[00:00:00] Speaker 04:
Your honor may it please the court parker writer long made of scad and arps for the capital group defendants appellants I'd like to reserve three minutes for rebuttal and I'll watch the clock I Want to start by laying out a roadmap for how I think the court should approach the case The briefs raise a number of issues and the possibility of conflict with other circuits, but I think there's a straightforward path here first I want to address consent second whether the effective indication doctrine bars individualized arbitration and third delegation to the arbitrator and

[00:00:29] Speaker 00:
which i think is the easiest way the court could read proceed here because the plan plainly delegates povers effective indication on that let's start with the third one on the on the uh... you waved you you didn't argue it below uh... i assume you're and as understood your argument was yet it's a legal issue so we can waive waiver their argument was you know povers doesn't understand things your response was doesn't matter the plan understands things

[00:00:58] Speaker 00:
Platt just basically adopted your argument on that.

[00:01:02] Speaker 00:
So you think we should waive waiver because her individualized defenses to consent are gone because of Platt?

[00:01:10] Speaker 04:
I think a couple reasons, Your Honor.

[00:01:12] Speaker 04:
So first of all, this is a pure question of law.

[00:01:14] Speaker 04:
It's also an argument.

[00:01:16] Speaker 00:
Yeah, it's a pure question of law if factual questions about consent don't play into it.

[00:01:20] Speaker 00:
And you don't think they do because Platt decides that.

[00:01:22] Speaker 04:
That's right, Your Honor.

[00:01:23] Speaker 04:
And also, I think there is a change in law in the sense of Choctaw Nation, which from this court made clear that enforceability challenges include the effective vindication issue.

[00:01:33] Speaker 04:
And that didn't happen until after the motion to compel.

[00:01:36] Speaker 04:
I think it's just a very clean way to resolve this case because it's a- But isn't it also really inefficient?

[00:01:41] Speaker 04:
I don't know that it is inefficient, Your Honor, because I think that no other Court of Appeals has addressed this question in this context that would be making useful law.

[00:01:49] Speaker 04:
And this issue just would get sent to the... Wait a minute.

[00:01:51] Speaker 02:
What useful law would we be making?

[00:01:53] Speaker 04:
Well, I think it would be making clear that the effective vindication argument applies in this context, and it gets delegated along with other issues of arbitrability to the arbitrator.

[00:02:02] Speaker 02:
So just saying that effective vindication is a threshold question that can be sent to the arbitrator, that's the development?

[00:02:08] Speaker 04:
Well, I think in this context it's a useful development because other courts of appeals have considered the effective indication Argument in the context of these defined contribution plans, and they haven't looked at a delegation question I don't understand the argument to have been made in any of those other cases and it is my efficiency point is if we sent that to arbitration we said yes, this should have gone to arbitration as this was written on all threshold questions including effective indication goes down to the arbitrator and they make a decision and that can be appealed and

[00:02:38] Speaker 02:
And that decision has been made by the district court at this point.

[00:02:42] Speaker 02:
The record is here.

[00:02:43] Speaker 02:
So why don't we just decide it?

[00:02:45] Speaker 02:
I mean, applying waiver or not is discretionary for us.

[00:02:48] Speaker 02:
So I think it looks pretty legal to me.

[00:02:51] Speaker 02:
It looks like a legal question.

[00:02:52] Speaker 02:
But I don't understand why we would buy the party's, I don't know how much longer in litigation, sending this down to come back up on the same question that's here right now.

[00:03:01] Speaker 04:
Well, I think, Your Honor, to the extent that the court thinks it's a difficult question to resolve effective vindication, this would be an easy way to resolve the case.

[00:03:07] Speaker 04:
That said, I do have arguments to make about effective vindication and why we think the district court's conclusion was wrong here, and why, in fact, POVER cannot bring these claims seeking relief essentially for other defines.

[00:03:17] Speaker 03:
So let's get to the merits of the effective vindication doctrine.

[00:03:21] Speaker 03:
I think you'd have to address the elephant in the room, which is this recent case of Platt, which the panel is now bound by.

[00:03:29] Speaker 03:
that case applied the effective vindication doctrine, right?

[00:03:33] Speaker 03:
Even assuming that the plan is the consenting party.

[00:03:36] Speaker 04:
It did, Your Honor, but I want to start by making two points, which then maybe we can explore.

[00:03:39] Speaker 04:
The first is that's a health plan context.

[00:03:42] Speaker 04:
That's not a defined contribution plan context.

[00:03:44] Speaker 04:
And what we know from all the cases and Supreme Court's cases, we have to look at the nature of the particular plan.

[00:03:49] Speaker 04:
You know, defined benefit plans are different from defined contribution plans, for example.

[00:03:53] Speaker 04:
And also the what?

[00:03:54] Speaker 03:
But the analysis and logic of plat apply, so you'd have to distinguish plat.

[00:03:58] Speaker 04:
I don't think it does and that's where I think the different nature of the plan comes into play.

[00:04:04] Speaker 04:
I think what Platt understood the bar there to be was on representative actions in what we have called in the brief in the principal agent sense, where the plan participant is representing both the plan participant's interest but also the plan as to the harm.

[00:04:22] Speaker 00:
Platt didn't really address your argument, which I found somewhat compelling, that if you read it in context, representative, the plan means representative in a sense of class or collective action.

[00:04:36] Speaker 00:
It doesn't mean it in this other sense that Viking Cruise is talking about.

[00:04:39] Speaker 00:
Platt doesn't address that.

[00:04:41] Speaker 00:
It does, though, just kind

[00:04:43] Speaker 00:
Platt's analysis is very, very cursory, but it does resolve it and say effective indication applies.

[00:04:49] Speaker 00:
But what do we do with that since Platt didn't address your argument?

[00:04:54] Speaker 00:
Is that still available to us to look at or does Platt foreclose it?

[00:04:58] Speaker 04:
No, Your Honor.

[00:04:59] Speaker 04:
I think that Platt does not foreclose the argument.

[00:05:02] Speaker 04:
I think as you said, it's a very cursory analysis.

[00:05:03] Speaker 04:
It doesn't address a waiver of representative claims where the... Does it matter what the...

[00:05:11] Speaker 00:
I mean, you know, Platte doesn't talk about what the provisions look like.

[00:05:15] Speaker 00:
You know, we know what your provisions look like because, you know, it's talked about in the briefs.

[00:05:19] Speaker 00:
As I recall, the Platte decision doesn't talk about that.

[00:05:22] Speaker 00:
I mean, we can go, I suppose, look in the Platte record and figure out

[00:05:25] Speaker 00:
What what those provisions look like does it matter what they look like or does it matter?

[00:05:30] Speaker 00:
What's on the face of the opinion?

[00:05:32] Speaker 00:
Binding us your honor.

[00:05:34] Speaker 04:
I think it matters us on the face of the opinion But I also think if you were to go look at the record in this at 3 er 306 and document 12 in the plat exercise records the Platts record

[00:05:43] Speaker 04:
The case number is 2355757, excuse me, 37.

[00:05:48] Speaker 04:
The waiver there said arbitration claims must be brought in a party's individual capacity and not as a plaintiff or class member in any purported class or representative proceeding.

[00:05:58] Speaker 04:
I think individual capacity makes clear you can't have a representative capacity.

[00:06:02] Speaker 04:
The way that Platt, this course of case law, Supreme Court case law talk about representative capacity in defined contribution plan participant claims is really... And that language is different than in your plan document you're saying?

[00:06:13] Speaker 04:
It's different than in ours and I think what's important about ours is you have a...

[00:06:17] Speaker 04:
The term, the defined term is class action waiver and it's putting together the terms class, collective, and representative.

[00:06:24] Speaker 04:
These words are known by the company they keep.

[00:06:26] Speaker 04:
It's really clear that the goal is to have mandatory individual arbitration.

[00:06:31] Speaker 03:
All right, so that's what really, maybe I didn't ask my question well, but that's what I was really getting to in terms of plat, right?

[00:06:37] Speaker 03:
We see the analysis, we don't see the distinction really in the facts and what was argued and what wasn't argued.

[00:06:43] Speaker 03:
The bottom line is that in order for the effective indication doctrine to apply in plat, but yet not in this case, you'll have to convince us that there is a difference that really matters, and you're saying that the representative language in the waivers are different, right?

[00:07:02] Speaker 03:
Is that how I understand your argument?

[00:07:03] Speaker 03:
Okay, so what's the effect of that?

[00:07:05] Speaker 04:
So I agree, Your Honor.

[00:07:07] Speaker 04:
I think the language is different.

[00:07:08] Speaker 03:
Is there the ability to seek plan-wide relief here in arbitration?

[00:07:11] Speaker 04:
Well, I want to pause on plan-wide relief for just a minute because I think that turns on the nature of the underlying claims.

[00:07:16] Speaker 04:
But I think the representative waiver in Platt, as I understand the opinion, as Judge Van Dyke alluded to, is a very cursory analysis, is a bar on any principal agent representation even.

[00:07:26] Speaker 04:
Platt couldn't even bring the claim.

[00:07:28] Speaker 04:
And I understand what it says in the Platt opinion, and this is at, I believe, page 19 of the Slip opinion, the representative action waiver there expressly precludes Platt from bringing claims in a representative capacity.

[00:07:42] Speaker 04:
We're not even getting to relief.

[00:07:43] Speaker 04:
So those circuit court decisions that Platt cites as supporting, they understood those to be the class action waiver type of representative.

[00:07:50] Speaker 04:
Waivers they had to look at the kinds of reliefs so really it's like a bar on bringing any type of claim and that was the problem because a 502 a to claim is this court's president holds and Platt again makes clear is Representative at least insofar as it's it's remedying the injury to the individual participants

[00:08:06] Speaker 04:
Participant in the plan so I understand plats language about a representative waiver just to refer to the first sense in the Viking River cruises of can't bring a Claim that is even representative of the plan on the plan wide relief point which goes on to discuss plan wide relief I think your honor it depends on the type of climate issue because we know take if you take the defined benefit Context for example we know you may have plan wide relief because that's the nature of the harm that has to occur even to get individualized relief and

[00:08:31] Speaker 04:
But if you look at defined contribution plans, the Supreme Court precedent also makes clear, each participant in those plans has his or her own account.

[00:08:40] Speaker 04:
And what they're entitled to is the value of that account at the time it gets paid out.

[00:08:43] Speaker 04:
So it's a different sense of harm that occurs as well.

[00:08:46] Speaker 04:
And you could have plan-wide relief in the defined benefit context.

[00:08:49] Speaker 04:
I'll give you an example, and I'll give you the example of it.

[00:08:51] Speaker 00:
Let me ask you a question about that, though.

[00:08:53] Speaker 00:
So let's say I put a waiver to the side, waving waiver to the side, and say I'm following you and agreeing with you all the way to the fact that you can pursue

[00:09:01] Speaker 00:
that this language does not bar representative actions in the sense of representing another entity, a key tam or a securities derivative type suit, right?

[00:09:12] Speaker 00:
And you're saying it doesn't bar that kind and that's what this is.

[00:09:17] Speaker 00:
In a key tam action, you're not somehow limited to getting the money for the piece of the guard rail that skewered your cousin or something like that.

[00:09:29] Speaker 00:
in a derivative, a securities derivative action, you're not limited to getting the money that is you lost in your, you get the, if you prevail and you get all the way through, you get the whole enchilada, money too, not just injunctive relief, et cetera.

[00:09:45] Speaker 00:
So I follow your argument all the way until you say, you just seem to say in your briefing, yeah, but we don't, you don't get the, they can sue on behalf of the plan, but we only get the money limit, and so,

[00:09:58] Speaker 00:
It seems to me the force of your argument would mean that you would go to arbitration and you would be able to get everything, including, you know, you would arbitrate the entire amount of money that the plans owed, not just

[00:10:11] Speaker 00:
not just Pover's little tiny slice.

[00:10:13] Speaker 00:
So why?

[00:10:13] Speaker 00:
I don't follow you as to why you, everything else Pover can ask for on behalf of the plan, but can only ask for, I think, her slice of the money.

[00:10:23] Speaker 04:
So Judge Van Dyck, I want to point you to two places to look for the answer to this, and I'm going to describe what they say.

[00:10:27] Speaker 04:
So I point to Judge Van Aschey's dissent.

[00:10:29] Speaker 00:
Yeah, that didn't make any sense to me.

[00:10:30] Speaker 04:
Okay, the toll decision that he relies on there, okay, because the toll decision actually addresses

[00:10:36] Speaker 00:
all the different but i don't know if you have a time i'd it's a super second that i don't find men ashe's and i want to talk to a total from the supreme court which he's relying on the point about all from the supreme he ultimately says something about like he did it like they can treat it like they don't have standing to

[00:10:51] Speaker 00:
to get more than their slice, I think.

[00:10:54] Speaker 00:
And that just, if that was true, you wouldn't have standing to get the tire mount for the key tam, or you wouldn't have standing to get, you have to have standing to get in, but then you're standing in the shoes of the entity that you're representing.

[00:11:07] Speaker 00:
Doesn't make any sense to me.

[00:11:08] Speaker 04:
I think that's the question, whether you can stand in the shoes of the entity for those purposes.

[00:11:12] Speaker 04:
And what Toll makes clear is that plan participants possess no equitable or property interest in the plan.

[00:11:18] Speaker 04:
It says it's clearly $5.90 US at $5.43.

[00:11:21] Speaker 00:
Participants have not Congress has given them the ability.

[00:11:24] Speaker 00:
I mean you have to satisfy standing you have to have some injury, but Congress has given them once they stand have some personal injury to

[00:11:31] Speaker 00:
to ask for a bigger chunk.

[00:11:32] Speaker 00:
We do that all the time from these representative actions.

[00:11:34] Speaker 04:
Judge Van Dyke, I don't think Congress has.

[00:11:36] Speaker 04:
I think that's the point.

[00:11:37] Speaker 04:
So this is the Supreme Court's opinion and told the majority opinion, which says participants have not been legally or contractually appointed to represent the plan.

[00:11:43] Speaker 04:
The court actually looks at the analogy to the key TAM statute.

[00:11:46] Speaker 04:
This is the Vermont Agency of Natural Resources versus the United States sexual Stevens decision and also looks at other assignment theories and talk about what that means in a minute and rejects those as analogies.

[00:11:55] Speaker 04:
In those cases, in your key TAM example, my understanding of the way standing works is that Congress has said, we're going to assign this claim to the relator, and it's a full assignment.

[00:12:04] Speaker 04:
You could have an assignment of a contract claim, too.

[00:12:06] Speaker 04:
I could buy a contract claim from someone else, and I could pursue it, and that would transfer the standing over.

[00:12:11] Speaker 04:
The Supreme Court has said that, and the Stevens case and the Supreme Communications case is the types of contract and other claims.

[00:12:17] Speaker 04:
But the Supreme Court in toll goes through here and rejects these bases and says, there is no interest that plan participants have.

[00:12:23] Speaker 04:
There's nothing like assignment like that.

[00:12:24] Speaker 04:
And actually, in fact, goes and looks at the dissents arguments, Justice Sotomayor writing for dissent and saying, there are all these bases for standing because plan participants have an interest.

[00:12:33] Speaker 04:
They're like a beneficiary of a trust.

[00:12:35] Speaker 04:
They're like a key tamer later.

[00:12:37] Speaker 04:
And the court just rejects all of these.

[00:12:38] Speaker 00:
So we got you down to two minutes.

[00:12:40] Speaker 00:
So this all sounds really complicated.

[00:12:42] Speaker 00:
I guess, taking this full circle.

[00:12:47] Speaker 00:
I thought maybe we should have the your argument is we should have the arbitrator decide this question since as a threshold matter I I do think so you're on that would be the easy way to do it because I think because I understood as I understood judge Judge call it judge for us and it was like it seemed like she was saying It seems kind of for sure going to come back But it's not clear to me now that it will for sure because maybe the arbitrator would see it the way I'm seeing it and you would

[00:13:13] Speaker 00:
You would win going to the arbitrator, but then you lose because the arbitrator would conclude that they can pursue monetary relief on behalf of the entire plan.

[00:13:21] Speaker 04:
Well, I think we would make all these arguments that we're making now to the arbitrator.

[00:13:24] Speaker 04:
And I also would point out that Trump passed the decision, which we discussed in the Rule 28 Jailder, because I think it just reinforces you can have only the relief to redress the injury that gives you standing in the first place.

[00:13:33] Speaker 03:
I'm going to take you over your time, but I promise I'll give you how many minutes did you want to save?

[00:13:39] Speaker 03:
I wanted to save three minutes.

[00:13:41] Speaker 03:
OK, I'll give you your three minutes back.

[00:13:43] Speaker 03:
Thank you.

[00:13:43] Speaker 03:
In your view, because this part, I'm still not sure I understand your argument, but what sort of remedies is the arbitrator empowered to order?

[00:13:51] Speaker 04:
So the remedies, I think, would actually be very simple to the one.

[00:13:54] Speaker 04:
It would be the same as a court could award.

[00:13:56] Speaker 03:
Setting aside the monetary, can the arbitrator order to move over fiduciary?

[00:14:01] Speaker 04:
They could, Your Honor.

[00:14:03] Speaker 04:
And I think a lot of the briefs go back and forth on this point, because that relief would be redressing.

[00:14:08] Speaker 03:
That reallocation of the investment choices.

[00:14:11] Speaker 04:
That as well, Your Honor.

[00:14:12] Speaker 03:
But then that affects everybody else.

[00:14:15] Speaker 03:
And arbitration clause here says that it's supposed to be individual only.

[00:14:18] Speaker 03:
What so so you're on it is individualized member of the plan and somebody else is removing a fiduciary maybe I like that fiduciary so I like the investment choices you're saying in in individual arbitration the arbitrator could order the scope of equitable leaves that would affect everybody else.

[00:14:34] Speaker 04:
So Trump versus Costa also makes this point clear.

[00:14:37] Speaker 04:
You could have incidental effects on parties that are not before the court when you have equitable relief.

[00:14:42] Speaker 04:
And that's OK.

[00:14:43] Speaker 04:
But the key point from both an Article III standpoint and traditional principles of equity point is that the relief is actually remedying the harm of the particular plaintiff before the court.

[00:14:51] Speaker 04:
OK.

[00:14:51] Speaker 04:
I understand your argument.

[00:14:52] Speaker 04:
Thank you.

[00:14:52] Speaker 04:
I'll give you the three minutes back.

[00:14:54] Speaker 04:
Thank you.

[00:14:54] Speaker 04:
Thank you, Your Honor.

[00:15:15] Speaker 01:
Good morning, your honors, Charles field and Sharon Kim for the appellee Kathy pover.

[00:15:22] Speaker 01:
This is an orisic case in which a defined contribution plan is seeking plan wide monetary and other remedial relief for breach of fiduciary duty.

[00:15:33] Speaker 01:
The appellants

[00:15:35] Speaker 01:
We want to enforce an arbitration agreement that limits that relief to Ms.

[00:15:39] Speaker 01:
Pover's individual losses only and all but eliminates all types of other plan-wide remedial relief.

[00:15:49] Speaker 01:
This directly contradicts what's in ERISA and it's contradictory to the applicable case law, including what this circuit just decided last week in Platt versus Sodexo.

[00:16:01] Speaker 01:
And therefore, we would ask this court to affirm the district court's decision.

[00:16:07] Speaker 01:
I want to address three points today, three main points.

[00:16:11] Speaker 01:
And that is appropriate relief under Section 409 means exactly what it says.

[00:16:17] Speaker 01:
And that means relief to the plan for all losses caused by the breach.

[00:16:22] Speaker 01:
relief to the plan for the profit?

[00:16:24] Speaker 00:
I'm going to see if I can, and my colleagues may have different, but the things I'm struggling with or focus on is first of all the waiver issue because that, Platt did address that too and it seemed to me your response before Platt to their argument was on the delegation issue to the delegating to the arbitrator was that argument wasn't made below.

[00:16:48] Speaker 00:
And then Platt comes out

[00:16:51] Speaker 00:
And he said that argument wasn't made below and there is individualized issues because we don't know, you know, POVER is not a sophisticated party.

[00:17:02] Speaker 00:
Platt came out and I think, and I'm curious if you agree with this, that kind of killed your second part of that because it says, you know, what matters is looking at the plan, not looking at POVER and I guess I assume Platt case.

[00:17:15] Speaker 00:
So what you have left is waiver.

[00:17:18] Speaker 00:
Is that your view of the lay of the land on the delegation waiver issue or is there something I'm missing there?

[00:17:27] Speaker 01:
No, I think that's right because what we have in the arbitration provision are two clauses that appear to be at war with each other.

[00:17:36] Speaker 00:
So their argument is it was and it continues to be, yeah, we may have waived it, but there's an exception for legal issues.

[00:17:45] Speaker 00:
And this is a purely legal issue.

[00:17:47] Speaker 00:
And if Platt has foreclosed your ability to make factual arguments about that, would you agree that it's a purely legal issue, and so we would have discretion to waive waiver?

[00:17:58] Speaker 01:
Well, yes, I would agree you would have discretion.

[00:18:00] Speaker 01:
But what I don't agree with is that it's a purely legal issue.

[00:18:04] Speaker 00:
And there are facts... What factual issues are left after Platt?

[00:18:07] Speaker 01:
Factual issues are, for example, if it was between the plan

[00:18:11] Speaker 01:
and the fiduciaries is the plan considered to be sophisticated.

[00:18:16] Speaker 01:
And then we also have the factual issue of these two provisions, the one that incorporates by reference the AAA rules which they're relying on to say clear and unmistakable evidence and we're relying on the waiver which says that this is pretty direct language that says that they have waived this right.

[00:18:37] Speaker 01:
And that if they waive this right, then this matter goes to a court of competent jurisdiction and not to an arbitrator.

[00:18:45] Speaker 00:
Okay.

[00:18:47] Speaker 00:
So moving on from waiver, the next big issue for me at least is if we were to decide this, or I suppose if an arbitrator were to decide this,

[00:18:58] Speaker 00:
Their argument is, it's a funny case because they basically agree 90% with you that, yeah, the majority of things can be litigated before an arbitrator.

[00:19:08] Speaker 00:
You know, I think you heard the answer to Judge Winn that basically everything except money, I think was the answer, that everything except money

[00:19:18] Speaker 00:
And I don't know if you understood what I was saying to your colleague, but I understand their argument and I think it makes a lot of sense that these terms are different and representative should not be read as the key TAM type representative.

[00:19:35] Speaker 00:
What I don't understand about their argument is if it goes to the arbitrator or to us or to a federal court I don't understand why their provisions would allow them to be able to get non-monetary relief in a representative capacity for the plan and

[00:19:52] Speaker 00:
but not be able to get monetary relief.

[00:19:54] Speaker 00:
So it seems like they could win by this going to an arbitrator, but lose by you guys being able to make the, we get the whole pie monetarily considered before the arbitrator.

[00:20:07] Speaker 00:
Is that, what am I missing there as far as, I understand their argument is proving too much for them is maybe that's,

[00:20:16] Speaker 01:
Well, our position is we don't see this going to an arbitrator because if this provision is deemed to be unenforceable.

[00:20:23] Speaker 00:
But if it went to an arbitrator, let's assume for a second, let's say it goes to an arbitrator because we determine that, no, this can go to, well, if it went to an arbitrator because we determined that, no, this is a, the word representative, the bar on representative actions is only a bar on class type actions where you're representing other people, not where you're representing like the plan.

[00:20:47] Speaker 00:
I don't understand why the arbitrator would not be able to consider monetary, the full injuries to the plan, because they're standing in the shoes of the plan at that point, and just like a person who's standing in the shoes of the company in a derivative securities action can ask for all the damages to the company, not just the little piece that involves the shares that they hold.

[00:21:12] Speaker 00:
Why wouldn't they be able to ask for all of the money

[00:21:15] Speaker 00:
Why wouldn't you guys be able to ask for, why wouldn't Pover be able to ask for, since she's standing in the shoes of the plan, be able to ask for all the money on behalf of the plan?

[00:21:24] Speaker 01:
Because the arbitration provision limits the arbitration to an individual arbitration.

[00:21:29] Speaker 01:
So if Ms.

[00:21:30] Speaker 01:
Pover goes into arbitration, the only thing that she can ask for are claims that are individual to herself.

[00:21:38] Speaker 01:
She wouldn't be allowed to ask for a representative claim on behalf of the plan because it would violate the,

[00:21:45] Speaker 01:
the arbitration agreement.

[00:21:47] Speaker 03:
And... So that's the money part, you know, right?

[00:21:50] Speaker 03:
Yes.

[00:21:51] Speaker 03:
And I tend to agree with you.

[00:21:52] Speaker 03:
It says individuals, so I don't know how the arbitrator could order that other people's monetary losses be funded too.

[00:21:59] Speaker 03:
What about equitable leave?

[00:22:01] Speaker 03:
Because your opposing council says that the full panoply of equitable relief removal of the fiduciary reinvestment allocations, all of that the arbitrator can order.

[00:22:14] Speaker 03:
And that would be incidental effects only on the other planned participants.

[00:22:20] Speaker 03:
What's your response to that?

[00:22:21] Speaker 01:
Well, my response, I heard your question earlier.

[00:22:26] Speaker 01:
And I don't see how an arbitrator could award plan-wide relief that reformed the investment lineup in the plan to change this lineup, change this fund, take this one out.

[00:22:38] Speaker 01:
And I don't see how that they could also remove the fiduciaries except on a representative basis.

[00:22:45] Speaker 03:
I'm struggling to understand that as well because the arbitrator's powers arises out of whatever it is that the parties agreed to give her, right?

[00:22:54] Speaker 03:
So I don't know how she could

[00:22:55] Speaker 03:
take action that affects the plan in that fashion.

[00:22:59] Speaker 01:
Well, we don't see that either.

[00:23:01] Speaker 01:
And the idea that this would affect the others only incidentally, that has problems with it too.

[00:23:08] Speaker 01:
And the problems is that if you bring in an individual arbitration, the plan is not a party to that case.

[00:23:16] Speaker 01:
It's not a party to the arbitration.

[00:23:18] Speaker 01:
It would be individual.

[00:23:19] Speaker 01:
So the plan would not be able to confirm the arbitration award because it's not a party.

[00:23:26] Speaker 03:
But the argument assumes that she gets to stand in the shoes of the plan.

[00:23:31] Speaker 01:
Well, that's right.

[00:23:32] Speaker 01:
That's right.

[00:23:33] Speaker 01:
But let's assume let's assume a worst case scenario where Miss Pover gets gravely ill.

[00:23:39] Speaker 01:
She leaves the country.

[00:23:40] Speaker 01:
She dies or she just changes her mind.

[00:23:43] Speaker 01:
The plan then is out of luck.

[00:23:46] Speaker 01:
because it couldn't enforce that award.

[00:23:48] Speaker 01:
It would have to go out and find another participant to bring a claim so that it could recover the full relief that it's entitled to under Section 409.

[00:24:04] Speaker 00:
argument is based on the fact that representative can have two different meanings and representative here does not mean class.

[00:24:10] Speaker 00:
It means representative in the sense of like a key tam or a private attorney's general type, that kind of, okay.

[00:24:18] Speaker 00:
And as I understand it, the other language there is individual because it says you can dispute arbitration on an individual basis only.

[00:24:26] Speaker 00:
Is your position that if it just that if this thing said

[00:24:30] Speaker 00:
that you can bring any dispute in arbitration on individual basis only, but did not go further and say not on a class collective or representative basis, that you would not be able to bring a, you could not bring one of these claims in arbitration, that the word individual, in other words, does all the work to where that would keep you from being able to stand in the shoes of the plan in an arbitration?

[00:24:53] Speaker 00:
Yes.

[00:24:54] Speaker 00:
So individual has that, so individual alone, so really,

[00:24:58] Speaker 00:
The language class collection or representative basis is not what does the work for you.

[00:25:03] Speaker 00:
As soon as you say you have to arbitrate on an individual basis, you then are foreclosing the ability to bring a claim on behalf of one of these type of claims or a representative action, not in a class sense, but in the sense of a key tam type.

[00:25:21] Speaker 01:
Yes, that's our position and it's pretty plain.

[00:25:24] Speaker 00:
You have case law that represents individual arbitration such that you can't bring, because I thought we had cases that said, for instance, where you have to arbitrate that you could, that you, there are times when Paga claims, are you familiar with Paga, that California's attorney, which is a similar type circumstance where you are bringing a representative claim, not in the sense of a class, but on behalf of the attorney general on the half of the state of California.

[00:25:50] Speaker 00:
I thought we had

[00:25:52] Speaker 01:
cases the said you could arbitrate those in arbitration but maybe i'm you're talking about biking river and uh... the difference between our case in biking river is that when you bring a pocket clay the individual bringing the claim they have an individual cause of action in their own right that's the claim that has to be

[00:26:15] Speaker 01:
We don't have that here.

[00:26:17] Speaker 01:
Ms.

[00:26:17] Speaker 01:
Pover is not allowed to bring an individual cause of action.

[00:26:20] Speaker 01:
She can only bring a claim for Section 409A relief, and 409A relief mentions the plan five times and not once.

[00:26:33] Speaker 01:
Does 409A mention relief to an individual or an individual's account?

[00:26:39] Speaker 01:
So the idea that she could come forward by herself, she cannot under the statute.

[00:26:46] Speaker 01:
Not available to her.

[00:26:47] Speaker 00:
Your view, and I'd be curious to hear from the other side as to whether or not the language, just individual alone, forecloses the type of, one of these type of representative actions, again, not class action, but a representative of, and it's not clear to me that it would, because you could, as an individual, bring a claim where you're standing in the shoes of someone, like you could bring it, as an individual, bring a key tam, as an individual, but I guess I'll have to look closer at that.

[00:27:14] Speaker 01:
Well, it's just here, if you look at the statute, all right, so you have two statutes.

[00:27:18] Speaker 01:
You have 409A, which provides relief to a plan for relief for losses or for profits and other remedial relief.

[00:27:30] Speaker 01:
The plan is mentioned five times.

[00:27:32] Speaker 01:
And now you have 502A2, which authorizes Ms.

[00:27:36] Speaker 01:
Pover to bring this claim and seek appropriate remedies under 409A.

[00:27:43] Speaker 01:
So if you look at those together, Ms.

[00:27:46] Speaker 01:
Pover is only allowed to bring claims that she could get relief for under 409.

[00:27:53] Speaker 01:
And 409A limits relief solely to the plan, nobody else.

[00:28:00] Speaker 01:
So she would not be able to bring a claim in her own right as an individual.

[00:28:04] Speaker 01:
She has no individual cause of action.

[00:28:07] Speaker 03:
That's the difference and you see some of these other games The language of the statute is really active read go back and read it carefully as was that clear, but I think there's case law Indicating that that the right is really for plan wide relief only right right the language says I can read the language if you'd like me to read it Yeah, no, so my question is just whether or not I so if we accept that

[00:28:31] Speaker 00:
You have, you can only, because I think that is fixed by case law, that you can only bring one of these claims on behalf of the plan.

[00:28:37] Speaker 00:
So I keep thinking to PAGA or KETAM or security certificate, you can only bring one of those type of claims.

[00:28:45] Speaker 00:
What I'm struggling with is the language in the actual arbitration agreement or the amendment to the agreement here to the plan terms which is that says that you can only bring it on individual basis.

[00:28:57] Speaker 00:
Does that mean that you can't bring one of those type of claim?

[00:29:00] Speaker 00:
just the individual language itself.

[00:29:02] Speaker 00:
And your position is that yes, that by saying you can only bring an individual, bring it on an individual basis, that forecloses the ability to bring one of those type of representative actions, even assuming that representative later in the text doesn't, it's like a class action or something.

[00:29:21] Speaker 01:
Okay.

[00:29:23] Speaker 01:
So 502 has three sections, A1, A2, and A3.

[00:29:28] Speaker 01:
The A1 claim and the A3 claim, you could bring as an individual.

[00:29:34] Speaker 01:
Those claims you can bring on an individual basis.

[00:29:37] Speaker 01:
The A2 claim, which is your breach of fiduciary duty claim, can only be brought on a representative basis with a participant representing the plan.

[00:29:48] Speaker 01:
But if they wanted to bring an individual claim for their own relief, then they would have to go to another section other than 502A2.

[00:29:57] Speaker 01:
And I think what we have here is Ms.

[00:30:00] Speaker 01:
Pover, she's authorized by statute under Section 502A2 to bring a claim on behalf of the plan to seek relief for the entire plan.

[00:30:12] Speaker 01:
This is not an instance where she has an individual cause of action in her own right.

[00:30:18] Speaker 01:
And she's bringing this case and trying to collectively join with other participants.

[00:30:23] Speaker 01:
That's not what she's doing here.

[00:30:25] Speaker 01:
And the statute wouldn't allow us to do that.

[00:30:29] Speaker 03:
Thank you, counsel.

[00:30:41] Speaker 00:
I'm curious to hear your view on whether the individual, you know, if you just pretend out of the language, pretend representative means what you mean, representative

[00:30:48] Speaker 00:
It just still does say on an individual basis.

[00:30:51] Speaker 00:
And then if it did mean that, could the court or an arbitrator sever the individual basis part out for the reason that you're under the same type of arguments you made, I think, later in your brief as like your second or third tier argument?

[00:31:06] Speaker 04:
Yes, I just I just want to back up judgment I can and try to explain what representative really means here Because when she's proceeding on an individual basis the question is she is representing the plan But the question is to what extent and we say the question is to the exit the answer is to the extent of her own injury That's what gives her standing to sue in the first place now remember so because you have just conceded that when she brings this claim she is representing the plan and

[00:31:28] Speaker 02:
Our job is to interpret the terms of this contract.

[00:31:31] Speaker 02:
We start with the plain language.

[00:31:33] Speaker 02:
You just said representative action can mean just representing another entity, which is exactly what this claim is defined to be.

[00:31:40] Speaker 02:
So why shouldn't we read it that way?

[00:31:42] Speaker 04:
So Judge Forrest, it's not representing the plan for the entire scope of plan wide relief to every account.

[00:31:49] Speaker 04:
Define contribution plan participants.

[00:31:50] Speaker 02:
The only relief that's available under that provision for this kind of a claim is

[00:31:56] Speaker 02:
for such losses to the plan resulting from the breach.

[00:32:01] Speaker 02:
There's no reference in that statute to an individualized recovery.

[00:32:05] Speaker 02:
It's lost to the plan.

[00:32:06] Speaker 02:
So I think your argument is, well, loss to one person is also lost to the plan, but it's not the only loss to the plan.

[00:32:14] Speaker 02:
And the statute just talks about the measure of damages is lost to the plan.

[00:32:17] Speaker 04:
So Your Honor, the question is, what is appropriate relief when the plaintiff is a defined contribution plan participant?

[00:32:23] Speaker 04:
Can she stand in the shoes for the plan as to all those losses, or just as the losses to her individual account?

[00:32:30] Speaker 02:
And we think LaRue makes- Under the statute, she can do it for all of them.

[00:32:33] Speaker 02:
Right?

[00:32:33] Speaker 02:
Do you agree with that?

[00:32:34] Speaker 04:
I don't, Your Honor.

[00:32:35] Speaker 04:
I would point the court to the Supreme Court's decision in toll, 590 US at 542 to 544.

[00:32:41] Speaker 03:
But getting back to the plain language again,

[00:32:44] Speaker 03:
Council's directed us to 502A2, a participant or beneficiary can bring with the beneficiary fiduciary for appropriate relief under Section 409, and 409 allows the restoration to such plan for any profits.

[00:33:04] Speaker 03:
So I don't know that you can just cut away the equitable relief part from the monetary

[00:33:10] Speaker 03:
plan-wide monetary restoration of profits part, which is authorized specifically.

[00:33:15] Speaker 03:
under 409.

[00:33:16] Speaker 04:
A couple points on that.

[00:33:18] Speaker 04:
So 502A2 says the Secretary of Labor or a participant or a beneficiary or fiduciary can seek appropriate relief under 409.

[00:33:26] Speaker 04:
And our point, as the briefs explain, is that appropriate relief may be different for each of those actors.

[00:33:30] Speaker 04:
And we know that inequity is flexible this way.

[00:33:32] Speaker 04:
Trump versus Costa makes that clear again.

[00:33:35] Speaker 04:
What Trump versus Costa makes very clear is that the relief must be complete relief only to the plaintiff before the court.

[00:33:41] Speaker 04:
And Pover is the plaintiff.

[00:33:42] Speaker 04:
So she's proceeding not in a collective class action sense, but just for herself.

[00:33:47] Speaker 04:
The question is, how much is appropriate relief that Arisa authorizes?

[00:33:50] Speaker 04:
And we think toll in Trump versus Costa make clear, it can't be more than the relief just to her individual account, although there may be incidental effects beyond that.

[00:33:58] Speaker 04:
All right.

[00:33:59] Speaker 04:
I think we've got the argument.

[00:34:00] Speaker 02:
I want to come back to the plain language.

[00:34:03] Speaker 02:
So class, collective, or representative action?

[00:34:08] Speaker 02:
If I construe representative the way you want me to, I don't understand what work it's even doing in that sentence.

[00:34:15] Speaker 04:
I think as with many terms and contracts, it is a belt and suspenders making clear that there can't be any collective type of arbitration here or a proceeding in court where POVER is representing the interests of other claimants.

[00:34:28] Speaker 04:
But I would say you can't conceive of a 502A2 action is only representing the interests of the plan.

[00:34:34] Speaker 04:
It has to for Article 3 standing reasons and I think also as LaRue makes clear, also has to be redressing the injury to the particular participant.

[00:34:41] Speaker 04:
And the way it works in a defined contribution plan context is that money is going to be recovered for the account and will be available in the plan participant's account.

[00:34:50] Speaker 00:
Okay.

[00:34:50] Speaker 00:
Can I ask one follow up?

[00:34:51] Speaker 00:
Of course.

[00:34:52] Speaker 00:
So is that, you said class collective or representative.

[00:34:57] Speaker 00:
you know, it's drafters like just adding, what else could this be?

[00:35:01] Speaker 00:
And that's the two it's with me.

[00:35:04] Speaker 00:
The question I've got is it says, if you read earlier it says, dispute and arbitration on an individual basis, comma, and not on a class collective or representative basis.

[00:35:14] Speaker 00:
So do you read those as flip sides of the, so when it says on an individual basis only,

[00:35:21] Speaker 00:
Is the way that should be interpreted is the opposite of a class collective or representative in the sense of collective representative or does individual basis only have additional meaning than the negative that follows it.

[00:35:36] Speaker 04:
If I understood correctly, Judge Mendec, I think it's just in the class action or collective sense that it's distinct from.

[00:35:43] Speaker 04:
So if you imagine that this is a waiver just as to proceeding in court, for example, it would basically be saying she can't bring a Rule 23 class action like she's tried to bring.

[00:35:52] Speaker 04:
What could she get if she's representing only one?

[00:35:54] Speaker 00:
Well, and the reason I ask the question is because I understood your colleague to be saying that individual alone sort of

[00:35:59] Speaker 00:
And even if you ignore the other, it does the work because this is not an individual action.

[00:36:03] Speaker 00:
It's on behalf of the plan.

[00:36:04] Speaker 00:
And so they're reading individual, I think, to mean not on behalf of somebody else.

[00:36:10] Speaker 00:
But your view would be that an individual action means the opposite of the way you read.

[00:36:16] Speaker 00:
It's the flip side of saying,

[00:36:19] Speaker 00:
not a class collective or representative basis, in the sense of representative being another word for class or collective action.

[00:36:26] Speaker 04:
So I think we know individual can't bear the meaning.

[00:36:28] Speaker 04:
The other side is putting on it from LaRue itself, 552 U.S.

[00:36:31] Speaker 04:
at 256, where they're talking about, in the circumstances of that case, the participant seeking relief as to his individual account and for the plan.

[00:36:39] Speaker 04:
So individual just means it's just as to his account.

[00:36:41] Speaker 04:
It's like one chapter of a book where you have all these chapters together that form the entire plan.

[00:36:47] Speaker 04:
But each person has their own defined chapter and you can look at any one.

[00:36:50] Speaker 04:
So individual just means we're focused on this particular plaintiff before the court.

[00:36:54] Speaker 03:
All right.

[00:36:55] Speaker 03:
Thank you very much both sides for your helpful arguments this morning.

[00:36:58] Speaker 03:
The matter is submitted.