[00:00:00] Speaker 01: The next case that I'll call up for argument is Houghton versus AH Capital Management. [00:00:34] Speaker 01: You've got a busy morning. [00:00:35] Speaker 01: I know. [00:00:37] Speaker 02: It's been tricky. [00:00:41] Speaker 02: May it please the court, Sir Mayor Degasen on behalf of defendants. [00:00:44] Speaker 02: I'd like to reserve two minutes of time for rebuttal. [00:00:47] Speaker 02: I'd like to devote the majority of my time here, I think, to the waiver issue. [00:00:51] Speaker 02: But just to note that all of the things we've been talking about in the Solano case, I think, are equally applicable here. [00:00:57] Speaker 02: This court held in Brennan that incorporation of the AAA rules, which are the relevant rules [00:01:04] Speaker 02: constitute clear and unmistakable evidence that the contracting parties agreed to arbitrate arbitrability. [00:01:08] Speaker 02: You have a similar incorporation of rules. [00:01:10] Speaker 02: You have a similarly broad delegation clause that the parties agree that any dispute, claim, disagreement arising out of or relating in any way to your access or use of violence. [00:01:19] Speaker 01: We've got multiple cases this week dealing with delegation clause issues. [00:01:25] Speaker 01: We're familiar with the legal arguments with regard to that. [00:01:28] Speaker 01: But I think in this case, [00:01:30] Speaker 01: What really jumps out is the fact that it's 20 months of pretty extensive litigation, which the district court said required plaintiffs to engage in multiple meet and confers, court appearances, responses in support of or in opposition defendants filing. [00:01:46] Speaker 01: So I suppose if it's 20 months where a good portion was stayed and there's nothing going on, that might present a different record. [00:01:55] Speaker 01: But there was quite a bit of litigation in this case. [00:01:58] Speaker 01: The district court said waiver. [00:01:59] Speaker 01: What do we do with that? [00:02:00] Speaker 02: Right. [00:02:00] Speaker 02: So I think the important question here is, when was it that we knew that we had a right to arbitrate? [00:02:07] Speaker 02: So all that 20-month stuff ultimately goes to the second prong, which is, did we act inconsistent with a known right? [00:02:12] Speaker 02: But when did we know the right? [00:02:14] Speaker 02: And this is a very unique and, I think, very narrow circumstance, because we're a third party. [00:02:19] Speaker 02: We were not in possession of the arbitration agreement. [00:02:22] Speaker 02: And I think the critical thing is, we had no knowledge of any of the circumstances that surrounded [00:02:28] Speaker 02: the signing of this arbitration agreement. [00:02:29] Speaker 02: Two things I think really underscore how little we know. [00:02:32] Speaker 02: At the time that I think the district court, under the district court's rule, would have said, this is when you have to try and bring your motion to compel. [00:02:39] Speaker 02: You know you have a right time. [00:02:40] Speaker 01: Is that a factual finding that we review for clear error? [00:02:42] Speaker 02: No. [00:02:43] Speaker 02: The only factual finding, I think, the most that could be said for the factual finding is on 1 ER 6 and 7, the more recent confirmation discovery does not negate that partner defendants' prior knowledge [00:02:54] Speaker 02: that Coinbase required users to agree to the arbitration through its user agreement. [00:02:58] Speaker 02: So I think what the district court was saying is, well, what you knew is that Coinbase had a user agreement. [00:03:04] Speaker 02: But that doesn't mean that we knew we had a right to arbitrate. [00:03:07] Speaker 02: And I think the two... All right. [00:03:08] Speaker 01: So as the knowledge, the District Court said at ER 6, that more recent confirmation in discovery does not negate the partner defendant's prior knowledge that Coinbase required users to agree to arbitration through its user agreement as admitted in its motion and known at least to defendants Leshner and Hayes. [00:03:26] Speaker 02: Exactly. [00:03:26] Speaker 02: That's the provision I just read out. [00:03:27] Speaker 02: And so that's the part of the District Court opinion. [00:03:29] Speaker 02: So what District Court is saying there is not that you had a knowledge of your right to arbitrate, [00:03:33] Speaker 02: But you had a knowledge that Coinbase required users to agree to arbitration through its user agreement. [00:03:39] Speaker 02: But just to give you two examples of how that's... Why isn't that enough? [00:03:42] Speaker 02: Because that is plainly not enough for us to be able to go into court and file a motion to compel. [00:03:48] Speaker 02: And I'll give you two reasons. [00:03:49] Speaker 04: But you did. [00:03:51] Speaker 04: Basically, I mean, you used the same agreement. [00:03:55] Speaker 02: Well, no, what we got is the admission to ER90 that [00:03:59] Speaker 02: They accepted, consented to, and agreed to the updated Coinbase user agreement. [00:04:04] Speaker 02: And that's a critical aspect of that. [00:04:06] Speaker 02: They agreed to it, and it is updated. [00:04:08] Speaker 01: One important fact here is that... The admissions were recently sought, but I don't know that you could really date knowledge from that point on because what the district court said was you could have sought limited discovery to verify what's in the user agreement. [00:04:24] Speaker 01: You knew of the user agreement. [00:04:25] Speaker 01: You could have sought limited discovery to do that, but instead you chose to pursue litigation, which then caused the plaintiffs to, as I alluded to earlier, respond to all of the intensive litigation that went on for 20 months. [00:04:37] Speaker 02: I think that the crux of the district court's holding is basically that we had an obligation to engage in early discovery, and that failing to engage in early discovery constitutes knowledge. [00:04:48] Speaker 02: And there's no case that says that. [00:04:50] Speaker 02: That's a very radical and unprecedented idea. [00:04:54] Speaker 03: It may not constitute knowledge, but maybe it constitutes waiver, I guess. [00:04:57] Speaker 03: That's what the district court seems to be saying, that you could have asked the district court, you could have flagged this and said, listen, we need some early discovery. [00:05:04] Speaker 03: We think there may be an arbitration clause. [00:05:06] Speaker 02: Right. [00:05:07] Speaker 02: But that can't be right, because the waiver test has two prongs. [00:05:10] Speaker 02: You have to have knowledge of your right, and then you secondly, after that, have to act inconsistently with that known right. [00:05:17] Speaker 02: But the threshold trigger is that you know the right. [00:05:20] Speaker 02: And I think all we're saying is that you don't know the right in a situation where you have no plaintiff-specific evidence whatsoever. [00:05:26] Speaker 02: And so two important points I just want to make. [00:05:29] Speaker 02: One is that the Coinbase user agreement substantially changed in January 2022. [00:05:35] Speaker 02: And it's significantly broadened the scope. [00:05:37] Speaker 02: And we're really not sure we would have had any right to arbitrate or bring our equitable stop or claim under the earlier version of that. [00:05:43] Speaker 02: And they alleged purchases from December 2021 to November 2022. [00:05:48] Speaker 02: And we really, you know, we basically didn't know which, you know, it might've been the case the Coinbase said when you sign up, that's when you have to sign, you know, agree to the arbitration agreement. [00:06:00] Speaker 02: So it could have been in December. [00:06:02] Speaker 02: They signed up using the old version. [00:06:04] Speaker 03: If there's reason to believe there might be arbitration, do you think your clients had any obligation to either flag this for the district court or to seek some additional discovery just to preclude this later finding of waiver? [00:06:18] Speaker 02: I don't think so, because the federal rules sequence, this is basically, we had a suspicion, I don't think that's obviously true, we suspected it might be true, we know that Coinbase often requires this, but we didn't know which arbitration agreement, and we didn't know the conditions of assent. [00:06:35] Speaker 02: And I'm curious what plaintiffs will say about this, but there is absolutely no way we could have gone into court on that basis and said, listen, we don't know which arbitration agreement they signed, we don't know how they assented to it, we don't know whether it was on a mobile or a desktop site. [00:06:49] Speaker 01: I think that's why the court said you should have sought a limited discovery. [00:06:54] Speaker 01: Right. [00:06:55] Speaker 01: So under your theory then, even if a party knows that there's a high likelihood that there's an arbitration issue, they could willfully bury their heads in the sand, utilize the federal forum, litigate that, receive adverse rulings and then come in and say, oh, now we want limited discovery to verify whether there's an arbitration agreement and then invoke that. [00:07:19] Speaker 01: What's the limiting principle there? [00:07:21] Speaker 02: I think this is a very unique situation that turns on the fact that we're a third party. [00:07:26] Speaker 02: In 99% of cases, a first party has knowledge of the arbitration agreement because they have the arbitration agreement. [00:07:32] Speaker 02: And courts always say, you can't just say, oh, well, you didn't find it. [00:07:35] Speaker 02: You have constructive knowledge of the arbitration agreement in your possession. [00:07:39] Speaker 02: But this is an arbitration agreement we had no knowledge of. [00:07:41] Speaker 02: We didn't know which one they signed. [00:07:43] Speaker 02: We didn't know anything about the circumstances. [00:07:46] Speaker 04: There was an arbitration agreement contained. [00:07:48] Speaker 04: According to the motion to compel, you say that, indeed, the user agreement has contained an arbitration agreement for over a decade. [00:07:59] Speaker 02: But different versions of the arbitration agreement. [00:08:01] Speaker 04: Yeah, but that's not what you said. [00:08:03] Speaker 04: Basically, I mean, the district court said, look, that shows you have least constructive knowledge. [00:08:09] Speaker 02: But we certainly did not have constructive knowledge of a right to arbitrate. [00:08:12] Speaker 04: Because you didn't know the precise language, even though you knew that there was an arbitration agreement, that excuses waiver? [00:08:21] Speaker 02: Our right to arbitrate turns on the precise language. [00:08:24] Speaker 02: The language that's added was the exact phrase that the right to arbitrate extends to, quote, products sold [00:08:30] Speaker 02: or distributed through Coinbase, which was us. [00:08:32] Speaker 02: So knowing the precise language is whether we know we have a right to arbitrate. [00:08:38] Speaker 02: And if we'd gone into court on the basis of not even knowing what the context was or what the arbitration agreement was, we would have absolutely lost. [00:08:46] Speaker 02: And I think the language from the Solana opinion on this issue is very helpful. [00:08:50] Speaker 02: And there, the defendants did try to go into court on the basis of this kind of speculation. [00:08:56] Speaker 02: And the court said, [00:08:57] Speaker 02: There is no evidence as to whether Young accessed the Exodus platform through a mobile download, desktop download, or summer method, nor is there any evidence of when he downloaded the Exodus software, which he could have downloaded significantly earlier than the transactions at issue. [00:09:09] Speaker 02: So those are all things that would have been true for us and we would have lost. [00:09:13] Speaker 02: So basically what the district court is saying is you have to go ahead with this speculation without evidence [00:09:20] Speaker 02: and then you'll lose your right to arbitrate. [00:09:22] Speaker 02: But if you wait too long, you lose your right to arbitrate too. [00:09:25] Speaker 02: And the fact that it's late in the case is just a function of when discovery occurs in securities cases. [00:09:31] Speaker 02: Discovery doesn't occur in a securities case because discovery under Congress's mandate is stayed under the PSLRA. [00:09:37] Speaker 02: And we would have had to go to the court and say, there's only two acceptance to that, whether you need it for preservation of evidence or prejudice [00:09:43] Speaker 02: to you, and we wouldn't have been able to meet the standard for a lifting discovery into the PSRA. [00:09:47] Speaker 03: Are there any cases that consider this waiver issue in the context of a non-signatory that's seeking to invoke the arbitration clause? [00:09:57] Speaker 03: That's part of what creates the complexity here, I think, is that feature. [00:10:02] Speaker 02: No, but there are cases where a party discovers their right in the Fifth Circuit case that we cite, the TriStar case, the Williams v. Signer case, where these are Fifth Circuit cases where the court said, [00:10:12] Speaker 02: Yeah, the party had a suspicion there was an arbitration clause, but they didn't discover the arbitration clause until sometime through discovery. [00:10:19] Speaker 02: And it's when they discover the arbitration clause that they have knowledge of their right to arbitrate. [00:10:23] Speaker 02: And here we had a suspicion, but we had no basis to go into court on that suspicion. [00:10:27] Speaker 02: We did what the ordinary thing you do in all civil litigation when you have a suspicion. [00:10:31] Speaker 02: You say, well, can we move on it now? [00:10:34] Speaker 02: No, we need more information. [00:10:36] Speaker 02: When can we get more information? [00:10:37] Speaker 02: We get more information in discovery. [00:10:39] Speaker 02: And in the first set of RFAs that we filed, we asked this exact question, and we got our response, and then we promptly moved. [00:10:45] Speaker 02: And what the district court is saying is that you have to seek new mechanisms, have to relieve yourself of bars on discovery. [00:10:54] Speaker 02: Seek early discovery. [00:10:56] Speaker 02: And if you don't do that, you've then waived your right that that constitutes actual knowledge [00:11:01] Speaker 02: of your right to arbitrate. [00:11:03] Speaker 02: And I just don't think that follows from the waiver precedents. [00:11:05] Speaker 01: You're out of time, but I'll put a couple of minutes back through the panel. [00:11:08] Speaker 02: Thank you so much, Your Honor. [00:11:15] Speaker 01: Good morning. [00:11:15] Speaker 00: Good morning, Your Honors, and may it please the court. [00:11:18] Speaker 00: Jamie Crooks on behalf of plaintiffs in the proposed class. [00:11:22] Speaker 00: I want to start where the court left off with waiver. [00:11:25] Speaker 00: In ruling for the plaintiffs on every issue before him, including waiver, Judge Orrick faithfully applied this court's precedent [00:11:30] Speaker 00: to cognizance of the record before him, made a factual finding that defendants knew from the moment we filed our complaint that we purchased on Coinbase, knew before the complaint that Coinbase had an arbitration clause, which, by the way, has not changed material respect in 2022. [00:11:45] Speaker 00: This is the first we're hearing of this argument. [00:11:48] Speaker 00: The relevant provision, the delegation clause, the definition of dispute has always said you and Coinbase agreed to decide disputes in front of an arbitrator. [00:11:57] Speaker 00: that has not changed in any relevant respects since before or after this litigation was filed. [00:12:01] Speaker 00: Judge Oreck recognized that the plaintiffs, two of them, have signed this arbitration agreement themselves. [00:12:06] Speaker 00: They knew everything they needed to know to move. [00:12:09] Speaker 03: Is that right? [00:12:10] Speaker 03: I could see the argument that they knew everything they needed to do something, to maybe inquire further, tell the court about this, or file some kind of motion for early discovery. [00:12:20] Speaker 03: But how about to actually move? [00:12:21] Speaker 03: I don't see how they could have filed a motion based on what they knew. [00:12:24] Speaker 00: So two responses to that, Judge Bress. [00:12:26] Speaker 00: So at the very least, they knew enough to have an obligation, like you suggested, to ask more questions. [00:12:32] Speaker 03: Wait, I mean, there's a question as to whether they should have that obligation. [00:12:34] Speaker 03: We can get to that in a second. [00:12:36] Speaker 00: I think in a situation like this, and this court has been clear, particularly in Hill v. Xerox, that waiver is a holistic question that you look at the totality of the circumstances, because the district judge knows what's going on and knows what they've seen and knows what they've done in litigation while they were sitting on their hands. [00:12:53] Speaker 00: And here, at the very least, if you have the suspicion, let's assume, which there's no evidence of this, let's assume that they did not know and were not able to move. [00:13:02] Speaker 00: They certainly should have moved for discovery before they filed a motion to dismiss, totally negating the PSLRA litigation bar. [00:13:11] Speaker 00: After they filed their motion to dismiss, they surely could have moved for an exception from the discovery bar. [00:13:17] Speaker 00: As Judge Chabria noted in ruling on the same question in a case that we submitted a 28-J letter, [00:13:23] Speaker 00: It's not a serious argument that the PSLRA discovery bar, which was created to benefit defendants, prevented these defendants from seeking discovery if they really did not know. [00:13:32] Speaker 00: But they did know. [00:13:33] Speaker 00: And there's nothing in the record suggesting that they couldn't have moved sooner. [00:13:36] Speaker 00: So this is the second point. [00:13:38] Speaker 00: If they had moved the day we filed our complaint, what would have happened? [00:13:42] Speaker 00: We would have said, yes, we signed the arbitration agreement. [00:13:44] Speaker 00: This is not a situation like the case you just heard where there is a different way to download [00:13:49] Speaker 00: Maybe he got it on his phone. [00:13:50] Speaker 00: Maybe he got it on the computer. [00:13:51] Speaker 00: And that is highly relevant to whether someone consented to arbitration. [00:13:55] Speaker 00: They make no argument that that's the case. [00:13:57] Speaker 00: Coinbase always requires a user to sign the arbitration clause. [00:14:00] Speaker 00: And there's no opt-out provision. [00:14:02] Speaker 00: So there was no discovery to do. [00:14:03] Speaker 00: So we would say they knew exactly what they needed to know to file. [00:14:07] Speaker 00: And the motion would have gotten litigated much the same way it did in Young versus Solano, which is the court would have looked at, would have seen we signed it, would have looked at the delegation provision, said this doesn't delegate. [00:14:18] Speaker 00: and then address the equitable estoppel issue exactly the same. [00:14:22] Speaker 00: My friend on the other side is suggesting they would have been sanctioned if they moved. [00:14:25] Speaker 00: There's not much more they could have known. [00:14:28] Speaker 00: They don't know today whether we were intoxicated when we signed the arbitration clause, but you don't need to know that before you know. [00:14:33] Speaker 00: You have knowledge of the right. [00:14:35] Speaker 00: You have an obligation to pursue it. [00:14:37] Speaker 00: And at the very least, you have obligations to seek that discovery sooner. [00:14:40] Speaker 03: So if we got past this waiver issue, how about on the next issue on the arbitrability? [00:14:45] Speaker 03: Do you see any disagreement among the circuits where the law currently stands on this? [00:14:49] Speaker 00: So I really don't. [00:14:50] Speaker 00: Judge Bress, I think I understand why you're asking that. [00:14:53] Speaker 00: So for instance, defendants rely heavily on Blandon. [00:14:56] Speaker 00: But Judge DePar was careful to note, and footnote one of that opinion, he says, the plaintiff here has waived any challenge to the [00:15:02] Speaker 00: the delegation question. [00:15:03] Speaker 00: So we're doing the writ large equitable estoppel analysis here. [00:15:07] Speaker 00: It would be, he says, it would be a different question if they had raised this properly. [00:15:11] Speaker 00: So then he goes on to do the more traditional strong presumption in favor of arbitrability analysis. [00:15:17] Speaker 00: Yes, he's talking about the delegation clause, but in footnote one he says, I'm not deciding whether the first option of the Chicago standard is applying. [00:15:24] Speaker 00: All of the other cases that defendants rely on involve either third-party beneficiaries, where the language in the arbitration agreement, unlike here, is very clear. [00:15:32] Speaker 00: It's expressed that this agreement is going to bind people other than the parties, or they involve successors in interests or assignees. [00:15:39] Speaker 00: So no, I don't think that in affirming Kramer, which is really all you need to do if you reach the delegation clause, [00:15:45] Speaker 00: would create any kind of circuits. [00:15:47] Speaker 03: How about the incorporation of some of these rules, right? [00:15:50] Speaker 03: AAA or Jams? [00:15:52] Speaker 00: I think here's AAA. [00:15:53] Speaker 00: I think it's really not relevant because the question is who agreed to be bound by the AAA rules? [00:15:59] Speaker 00: We did not agree anything with defendants. [00:16:02] Speaker 00: And as Judge O'Scamlin noted, he was sitting by designation in the 11th Circuit, but as he noted in the Levine case, the whole premise of equitable asaple is you don't have an agreement. [00:16:12] Speaker 00: We have not made any agreement with these plaintiffs. [00:16:15] Speaker 00: I'm sorry, with these defendants. [00:16:16] Speaker 00: And so you don't get the benefit of whatever the terms of the agreement say. [00:16:20] Speaker 00: You apply the equitable factors if you get there. [00:16:23] Speaker 00: Similarly, in the Young versus Bydance case, Judge Chabria, relying on Judge O'Scannons' decision, said, I don't even see how it's possible. [00:16:31] Speaker 00: I can't think of a situation in which an agreement enforced by equitable estoppel would meet the standard of [00:16:38] Speaker 00: of a clear and unmistakable intent to delegate. [00:16:41] Speaker 00: So there's a little bit of a gap when it comes to third-party beneficiaries. [00:16:45] Speaker 00: There's a question there. [00:16:46] Speaker 00: If the agreement's very clear that it's intending to provide benefits to third parties, then perhaps the delegation clause could be enforced by a non-signatory. [00:16:55] Speaker 00: But whereas here, the agreement is very clear. [00:16:57] Speaker 00: You and Coinbase agree. [00:16:58] Speaker 00: And I just want to be very clear. [00:17:00] Speaker 00: In their briefs, they suggest that the only time the agreement says you and Coinbase is in the preface. [00:17:05] Speaker 00: And then everything else speaks in these broad, universal terms. [00:17:08] Speaker 00: If you look at the definition of dispute, which they hinge their entire delegation argument on, it says you and Coinbase agree to litigate these disputes. [00:17:17] Speaker 00: And I would urge you to look not just at Judge Oreck's quoting of that language on ER4, but the actual agreement on ER81. [00:17:23] Speaker 00: You and Coinbase is all over that page. [00:17:25] Speaker 00: This is very clearly a bilateral agreement. [00:17:27] Speaker 00: And so if it's going to be enforceable at all by these defendants, it would be through equitable stopple. [00:17:33] Speaker 00: And I think for the reasons Judge Oreck laid out, this is just not the case to do that. [00:17:38] Speaker 00: In terms of waiver, I want to be clear that the knowledge finding that Judge Oreck made certainly was made in light of, as it always is by a district court in these circumstances, the litigation conduct of these defendants. [00:17:51] Speaker 00: Now, my friend on the other side suggests, we did this as soon as we could. [00:17:55] Speaker 00: Number one, no. [00:17:56] Speaker 00: They could have done this before the motion to dismiss, and there's no problem with that. [00:17:59] Speaker 00: 9 USC 4 gives them exactly that right, particularly when you have as clear evidence of here as you do here. [00:18:06] Speaker 00: that this arbitration agreement does not have an opt-out. [00:18:09] Speaker 00: It was obviously signed by anybody who purchased. [00:18:11] Speaker 00: But they moved to dismiss the complaint. [00:18:13] Speaker 00: They sought reconsideration of that. [00:18:15] Speaker 00: And then when their motion to dismiss was denied, they issued a large swath of discovery requests on us and an answer that does not mention arbitration and alleges counterclaims against us and asks for a jury trial. [00:18:30] Speaker 00: And then eight months later, after their first swath of discovery requests, [00:18:34] Speaker 00: then they issue their RFAs and say, oh, we have no idea we need this discovery. [00:18:39] Speaker 00: Judge Oreck looked at all this, and he made a factual finding they knew, and he held they should have acted sooner under this court's precedence. [00:18:44] Speaker 00: And you don't need to reach the delegation question in light of the record here. [00:18:51] Speaker 03: How about the actual equitable estoppel? [00:18:52] Speaker 03: We haven't heard a lot about that today. [00:18:55] Speaker 00: So I think I agree with the counsel that came before me that the Ford Motors case, if you're going to reach the substantive questions, general equitable estoppel, I think [00:19:04] Speaker 00: The Ford Motor case basically aligned the California Supreme Court with Kramer, which is either it applies only if you're seeking to enforce the agreement, or the defendants have colluded with the other signatory, the non-present signatory, and the plaintiff is seeking relief that turns inherently on the agreement. [00:19:26] Speaker 00: Here, the agreement is just simply not at all a part of our claims. [00:19:29] Speaker 00: We allege, yes, it's true that our plaintiffs bought their [00:19:33] Speaker 00: comp tokens on Coinbase, but we made clear that that was just a matter of happenstance. [00:19:37] Speaker 00: Paragraph 83 of the complaint notes that these are listed, all kinds of exchanges. [00:19:41] Speaker 00: If our plaintiffs had bought the same securities from a friend, just in a peer-to-peer transaction, our claim against defendants would not look any different. [00:19:49] Speaker 00: And so we couldn't even allege the same Securities Act claim that we allege against the defendants against Coinbase. [00:19:55] Speaker 00: It's totally differently situated. [00:19:56] Speaker 00: It's not a partner in the endeavor. [00:19:58] Speaker 00: We have no idea whether they hold any comp. [00:20:00] Speaker 00: That's just not a part of our case. [00:20:03] Speaker 00: This case is very, very far removed. [00:20:05] Speaker 00: The only relevance of the agreement to this case is this arbitration question. [00:20:09] Speaker 00: If you deleted Coinbase from our complaint, it would not change our securities claims one-wit. [00:20:14] Speaker 00: And I think that's more than enough to satisfy Kramer and the California Supreme Court's recent decision in Ford Motors. [00:20:23] Speaker 00: If your honors don't have any more questions, thank you. [00:20:25] Speaker 01: All right. [00:20:26] Speaker 01: Thank you, counsel. [00:20:32] Speaker 02: Thank you, and I think it's pretty clear from that that the waiver question here just comes down to the early discovery rule because it's very clear we could not have gone forward with the evidence that we had. [00:20:43] Speaker 02: We would have lost. [00:20:45] Speaker 02: They say they would have just admitted it, but we didn't know they would admit it. [00:20:48] Speaker 02: I don't think you could reasonably counsel a client to go ahead on the basis of not even knowing what the arbitration agreement is and say. [00:20:54] Speaker 02: Well, we don't even know what the arbitration agreement is, but please enforce it. [00:20:57] Speaker 02: I mean, I think that's not plausible. [00:20:59] Speaker 02: So the question is this, really, whether there's an early discovery rule. [00:21:02] Speaker 02: And that means, does failure to take early discovery and acquire knowledge of something that you don't have, is that the same thing as having knowledge? [00:21:10] Speaker 02: That's, I think, a very broad inquiry notice type, constructive knowledge type assessment that no court has ever done with respect to the waiver analysis. [00:21:19] Speaker 02: And I understand that the 20 months sort of looks bad in this context. [00:21:23] Speaker 02: But that's just a consequence of the unusual situation that we have in this case, which is that we're a non-signatory. [00:21:27] Speaker 04: So if you knew that there was an arbitration clause and you didn't raise it in your answer, what are we supposed to make of that? [00:21:36] Speaker 04: We did not know at that point. [00:21:38] Speaker 02: We only know at the point. [00:21:39] Speaker 04: You knew that there was one. [00:21:42] Speaker 02: Our answer is supposed to be something that contains valid defenses. [00:21:46] Speaker 02: And so a situation where we still have no idea, we have a suspicion, we have a plan, which is, [00:21:53] Speaker 02: At the first available opportunity that the federal rules provide, aside from unusual circumstances like Rule 26D or the PSR, we have to go to court and say, please, let's do something irregular and get discovery in a regular time. [00:22:05] Speaker 02: The first opportunity is when you serve your ordinary discovery. [00:22:09] Speaker 02: In our first tranche of RFAs, we requested this information. [00:22:12] Speaker 02: That was a sensible course if you don't think there's an early discovery rule. [00:22:15] Speaker 02: If you think there's an early discovery rule, gosh, absolutely, we should have been flagging it from day one. [00:22:19] Speaker 02: But that's the benefit of hindsight. [00:22:21] Speaker 02: We didn't realize there had been an early discovery rule. [00:22:23] Speaker 02: What we thought was, we don't know. [00:22:25] Speaker 02: We have a suspicion. [00:22:25] Speaker 02: Can we go to court on this now? [00:22:27] Speaker 02: No, we'll lose, just like they lost in Solana. [00:22:30] Speaker 02: What should we do? [00:22:31] Speaker 02: Let's wait till we have the chance to figure this out through an RFA. [00:22:35] Speaker 02: And the fact that it took a long time is not like the cases where someone is trying to [00:22:41] Speaker 02: You know, get two bites of the apple or try to game the system. [00:22:43] Speaker 02: It's just a consequence of being a third party in this very unusual situation and having a PSLR stay in Congress saying, we don't really want discovery until after all this motion dismissed stuff is hashed out. [00:22:55] Speaker 02: And then your first real opportunity or normal opportunity is through RFAs. [00:22:59] Speaker 02: And we did it at that first opportunity. [00:23:01] Speaker 02: So it's an unusual case with a very narrow scope. [00:23:02] Speaker 01: Thank you for your argument, counsel. [00:23:04] Speaker 01: Thank you to both sides. [00:23:05] Speaker 01: The matter is submitted.