:21] Speaker 01:
Those are specific duties in the employee handbook and the code of conduct.

[00:30:25] Speaker 01:
And the only thing in this very unique and unusual case that happened is that Citigroup filed a motion for an anti-suit injunction to prevent this Mexican litigation, the remedy of which would cause us to run completely afoul of federal law.

[00:30:42] Speaker 01:
And so, I mean, there's no case where the litigation privilege has ever applied

[00:30:46] Speaker 01:
Really number one to federal claims to begin with I mean there are cases that say it's limited to state claims Sorry council does your position is it affected by his argument say that?

[00:30:59] Speaker 00:
Maybe some of the payments wouldn't have actually violated the FDIC order is it enough that I mean let's assume for the moment.

[00:31:07] Speaker 00:
That's true.

[00:31:07] Speaker 00:
You know Does that affect the merits of your argument here?

[00:31:12] Speaker 01:
I don't think it does, Your Honor, because that's all sort of error of law stuff that goes to the arbitrator's discretion here.

[00:31:19] Speaker 01:
It's not something for this court to review.

[00:31:23] Speaker 01:
But the arbitrator made findings that there was no ability for any relief for Mr. Villar unless he presented himself for reinstatement to Banamex.

[00:31:32] Speaker 01:
And that is absolutely prohibited by the prohibition order.

[00:31:36] Speaker 01:
And the payments he's seeking are plainly the monetary equivalent of reinstatement, even under Mexican law.

[00:31:42] Speaker 01:
And there was extensive expert testimony, both of Mexican law experts and of regulatory law experts that confirmed that.

[00:31:50] Speaker 01:
So this is a merits determination by the arbitrator.

[00:31:53] Speaker 01:
And even if he's right, it's not something that goes to public policy or anything of that grand nature.

[00:32:00] Speaker 01:
It certainly doesn't go to manifest disregard of the law or anything that would be an illegal contract.

[00:32:06] Speaker 01:
So again, the litigation privilege doesn't prevent this.

[00:32:08] Speaker 01:
1668 is something that talks about tort liability, not bargaining away your ability to bring a case in tort for willful misconduct or negligence.

[00:32:18] Speaker 01:
That has nothing to do with this case.

[00:32:20] Speaker 01:
That's a contract case.

[00:32:22] Speaker 01:
So there's no policy that he's espoused that could even come close to going to a level where this court should be troubled by the arbitration award.

[00:32:31] Speaker 01:
And again, the district court did, albeit on limited review, but looked at this for manifest disregard of the law

[00:32:37] Speaker 01:
and said there simply was none.

[00:32:39] Speaker 01:
And then if you do look at public policy, there's a huge countervailing policy that supports the award.

[00:32:45] Speaker 01:
Right here, Mr. Villar tried to circumvent federal law, brought a case in Mexico that was highly dubious to try to claim he was actually an employee of Banamex, an entity he hadn't worked for in 30 years, to try to seek money that is absolutely prohibited by federal law.

[00:33:01] Speaker 01:
So the policy, to the extent the court were to consider it,

[00:33:04] Speaker 01:
Strongly favors the arbitration award not vacating it for no other questions.

[00:33:09] Speaker 02:
I see my time has expired Thank you Quickly quickly address It's important here

[00:33:30] Speaker 03:
The reference to relitigation and the deference given to the arbitrator's findings, that's the fundamental error here, is to just adopt the arbitrator's findings of law.

[00:33:41] Speaker 03:
Because the source of the deference to the arbitrator is that he's acting within the bounds of the contract.

[00:33:48] Speaker 03:
Stolt, Nielsen, other cases in the Ninth Circuit have all made clear that the reason an arbitrator gets deference is because his ruling is the party's contract because they contracted for that ruling.

[00:34:00] Speaker 03:
Okay, but when an arbitrator makes a ruling that is, that the parties could not have contracted for themselves because it violates a separate statute or public policy such as agreeing to an illegal contract to waive rights ahead of time and waive a right to lawsuit, then there is no deference.

[00:34:20] Speaker 03:
And the cases under the sort of public policy exception have made clear that it's for the court to decide if a remedy, and there's an issue too, the difference between the remedy

[00:34:30] Speaker 03:
here, which is unlawful, of supporting an unlawful contract versus any other part of the ruling.

[00:34:38] Speaker 03:
So it's not entitled to deference.

[00:34:42] Speaker 03:
The arbitrator, the court should have looked to the fact, for instance, under Comedy Club, the Ninth Circuit case, there was an arbitrator issued an injunction to enforce a covenant not to compete.

[00:34:57] Speaker 03:
And the court, this court said,

[00:34:59] Speaker 03:
They looked at it.

[00:35:00] Speaker 03:
They gave no difference to that.

[00:35:02] Speaker 03:
They looked at it and they said no his interpretation of the covenant not to compete statute is too narrow This violates the covenant not to compete statute business and profession code 16600 Therefore it has to be vacated.

[00:35:17] Speaker 03:
So appreciate it.

[00:35:18] Speaker 02:
Thank you very much the case of Citigroup Inc and Banco Nacional de Mexico versus Salvador

[00:35:24] Speaker 02:
is now submitted.

[00:35:27] Speaker 02:
The next case on our docket has also been submitted on the briefs and that is the case of Janet Solis and Michael Ortega versus Advanced Weight Loss Surgical Association and Minimally Invasive Surgical Association versus T-Mobile U.S.

[00:35:45] Speaker 02:
and United Healthcare Insurance Company.

[00:35:48] Speaker 02:
So the next case on our docket, I want to thank you both very much Mr. Rosen

[00:35:54] Speaker 02:
and Mr. Van Fleck for your arguments.

[00:35:57] Speaker 02:
The case has now been submitted.