[00:00:02] Speaker 00:
Good morning, Your Honors, and may it please the Court.

[00:00:04] Speaker 00:
My name is Brandon Boxer on behalf of Appellant FCA, and I would like to reserve five minutes for a bottle.

[00:00:10] Speaker 00:
In Henry Schein, the Supreme Court unanimously explained that if a valid contract exists and if the agreement has a delegation clause, then the Court may not resolve an arbitrability dispute.

[00:00:21] Speaker 00:
That rule resolves this appeal.

[00:00:22] Speaker 03:
But the parties in Schein were the same parties to the contract, and that's not the case here.

[00:00:27] Speaker 03:
So why should it apply?

[00:00:29] Speaker 00:
That's not correct, Judge Freeland.

[00:00:31] Speaker 00:
If you read Henry Schein, the statement of facts, Henry Schein, the company that was seeking to enforce the arbitration agreement, was a non-signatory.

[00:00:38] Speaker 00:
It was a successor in interest to one of the parties that had signed it.

[00:00:42] Speaker 03:
OK, thank you for clarifying that.

[00:00:43] Speaker 03:
But still, I don't think you have a successor in interest here, do you?

[00:00:47] Speaker 00:
We do not.

[00:00:47] Speaker 00:
But successor in interest is one of those traditional state law doctrines that allow a non-signatory to enforce an arbitration clause against a signatory.

[00:00:56] Speaker 00:
And we know from other Supreme Court cases, such as Arthur Anderson and GE Energy Power, that nonsignatories can compel signatories to arbitration.

[00:01:05] Speaker 00:
And so the fact that FCA is not a signatory to the arbitration agreement doesn't affect the analysis.

[00:01:11] Speaker 00:
It certainly didn't in Henry Sean that it wasn't nonsignatory.

[00:01:14] Speaker 04:
But don't we have to look at the contract language to figure out who is a party or who can be?

[00:01:21] Speaker 04:
able to enforce the agreement?

[00:01:24] Speaker 04:
Because this is limited to you and us, or our employees, agents, successors, or assigns.

[00:01:32] Speaker 04:
And I don't believe that your client would fall into those categories.

[00:01:37] Speaker 00:
I'll say a couple things to that, Judge Schrier.

[00:01:39] Speaker 00:
One, the delegation clause has no such language.

[00:01:41] Speaker 00:
That language, that plaintiff's stress in their brief, appears in other parts of the arbitration agreement, in other clauses.

[00:01:48] Speaker 00:
but it does not appear anywhere in the delegation clause.

[00:01:51] Speaker 00:
The delegation clause has no you, we, us, dealership.

[00:01:54] Speaker 00:
It simply says also to the extent allowed by law, the validity, scope, and interpretation of this agreement is to be decided by arbitration.

[00:02:01] Speaker 00:
And we know from cases like Rana Center that delegation clauses are essentially several many arbitration agreements.

[00:02:08] Speaker 00:
actually like how Judge Friedland put it in Caremark, the delegation clauses are essentially a mini-arbitration agreement.

[00:02:15] Speaker 00:
Or as Holly Gallagy case, another Ninth Circuit case said, delegation clauses are essentially several mini-agreements.

[00:02:21] Speaker 00:
And so we have to look at the enforceability or the language of the delegation clause

[00:02:25] Speaker 03:
But if you pull that out, what is the limiting principle?

[00:02:30] Speaker 03:
I mean, so if you sue me for a car crash and I look at your life and figure out that you have an arbitration agreement with your cell phone provider that has a delegation clause, can I say I want to invoke that delegation clause and take this arbitration and now we're going to litigate our car crash in arbitration until someone decides whether that's under your cell phone provider?

[00:02:52] Speaker 00:
The answer is yes, and I would point the court to Henry Schein.

[00:02:55] Speaker 03:
But that makes no sense, does it?

[00:02:57] Speaker 03:
So you're saying anyone who has any arbitration agreement with anyone can be brought to arbitration because of their delegation clause, even if it's totally unrelated?

[00:03:04] Speaker 00:
I would say yes, under Henry Schein, which again, did away with the wholly groundless exception, which was essentially what you're saying.

[00:03:09] Speaker 00:
If it's wholly groundless, how can it possibly be enforced?

[00:03:13] Speaker 00:
And the Supreme Court said, under Section 2 of the FAA, it's not our ground to carve out exceptions to the enforceability.

[00:03:19] Speaker 00:
And I would also direct the court to sort of the bottom third

[00:03:22] Speaker 00:
of the Henry Schein opinion, which dealt exactly with that policy concern, where the party that was seeking to continue the wholly groundless exception said, look, this is going to lead to a bunch of frivolous motions to propel arbitration.

[00:03:33] Speaker 00:
They're going to be all over the place.

[00:03:34] Speaker 00:
And the Supreme Court said, well, A, that's overstated.

[00:03:37] Speaker 00:
There's no evidence of that happening.

[00:03:39] Speaker 00:
And if you look at other courts that had rejected the wholly groundless exception, there was no evidence of those sort of frivolous, all out of control motions to compel being filed.

[00:03:49] Speaker 00:
And indeed, arbitrators have tools that they are dispensable.

[00:03:51] Speaker 00:
And again, Henry Schein addressed that.

[00:03:53] Speaker 00:
If it is truly frivolous, then they can impose sanctions.

[00:03:56] Speaker 00:
And courts, of course, can do the same thing.

[00:03:57] Speaker 03:
But if arbitration, if the reason we compel arbitration is because of the voluntary contract that people form to go to arbitration,

[00:04:07] Speaker 03:
How is there any plausible idea that anyone has formed a contract in that kind of scenario?

[00:04:12] Speaker 00:
Well, there is a contract.

[00:04:13] Speaker 00:
And I think that's where I would go back to the Arthur Anderson line of cases and the GE power where it says third parties can enforce.

[00:04:21] Speaker 00:
We have a contract here.

[00:04:22] Speaker 00:
We know there's a contract.

[00:04:24] Speaker 00:
FCA has never argued that we are a party to the contract.

[00:04:26] Speaker 00:
We're a signatory to the contract.

[00:04:27] Speaker 00:
But we know that non-signatories can enforce arbitration agreements.

[00:04:31] Speaker 00:
And FCA is a non-signatory seeking to enforce the arbitration agreement that plaintiff entered into with the dealership.

[00:04:38] Speaker 00:
And so there are state law doctrines that allow this sort of thing to happen for our non-signatories to enforce.

[00:04:44] Speaker 00:
The Supreme Court has reminded us many times.

[00:04:46] Speaker 00:
And that's all that's happening here.

[00:04:48] Speaker 00:
So the question, if you look at the language in Henry Schein.

[00:04:51] Speaker 03:
And what is the state law doctrine that you think allows you to do this here?

[00:04:54] Speaker 00:
So in our briefs, we argued equitable estoppel, which I think is much more difficult now given the four mortal warranty cases.

[00:05:00] Speaker 00:
But we also argued third party beneficiary doctrine.

[00:05:03] Speaker 00:
And we also made some plain language arguments there.

[00:05:06] Speaker 00:
But those reaching the merits of those arguments are not for the courts to reach because of the delegation clause, which again is not limited to the you and we.

[00:05:15] Speaker 04:
But don't we have to reach that issue?

[00:05:17] Speaker 04:
Because if you look at Henry Schein, it starts out by saying that the first thing that you have to look at is a question of the contract, the language in the contract.

[00:05:26] Speaker 04:
And you've admitted

[00:05:28] Speaker 04:
that your client isn't a party to the contract.

[00:05:32] Speaker 04:
So the only way that we would be able to find that it was binding, that there should be arbitration, should go to arbitration, is if you're able to look at one of these other doctrines.

[00:05:45] Speaker 04:
And isn't that something that the court would need to do?

[00:05:47] Speaker 04:
Because they're not a party under the contract itself.

[00:05:51] Speaker 00:
I would say no, because of the delegation clause, it sends all those scope and interpretation questions to an arbitrator.

[00:05:59] Speaker 00:
And if you kind of follow out that line of reasoning that a non-party cannot enforce the delegation clause or cannot enforce the agreement, then you've essentially carved out an exception to delegation clauses for non-signatures, which we know from cases like Morgan versus Sundance, courts can't create bespoke rules for arbitration.

[00:06:19] Speaker 00:
And again, going back to GE Energy Power and Arthur Anderson, third parties can enforce arbitration agreements.

[00:06:25] Speaker 00:
I guess the question is who decides whether the third party can enforce, who applies those doctrines?

[00:06:31] Speaker 00:
And our position is that because of the delegation clause,

[00:06:34] Speaker 00:
That's a question for an arbitrator and not for the court and concluding otherwise would essentially take that entire category of arbitrability disputes away from the arbitrator in violation of the delegation clause, which again here has no such limiting language as the you and the we and the us.

[00:06:51] Speaker 00:
I'm not sure I understood.

[00:06:54] Speaker 05:
I apologize.

[00:06:56] Speaker 05:
The answer to Judge Friedland's question about she has a contract with her cell phone provider that has an arbitration clause and you have a dispute with her.

[00:07:09] Speaker 05:
under a different contract, you can invoke her contract with the cell phone person to determine whether your contract with her dealing with her roof is arbitrable or not?

[00:07:26] Speaker 00:
If the two prerequisites of Henry Scheiner met, then yes.

[00:07:29] Speaker 00:
If there's a valid arbitration agreement and it has a delegation clause.

[00:07:33] Speaker 00:
The analysis ends.

[00:07:34] Speaker 05:
So any contract that she has with anybody that has a valid arbitration clause with a delegation provision is a third party can invoke.

[00:07:46] Speaker 05:
Yes.

[00:07:48] Speaker 05:
I don't see how Henry Schein has anything to do with that.

[00:07:51] Speaker 00:
Well, Henry Schein carved out.

[00:07:53] Speaker 05:
It dealt with this limited exception for the courts deciding that it's groundless so we don't have to pay attention to it.

[00:07:59] Speaker 00:
That sounds very similar to the question that I'm being asked.

[00:08:03] Speaker 00:
What is this ridiculous, frivolous hypothetical, right?

[00:08:06] Speaker 00:
There's no way that applies.

[00:08:08] Speaker 00:
That's the wholly groundless exception.

[00:08:09] Speaker 03:
Isn't the wholly groundless about whether the dispute is the right type of dispute, not whether the parties had a contract?

[00:08:18] Speaker 00:
Yeah.

[00:08:19] Speaker 00:
Well, Henry Schein said that if there is an arbitration agreement that's valid, which is a question the court can always decide, right?

[00:08:27] Speaker 03:
But isn't part of that question, whether it's between these parties even plausibly?

[00:08:30] Speaker 03:
No.

[00:08:31] Speaker 03:
Because what does it mean to have an agreement if it's not the right people agreeing?

[00:08:35] Speaker 00:
Well, I would say, again, going back to those other Supreme Court cases, I'd say non-signatories, non-parties can't enforce arbitration.

[00:08:42] Speaker 03:
But only when they have some standing to do so, when there's some plausible way that they're connected.

[00:08:48] Speaker 03:
And you're trying to take out that piece.

[00:08:51] Speaker 00:
No, we're not trying to take it away at all.

[00:08:52] Speaker 00:
What we're saying is the arbitrator has to decide that piece because of the delegation.

[00:08:57] Speaker 03:
But the arbitrator has to decide whether it's a type of dispute within the agreement, not whether there is an agreement, which has to do with who the parties are.

[00:09:06] Speaker 00:
I would say it's, I think we're, I agree that the threshold question of is there a valid arbitration agreement, that is for the court to decide.

[00:09:16] Speaker 00:
But adding that additional layer of between the non-signatory and signatory, if that's the question for the court, then that goes beyond the is there a valid arbitration agreement question.

[00:09:27] Speaker 00:
Because then you're deciding these state law doctrines, whether they apply, how they apply, does the agreement reach the non-signatories?

[00:09:35] Speaker 00:
and you would be essentially carving out that entire category of enforceability rights from the scope of a delegation clause or an arbitration agreement as a matter of law by saying arbitrators cannot decide these questions if the non-signatory, the party seeking enforcement was not a party.

[00:09:53] Speaker 00:
And we know that's wrong under GE Electric Power and Arthur Anderson, which said non-signatories can enforce arbitration agreements.

[00:10:00] Speaker 03:
But they don't say, and courts don't get to decide that,

[00:10:07] Speaker 03:
Because whether there's a valid agreement, if you can point to any case that says we let the arbitrator decide whether there's a valid agreement between these parties, I don't know of a case that says that.

[00:10:17] Speaker 00:
Right, I agree with that, because that first step wouldn't agree with between these parties.

[00:10:21] Speaker 05:
The first step is you have to have an arbitration agreement, which means it has to be binding between these parties.

[00:10:28] Speaker 00:
Well, that between these parties stuff is the one I don't think the law goes as far.

[00:10:34] Speaker 00:
Because if that were the question for the court, then an arbitrator could never decide the enforceability by a non-signatory.

[00:10:41] Speaker 03:
And that's the, if you add- Well, the arbitrator could still decide whether the contract that the third party is enforcing covers this type of dispute, but it couldn't decide whether the third party gets to stand in the shoes of the agreeing parties.

[00:10:57] Speaker 03:
It's not like it would take away everything from the arbitrator, but it would take away whether this person trying to invoke arbitration is plausibly part of this agreement.

[00:11:06] Speaker 00:
I see.

[00:11:07] Speaker 00:
Right.

[00:11:07] Speaker 00:
And I'm not aware of, other than the Kramer line of precedence, I'm not aware of there being a rule that says delegation clauses

[00:11:16] Speaker 00:
that would essentially render the delegation clause superfluous for purposes of third parties.

[00:11:21] Speaker 00:
And that was the reason.

[00:11:22] Speaker 03:
Well, not entirely.

[00:11:23] Speaker 03:
That's what I'm saying.

[00:11:24] Speaker 03:
There would still be a role.

[00:11:26] Speaker 03:
It would be if the third party can invoke the contract, the arbitrator gets to decide whether

[00:11:31] Speaker 03:
you know, this type of warranty issue is part of this type of contract, what was sent to arbitration.

[00:11:39] Speaker 03:
But there would still be topics for the arbitrator to decide about the scope of the arbitration agreement.

[00:11:44] Speaker 03:
But who has the arbitration agreement would be decided by the court.

[00:11:47] Speaker 03:
Can you point to any case that says that way of understanding it is wrong?

[00:11:51] Speaker 00:
Well, not from this circuit, but I would point to the decisions of other circuits, the sixth, the eighth, the tenth, who have all said that would render the delegation clause superfluous, like the Blanton decision said that exact thing, that construing the delegation clause that way would mean that essentially the court already answers the question that has been delegated.

[00:12:13] Speaker 03:
But what about footnote one in Blanton that says the question whether the non-signatory had any right to enforce the delegation provision was a distinct question not before the court?

[00:12:21] Speaker 00:
Well, then I would also then I would point to swagger which dealt with a similar issue Becker which that pointed to a swagger.

[00:12:29] Speaker 03:
I think the plaintiffs hadn't challenged the enforcement of the delegation clause, right?

[00:12:33] Speaker 00:
Well, plaintiffs here have challenging enforcement of the delegation clause.

[00:12:38] Speaker 00:
But, well, I wouldn't say challenging enforceability.

[00:12:39] Speaker 00:
What they've said is that FCA cannot enforce it as a non-signatory.

[00:12:42] Speaker 00:
Right.

[00:12:43] Speaker 03:
And that's what had not happened in Swigger.

[00:12:46] Speaker 00:
Right.

[00:12:47] Speaker 00:
Well, then I would try Eckert, which would be a decision from the Eighth Circuit, which had a similar issue of non-signatories seeking enforcement.

[00:12:55] Speaker 00:
And then also the Casa arena case comes to mind from the 10th circuit.

[00:13:00] Speaker 03:
So, so I think it wasn't an Eckerd the party successor, though, or a signee.

[00:13:07] Speaker 00:
Right.

[00:13:07] Speaker 00:
Which again, is one of those doctrines that allow a non-signatory to enforce an arbitration.

[00:13:11] Speaker 03:
But the court decided they were right.

[00:13:15] Speaker 03:
The court said you're an assignee so it's okay but here we can't say you're an assignee because you haven't pointed to any state law doctrine that would let us do that.

[00:13:23] Speaker 00:
We're not not in the assignee but we have pointed to other state law doctrines in our briefs like equitable stop which again I'm putting aside third-party beneficiary anyway when we raised a plain language argument so Louise so if the court decides but if we were following Eckert wouldn't we decide whether you were right about those state law doctrines?

[00:13:40] Speaker 00:
Yeah and we think that that would be

[00:13:42] Speaker 00:
we would prevail under that because we have those arguments, if the court reaches that question instead of sending it to arbitration.

[00:13:50] Speaker 04:
Oh, right.

[00:13:52] Speaker 03:
You're almost out of time.

[00:13:54] Speaker 03:
Let's save the rest of your time for a bottle.

[00:13:55] Speaker 03:
Thank you.

[00:14:02] Speaker 01:
Thank you, Your Honors.

[00:14:03] Speaker 01:
And may it please the court, I'm Mark Chalice of the Leaf Cabrazer Law Firm here on behalf of the plaintiffs.

[00:14:09] Speaker 01:
So I'd like to start out with some basic principles.

[00:14:13] Speaker 01:
First, it's a fundamental principle that arbitration is a matter of contract.

[00:14:18] Speaker 01:
These are basic principles from the United States Supreme Court.

[00:14:21] Speaker 01:
Second, the United States Supreme Court has said that it is clear from our precedence and the contractual nature of arbitration that parties may specify with whom they choose to arbitrate their disputes.

[00:14:34] Speaker 01:
And the third basic principle, nothing in the Federal Arbitration Act authorizes a court to compel arbitration of any issue or by any party that are not already covered in the agreement.

[00:14:46] Speaker 01:
Those are the basic principles.

[00:14:49] Speaker 01:
It is also a basic principle that state law determines whether a non-signatory to an agreement containing an arbitration clause may compel arbitration.

[00:14:58] Speaker 01:
So turning to the case at bar, the contracted issue here is between Mr. Olson and his dealership.

[00:15:04] Speaker 01:
AutoNation, FCA is not a party to the contract, Mr. Olson and FCA haven't agreed to anything, let alone to arbitrate a dispute between them.

[00:15:16] Speaker 01:
The contract with the dealership clearly says that an arbitration process can only be invoked by you or we.

[00:15:22] Speaker 01:
You is Mr. Olson, we is the dealership.

[00:15:26] Speaker 01:
Now it does include it's the signs and some others, but really those aren't at issue here because FCA is not any of those things.

[00:15:31] Speaker 04:
So does it matter that that same language isn't used in the delegation clause?

[00:15:36] Speaker 01:
So no, short answer, no, it doesn't matter.

[00:15:39] Speaker 01:
And because the state law determines when the interpretation of the arbitration agreement in the Ford warranty cases, they address that exact issue in that exact argument.

[00:15:53] Speaker 01:
And what the California Supreme Court said there is the third party language in the arbitration clause means that if a buyer

[00:16:01] Speaker 01:
sues a dealer based on the condition of the vehicle, the dealer can elect to arbitrate the claim.

[00:16:06] Speaker 01:
The sales contract says nothing of binding the purchaser to arbitrate with a universe of unnamed third parties.

[00:16:12] Speaker 01:
And in that context, what they said is, you must look at the agreement as a whole.

[00:16:17] Speaker 01:
And you can't pull out one sentence and say, the agreement says you only have to arbitrate you or we.

[00:16:23] Speaker 01:
But there's one sentence here that alludes to other parties or doesn't specifically restrict it to you or we, and therefore it remakes the contract.

[00:16:31] Speaker 01:
They said, no, you have to look at that as a whole.

[00:16:33] Speaker 01:
And if you look at the contract as a whole, it is clear.

[00:16:36] Speaker 01:
That sentence starts with also.

[00:16:38] Speaker 01:
It doesn't say this is a completely new subject.

[00:16:41] Speaker 01:
It is in the context of you and we, you and we, you and we, also.

[00:16:45] Speaker 01:
And then it goes on to say the delegation issue.

[00:16:47] Speaker 01:
So it is not a separate provision.

[00:16:50] Speaker 01:
It is not a separate paragraph.

[00:16:51] Speaker 01:
It is not a separate notion.

[00:16:53] Speaker 01:
It must be read in the context in which it was written.

[00:16:56] Speaker 05:
Can you help me?

[00:16:57] Speaker 05:
I'm trying to figure out what's at stake here.

[00:16:58] Speaker 05:
Yes.

[00:16:59] Speaker 05:
You're representing a class.

[00:17:01] Speaker 05:
Yes ma'am.

[00:17:02] Speaker 05:
Of what?

[00:17:02] Speaker 05:
Of purchasers or renters or something of this car.

[00:17:08] Speaker 05:
That's right.

[00:17:09] Speaker 05:
Automobile that has allegedly a defect.

[00:17:12] Speaker 05:
Right.

[00:17:13] Speaker 05:
So how big is, just curious, how big is this class?

[00:17:16] Speaker 01:
There are about 200,000 California purchasers or lacies.

[00:17:20] Speaker 01:
And right, the context that we come here in is this case was filed over six years ago.

[00:17:25] Speaker 01:
And it was a victim in part of COVID.

[00:17:29] Speaker 01:
It was also a victim in part of the judicial emergency in the Eastern District of California where they just don't have enough judges or didn't have enough judges.

[00:17:36] Speaker 01:
So the case sat around for a while.

[00:17:38] Speaker 01:
We had a class representative named Sean Alger.

[00:17:41] Speaker 01:
He bought his car from the very same dealership, AutoNation, had a almost identical contract, which included the arbitration provision.

[00:17:50] Speaker 01:
FCA chose not to move to compel arbitration for six years.

[00:17:55] Speaker 01:
Mr. Alger, because of life circumstances, couldn't proceed in the litigation.

[00:18:00] Speaker 01:
So Mr. Olson volunteered to step in his spot.

[00:18:03] Speaker 01:
Basically the same contract, same dealership, same issue.

[00:18:07] Speaker 01:
And at that point, just short of trial, FCA made the strategic decision to move to compel arbitration.

[00:18:14] Speaker 01:
The district judge denied that, rightly in our view, and they've appealed it.

[00:18:18] Speaker 01:
So that's the context that we're here in.

[00:18:21] Speaker 03:
And you have a forfeiture argument that they should have made this argument earlier.

[00:18:26] Speaker 03:
But if we agreed with you that they just can't enforce this contract regardless, we don't need to reach the forfeiture?

[00:18:34] Speaker 01:
That's true, Your Honor.

[00:18:36] Speaker 01:
I don't think that the district court didn't reach the waiver argument.

[00:18:40] Speaker 01:
His view was that this contract is very clear.

[00:18:42] Speaker 01:
You and we, FCA is not a part of the contract.

[00:18:44] Speaker 01:
FCA has no right to even invoke the arbitration provision.

[00:18:48] Speaker 01:
So he didn't reach waiver.

[00:18:50] Speaker 05:
So if we were to uphold the district court, this would go back and is it ready to be tried or?

[00:18:56] Speaker 01:
Yes, ma'am.

[00:18:58] Speaker 01:
It is.

[00:19:00] Speaker 04:
So I think the Ford warranty case kind of resolves the equitable stopple argument.

[00:19:05] Speaker 01:
I believe it does.

[00:19:06] Speaker 04:
Could you address the third party beneficiary argument that was raised?

[00:19:11] Speaker 01:
Sure.

[00:19:12] Speaker 01:
And I don't know that

[00:19:14] Speaker 01:
It certainly hasn't been developed on the appellate level.

[00:19:18] Speaker 01:
And I'm not sure it's properly before the court.

[00:19:21] Speaker 01:
I think they may have abandoned that.

[00:19:22] Speaker 01:
I mean, I guess that's a question for my friend Mr. Boxer.

[00:19:25] Speaker 01:
But there is no indication that they are a third party beneficiary.

[00:19:30] Speaker 01:
In the forward warranty cases, there is a parenthetical that specifically reference third parties that doesn't exist in our case.

[00:19:42] Speaker 01:
And what it said is the scope of arbitration.

[00:19:44] Speaker 01:
Again, it has the you and we.

[00:19:45] Speaker 01:
I'm talking about the Ford warranty cases.

[00:19:47] Speaker 01:
It has the you and we language.

[00:19:49] Speaker 01:
It has any claim or dispute between us that arises from any relationship.

[00:19:54] Speaker 01:
Now, that's in our agreement.

[00:19:55] Speaker 01:
But it goes on to say, including any such relationship with third parties who did not sign this contract.

[00:20:02] Speaker 01:
That's in the Ford Motor Warranty.

[00:20:03] Speaker 01:
And in that context, the California Supreme Court said,

[00:20:06] Speaker 01:
that you have to read it all as a holistic unit, the arbitration provision.

[00:20:11] Speaker 01:
And even with that language, they are not third-party beneficiaries.

[00:20:14] Speaker 01:
And in our case, we don't even have that language.

[00:20:16] Speaker 01:
So there's really no, I don't think, basis for even suggesting they're a third-party beneficiary.

[00:20:21] Speaker 05:
Third-party beneficiary, I have a little trouble following.

[00:20:26] Speaker 05:
Your contract, the buyer's contract was with the seller.

[00:20:33] Speaker 01:
With the dealership.

[00:20:34] Speaker 01:
Yeah.

[00:20:34] Speaker 01:
Yes, ma'am.

[00:20:34] Speaker 05:
The dealership.

[00:20:35] Speaker 05:
And this is the manufacturer.

[00:20:38] Speaker 05:
And so the argument would be that the manufacturer is the third party beneficiary of the contract between the dealer and the buyer.

[00:20:47] Speaker 01:
I don't want to make an argument for them.

[00:20:49] Speaker 01:
I think that's their argument.

[00:20:50] Speaker 05:
That's the theory.

[00:20:51] Speaker 01:
I think that's their theory.

[00:20:53] Speaker 01:
I'm frankly not sure what the contours of their argument are.

[00:20:58] Speaker 01:
My view is that it's not a meritorious argument.

[00:21:01] Speaker 01:
And I'm not sure when he said there's also plain language arguments.

[00:21:04] Speaker 01:
I'm not really sure what that means.

[00:21:05] Speaker 01:
But I don't know that any of those have been preserved.

[00:21:07] Speaker 05:
In any event, it's been hanging around for six years.

[00:21:09] Speaker 05:
It has been hanging around for six years.

[00:21:10] Speaker 05:
This hasn't been developed yet.

[00:21:11] Speaker 05:
OK.

[00:21:12] Speaker 01:
Right.

[00:21:12] Speaker 01:
That's right.

[00:21:13] Speaker 01:
It has been hanging around for a while.

[00:21:15] Speaker 01:
So it's our view that the Kramer

[00:21:18] Speaker 01:
case is still good law.

[00:21:20] Speaker 01:
This court has said that in the Nino case, which post-dates Henry Schein, this court in two unreported decisions, the Jump Trading case and the Gweesinger case, this court has affirmed that that is also still good law.

[00:21:37] Speaker 01:
And we would stand that

[00:21:39] Speaker 01:
on that argument that we've made in our briefs that Kramer still is good law and post-tates Henry Schein.

[00:21:45] Speaker 01:
For the issues that this court's identified in its questions, we think that Henry Schein does not do what FCA says it does.

[00:21:54] Speaker 01:
It is not the game changer that they say it is.

[00:21:57] Speaker 01:
The very clear language of that opinion makes it clear that it is limited to a situation where the arbitration parties are the same as the litigation parties.

[00:22:05] Speaker 01:
In other words, the litigation parties have a binding arbitration agreement between themselves.

[00:22:09] Speaker 01:
And only then do you get into the question of wholly groundless and how it applies or whether it applies or whether it's a viable doctrine under the FAA.

[00:22:16] Speaker 01:
The antecedent question, have these parties agreed?

[00:22:20] Speaker 01:
What have these parties agreed to?

[00:22:22] Speaker 01:
Is one for the court to decide?

[00:22:23] Speaker 01:
It's very clear on the contract language here that FCA and Ms.

[00:22:27] Speaker 01:
Rolston have not agreed to anything, let alone have they agreed to arbitrate their disputes.

[00:22:34] Speaker 01:
Unless the court has any questions, I think I'll leave it there.

[00:22:37] Speaker 03:
Thank you.

[00:22:39] Speaker 03:
Let's put two minutes on the clock for rebuttal, please.

[00:22:50] Speaker 00:
OK, just a few things.

[00:22:52] Speaker 00:
One, there was a suggestion of waiver of arbitration rights.

[00:22:56] Speaker 00:
And the key thing on the waiver question is that this is a new plaintiff.

[00:23:01] Speaker 00:
The plaintiff is not appointed as the class representative.

[00:23:03] Speaker 00:
It's not been appointed.

[00:23:04] Speaker 00:
It's a new plaintiff that came in six years later.

[00:23:07] Speaker 00:
Within 18 days, we located the arbitration agreement for this plaintiff and we moved to compel arbitration of this plaintiff.

[00:23:13] Speaker 00:
As we know from Morgan versus Sundance, waiver is the intentional relinquishment of a known right.

[00:23:20] Speaker 00:
Soon as FCA knew that it had a right to compel arbitration as to this plaintiff, it promptly moved to compel arbitration.

[00:23:27] Speaker 00:
It was the first filing that FCA made as to whenever the Amenica Plaint was filed, adding Mr. Olson as the plaintiff.

[00:23:33] Speaker 05:
Are you saying that the original plaintiff didn't have an arbitration clause in the?

[00:23:37] Speaker 00:
He did have an arbitration clause.

[00:23:38] Speaker 00:
It was different than the arbitration clause here, and the delegation clause in that plaintiff's arbitration provision was also quite different.

[00:23:47] Speaker 00:
So if you compare ER67 to FER7, those are the two arbitration agreements, and the language is different.

[00:23:54] Speaker 00:
But I'm not sure, even if the language were identical, I don't think it would make a difference, because a party doesn't waive arbitration rights as to the language of some agreement, right?

[00:24:03] Speaker 00:
It waives arbitration rights as to an individual.

[00:24:06] Speaker 00:
So it would be, it doesn't really matter if the language is the same or not.

[00:24:10] Speaker 00:
What matters is the right to compel to a particular individual.

[00:24:15] Speaker 00:
There was a brief mention of the Ngo case and Grusinger case.

[00:24:20] Speaker 00:
We addressed those in our briefing.

[00:24:21] Speaker 00:
Of course, they did not resolve the question that we've raised here about whether Henry Schein controls.

[00:24:27] Speaker 00:
And I would also note that a lot of the cases that plaintiffs point to and rely on are Ninth Circuit precedents.

[00:24:34] Speaker 00:
And the cases that we rely on are Henry Schein and Renna Center and other Supreme Court cases.

[00:24:39] Speaker 00:
And I think that difference, if you do nothing else about this case,

[00:24:42] Speaker 00:
that difference should help show you the irreconcilability.

[00:24:46] Speaker 03:
Can I just ask for a second?

[00:24:49] Speaker 03:
If we disagree with you about who gets to decide whether your client can invoke this arbitration agreement and we have to look at the state law doctrines as you're saying,

[00:25:00] Speaker 03:
have you briefed them to us other than the one that is foreclosed now by the California Supreme Court?

[00:25:04] Speaker 00:
On page 38 of our brief, we do have a discussion about if the judicial court correctly reached this question, here's why it aired.

[00:25:12] Speaker 00:
So we would point to those arguments and rely on those arguments if the court reaches that question as well.

[00:25:17] Speaker 00:
Thank you for your time, Your Honors.

[00:25:19] Speaker 03:
Appreciate it.

[00:25:20] Speaker 03:
Thank you.

[00:25:21] Speaker 03:
Thank you both sides for the helpful arguments this case has submitted.