[00:00:00] Speaker 00:
Good morning and welcome to the Ninth Circuit.

[00:00:03] Speaker 00:
I'm Bridget Beatty and I'm very pleased to be joined by my colleagues Richard Pullman and Ken Lee here this morning.

[00:00:12] Speaker 00:
Four of the cases on the calendar have been submitted on the briefs and we will be hearing argument in two cases.

[00:00:21] Speaker 00:
First VIP mortgage versus Jennifer Gates and Council, whenever you're ready, please proceed.

[00:00:34] Speaker 04:
May it please the court and welcome back Judge Beatty.

[00:00:39] Speaker 04:
Good morning, Your Honor.

[00:00:41] Speaker 04:
My name is Jeff Topple and thank you for the opportunity to present argument on behalf of appellant VIP mortgage in this matter.

[00:00:48] Speaker 04:
I would like to reserve three minutes for rebuttal.

[00:00:51] Speaker 00:
Please watch the clock.

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

[00:00:53] Speaker 04:
your honors i would be doing a disservice to my client as well as the court if i did not start by acknowledging that we fully appreciate that the standard that applies under the f a a the federal arbitration act is a high one i'm not going to even uh... attempt to sidestep that reality is that fully expect a hair opposing counsel

[00:01:13] Speaker 04:
tell you that the standard to vacate an arbitration under the FAA is exceedingly or exceptionally high and how rarely federal courts vacate under the FAA.

[00:01:24] Speaker 04:
While both of those may be true, of course, what is equally true and indisputable is that the standard under section 10A of the FAA for the federal court's confirmation or vacation of an arbitration award is not absolute.

[00:01:39] Speaker 04:
For if it was absolute, I likely would not be given the opportunity to stand here before you today.

[00:01:46] Speaker 04:
Congress created four carefully crafted... May I interrupt you?

[00:01:50] Speaker 03:
Yeah, absolutely.

[00:01:51] Speaker 03:
Could you jump into the issue with regard to the proof on the overtime?

[00:01:56] Speaker 03:
Because it seems to me that your client as the employer basically did not keep adequate records and yet

[00:02:06] Speaker 03:
your client is now challenging the arbitrator's decision with regard to the overtime, which the plaintiff seems to have pretty well substantiated with corroborating information.

[00:02:21] Speaker 03:
Given that the highly differential standard that you acknowledge applies here, you're not asking us to reweigh the evidence, are you?

[00:02:29] Speaker 04:
I'm not.

[00:02:30] Speaker 04:
What I'm asking, Your Honor, and I appreciate you starting there, and I will start on that basis, is not reweigh the evidence, but based on the arbitrator's own factual determinations, the conclusions that she reached based on that evidence,

[00:02:45] Speaker 03:
are completely irrational and exceed what you say that, but you're representing a party that offered no, no evidence because it didn't keep adequate records.

[00:02:58] Speaker 03:
So I'm having a very difficult time accepting your premise or your conclusion that she overstepped her authority in the face of a plaintiff who did attempt to substantiate her over time.

[00:03:13] Speaker 04:
And it's a wonderful question, Your Honor, and attempted to... I'm anxious for a wonderful answer.

[00:03:20] Speaker 04:
I appreciate that.

[00:03:21] Speaker 04:
Well, I'll give you one.

[00:03:22] Speaker 04:
Okay.

[00:03:23] Speaker 04:
Well, what I want to note is some of the facts that were accepted and were not disputed in this case, one of which is that she did not keep contemporaneous records.

[00:03:33] Speaker 03:
She was under a contractual obligation... Well, she did provide contemporaneous records in the sense that there are computer

[00:03:41] Speaker 03:
entries that showed when she signed in when she was last active i mean the arbitrator had some evidence before your argument is that it's too thin it not only she did have some evidence before her in order to try and make a.

[00:03:57] Speaker 03:
determination of what the approximate amount of overtime was.

[00:04:00] Speaker 04:
Absolutely.

[00:04:01] Speaker 04:
And what the evidence showed, and it's an excellent point, and I'm going to get into that.

[00:04:06] Speaker 04:
Of course, to your point under Mount Clemens, which is the underlying Supreme Court case that addresses off the work hours, to meet her burden under that standard, Mount Clemens, Pelley submitted the overtime spreadsheet that is, of course, the focus of much of our discussion.

[00:04:26] Speaker 04:
which she created for the arbitration.

[00:04:28] Speaker 04:
There's no doubt about that.

[00:04:31] Speaker 04:
And as you noted, it addressed the first and the last.

[00:04:34] Speaker 04:
And she acknowledged that during she being the appellee.

[00:04:37] Speaker 04:
And as a result of that, it created these extraordinary results.

[00:04:41] Speaker 04:
that she worked over 12 hours on approximately 205 days, that she worked over 14 hours on approximately 51 days, that she worked over 16 hours or two-thirds of the workday on approximately 16 days, incredibly that she worked 18 hours or three-fourths.

[00:05:00] Speaker 03:
But the arbitrator did make adjustments and reduce the amount of her claim.

[00:05:06] Speaker 03:
With all due respect, you're making a great argument.

[00:05:10] Speaker 03:
You've got some tough facts here.

[00:05:12] Speaker 03:
And one of the toughest facts you have to overcome is that as I read the record, the client basically told us employees don't log more than 40 hours in a work week, even though the employer obviously knew she was working overtime because they expected her to handle things on weekends and at night and that sort of thing.

[00:05:33] Speaker 03:
And again, I'm finding it's a little hard for me to be sympathetic to your client's cause in the face of bad facts like that.

[00:05:43] Speaker 04:
Well, Your Honor, what I really, again, all very good points.

[00:05:48] Speaker 04:
I want to focus on, in particular, one of the arbitrators finding in the case.

[00:05:52] Speaker 00:
Well, can I ask you to do that in the context of the standard that applies?

[00:05:56] Speaker 00:
Because it seems to me that you're asking us to reweigh the facts that were presented to the arbitrator when she made her

[00:06:04] Speaker 00:
award, which under the FAA were not doing.

[00:06:08] Speaker 00:
You had argued under the fourth exception that this was manifest disregard for the law, the arbitrator exceeded their authority.

[00:06:14] Speaker 00:
This is the part of the statute that we can use to set aside the arbitration award.

[00:06:20] Speaker 00:
But what you're arguing are factual disputes about the sufficiency of the evidence and how much

[00:06:27] Speaker 00:
the plaintiff worked and how much she, how she documented that.

[00:06:31] Speaker 00:
So assuming you're right on all of that, I still don't know how we can set aside the arbitration award.

[00:06:38] Speaker 04:
Well, the arbitrator herself found, and this is where I really think it's that the employer negated the reasonableness.

[00:06:46] Speaker 04:
First of all, she found that much of the, even though she determined the appellee had

[00:06:51] Speaker 04:
had met her burden by producing the overtime spreadsheet.

[00:06:55] Speaker 04:
She also found that that overtime spreadsheet had over 200 inaccuracies.

[00:06:59] Speaker 04:
So that the information that the appellee provided was inaccurate.

[00:07:03] Speaker 04:
That's a factual determination that we're not disputing.

[00:07:07] Speaker 04:
She also determined that at the hearing,

[00:07:15] Speaker 04:
VIP quote, at the hearing V point out a number of instances not accounting for a claimant's reconstruction of her hours.

[00:07:21] Speaker 04:
These included medical appointments, appointments at the Mexican Consulant, a company war trip to a resort in Mexico, the weekend claimant attended her daughter's wedding, all these different things.

[00:07:32] Speaker 04:
And as a result of that, she said that the spreadsheet

[00:07:37] Speaker 04:
resulted in an overstatement of her actual hours, which is again a factual determination, yet she relied on that overtime to award her thousands of hours, which without... After making adjustments to respond to your objections to excessive billing, if I can use that term.

[00:08:00] Speaker 04:
With that said, what she didn't do, and she acknowledged, was to do a day-to-day analysis, even though she found that this spreadsheet was unreliable and that it was for 205 days.

[00:08:11] Speaker 03:
You know, I read that argument in your brief, but the arbitrator does go through at least maybe not every day that she worked, but she did look at individual days and making those adjustments.

[00:08:23] Speaker 03:
How can you say that she didn't do a day-by-day analysis?

[00:08:26] Speaker 04:
Well, she did that with respect to the weekends, on-call weekends, which was a separate, with respect to the daily overtime.

[00:08:36] Speaker 04:
She specifically said it would have been impractical to do that.

[00:08:39] Speaker 03:
But she also found that... But hasn't the Ninth Circuit said in those cases that a good faith effort to approximate the amount of the time worked is sufficient to

[00:08:51] Speaker 03:
to meet the legal standards.

[00:08:55] Speaker 04:
Those estimations were found by the arbitrator themselves to be highly suspect and unreliable.

[00:09:03] Speaker 03:
Yet she relied on them.

[00:09:04] Speaker 03:
But then she made adjustments in order to account for that.

[00:09:08] Speaker 03:
So I'm trying to figure out where's the beef here, you know, other than asking us to reweigh the facts and come out the other way.

[00:09:15] Speaker 04:
But she didn't make adjustments on even though she found inaccuracies on the days because she didn't look at those individual days.

[00:09:21] Speaker 04:
She found she did make adjustments on certain days.

[00:09:24] Speaker 04:
On individual days.

[00:09:26] Speaker 04:
Right, on certain individuals' days in which she found that the evidence did not show, but she didn't go through each individual day to make that decision.

[00:09:33] Speaker 03:
Well, how could she if your client didn't provide any reliable information to rebut the inferences that she was asking the arbitrator to make based on the evidence that she produced?

[00:09:45] Speaker 04:
Well, in some cases, of course, we did provide, and even in some of those cases in which we did provide evidence, of course, as you noted, she did make reductions.

[00:09:53] Speaker 04:
She did not make deductions in all those places.

[00:09:56] Speaker 02:
Can you address the counterclaim fees?

[00:09:59] Speaker 02:
You point out that there was a settlement and the parties agreed to bear their own costs, but did you actually remind the arbitrator that you had that provision saying each party will bear its own costs?

[00:10:11] Speaker 04:
Absolutely, in response to our request for the... Can you tell me, because I was trying to look for it in the record and I didn't see it.

[00:10:19] Speaker 04:
I do not have that on the top of

[00:10:22] Speaker 04:
my at the top of my head, I apologize, Your Honor.

[00:10:25] Speaker 00:
What would be the difference in the award?

[00:10:27] Speaker 00:
Basically, how much are we talking about with respect to the fees on the counter clean?

[00:10:32] Speaker 04:
Several thousand not not a small portion, but certainly 10,000.

[00:10:37] Speaker 04:
I don't know the exact amount, but 10 to 20,000 is what I would say.

[00:10:43] Speaker 04:
But again to your point in this case we did object.

[00:10:47] Speaker 04:
We did say that that's not covered in with respect to that instance of course not only does it.

[00:10:55] Speaker 04:
Violate the court's own order in which he dismisses counterclaims with each party to bear its own fees.

[00:11:01] Speaker 04:
but it also violates the limited rights or authority under the arbitration for the arbitrator to award those fees.

[00:11:11] Speaker 04:
Because under that provision, the arbitrator was only permitted to award fees, quote, statutory claims for which attorneys sees were expressly recoverable.

[00:11:24] Speaker 04:
Not only were they counterclaims, uh, which were, uh, which were settled well in advance.

[00:11:30] Speaker 03:
Prevailing party gets fees, right?

[00:11:33] Speaker 03:
Under the FLSA.

[00:11:34] Speaker 04:
The counterclaims were not related.

[00:11:36] Speaker 03:
And you can see that you didn't remind the arbitrator at the end of the case that she had entered a previous order several months before approving the settlement in which each party had agreed to bear their own call.

[00:11:49] Speaker 04:
You know, Your Honor, to be honest with you, I don't remember if I, if I, I raised the objections.

[00:11:54] Speaker 03:
I looked at the same record Judge Lee did and I didn't see where anybody reminded the arbitrator of it.

[00:11:59] Speaker 04:
That she, okay.

[00:12:00] Speaker 04:
And I, I, what I did say was that these were for unrelated counterclaims.

[00:12:04] Speaker 04:
I don't know that I, I don't recall that I said.

[00:12:07] Speaker 03:
Yeah, I didn't find anything that said, excuse me, Your Honor, but there's this order here that you, that's your signature on it.

[00:12:14] Speaker 04:
number of your point nonetheless either way it would certainly from our perspective still violate the arbitration provision because she awarded fees for which she would that that was what we would have to find it to be what a manifest abuse of justice or whatever the standard or uh... really rational completely or exceeded exceeded her authority because you didn't have the x or she had the authority to award attorneys fees now we're arguing over the amount of the award and the fact that she overlooked what you say

[00:12:42] Speaker 03:
is a key dispositive fact on at least the fees that had been incurred on the counterclaim.

[00:12:47] Speaker 04:
Well, I would say she didn't have the authority under the agreement to award those specific fees for which we did object to and point out that those were fees for the counterclaim.

[00:12:58] Speaker 00:
Can I ask you something else?

[00:13:00] Speaker 00:
You made an argument in your brief that the motion to vacate the award should have been viewed as a

[00:13:06] Speaker 00:
leading and the Iqbal Twamili standard applied.

[00:13:10] Speaker 00:
What difference would that make?

[00:13:11] Speaker 00:
What is the practical result if we were to, if the district court were to view your motion in that light and if we were to do so as well?

[00:13:18] Speaker 04:
First of all, I think based on the Twomley standard, of course, sufficiency of the pleadings.

[00:13:25] Speaker 04:
I do think here we pled three separate bases for why we believed the arbitration fee exceeded or the arbitrator exceeded her authority.

[00:13:35] Speaker 00:
So what are you suggesting when you file a motion to vacate the arbitration award?

[00:13:38] Speaker 00:
We look at it as if it's a pleading, like a complaint.

[00:13:42] Speaker 00:
If you've alleged enough, then there's discovery?

[00:13:47] Speaker 00:
Not necessarily discovery, but the opportunity to brief and introduce... Well, why doesn't that happen in the context of the motion to vacate the response to the reply, and also at the same time, their motion to affirm your response, their reply?

[00:14:01] Speaker 00:
dual track briefing going on.

[00:14:04] Speaker 00:
So I'm puzzled as to what benefit you would gain if we were applying a pleaded standard.

[00:14:12] Speaker 04:
The opportunity to fully brief and to introduce portions of the... But how did you not have that?

[00:14:18] Speaker 04:
Well, again, I specifically asked the court.

[00:14:21] Speaker 02:
Again, as pleadings you would... But it makes no sense to treat this as a pleading.

[00:14:28] Speaker 02:
A pleading is just your allegations.

[00:14:29] Speaker 02:
You haven't had a discovery.

[00:14:31] Speaker 02:
That's one thing.

[00:14:32] Speaker 02:
Here, you already know the facts.

[00:14:34] Speaker 02:
I mean, it's not, everything's there in the arbitration records.

[00:14:38] Speaker 02:
It makes no sense to treat it as a pleading.

[00:14:39] Speaker 02:
That's why the statute refers to it as a motion, because you have the facts.

[00:14:42] Speaker 02:
So we don't have to determine whether something's plausible or not.

[00:14:45] Speaker 02:
We have the facts in front of us.

[00:14:47] Speaker 02:
Or the arbitrator did, so we have it in front of us.

[00:14:50] Speaker 04:
Well, and again, if it was a motion to dismiss standards, though, those facts were in front of them and should have continued, and we should have been given the opportunity to further break.

[00:15:00] Speaker 00:
So we've taken you down to just about 30 seconds, and I understand you wanted to reserve, I think, three minutes.

[00:15:07] Speaker 00:
That's okay.

[00:15:07] Speaker 00:
No, but I'll give you a couple minutes in rebuttal because we took you over time.

[00:15:11] Speaker 04:
Okay.

[00:15:12] Speaker 04:
Thank you, Your Honor.

[00:15:30] Speaker 01:
Good morning, Your Honors, and may it please the Court.

[00:15:32] Speaker 01:
My name is James Weiler, and I have the pleasure of representing the appellee in this matter, Jennifer Gates.

[00:15:40] Speaker 01:
This is an FLSA overtime case.

[00:15:43] Speaker 01:
Jennifer Gates was a loan officer who was instructed to input a block of eight hours in her time card every day for five days a week.

[00:15:54] Speaker 01:
And this started in 2016.

[00:15:56] Speaker 01:
In 2019, the mortgage industry

[00:16:00] Speaker 01:
entered into historical times for them.

[00:16:04] Speaker 01:
Mortgage rates were the lowest they had been maybe ever, or certainly in decades.

[00:16:11] Speaker 01:
And as a result, everyone refinanced the loan.

[00:16:14] Speaker 01:
The housing market was booming.

[00:16:16] Speaker 01:
And so she was required to take on the extra duties to meet that demand while under the direction of her supervisor, demanding that she maintains the same level of customer service they had when they were doing a fraction of those loans.

[00:16:29] Speaker 01:
And as a result, she worked more than 40 hours.

[00:16:33] Speaker 01:
And at an arbitration hearing, we presented numerous witnesses.

[00:16:38] Speaker 01:
We presented phone logs.

[00:16:40] Speaker 01:
We presented encompass records, which is the system that they use to input all of their loans, to track their loans.

[00:16:49] Speaker 01:
So you could see certain times that an individual would log in or use that system.

[00:16:54] Speaker 01:
We used emails.

[00:16:56] Speaker 01:
We used witness testimony.

[00:16:58] Speaker 01:
Across the board, all of the witnesses agreed.

[00:17:01] Speaker 01:
We all entered eight hours each day for five days a week.

[00:17:05] Speaker 01:
We did not accurately record our time.

[00:17:08] Speaker 01:
And the VIP in the moment had no issue with that.

[00:17:13] Speaker 01:
And they had no issue reaping the benefits of all of their hard work.

[00:17:17] Speaker 01:
And now after an arbitrator hears all this evidence, they're now taking issue with that.

[00:17:23] Speaker 01:
And they're claiming that the arbitrator, against the manifest weight of the evidence,

[00:17:29] Speaker 01:
made a decision that was wrong.

[00:17:31] Speaker 01:
And that couldn't be further from the truth.

[00:17:34] Speaker 00:
What if it is?

[00:17:34] Speaker 00:
Even if it is under the standard for an arbitration award, are they just asking us to weigh the evidence?

[00:17:43] Speaker 00:
Their point is that there were flaws and gaps in the evidence that Ms.

[00:17:48] Speaker 00:
Gates presented, dates she was out of the country, which would not be covered by the statute, vacations, medical appointments, a daughter's wedding, all of these sorts of things, so that

[00:17:57] Speaker 00:
I think that the point of their argument is that that means that the award was outside the arbitrator's authority, completely irrational, manifestly unjust because of the flaws in the evidence.

[00:18:09] Speaker 00:
How do you respond to that?

[00:18:12] Speaker 01:
I would respond that they have mischaracterized the evidence that was at the hearing in the first place, and then on top of it, they are asking this panel for the first time, which they

[00:18:22] Speaker 01:
didn't necessarily do at the district court.

[00:18:23] Speaker 01:
I mean, the district court pleading was four sentences of conclusory statements of law and fact that the district court summarily dismissed.

[00:18:32] Speaker 01:
So they're raising all of these for the first time here.

[00:18:35] Speaker 01:
But what they're asking is weigh the evidence, she got it wrong.

[00:18:40] Speaker 01:
They haven't set forth any case law that says an arbitrator has to do a day by day analysis.

[00:18:46] Speaker 01:
It's important to note that they did not do a day by day analysis.

[00:18:49] Speaker 01:
And every instance that they raised to challenge the credibility of the estimate, the arbitrator took into consideration.

[00:18:56] Speaker 01:
So for them to now say the arbitrator ignored their arguments is patently false.

[00:19:03] Speaker 01:
On top of it,

[00:19:05] Speaker 01:
time that the arbitrator deducted for the period of time she was in Mexico, the arbitrator raised that argument suespante at the arbitration.

[00:19:14] Speaker 01:
That was not an affirmative defense raised in response to discovery.

[00:19:17] Speaker 01:
That was not an affirmative defense set forth in an answer to the complaint.

[00:19:20] Speaker 01:
The arbitrator went above and beyond to ensure that based upon the evidence presented to her, the correct decision was made.

[00:19:29] Speaker 01:
And so

[00:19:30] Speaker 01:
There is no merit to their arguments that she wasn't aware of the law.

[00:19:35] Speaker 01:
She cited it in her award.

[00:19:38] Speaker 01:
And then she applied it based upon what she actually witnessed, what she read, what she saw at the hearing itself.

[00:19:45] Speaker 01:
So every one of her decisions is based upon not only her foundation and understanding of the law, but also what happened at the hearing.

[00:19:54] Speaker 01:
And she had the opportunity to weigh that evidence, which this court should not be doing.

[00:19:58] Speaker 01:
This court should not be questioning the decision she made about what evidence she should have cared more about, where she should have placed the emphasis.

[00:20:05] Speaker 01:
That's not what we should be here today to discuss.

[00:20:09] Speaker 00:
Well, what seems to be, and thank you for your answer, but what seems to be a little more problematic is that the parties had a settlement agreement with respect to some claims, counterclaims, and that settlement agreement included a provision that they would each bear their own costs and attorney's fees.

[00:20:25] Speaker 00:
And yet the arbitration award includes attorney's fees against VIP and in favor of Gates.

[00:20:32] Speaker 00:
And so that seems irreconcilable with the party's agreement.

[00:20:37] Speaker 00:
And it seems as if it was clearly erroneous.

[00:20:40] Speaker 00:
I guess the question is, does it rise to the level of manifest injustice or clearly irreconcilable?

[00:20:47] Speaker 00:
So how do you defend her award on fees that had been settled?

[00:20:54] Speaker 01:
Yeah, so short answer, no, it does not.

[00:20:58] Speaker 01:
Longer answer, there was counterclaims that were brought that in response to our, well, if you're going to maintain those counterclaims, we're going to bring an FLSA retaliation claim because those counterclaims are baseless.

[00:21:11] Speaker 01:
And so those counterclaims were dismissed on go because they didn't want to face an FLSA retaliation claim.

[00:21:17] Speaker 01:
So there wasn't this substantive work that went into the counterclaims that worked all the way up.

[00:21:22] Speaker 01:
To be honest, I'm not entirely sure what entries in there they're talking about because they didn't put those in the brief.

[00:21:29] Speaker 01:
So which ones?

[00:21:30] Speaker 01:
I would be happy to discuss the specific entry if they would have argued that.

[00:21:36] Speaker 01:
Because my guess is some of the entries they may be talking about were entries that would say discussed discovery into our FLSA claim and then had an add-on and also discussed dismissing the counterclaims.

[00:21:50] Speaker 01:
what would be the appropriate deduction there or not.

[00:21:53] Speaker 01:
The arbitrator had the opportunity to review every one of our time entries.

[00:21:58] Speaker 01:
She did make deductions.

[00:21:59] Speaker 01:
She deducted the hourly rate that we requested from 450 to 400.

[00:22:03] Speaker 01:
She did take deductions off of certain activities that we performed, whether they were paralegal or not.

[00:22:09] Speaker 01:
So to say she didn't perform any sort of analysis, didn't read the actual entry, there's nothing that has been put forth in the record by VIP to suggest that that was in fact the case.

[00:22:19] Speaker 00:
Was there a calculation?

[00:22:20] Speaker 00:
I asked your friend on the other side, he said he didn't know the amount.

[00:22:23] Speaker 00:
Did you do some sort of calculation?

[00:22:25] Speaker 00:
Has anybody figured out how much we're talking about for the fees, for those particular fees that were settled?

[00:22:30] Speaker 01:
So I went back and looked and tried to find any entry that said in any way reference counterclaims or something like that.

[00:22:36] Speaker 01:
And I think I found about 10 hours.

[00:22:39] Speaker 01:
So $4,000.

[00:22:42] Speaker 01:
And of those ones referencing it, I would be more than happy on a line by line to make an argument about how that wasn't just about the counterpoint.

[00:22:52] Speaker 01:
But as I sit here, I don't know what entry we're talking about because they didn't argue.

[00:22:57] Speaker 01:
They didn't put it in the brief.

[00:22:58] Speaker 01:
They definitely didn't put it in the brief to the district court, which you would note that the record here at the appellate court is substantially greater than the record that was provided to the district court.

[00:23:10] Speaker 02:
I take it your big picture argument is your friend on the other side pinpointed certain hours that she allegedly didn't work and the arbitrator looked at it and at least cut some hours and some amounts.

[00:23:24] Speaker 02:
I guess you request something like $260,000 in fees and the arbitrator awarded about $220,000 or something around there.

[00:23:32] Speaker 02:
I mean, what's the drawing line to where we can say, no, it's a manifest or complete irrational or manifests disregard of laws?

[00:23:41] Speaker 02:
I mean, if the arbitrator had only cut, say, just $5,000, would that be complete irrational?

[00:23:50] Speaker 02:
It looks like the arbitrator did take into account and acknowledge that maybe she didn't work these hours, but then the actual number is very, very small.

[00:24:00] Speaker 01:
Sure.

[00:24:01] Speaker 01:
My argument is I don't think that you can just make a bright line rule about a percentage.

[00:24:06] Speaker 01:
Arbitrator receives a fee app.

[00:24:08] Speaker 01:
If they don't cut at least 10%, it's a manifest disregard of the evidence.

[00:24:13] Speaker 01:
I think it's on a line-by-line basis.

[00:24:17] Speaker 01:
Was that line item appropriate?

[00:24:19] Speaker 01:
Is that something that had to do with the prosecution of, which was the successful prosecution of, FLSA claims?

[00:24:27] Speaker 01:
are under the statute, under 216, are you entitled to recover that?

[00:24:32] Speaker 01:
The challenge I have in answering your question on the specifics of this case is I don't know what their argument is because they didn't make it.

[00:24:39] Speaker 01:
They just blank it said, she did something wrong with the fees.

[00:24:45] Speaker 01:
Okay, which line items?

[00:24:46] Speaker 01:
There's a spreadsheet.

[00:24:47] Speaker 01:
There's entries.

[00:24:48] Speaker 01:
Which entry?

[00:24:49] Speaker 01:
And let's talk about the specific entries.

[00:24:51] Speaker 01:
Well, they didn't do that.

[00:24:51] Speaker 01:
And the time to do that passed.

[00:24:53] Speaker 03:
Well, it appeared to me that the arbitrator basically followed the Hensley factors in the Ninth Circuit that we normally apply in reviewing district court's fee adjustments.

[00:25:07] Speaker 01:
You're correct.

[00:25:09] Speaker 01:
Yes.

[00:25:10] Speaker 01:
And that's why we picked arbitrator Matheson.

[00:25:12] Speaker 01:
Michelle Matheson is a very well-respected attorney here in

[00:25:15] Speaker 01:
Here in Phoenix and the state of Arizona, she's handled numerous FLSA claims, and she demonstrated that knowledge throughout the entire process with her rulings on summary judgment, with her application of the Mount Clemens standard, with her rulings and decisions that she made in the hearing on what could or couldn't, what arguments could or couldn't be made in the hearing.

[00:25:35] Speaker 01:
And then after, she wrote 25 pages.

[00:25:38] Speaker 03:
Which as I recall the district court observed was a pretty thorough analysis of the facts in this case contained in that 25 page award.

[00:25:49] Speaker 01:
Correct.

[00:25:50] Speaker 01:
And what I think has kind of happened at the hearing, happened at the district court, and happened now here today is VIP wants the judges to step in and with their own eyes look at evidence on their own, come up with their own arguments and make

[00:26:09] Speaker 01:
Because what they put in their briefs.

[00:26:12] Speaker 03:
He acknowledges that we can't reweigh the facts, but he's asking us to look at the record and declare that it meets the statutory standard for setting aside an arbitration order under the FAA.

[00:26:23] Speaker 03:
That's really what he's asking us to do.

[00:26:25] Speaker 01:
Correct.

[00:26:26] Speaker 01:
And look at it broadly yourself, not with citations to it, not with specific points, not with specific issues.

[00:26:33] Speaker 01:
So how can this panel or the appellee

[00:26:37] Speaker 01:
formulate appropriate arguments on specifics when we don't know what the specifics are.

[00:26:42] Speaker 01:
All we know is they're unhappy with it.

[00:26:44] Speaker 01:
They're very unhappy with it.

[00:26:46] Speaker 01:
They're so unhappy they filed a claim against Jennifer Gates in Superior Court and against her husband for conspiracy based on their testifying about ours.

[00:26:56] Speaker 01:
They're very unhappy.

[00:26:57] Speaker 03:
I think you may be outside the record.

[00:26:59] Speaker 01:
And I apologize for that.

[00:27:00] Speaker 02:
On the counterclaim issue, if VIP had informed the arbitrator explicitly and said, look, you approve this stipulation that says each party will bear its own costs, and the arbitrator still awarded the counterclaim attorney's fees, would that be a manifest disregard of law or completely irrational?

[00:27:19] Speaker 01:
For the entries that were specifically and solely related to the defense of the counterclaim, yeah, I'd have a hard time

[00:27:26] Speaker 01:
standing up here and telling you that that's following the law, that's abiding by the settlement contract.

[00:27:32] Speaker 01:
So yeah, on those particular instances, yeah, I'd have a hard time saying that's not a disregard for the law, right?

[00:27:40] Speaker 01:
But in this particular instance, what were those entries?

[00:27:45] Speaker 01:
What were they?

[00:27:47] Speaker 01:
They didn't make that argument.

[00:27:48] Speaker 01:
So I don't think

[00:27:50] Speaker 01:
that the appellant has met their burden in this case.

[00:27:52] Speaker 01:
I don't think that they've demonstrated that there was this manifest disregard for the law.

[00:27:57] Speaker 01:
And to the contrary, the arbitrator made it very clear that she was thorough, that she reviewed the documents.

[00:28:04] Speaker 01:
She understood the law.

[00:28:05] Speaker 00:
So if we accept what you've just said, that you can't really defend awarding fees for those entries, but you don't know what they are, would it be appropriate for us to remand it to the district court for them to consider

[00:28:19] Speaker 00:
I mean, I'm not sure what happens procedurally, but if there's a problem with some of the fees and you're acknowledging that, is there any remedy?

[00:28:28] Speaker 01:
I guess I would say I'm not necessarily acknowledging it because the argument hasn't been made, so I don't think it's appropriate to send it back.

[00:28:33] Speaker 03:
But if that were the issue... What's the amount of money that we're talking about?

[00:28:37] Speaker 03:
Roughly $4,000.

[00:28:37] Speaker 03:
$4,000 of attorney time or FLSA time?

[00:28:42] Speaker 01:
Not FLSA time, attorney time.

[00:28:46] Speaker ?:
Okay.

[00:28:46] Speaker 01:
All right.

[00:28:47] Speaker 01:
Less time than we're spending arguing about the issue.

[00:28:50] Speaker 01:
and that's not a good argument, you know, the project being glib.

[00:28:55] Speaker 01:
But yeah, if ultimately the court were to decide, hey, we want to allow further briefing on that narrow issue, that specific issue, then I wouldn't disagree with the court that you could remand it back on that narrow issue alone.

[00:29:09] Speaker 01:
I don't think it should be sent back to then restart the briefing process again on the issues where they're arguing about weighing evidence.

[00:29:16] Speaker 03:
She did make a more

[00:29:17] Speaker 03:
a more substantial reduction in your overall fee request, did she not, by reducing the hourly rate and cutting some of the hours?

[00:29:25] Speaker 01:
That is correct.

[00:29:25] Speaker 01:
She cut, based off of what we submitted, she cut an amount way greater than what would potentially be an issue.

[00:29:32] Speaker 03:
So in the wash, it all comes out, is that what you're saying?

[00:29:35] Speaker 01:
They come out further ahead.

[00:29:37] Speaker 01:
Okay.

[00:29:43] Speaker 01:
And I guess last one, perhaps we haven't touched on, just to emphasize again,

[00:29:47] Speaker 01:
The petition for vacator pursuant to the FFA section 6 should have been treated as a motion.

[00:29:57] Speaker 01:
The district court correctly treated as a motion.

[00:29:59] Speaker 01:
They should not have been afforded another opportunity to do discovery or submit additional briefing.

[00:30:06] Speaker 01:
They filed their initial petition.

[00:30:09] Speaker 01:
They chose to do it that way.

[00:30:10] Speaker 01:
We responded, and it wasn't until perhaps one sentence in an answer to the motion to confirm the award where they asked for additional time to brief.

[00:30:19] Speaker 01:
And I don't believe that that would be a sufficient motion to amend their pleading or to get additional briefing that would require this court to remand the matter.

[00:30:28] Speaker 01:
I see that my time has expired.

[00:30:29] Speaker 01:
Thank you very much, Your Honors.

[00:30:30] Speaker 00:
Thank you.

[00:30:34] Speaker 04:
mister topple uh... you have two minutes thank you and i don't know that i'll even take that much just as a few things to note i mean the district court did note that it was a lengthy well-reasoned opinion but that does not of course preclude uh... the fact that it could still exceed the arbitrators authority uh... so the mere fact that it was well uh... lengthy and potentially well-reasoned we would argue differently but but you're not taking the position that the arbitrator had no authority to

[00:31:03] Speaker 03:
assess and award attorney's fees to the prevailing party.

[00:31:07] Speaker 03:
No, we are not.

[00:31:08] Speaker 03:
You're really challenging the error in, I'll call it double counting, including the $4,000 in fees that were essentially compromised in the settlement by directing that each party should bear its own cost.

[00:31:26] Speaker 04:
And really not double counting, that would be in addition to, because she did make deductions relating to other things that she felt was appropriate under Lodestar.

[00:31:34] Speaker 04:
This would be fees in addition to those.

[00:31:37] Speaker 04:
And to note, we did specifically identify.

[00:31:40] Speaker 04:
So for him to say that we didn't, we did in our response to the arbitrary, to the appellee's motion to four attorneys fees, we specifically identified those entries that were relating to.

[00:31:54] Speaker 04:
Unfortunately, I don't have that in front of me or I'd be able to tell you how much those were.

[00:31:59] Speaker 04:
The last point that I want to make here is the arbitrator herself found in this case that the electronic data that the appellee provided was not an accurate reflection of the hours that she worked.

[00:32:13] Speaker 04:
And while the appellee noted that she made several deductions, and if we look at what she started at, Gates was originally saying she worked 5,960 hours of overtime.

[00:32:25] Speaker 04:
Our point is the arbitrator did not deduct

[00:32:29] Speaker 04:
based on the evidence that we presented on those days that she did not do it day-by-day analysis.

[00:32:35] Speaker 04:
Thank you, Your Honor.

[00:32:36] Speaker 02:
One question, did you ask the arbitrator, did you tell the arbitrator how much she should reduce the attorney fees?

[00:32:42] Speaker 02:
Did you give an amount?

[00:32:44] Speaker 04:
I don't know if it was an amount.

[00:32:45] Speaker 04:
My recollection was the entries we listed, so I don't know if it was an amount, but the entries were specific relating to the counterclaim were listed.

[00:32:54] Speaker 04:
Thank you all, Your Honor.

[00:32:56] Speaker 00:
Thank you.

[00:32:56] Speaker 00:
Thank you both for your arguments this morning, and this case is submitted.