[00:00:00] Speaker 05:
Back on record, Judge Smith, can you hear us okay?

[00:00:03] Speaker 05:
I can.

[00:00:03] Speaker 05:
Okay, great.

[00:00:08] Speaker 05:
We'll go back on record.

[00:00:10] Speaker 05:
The next case on the calendar is 24-6273, 24-6277, Plischka versus Axel Spank.

[00:00:23] Speaker 03:
Good morning.

[00:00:24] Speaker 03:
I'm Jay Ramsey for Axos Bank.

[00:00:27] Speaker 03:
I'd like to reserve two minutes for rebuttal.

[00:00:29] Speaker 05:
You bet.

[00:00:29] Speaker 05:
Just keep an eye on the clock, please.

[00:00:31] Speaker 03:
Yes, will do.

[00:00:31] Speaker 03:
Thank you so much.

[00:00:33] Speaker 03:
So this case is about a bank that had an agreement with its customers.

[00:00:37] Speaker 03:
That agreement had a clause in it that permitted the bank to make modifications.

[00:00:41] Speaker 03:
Consistent with this court's decision in Davis, it made a modification

[00:00:45] Speaker 03:
It provided notice to all of the customers of that modification.

[00:00:48] Speaker 03:
It described the modifications and also provided an opportunity to opt out.

[00:00:54] Speaker 03:
Our plaintiffs here did not opt out, continued with their services with the bank, and after the modified agreement went into effect, brought a class action case in court, and we're seeking to compel arbitration.

[00:01:08] Speaker 03:
The district court, well, let me get straight to standing because I think we were directed to do that.

[00:01:16] Speaker 03:
So I want to be clear.

[00:01:17] Speaker 03:
If I lose today, we will be back in district court, not in arbitration.

[00:01:24] Speaker 03:
And so there's three ways that we were denied our motion to compel arbitration.

[00:01:29] Speaker 03:
And therefore, in my view, obviously have standing and the proper to be here on appeal.

[00:01:34] Speaker 03:
So the three ways are this.

[00:01:39] Speaker 03:
We moved to compel arbitration under an arbitration provision in the modified, the new account agreement, PVAA, and also the new OAA online access agreement.

[00:01:52] Speaker 03:
with respect to both of those, and those are the ones that we say apply, not the old one.

[00:01:57] Speaker 05:
We understand.

[00:01:58] Speaker 03:
That we, you know, the court just denied our motion with respect to those, that motion.

[00:02:04] Speaker 05:
You moved to compel arbitration and the court compelled arbitration.

[00:02:10] Speaker 03:
So it did not undergo arbitration.

[00:02:11] Speaker 05:
So not the way you wanted it, right?

[00:02:13] Speaker 05:
You wanted the arbitration pursuant to the original, sorry, the modified agreement, not the original agreement, right?

[00:02:21] Speaker 05:
Correct.

[00:02:21] Speaker 05:
And so why do we have jurisdiction?

[00:02:24] Speaker 03:
So we cited a case law in our briefing that's actually three separate orders.

[00:02:30] Speaker 03:
And with respect to the later two orders, we were denied.

[00:02:34] Speaker 03:
On the first order, the original online access agreement, we were compelled to arbitration, but only in the first instance for the arbitrator to decide whether the claim was even arbitrable under that clause.

[00:02:45] Speaker 03:
We went over to arbitration with respect to Pliska and Ash.

[00:02:51] Speaker 03:
The arbitrators there said, no, it's not arbitrable.

[00:02:54] Speaker 03:
And so at that point, we were denied arbitration under the OAA and then denied arbitration under the modified clauses.

[00:03:02] Speaker 03:
And so the entire ruling is that we were denied.

[00:03:05] Speaker 03:
It's interesting, Stempel, who was the third plaintiff, who's no longer with us, that claim did get compelled.

[00:03:11] Speaker 03:
We went down to arbitration with respect to him.

[00:03:13] Speaker 03:
And the arbitrator there found that it was arbitrable.

[00:03:16] Speaker 03:
And he's obviously.

[00:03:17] Speaker 05:
But that's not before us.

[00:03:18] Speaker 03:
Correct.

[00:03:19] Speaker 03:
And so I think the difference there sort of shows why this case ought to be before you, because we moved to compel with respect to the modified versions.

[00:03:27] Speaker 03:
We believe those are the only ones that actually apply.

[00:03:30] Speaker 03:
We modified the clauses.

[00:03:32] Speaker 03:
The old one, in our view, doesn't apply at all.

[00:03:35] Speaker 03:
And so we were denied arbitration.

[00:03:38] Speaker 05:
Do you have any case law where we applied the FAA in this way?

[00:03:43] Speaker 03:
No, I'm not aware of applying the FAA.

[00:03:46] Speaker 03:
Well, in this way, I'm not aware of any case law going the other direction either.

[00:03:51] Speaker 03:
They cited three in, I think, a Rule 28 letter shortly before argument.

[00:03:56] Speaker 03:
And none of those are like this.

[00:03:59] Speaker 03:
In one of them, that's the Van Dusen case, the court reserved judgment with respect to arbitration, whether it was going to compel arbitration.

[00:04:08] Speaker 03:
And it issued a case management order that says, well, we're going to do some discovery on that.

[00:04:12] Speaker 03:
I'd like to figure out what this discovery is going to result.

[00:04:16] Speaker 03:
And they appealed on that decision.

[00:04:18] Speaker 04:
I like your case.

[00:04:19] Speaker 04:
I mean, Congress clearly wanted people to know one way or another whether they were going to be in arbitration.

[00:04:25] Speaker 04:
They wanted to move quickly.

[00:04:27] Speaker 04:
You've got a hybrid here.

[00:04:29] Speaker 04:
And I honestly don't see how we have jurisdiction, slicing and dicing.

[00:04:35] Speaker 04:
How do we have jurisdiction in this case at this point?

[00:04:41] Speaker 03:
Because we were denied our right to arbitrate under the clauses that we say are in effect.

[00:04:47] Speaker 03:
We moved with respect to the new clauses, that those are the agreements that are in effect.

[00:04:52] Speaker 03:
Those are the ones that apply.

[00:04:53] Speaker 03:
And the court said, no, they don't.

[00:04:55] Speaker 03:
But it turns out that the original agreement also had an arbitration clause, a different one.

[00:05:00] Speaker 03:
It's not the same clause.

[00:05:02] Speaker 03:
The later ones are certainly broader.

[00:05:05] Speaker 03:
And so we went down to arbitration under the old not as broad clause.

[00:05:11] Speaker 03:
And we had two, say, not within the scope of the clause and one that did, which is a little bit odd.

[00:05:17] Speaker 04:
Basically, you've got to, instead of having an arbitration clause, you've got a series of them.

[00:05:23] Speaker 04:
You're appealing not all of them, but some of them.

[00:05:26] Speaker 04:
And that's why I'm wondering how we end up with jurisdiction.

[00:05:29] Speaker 04:
The court's clear.

[00:05:30] Speaker 04:
I mean, the Congress is clear.

[00:05:32] Speaker 04:
You've got a nice, clean denial.

[00:05:34] Speaker 04:
Great.

[00:05:35] Speaker 04:
But we don't have that here.

[00:05:36] Speaker 03:
Why do we have jurisdiction?

[00:05:38] Speaker 03:
You do have a very clean denial with respect to the modified clauses.

[00:05:42] Speaker 03:
Excuse me.

[00:05:42] Speaker 05:
Can I interrupt you right there?

[00:05:44] Speaker 03:
Oh, sorry.

[00:05:44] Speaker 05:
I think you moved, and it may change your answer to Judge Smith's question, I don't know, but my read of the record is that you sought to compel arbitration in the alternative.

[00:05:56] Speaker 03:
Yes, we moved with respect to the new clauses.

[00:05:58] Speaker 03:
The new one and the old one.

[00:06:00] Speaker 03:
And then as a fallback argument pointed out that there was an arbitration law.

[00:06:04] Speaker 05:
So that's why Judge Smith, I mean, you won.

[00:06:05] Speaker 05:
That's the problem that we have with the FAA.

[00:06:07] Speaker 05:
And I just want to, in fairness, give you a chance to respond to that.

[00:06:10] Speaker 05:
But I did not read the record to say that you only moved or sought to compel arbitration as to the modified agreement, sir.

[00:06:16] Speaker 03:
That's fair, but we are primary position was that the new ones applied because that we modified the agreement prior to their filing That's what we can tend actually applies And and so this is not a situation like one of the cases that they cited where you have two Agreements that are in play at the exact same time right we say old agreement gone new agreement

[00:06:41] Speaker 03:
And they cited a case where there were two agreements where each had an arbitration clause.

[00:06:44] Speaker 03:
One required one forum, one required a different forum, and the court granted it with respect to both.

[00:06:51] Speaker 03:
Yes, there's an arbitration provision in both agreements, but I'm going to send it to one venue as opposed to a different one.

[00:06:57] Speaker 03:
And the party moving to compel arbitration there appealed an order that fully granted its motion.

[00:07:04] Speaker 03:
And here, we have an order partially granting and partially denying.

[00:07:09] Speaker 03:
And it's the denial that we are appealing.

[00:07:13] Speaker 03:
It's not the grant portion.

[00:07:15] Speaker 03:
And again, if I lose today, we're going to go back down to district court.

[00:07:19] Speaker 03:
And we are going to be in court.

[00:07:22] Speaker 03:
And I don't know how that is not a denial of a motion to compel arbitration.

[00:07:26] Speaker 03:
And so it would seem odd to me that if I went back down to district court,

[00:07:31] Speaker 03:
We enter a new order that consistent with the prior order.

[00:07:33] Speaker 03:
We went to arbitration, denied arbitrability.

[00:07:37] Speaker 03:
And so now there's an order fully denying my motion to compel arbitration.

[00:07:41] Speaker 03:
And I could appeal then.

[00:07:43] Speaker 03:
That strikes me as, perhaps that's the right way to do it, strikes me as odd.

[00:07:48] Speaker 03:
Because here we are today having fully denied the motion to compel arbitration.

[00:07:55] Speaker 05:
Questions?

[00:07:57] Speaker 05:
Would you like to reserve the bulk of your time?

[00:08:00] Speaker 03:
So you would not like me to address the merits.

[00:08:02] Speaker 05:
Oh, go right ahead.

[00:08:02] Speaker 03:
I thought you were.

[00:08:03] Speaker 03:
Oh, no, no, sorry.

[00:08:04] Speaker 03:
OK, so on the merits, there's two primary issues.

[00:08:07] Speaker 03:
There is, did we follow the proper notice procedure in order to have a modified clause affected?

[00:08:12] Speaker 03:
And then whether PAYLAG, the California Court of Appeal decision, basically says the implied covenant doesn't permit you to amend or to modify a dispute resolution provision when there's a claim that has accrued but not yet filed.

[00:08:25] Speaker 03:
Certainly with a filed claim, making a change mid-course, they file in court, and I say, whoop, just kidding, we're going to amend it and do arbitration.

[00:08:34] Speaker 03:
That's not permitted, absent an express agreement from them.

[00:08:39] Speaker 03:
But as to accrued claims, there is no case law that I agree that the implied covenant would apply.

[00:08:45] Speaker 03:
To the extent there's a provision in an agreement that allows a bank or any other company to modify its terms, it has to exercise that discretion consistent with

[00:08:55] Speaker 03:
With the implied covenant, but that then begs the next question, which is whether the modification is either subjectively unreasonable or objectively unreasonable.

[00:09:06] Speaker 03:
There's no evidence of that here.

[00:09:07] Speaker 03:
The payload case doesn't actually address that issue at all.

[00:09:11] Speaker 03:
It rules under Texas law about whether a contract with a modification provision is illusory.

[00:09:16] Speaker 03:
It has some dicta with respect to California law.

[00:09:20] Speaker 03:
Then there's no California case law that holds that the implied covenant prohibits automatically a revision to an arbitration clause as to an accrued but not yet filed claim.

[00:09:35] Speaker 03:
There's two cases they cite.

[00:09:38] Speaker 03:
They both come up within the context of an employment agreement.

[00:09:42] Speaker 03:
With one of them, that's Avery, the claim had already been filed in court.

[00:09:48] Speaker 03:
So that's an already filed claim, not an accrued claim.

[00:09:52] Speaker 03:
And then with Pang, the court doesn't even address that issue at all.

[00:09:56] Speaker 03:
The only thing Pang was looking at was whether an arbitration provision that allowed for modifications was unconscionable, but there was actually no modification made whatsoever in that case.

[00:10:07] Speaker 03:
And so we have the the Trudeau case which we cited versus Google I would point the court to that decision it goes through a why pay like what doesn't apply and in our precise context says When there is a modification and a proper one done under the Ninth Circuit's precedence in Nordstrom Davis v. Nordstrom that

[00:10:27] Speaker 03:
that you would have to have some additional showing as to why the new clause is unreasonable in some way such that it would trigger the implied covenant.

[00:10:38] Speaker 03:
Just purely modifying it and saying you can take your claim from court and do it in arbitration.

[00:10:43] Speaker 03:
without any change of rules.

[00:10:45] Speaker 03:
So for example, the Heckman case went through, well, with that new arbitration clause, we have limited discovery.

[00:10:51] Speaker 03:
It may take a long time in order to get to my claim.

[00:10:53] Speaker 03:
There's lots of reasons why the clause itself limited or harmed the plaintiff's ability to pursue the claims.

[00:11:00] Speaker 03:
And there's no argument here to that effect.

[00:11:02] Speaker 03:
And so they haven't established a breach of the implied covenant.

[00:11:06] Speaker 03:
And then on the notice piece, I would point the court to,

[00:11:11] Speaker 03:
The Davis case, as our best argument, it's remarkably similar to this case.

[00:11:17] Speaker 03:
They had a dispute resolution provision that required arbitration on an individual basis, and this was in June of 2011, but that if you were going to bring a class action, you had to do it in court.

[00:11:30] Speaker 03:
And the reason for that is at that time in California, you couldn't have a class action waiver.

[00:11:35] Speaker 03:
Concepcion comes out with Supreme Court decision saying,

[00:11:38] Speaker 03:
No, California's rule conflicts with the FAA.

[00:11:43] Speaker 03:
And so then the next month, Nordstrom modifies its arbitration provision, sends out notice.

[00:11:50] Speaker 03:
The notice is actually not as clear as ours, if you compare the two.

[00:11:54] Speaker 03:
And the plaintiff employee there, after it goes into effect, files suit in court.

[00:12:02] Speaker 03:
And that suit relates not just to conduct that occurred after the modification.

[00:12:06] Speaker 03:
It certainly encompassed accrued claims.

[00:12:09] Speaker 03:
It was about meal and rest break periods and wage and hour violations going back in time.

[00:12:14] Speaker 03:
And so that case you have already accrued claim applying the modified provision when there was notice just like here.

[00:12:24] Speaker 03:
Absent further questions, I'll reserve it to balance my time now.

[00:12:26] Speaker 05:
You bet.

[00:12:27] Speaker 03:
Thank you.

[00:12:36] Speaker 02:
Good morning, your honors.

[00:12:37] Speaker 02:
May it please the court?

[00:12:38] Speaker 02:
My name is Philip Black from Wolf Popper LLP.

[00:12:41] Speaker 02:
I'm appearing today on behalf of Plaintiff Appellee Mr. Pliska.

[00:12:45] Speaker 02:
Joining me is my colleague Sophia Gold from Khalil Gold.

[00:12:49] Speaker 02:
She's appearing on behalf of Plaintiff Appellee Ash.

[00:12:52] Speaker 02:
I plan to address the jurisdictional issue as well as the notice and assent issue, and Ms.

[00:12:59] Speaker 02:
Gold will address the implied covenant issue.

[00:13:03] Speaker 02:
So starting with jurisdiction.

[00:13:05] Speaker 02:
The order here granted the defendant's motion to compel arbitration.

[00:13:11] Speaker 02:
That's at ER 16 for the Ash case, ER 32 for the Pliska case.

[00:13:16] Speaker 02:
It does not say granted in part and denied in part.

[00:13:19] Speaker 02:
It says granted, and then it says the parties are ordered to proceed to arbitration.

[00:13:24] Speaker 02:
The portion that says denied was as to UFB's motion to dismiss.

[00:13:29] Speaker 02:
That is the part that says denied.

[00:13:31] Speaker 02:
So that's what the court said.

[00:13:33] Speaker 02:
And then there's what the court did, which was direct the parties to go to arbitration, not don't go to arbitration, go to arbitration.

[00:13:40] Speaker 02:
And we would submit that under the Bushley case, which my colleague tried to distinguish,

[00:13:46] Speaker 02:
that this is an order granting arbitration and it's not appealable.

[00:13:53] Speaker 02:
In Bushley, again, there was one

[00:13:56] Speaker 02:
agreement that there were two agreements.

[00:14:00] Speaker 02:
The company moved under both at the same time.

[00:14:01] Speaker 02:
The district court concluded that one of them was not properly executed.

[00:14:05] Speaker 02:
It's a very similar fact pen to what we have here.

[00:14:07] Speaker 02:
And contrary to what my colleague said, if you look at Bushley 360 F3rd at 1151, the court there did deny the motion to compel arbitration under the company's preferred agreement.

[00:14:21] Speaker 02:
and granted it under the other one.

[00:14:23] Speaker 02:
And the company nevertheless appealed under the FAA, and the Ninth Circuit said, well, what happened here?

[00:14:30] Speaker 02:
At bottom, the court said, go to arbitration.

[00:14:33] Speaker 02:
That is not under the plain language of the statute.

[00:14:36] Speaker 02:
That is not the type of order that we have jurisdiction over.

[00:14:39] Speaker 02:
And finally, as to counsel's argument that they think really only the updated versions apply, but not the original version, it was their strategic choice here to move to compel arbitration under all three separate agreements.

[00:14:54] Speaker 02:
If it's really the case that they would only consent to the outcome of an arbitration under the updated agreements, they should have moved under just those agreements.

[00:15:03] Speaker 02:
But the bedrock principle here is that arbitration is a matter of consent, not coercion.

[00:15:09] Speaker 02:
And so if they didn't consent to the arbitration that they moved under,

[00:15:12] Speaker 02:
The fact that they moved to compel arbitration under that agreement shows that that's something they consented to.

[00:15:18] Speaker 02:
They moved for individual arbitration.

[00:15:20] Speaker 02:
They got individual arbitration.

[00:15:22] Speaker 02:
The parties did that arbitration.

[00:15:24] Speaker 02:
We would submit that under the plain language.

[00:15:26] Speaker 02:
That's an unappealable order.

[00:15:29] Speaker 04:
Okay, so I want to be sure where we are on this.

[00:15:32] Speaker 04:
Do you agree that we do or do not have jurisdiction to hear this case?

[00:15:37] Speaker 02:
It's our position that you do not have jurisdiction in this case.

[00:15:41] Speaker 05:
We were kind of waiting for that, counsel.

[00:15:44] Speaker 02:
I will lead with that next time.

[00:15:47] Speaker 02:
I will lead with that next time, Your Honors.

[00:15:49] Speaker 02:
I appreciate that.

[00:15:50] Speaker 02:
That's okay.

[00:15:50] Speaker 05:
I was looking for it in your 28-J.

[00:15:51] Speaker 05:
I was looking for it.

[00:15:53] Speaker 02:
All right.

[00:15:54] Speaker 02:
If I could just briefly, to the extent the panel reaches the merits, on the issue of notice and assent to the updated terms,

[00:16:01] Speaker 02:
I think it's helpful to clarify the timeline here.

[00:16:04] Speaker 02:
So, UFB attempted to modify its agreements by sending one email on January 26, 2024.

[00:16:09] Speaker 02:
It said the new terms would be effective February 9th, but if you didn't want the arbitration, you could opt out by 30 days after the effective date.

[00:16:17] Speaker 02:
That would have been March 10th.

[00:16:19] Speaker 02:
It also said you have to close your account if you opt out and you have another 30 days to do that, but March 10th was the opt-out date.

[00:16:26] Speaker 02:
Mr. Pliska sued UFB in court

[00:16:30] Speaker 02:
and called to close his account on March 6th within the prescribed deadline by the bank to act to opt out.

[00:16:38] Speaker 02:
So the question that the law dictates we ask here is was there a manifestation of assent to the new terms or was there continued use of the product?

[00:16:48] Speaker 02:
In both cases the answer is no as to Mr. Pliska.

[00:16:51] Speaker 02:
What he did by calling to close his account and by suing in court, he's manifesting objectively to an objectively reasonable person, I don't want to do any business with this bank anymore, and I reject the arbitration clause.

[00:17:03] Speaker 02:
That's the manifestation.

[00:17:04] Speaker 02:
And under those circumstances, we would say there was clearly no assent.

[00:17:08] Speaker 02:
Unless the court has any further questions, I'll give the remainder of my time to my colleagues.

[00:17:12] Speaker 05:
It does not appear that we do.

[00:17:14] Speaker 02:
Thank you, Your Honor.

[00:17:15] Speaker 05:
Thank you.

[00:17:21] Speaker 01:
Good morning, Your Honors.

[00:17:22] Speaker 01:
May it please the Court.

[00:17:23] Speaker 01:
My name is Sophia Gold, and I will be addressing the implied covenant argument.

[00:17:28] Speaker 01:
I will be very clear that it is also our position that this Court does not have jurisdiction, and if it does not have jurisdiction, it need not address the implied covenant argument.

[00:17:39] Speaker 01:
Nevertheless, to briefly cover it, you heard my colleague Mr. Ramsey say that he agrees with us

[00:17:48] Speaker 01:
that the implied covenant in California prevents a defendant's ability to unilaterally modify a form contract in the middle of a pending dispute and have those changes apply to that dispute, particularly when the notice is silent as to the effect of the change on the pending dispute.

[00:18:11] Speaker 01:
And the critical fact here is the Sutanaman case

[00:18:15] Speaker 01:
was filed one month before UFB added their arbitration provision.

[00:18:22] Speaker 01:
UFB's briefs don't even mention the Sutaniman case, and we would not be standing here today arguing the implied covenant in Peleg unless that Sutaniman case existed.

[00:18:33] Speaker 01:
The district court's decision hinged upon it.

[00:18:37] Speaker 01:
The Sutaniman case involved the same conduct that's at issue in our case.

[00:18:42] Speaker 01:
Plaintiff Ash is a class member in the Sutaniman case.

[00:18:47] Speaker 01:
The Ash case and the Sutaniman case share virtually the same class definitions, and all of the cases have been deemed related to one another.

[00:18:58] Speaker 01:
The fact that our case was not technically on file is not dispositive here.

[00:19:04] Speaker 01:
And in fact, a very similar situation was addressed by the California Court of Appeal in Avery versus Integrated Healthcare Holdings.

[00:19:13] Speaker 01:
I hate to put too much stock on a footnote, but a footnote proves critical in that case.

[00:19:18] Speaker 01:
It's footnote four.

[00:19:20] Speaker 01:
And there, the court noted that the fact that the first case

[00:19:25] Speaker 01:
in a series of related cases was filed as a class action and that the subsequent plaintiffs were class members in that class action meant, and I quote, that the claims of all plaintiffs were on file before the defendant had changed its arbitration provision.

[00:19:46] Speaker 01:
The same is true here.

[00:19:48] Speaker 01:
Because Ash is undoubtedly a class member in Sultanaman, his claims were deemed unfile under California law for purposes of the implied covenant.

[00:20:03] Speaker 01:
UFB argued that Pelleg should only apply in employment cases.

[00:20:08] Speaker 01:
But the implied covenant of good faith and fair dealing is inherent in every contract in California.

[00:20:15] Speaker 01:
The seminal case, Beatty versus Bank of America, was a consumer case, as was Cobb versus Ironwood, as was this court's decision in Heckman versus Live Nation, where it referenced the holding in the Pellig case with approval.

[00:20:34] Speaker 01:
Unless Your Honor has any further questions.

[00:20:58] Speaker 03:
Thank you.

[00:20:59] Speaker 03:
Just briefly with respect to the implied covenant, I just want to be clear.

[00:21:03] Speaker 03:
I'm obviously not adopting their belief that we cannot change a clause as to an accrued but not a filed claim.

[00:21:11] Speaker 03:
As a filed claim, I agree.

[00:21:12] Speaker 03:
We can't change it mid-course.

[00:21:14] Speaker 03:
And we dealt with the cases she cited.

[00:21:16] Speaker 05:
So your position that if a claim is accrued and your client had known about it, they would still be free to change the arbitration provision?

[00:21:23] Speaker 03:
Yes, subject to the limits of the implied covenant, but then you would need evidence with respect to whether the change made to the arbitration clause violates the implied covenant.

[00:21:33] Speaker 03:
And that, under California law, is subjective bad faith or objective unreasonableness, and there's no evidence here of that.

[00:21:40] Speaker 03:
Peleg purports to create this bright line rule, no change whatsoever.

[00:21:45] Speaker 03:
And I think what highlights that is imagine if we changed the arbitration clause in a way that benefited them.

[00:21:52] Speaker 03:
Right?

[00:21:53] Speaker 03:
We, I don't know, made discovery easier for them or cheaper for them or whatever it might be.

[00:21:58] Speaker 03:
I can't imagine that that would be a breach of the implied covenant.

[00:22:00] Speaker 03:
And so you have to go the step down and get to the evidence.

[00:22:03] Speaker 03:
I'm standing, because that's obviously on everyone's mind.

[00:22:07] Speaker 03:
Addiction, yeah.

[00:22:08] Speaker 03:
Yes, a jurisdiction, excuse me.

[00:22:10] Speaker 03:
I want to be very clear about what happened.

[00:22:13] Speaker 03:
With respect to the old clause, that clause said that in the first instance, arbitrability, meaning whether it was in the scope of the claims and the scope of the clause, is dealt with by the arbitrator.

[00:22:27] Speaker 05:
And so... Well, as to one of the agreements, right?

[00:22:29] Speaker 05:
As to the old one.

[00:22:30] Speaker 03:
Correct.

[00:22:31] Speaker 05:
Well, there's the personal deposit account agreement and the online access agreement.

[00:22:35] Speaker 05:
and one had an arbitration provision and one did not, right?

[00:22:38] Speaker 03:
Originally.

[00:22:38] Speaker 03:
Yes, but the one we were compelled to arbitrate under had the provision that said the arbitrator decides.

[00:22:43] Speaker 03:
Let's imagine it didn't, that wasn't that.

[00:22:46] Speaker 03:
But the court got to decide it and the court issued an order that said not within the scope of that arbitration clause.

[00:22:52] Speaker 03:
In that case, we would have been denied with respect to that and denied with respect to the modified clauses, and I certainly would have been able to appeal.

[00:23:00] Speaker 03:
Right?

[00:23:00] Speaker 03:
This is not a case where we were compelled to arbitrate the merits of the claim.

[00:23:04] Speaker 03:
We never got to that.

[00:23:06] Speaker 03:
Right?

[00:23:06] Speaker 03:
We only got to that initial step, and we were still deciding whether the claim was arbitrable under that agreement.

[00:23:14] Speaker 03:
And the court and the arbitrator said no.

[00:23:16] Speaker 03:
And so now we're back in court with a complete denial of our request to arbitrate.

[00:23:21] Speaker 00:
And I point out that he brought up... I don't think it's fair to characterize that because you did arbitrate.

[00:23:25] Speaker 00:
I mean, you're describing to us you arbitrated some issues.

[00:23:27] Speaker 00:
So that doesn't mean that you got completely denied.

[00:23:30] Speaker 00:
the motion to arbitrate.

[00:23:32] Speaker 00:
It means that you lost the arbitration.

[00:23:34] Speaker 03:
No, because the merits.

[00:23:36] Speaker 03:
If I lost the arbitration, I wouldn't be in court saying they don't have a claim on the merits.

[00:23:41] Speaker 03:
I lost whether the claim is arbitrable, whether it should go to arbitration.

[00:23:45] Speaker 03:
That's what the issue that we lost.

[00:23:47] Speaker 03:
He compelled with respect to arbitrability.

[00:23:49] Speaker 03:
We went to that issue.

[00:23:51] Speaker 03:
As to these two plaintiffs, we lost.

[00:23:53] Speaker 03:
And I would ask that the court really look at the Bushley case.

[00:23:56] Speaker 03:
That case says, and I see this, I just want to read this, pursuant

[00:24:01] Speaker 03:
A party cannot appeal a district court's order unless at the end of the day the parties are forced to settle their dispute other than by arbitration.

[00:24:08] Speaker 03:
That's exactly what happened here.

[00:24:10] Speaker 03:
We never got to the merits in arbitration and now we're going to be going to court.

[00:24:13] Speaker 03:
We lost to the arbitration motion.

[00:24:16] Speaker 03:
There's no avenue to review that order if you find that there's no standing.

[00:24:21] Speaker 03:
Thank you.

[00:24:22] Speaker 03:
Thank you both.

[00:24:24] Speaker 05:
We'll take that case under advisement and go on to the next case on the calendar.