[00:00:00] Speaker 04: The next case on calendar, Estrada Ertado versus Bundy has been submitted on the briefs, as has the following case, Orochi Montoya versus Bundy. [00:00:09] Speaker 04: The next case on calendar for argument is Ponke versus LLR. [00:00:50] Speaker 04: Good morning, counsel. [00:00:51] Speaker 04: Will counsel for appellant please approach and proceed? [00:00:53] Speaker 01: Good morning, your honors, and may it please the court. [00:01:04] Speaker 01: I'm going to begin with the motion to dismiss before the motion for transfer issue. [00:01:09] Speaker 01: And the concern with the district court's ruling is that it effectively found [00:01:16] Speaker 01: that because there have been at least a couple examples of authorities before that found a one-year contractual provision to be reasonable, that means that in all circumstances, including the one that we had here, it would also be reasonable. [00:01:32] Speaker 01: This standard, however, skips over the near dozen cases that have been cited in plaintiff's briefs, including California cases and Ninth Circuit Court of Appeals cases where the [00:01:45] Speaker 01: reduced statute of limitations as compared to the default standard statutory provision. [00:01:53] Speaker 01: For example, if the default is three or four years, courts have consistently found that when it's reduced to one year, that is unreasonable. [00:02:01] Speaker 01: Now, the court [00:02:02] Speaker 01: The district court relied effect essentially on two different district court nine circuit authorities. [00:02:09] Speaker 01: The first is Tom's Tompkins versus 23 and me Tompkins however supports why the one year provision here is unreasonable and Tompkins. [00:02:21] Speaker 01: The there was a finding that a one year provision was reasonable. [00:02:26] Speaker 01: However, it was dispositive there that that provision specifically was applied bilaterally, meaning both parties had agreed to that one year reduction. [00:02:36] Speaker 01: It specifically compared its facts to the Ninth Circuit decision in Pecorny versus Quickstart, where there was a unilateral clause shortening the limitations period. [00:02:47] Speaker 01: And so Tompkins itself supports that because the one-year provision here is unilateral, that is effectively dispositive of the unreasonableness of the provision itself. [00:03:02] Speaker 01: The other Ninth Circuit authority that the court cited to was Hawn versus Mobile Oil. [00:03:07] Speaker 01: In that case, however, there was no dispute as to the enforceability of the provision there. [00:03:16] Speaker 01: It was just accepted as binding, so that has no binding effect here. [00:03:21] Speaker 02: How much of your unconscionability argument as to the one-year statute of limitations turns on your reading of it as [00:03:29] Speaker 01: Not continuing a discovery rule for accrual It adds an additional layer of why it's unconscionable It's unconscionable in and of itself because it's a unilateral one-year provision But on top of that it is an alternative basis as to why it's unconscionable in that there is a waiver of the discovery rule What do we do with the prior? [00:03:52] Speaker 02: panels The fact that they they decided not to reach it that they did [00:03:58] Speaker 02: They could have. [00:03:58] Speaker 02: I mean, it was about unconscionability, but they didn't reach this provision. [00:04:03] Speaker 01: As the district court found, that's really just an issue that is left open. [00:04:08] Speaker 01: I view the panel's decision as the contract was so permeated with unconscionability, it just didn't feel the need to have to reach that issue. [00:04:20] Speaker 01: But I can't say one way or another how it would have found on that particular issue. [00:04:26] Speaker 04: What would the statute of limitations ordinarily be? [00:04:30] Speaker 01: So we've pleaded unfair competition law, which is [00:04:34] Speaker 01: California statute which was created for a public reason that one has a four-year statute of limitations We've also pleaded false advertising law. [00:04:44] Speaker 01: That's another statute What that was enacted for public reasons and that one's three years? [00:04:50] Speaker 02: So we effectively have four-year and three-year statute of limitations you can see that Even under those even if this is unconscionable You're facing limitations problems with the remaining claims [00:05:04] Speaker 01: most of the remaining claims I know no your honor I'm happy to get into those so as to the 8th cause of action the 8th cause of action specifically is conspiracy to commit violation of the seller assisted marketing plan and under California Supreme Court authority [00:05:28] Speaker 01: That's specifically governed by the last overt act rule. [00:05:33] Speaker 01: That means that when there's a conspiracy, it's the last over act and furtherance of that conspiracy. [00:05:39] Speaker 02: What about the securities and Samp Act claims? [00:05:47] Speaker 01: Yeah, so that's the Samp Act. [00:05:48] Speaker 01: So we also have here equitable tolling and discovery rules. [00:05:55] Speaker 01: So if there's anything that's under three years, [00:05:58] Speaker 01: Plaintiffs concede that that would be time barred anything that's two years it turns on the signing of the contract. [00:06:05] Speaker 01: It's out No plaintiffs disagree with that so if it turns on the if the trigger date is a signing of the contract They're still equitable tolling here, and what's the basis for tolling so just sticking with the the Sam? [00:06:19] Speaker 03: Act the the violation you're alleging is she didn't get the disclosures when she signed up [00:06:28] Speaker 03: How does that accrue at any time other than when she signed up, which I believe was March of 2017? [00:06:35] Speaker 03: And I guess sort of the follow-up is, what would be the basis for tolling at beyond that date? [00:06:40] Speaker 01: Sure. [00:06:40] Speaker 01: So I want to distinguish the regular SAMP allegation claim versus the conspiracy to commit the SAMP violation. [00:06:48] Speaker 01: Under California law, even if someone could have known the claim accrued earlier under the California Supreme Court case in Wyatt, [00:06:57] Speaker 01: when there's a conspiracy to violate some sort of a, to commit some sort of a tort or violate a statute, you look at the last over act in furtherance of that scheme. [00:07:08] Speaker 01: And plaintiffs have pleaded that as of the filing of the complaint, the SAMP Act continued to be violated. [00:07:14] Speaker 01: But now moving towards- With respect to- I'm sorry. [00:07:17] Speaker 01: How was it? [00:07:19] Speaker 03: Go, go. [00:07:19] Speaker 03: No, you go. [00:07:20] Speaker 03: I'm sorry. [00:07:20] Speaker 04: You go, you go. [00:07:22] Speaker 03: I think we're probably asking the same question, which is how How what is the violation? [00:07:28] Speaker 03: I mean, maybe they're violating it with respect to other people who are signing up later But what's the violation with respect to your client? [00:07:36] Speaker 01: You know after the date that she signed up and didn't get the disclosure Disclosures with respect to my client there isn't one but here the claim is conspiracy to violate the Samp Act it's an entire scheme and [00:07:48] Speaker 01: And if you look at the California Supreme Court decision in Wyatt, the argument that Lula Rowe is making is effectively the same argument that the dissent made in Wyatt, which was rejected by the majority. [00:08:02] Speaker 01: And I think that's worth quoting from. [00:08:04] Speaker 01: It says, and this is the dissent first the majority's proposal ignores the well settled principle discussed above that the focus of a civil conspiracy action is indeed upon the separate towards not the continuing nature of the scheme itself, despite the majority's protestations to the contrary. [00:08:22] Speaker 01: acceptance of any last-over act rule amounts to a concession that the continuing unlawful scheme is in itself a tort. [00:08:31] Speaker 01: That is not the law and the majority errs in characterizing the fraud as a continuing wrong. [00:08:38] Speaker 03: So do you read Wyatt for the proposition that even if there's no further tort with respect to the plaintiff, the fact that there's [00:08:47] Speaker 03: What can be characterized to conspiracy as a conspiracy to commit torts with respect to other people means that the plaintiff's statute of limitations Just you know never runs. [00:08:57] Speaker 03: I mean as long as they're doing it to other people It could be you know another 20 years and then her that entered isn't running That's precisely how I read it, and I know that that may seem at odds with [00:09:07] Speaker 01: some other states and how statute limitations typically function, but that is the California law and there's policy reasons for it. [00:09:15] Speaker 01: I'll quote more from Wyatt. [00:09:16] Speaker 04: Please don't. [00:09:17] Speaker 02: Okay. [00:09:20] Speaker 02: I guess the equitable claims, your client's not seeking any forward-looking relief, no longer involved, so why would the equitable claims make it? [00:09:31] Speaker 01: By the equitable claims, are you referring specifically to the unfair competition law? [00:09:35] Speaker 01: Yeah, the remedies. [00:09:37] Speaker 01: So just because there isn't ongoing, just because there isn't, well, first of all, there's two remedies under the unfair competition law. [00:09:48] Speaker 01: One is injunctive relief and the other, [00:09:53] Speaker 01: is essentially recovery of money that went into that scheme or project. [00:10:02] Speaker 01: And here, what you're talking about is the injunctive relief component. [00:10:06] Speaker 01: But there's still rescission here, which is an applicable remedy. [00:10:12] Speaker 01: And so we've pleaded claims under the unfair competition law [00:10:17] Speaker 01: that are not dependent on violations of other statutes. [00:10:21] Speaker 01: They stand on their own as equitable claims for which rescission is sought. [00:10:30] Speaker 03: Before you run out of time, I do want to ask you about the transfer. [00:10:33] Speaker 03: So you're from Costa Mesa? [00:10:36] Speaker 03: Yes. [00:10:36] Speaker 03: You'd really rather go out to Riverside than litigate this case in LA? [00:10:44] Speaker 01: I will tell you the truth, Your Honor. [00:10:45] Speaker 01: I hate LA traffic. [00:10:46] Speaker 01: So if you're asking my honest preference, it would be to go to Riverside. [00:10:50] Speaker 01: But that's not the standard that needs to be followed here. [00:10:54] Speaker 01: The standard is that we have an enforceable form selection clause that specifically calls for the Eastern Division. [00:11:00] Speaker 01: and plaintiffs filed in the Eastern Division. [00:11:03] Speaker 01: And just because this judge had previously adjudicated the initial case against Lularoe that was filed in the Western Division, that's why plaintiff's case was related and moved to the Western Division. [00:11:18] Speaker 02: Do you contend that you, I mean, I think you do, but I'd like to, if you could walk me through it, that you couldn't have objected sooner to the transfer? [00:11:27] Speaker 02: It played out quite a bit. [00:11:29] Speaker 02: I get there was an arbitration, [00:11:30] Speaker 02: There is no opportunity for you to raise this issue earlier. [00:11:34] Speaker 01: The only opportunity would have been if under the 7-3 local rules in Central District of California, if we met and conferred before defendants raised this issue. [00:11:47] Speaker 01: And so what I mean by that is maybe we could have filed it as early as the same date that defendants filed their motion to dismiss, excuse me, their motion to compel arbitration. [00:12:00] Speaker 01: based on our read of the law, and the district court disagreed, but based on our read of the law, a motion to compel arbitration would be decided before a motion to transfer. [00:12:11] Speaker 01: And in any event, I think it's really important to discuss what it is that the judge found as to why it denied transfer under a forum selection clause. [00:12:22] Speaker 01: It essentially found that because [00:12:24] Speaker 01: plaintiffs, excuse me, the judge had ruled on motions to compel earlier that it had experience with the case and because plaintiffs waited until after the determination of the arbitration ruling to move to transfer that that was a reason to deny enforcement of the form selection clause. [00:12:45] Speaker 01: But effectively that's a waiver analysis and under a waiver analysis it's a rigorous burden. [00:12:52] Speaker 01: including that it was, and this is under Ninth Circuit precedent, actively litigated the merits of a case for a prolonged period of time in order to take advantage of being in court. [00:13:04] Speaker 01: Here, there cannot be any waiver. [00:13:06] Speaker 01: Plaintiffs never even filed their own motion. [00:13:09] Speaker 01: All plaintiffs did was oppose one motion. [00:13:11] Speaker 01: And so, effectively, [00:13:14] Speaker 01: the district court created an end-run rule around waiver jurisprudence, where you could have facts insufficient for a waiver, yet still deny a transfer. [00:13:26] Speaker 03: I don't know what legal consequence this has, but it is somewhat ironic that [00:13:35] Speaker 03: The form selection clause is part of this contract that you're saying is a contract of adhesion, presumably written for the convenience of the defendant. [00:13:45] Speaker 03: And now, here you are, insisting on enforcing it. [00:13:50] Speaker 03: And I suppose the contract is the contract. [00:13:54] Speaker 01: Well, the contract is the contract. [00:13:56] Speaker 01: And that's not a provision that plaintiffs have ever argued as unconscionable. [00:14:00] Speaker 01: You could have a contract of adhesion that doesn't necessarily mean that every single provision within that contract is being Addressed as being unconscionable and here that's even more reason why it should be transferred to the Eastern Division its Defendants very own contract that they drafted and they're now not willing to abide by the terms of that contract So thank you your honors [00:14:32] Speaker 00: Good morning, Your Honors, and may it please the Court. [00:14:35] Speaker 00: Jenny Hua on behalf of Defendants and Appellees. [00:14:40] Speaker 00: Now, I'd like to start with a little bit of a framework for this Court, because if this Court agrees with the District Court that the one-year contractual limitation is enforceable, then this Court does not need to reach a slew of other issues, with possibly one exception. [00:14:53] Speaker 00: There would be no reason to reach the transfer issue, or whether the case should be reassigned, [00:14:57] Speaker 00: The court would need to reach the questions of whether and what tolling applies. [00:15:02] Speaker 00: The court would need to reach the issues of the length of the tolling periods or the questions of whether delayed discovery rule or concealment saves any of the cases. [00:15:10] Speaker 00: Now, turning back to the one-year statute of limitations, which is the focus of this appeal, of all the cases cited by the parties, not a single one does what the plaintiff asks this court to do, which is to strike down a one-year contractual provision outside of the arbitration context [00:15:27] Speaker 00: And in a case not involving a statute with an explicit anti-waiver provision. [00:15:31] Speaker 03: Why does that qualification outside of the arbitration context matter? [00:15:36] Speaker 03: Because the FAA says, and the Supreme Court has said very clearly, the state can't have a more demanding rule for arbitration than for anything else. [00:15:46] Speaker 00: That's exactly where I was going next, because on its face it might not sound too intuitive. [00:15:50] Speaker 00: But the context matters. [00:15:51] Speaker 00: When the court is faced with a motion to compel arbitration, the courts are looking at multiple problematic provisions that make the arbitral forum a fundamentally inferior forum to court for one party or the other. [00:16:05] Speaker 00: Ronderos is the perfect example of that, the Ninth Circuit case on which the plaintiffs rely. [00:16:10] Speaker 00: The provision that the court found to be akin to a one-year statute of limitations period wasn't exactly a one-year statute of limitations period. [00:16:16] Speaker 00: What that provision actually said was that the employee had one year in which to bring an arbitration claim to the employer. [00:16:26] Speaker 00: So that was an arbitration-specific clause. [00:16:31] Speaker 00: Ours is not, which is precisely why this court [00:16:34] Speaker 00: in its first trip to the Ninth Circuit did not rule on the enforceability issue when it reversed the order granting Lulu Rose motion to compel arbitration because this is a clause that applies equally in court and in arbitration. [00:16:48] Speaker 04: Council, if we determined that the one-year statute of limitations rendered the arbitration unconscionable, which claims would survive in your view? [00:16:59] Speaker 00: That's a very good question. [00:17:00] Speaker 00: I actually have this charted out because this is a pretty complicated case with a lot of permutations. [00:17:05] Speaker 00: There's a different calculation as to Ms. [00:17:10] Speaker 00: Ponke versus Ms. [00:17:12] Speaker 00: Braun. [00:17:13] Speaker 00: We haven't even briefed the relation back doctrine as far as Ms. [00:17:16] Speaker 00: Braun because she added her claims two and a half years after the cases have been going on. [00:17:20] Speaker 00: Well, for Ms. [00:17:20] Speaker 00: Ponke, who joined later and exited the system later, her possibly surviving [00:17:29] Speaker 00: Claims include the breach of contract claim Which has a four-year statute of notation and runs from the time that she says her You know she might she might have made returns Also the breach of warranty claim It's not clear from the first amendment complaint when she allegedly or whether she even allegedly received faulty leggings But that's another possible one that might survive and then the Rico claims [00:17:57] Speaker 00: which have four-year statute of limitations. [00:17:59] Speaker 00: It has other problems, but for purposes of statute of limitations, that would likely survive. [00:18:04] Speaker 03: What about the endless chain law claim? [00:18:07] Speaker 00: The endless chain law claim would not survive even without the one-year statute of limitations because it's a three-year statute of limitations, and it should start to accrue within months of when she started. [00:18:19] Speaker 03: But the statute says you can recover all the consideration you paid. [00:18:24] Speaker 00: Pursuant to a scheme if it if the scheme violates the statute and so Doesn't it continue to run as long as she's continuing to pay and I believe her last purchase was was within three years was December 2018 So that might be a possible one Even without equitable tolling which is a separate issue And as far as the one-year staffers limitations [00:18:50] Speaker 00: The other piece of why arbitration context matters is that even in the arbitration cases, if we're looking at those cases specifically, none of them are based solely on a shortened limitations provision. [00:19:02] Speaker 00: And like I said, there's a reason Little World can rely on these arbitration cases, but plaintiffs can't. [00:19:07] Speaker 00: In cases like Thompson's, where a shortened limitations provision was found not to be unconscionable, was enforced, [00:19:14] Speaker 00: The issue is that that means it was so unproblematic that it can't even be one of several factors that contributes to unconscionability. [00:19:22] Speaker 00: Unconscionability is a cumulative analysis and a sliding scale analysis. [00:19:26] Speaker 00: So you must have procedural and substantive. [00:19:28] Speaker 00: And if you don't have as much procedural, you need to have a lot strong substantive unconscionability. [00:19:34] Speaker 00: So using, again, Ronderos as an example, one of plaintiff's cases, [00:19:38] Speaker 00: There, there was a cost splitting provision. [00:19:40] Speaker 00: There were FIHA claims at issue, which courts have recognized as a special beast. [00:19:44] Speaker 00: We don't have that here. [00:19:46] Speaker 00: And there were carve-outs for injunctive relief, which benefited the employee, which went to mutuality. [00:19:51] Speaker 00: So it was in the combination, the accumulation of all those issues that Ronderos found the one-year provision to be problematic as part of a bigger puzzle. [00:20:01] Speaker 02: Are we applying federal or state law in the unconscionability analysis? [00:20:05] Speaker 00: State law. [00:20:06] Speaker 02: Okay. [00:20:07] Speaker 02: So these are federal cases. [00:20:08] Speaker 00: Correct. [00:20:09] Speaker 00: But they're applying the state standards. [00:20:10] Speaker 00: Right. [00:20:11] Speaker 02: But we're not applying the federal cases, applying state law. [00:20:13] Speaker 02: We're applying state law. [00:20:15] Speaker 00: That's correct. [00:20:15] Speaker 00: So even with the state law cases, none of them do what plaintiffs wanted to do. [00:20:20] Speaker 00: And maybe I'll go to Moreno next, because it's a California Supreme Court case. [00:20:23] Speaker 00: And Your Honor asked the question earlier about the delayed discovery rule. [00:20:28] Speaker 00: So we think that plaintiffs misread Moreno. [00:20:32] Speaker 00: It is not a case where the court struck down a one-year statute of notations. [00:20:37] Speaker 00: It's a case where the court actually imported the discovery rule and found that because the claims were brought within one year of discovery, found that the claims were not barred, but maybe a little bit of the factual history of Moreno would help. [00:20:51] Speaker 00: So there, the homeowners sued the home inspector for various issues that were not easily discoverable to the buyers. [00:20:58] Speaker 00: There were air ducts in the cross space that were lined with asbestos, an unsealed air return, the property was built on expansive soil, and more. [00:21:05] Speaker 00: But critically, the plaintiffs filed their claims within one month after they discovered the problems, after they hired engineers and specialists to go in to figure out why they've been sick over the last year. [00:21:16] Speaker 00: So it ended up being that the claims were filed within one year and two months of the actual inspection. [00:21:22] Speaker 00: And there, the contract provision that was at issue said, the one-year provision was that all claims against the home inspector had to be brought within one year of the actual inspection. [00:21:34] Speaker 02: the court said that doesn't work specifically for home inspections because there are all these claims that you can't discover quickly what about the I guess to turn to the of course the the discovery rule is not something that gets applied if the whole thing is the lack of one is if the whole thing is unconscionable most of the cases I think I guess I see a different line between the cases and not whether they're arbitration or not or state or federal but [00:22:04] Speaker 02: A lot of the state cases seem to deal with employment. [00:22:07] Speaker 00: That's correct. [00:22:08] Speaker 02: Why would that matter here in whatever this relationship is, which doesn't seem to be employment? [00:22:15] Speaker 00: You're exactly right, but that's another context that's distinct. [00:22:18] Speaker 00: And the reason that the shortened limitations provisions are problematic, specifically either for labor code violations or FIHA violations, they're a little bit different reasoning. [00:22:27] Speaker 00: For labor code, it's because, as Pellegrino calls out, [00:22:30] Speaker 00: There's a specific anti-waiver provision for the labor code that precludes you from waiving your rights and remedies under the labor code. [00:22:38] Speaker 00: That's why shortened limitations do not work for labor code. [00:22:40] Speaker 02: So the lack of bilaterality isn't doing any work? [00:22:46] Speaker 02: I mean, it just strikes me that that's the clearest connection to unconscionability. [00:22:50] Speaker 02: It's just not fair to impose a rule on one that's not imposed on the other. [00:22:56] Speaker 00: That's a great point. [00:22:57] Speaker 00: For the issue of mutuality, [00:22:59] Speaker 00: Not all contractual provisions need to be entirely mutual. [00:23:03] Speaker 00: That's the way contracts work. [00:23:04] Speaker 02: It isn't at all mutual. [00:23:05] Speaker 00: Right. [00:23:05] Speaker 00: The only person who gets the benefit of this provision is... Yes, and I actually walked through the provisions of the agreement, and there are many provisions, including the one right above the one-year statute of limitations, that's beneficial only for the plaintiffs. [00:23:24] Speaker 00: Like provision 32, so the one-year statute of limitations is paragraph 33. [00:23:28] Speaker 00: Paragraph 32 says that the plaintiffs, the retailers, have the unilateral ability to cancel at any time for any reason. [00:23:37] Speaker 04: It's a little bit different than the statute of limitations, which is a really important right. [00:23:43] Speaker 00: That's true. [00:23:45] Speaker 00: But the point is not all these provisions have to be mutual. [00:23:48] Speaker 00: And so you have to look at the big picture of is it so fundamentally unfair [00:23:54] Speaker 00: on its own, are these the types of claims that cannot be brought within a year? [00:23:59] Speaker 00: And Moreno's also instructive on that point, because even the Moreno Court acknowledged that contractually shortened limitations period are fine in transaction with clear triggering events. [00:24:08] Speaker 00: And a lot of the claims in this action have clear triggering events. [00:24:12] Speaker 00: To the extent they're based on allegedly moldy or problematic leggings, well, that's known at the time they received the product. [00:24:20] Speaker 00: To the extent they're based on [00:24:23] Speaker 00: whether or not on the breach of contract issue, whether or not Lularoe would honor its return policy. [00:24:33] Speaker 00: That would have been known at the time they either tried to make its return or, according to the first submitted complaint, when they received information from other people that it would have been futile. [00:24:42] Speaker 00: There's a clear tricking point for those, and so a one-year statute of limitations is not unreasonable. [00:24:47] Speaker 00: And the fact that it's unreasonable, I don't know what the legal effect of this is, was borne out in fact because after all the changes in Lularoe in 2017, so that's when the allegations of the change in the return policy happened, that's when Lularoe changed its bonus plan and structure, there were half a dozen cases that were brought that fall, including Lemberg and five or six cases that were then consolidated into Lemberg. [00:25:14] Speaker 00: So retailers did bring these types of claims. [00:25:18] Speaker 00: well within one year of whenever this occurred. [00:25:21] Speaker 04: But the issue is were they required to? [00:25:23] Speaker 04: There's a difference between electing to do it and being required to do it. [00:25:28] Speaker 00: But that distinction is important because the one-year statute of limitations, as a default rule under California law, is enforceable unless it's unreasonable. [00:25:38] Speaker 00: So the question is, is it so unreasonable that you can't, or as a matter of course, you normally cannot discover this within a year? [00:25:48] Speaker 00: And that's not the case for the types of claims that are at issue. [00:25:51] Speaker 04: Counsel, may I ask you, do you take issue with opposing counsel's position that he and his client didn't have an earlier opportunity to challenge the transfer to the central western portion of the central district? [00:26:06] Speaker 00: No. [00:26:06] Speaker 00: And I think part of the fact pattern here that's so complicated is that this is really a series of three cases against Little Row. [00:26:16] Speaker 00: But we're just talking about this case. [00:26:17] Speaker 04: In this case, did he have an early opportunity to challenge the transfer to the LA? [00:26:25] Speaker 00: Yes. [00:26:25] Speaker 00: So when he originally filed his civil case cover sheet and he didn't add the related cases, there was notice of deficiency sent up by the court. [00:26:34] Speaker 00: And at that point, he included sparing as a related case, which caused the transfer to occur. [00:26:42] Speaker 00: He could have objected. [00:26:42] Speaker 00: He could have raised that there was a form selection clause at that point. [00:26:46] Speaker 00: What mechanism would he have used to object? [00:26:51] Speaker 00: He could have either filed an objection on its own or filed his own motion to transfer at that time. [00:26:57] Speaker 00: And in fact, in May 2021, it's not that there could have been a meet and confer. [00:27:02] Speaker 00: There was a meet and confer where the parties reached out about the possibility of a motion to transfer. [00:27:08] Speaker 00: So that was well within the contemplation of the plaintiff's attorneys. [00:27:12] Speaker 00: And the decision was to not move forward with that. [00:27:15] Speaker 03: So Atlantic Marine says that when there's a forum selection clause and the motion to transfer is seeking to give effect to it, it's supposed to be granted unless extraordinary circumstances clearly disfavor the transfer. [00:27:29] Speaker 03: So is it your view that if we agree with you that he delayed in filing this motion that that constitutes an extraordinary circumstance? [00:27:40] Speaker 00: Yes, I it's our position to the combination of facts in this circumstance are extraordinary circumstances the public interest in preventing the type of deliberate strategy to kind of delay this until you could tell if you can get another ruling from Judge Brewer watt that was in your favor now that you have a reversal from the Ninth Circuit, that's the exact type of deliberate strategy that Kind of undermines the public policy and the trust in the judiciary Sure [00:28:10] Speaker 02: But I guess one of the puzzles here is that I think Atlantic Marine directs us to the form where it was brought. [00:28:19] Speaker 02: And so maybe it doesn't make a difference. [00:28:21] Speaker 02: I mean, maybe it's a general extraordinary circumstance. [00:28:25] Speaker 02: But don't you, what you really have to show is that it was the public policy in the Eastern Division that Judge Berwatt was, he was challenging or channeling in the Western Division. [00:28:40] Speaker 02: in this case, what was a strong public policy in the Eastern Division. [00:28:45] Speaker 02: Now, it may be that it's a strong public policy everywhere. [00:28:47] Speaker 02: That's as I take it. [00:28:48] Speaker 02: But it does seem a little odd that when the Atlantic Marine contemplates a locus to the public policy, that such general considerations would obtain. [00:29:02] Speaker 00: And in your points, back to the question of the very procedural posture of this is an extraordinary circumstance. [00:29:09] Speaker 00: In virtually all, if not all, of the cases that both parties have cited, it's the defendant that's moving the transfer after the plaintiff's file. [00:29:17] Speaker 02: Right. [00:29:17] Speaker 02: Why wouldn't we frame it then that what's so extraordinary about this is that the defendant isn't willing to stay in the venue that they contracted for? [00:29:27] Speaker 00: But to be fair, [00:29:29] Speaker 00: We would probably have no problem with that venue had these cases first been brought there. [00:29:33] Speaker 00: Wait. [00:29:35] Speaker 02: This case was? [00:29:36] Speaker 00: This case was, but it was transferred, but was then litigated there. [00:29:39] Speaker 00: So if it was just a matter of efficiency, and we had a new judge from the start, and maybe things would be different with sparing. [00:29:46] Speaker 00: So I understand that they're two separate cases, but they're really interconnected. [00:29:49] Speaker 00: And there are several, at least, district court decisions that make that clear. [00:29:53] Speaker 00: It's like, these are the same plaintiff's attorneys driving these two cases between sparing and Ponke. [00:29:58] Speaker 00: At least the first complaints were virtually identical other than with different parties. [00:30:03] Speaker 00: So this is really a tag team between the two cases to see if one can survive and whether we can, you know, Judge Burr-Watz made rulings against them in sparing. [00:30:12] Speaker 00: Can we get a new court, can we get a new, you know, judge to hear this? [00:30:15] Speaker 00: And then sparing was in the Ninth Circuit, Ponke was in the Ninth Circuit. [00:30:20] Speaker 00: It wasn't until it was pretty clear that sparing was a done deal in the Ninth Circuit that Ponke was brought. [00:30:25] Speaker 00: And so all of these factors, [00:30:28] Speaker 00: kind of underlying judge bureau's decision that this doesn't I mean these are these are odd circumstances these are extraordinary circumstances and we're not going to condone this type of judge shopping and that this is against the public policy all right thank you counsel thank you no questions thank you your honors a few points [00:30:58] Speaker 01: Defendants raised that relation back wasn't litigated. [00:31:01] Speaker 01: In the lower court, defendants didn't raise relation back. [00:31:06] Speaker 01: Plaintiffs in the opposition pointed out that defendants essentially concede that Ms. [00:31:11] Speaker 01: Braun's claims relate back, and defendants just never oppose that. [00:31:14] Speaker 01: So I think it's just a concession that we do have relation back as to Ms. [00:31:18] Speaker 01: Braun's claims to the date that this was filed. [00:31:22] Speaker 01: Defendants say that there's no cases outside of the arbitration context. [00:31:28] Speaker 01: As the court correctly notes it really shouldn't make any difference California is the employment The fact that most these are employment cases make a difference. [00:31:39] Speaker 01: No it doesn't indeed we cite [00:31:42] Speaker 01: handful of cases where a shortened provision was found to be unreasonable outside of the context of employment. [00:31:50] Speaker 01: There's Fisher versus MoneyGram. [00:31:52] Speaker 01: That's where consumers brought a UCL claim. [00:31:55] Speaker 01: Denison versus Rosalind Capital. [00:31:58] Speaker 01: That's a customer agreement dispute. [00:32:01] Speaker 01: Gosta versus Skills Platform. [00:32:04] Speaker 01: That's unfair competition law brought by a customer for online games. [00:32:08] Speaker 01: There's even the Ninth Circuit decision in Pecorny versus Quickstar, which actually was about a pyramid scheme alleging unfair competition law. [00:32:20] Speaker 01: Defendants or yeah defendants claim that retailers didn't bring it within one year and that should have been reasonable That's refuted actually by the very by the lead case the Lemberg case in that case Lemberg filed one and a half years after first Onboarding and so to claim that those cases reflect that one year's reasonable is actually refuted because they were not filed within one year of What defendants claim is the triggering point? [00:32:49] Speaker 01: that there's extraordinary circumstances here. [00:33:00] Speaker 01: In order for extraordinary circumstances, at least as to what applies here for public policy, there needs to be a statute or judicial decision that clearly states that there's a strong public policy. [00:33:12] Speaker 01: And that's from the Ninth Circuit Decision Sun case. [00:33:18] Speaker 01: And I also want to point out that we did file the sparing case as well. [00:33:23] Speaker 01: And to the extent that defendants want to tie Pecorny to sparing, [00:33:27] Speaker 01: Sparing was filed in the Eastern Division as well and transferred to the Western Division. [00:33:32] Speaker 04: All right. [00:33:32] Speaker 04: Thank you, counsel. [00:33:33] Speaker 04: Thank you to both counsel for your helpful arguments. [00:33:36] Speaker 04: The case just argued is submitted for decision by the court.