[00:00:09] Speaker 02:
Good morning, Your Honors. May it please the Court. Tanner Laish on behalf of Appellant Yintao Yu, and I'd like to reserve five minutes for rebuttal. I will watch my clock. This appeal asks a simple question, whether a state law contract formation dispute can be turned into a federal case under the New York Convention.

[00:00:26] Speaker 01:
Council, I would appreciate your addressing right away the question that we posed.

[00:00:35] Speaker 01:
As I understand the record, your client quote, independently agreed to arbitrate his claims and submitted a demand for arbitration, which is repeated, for arbitration on December 5th, 2024.

[00:00:51] Speaker 01:
So what is the status of that arbitration now and what claims were submitted to arbitration?

[00:00:58] Speaker 02:
Your Honor, the arbitration is ongoing. The claims that were submitted to arbitration were Mr. Yu's underlying employment claims which are largely reflected in his amended state court complaint that's in the record at ER66.

[00:01:09] Speaker 04:
And that's the, that's the, those are the claims about which this litigation focused, because the question was whether your client signed the arbitration agreement, and if he did not, whether the claims were arbitrable. And so, tell me what you'd have us order in this case.

[00:01:32] Speaker 04:
Maybe we agree with your position, that the court lacked jurisdiction. Maybe we don't.

[00:01:41] Speaker 04:
This is a nice academic exercise. We can all write opinions or memos to each other about it. What relief do you get?

[00:01:50] Speaker 02:
We ask that the court vacate the district court's order.

[00:01:53] Speaker 04:
And if the court vacates the district court's order, aren't you in precisely the same position that you have voluntarily placed yourself in? We are not, Your Honor.

[00:02:03] Speaker 02:
To address the issue of mootness, an appeal is moot only if it's impossible.

[00:02:07] Speaker 04:
No, no, just don't read the case law to me. Absolutely. Answer my question. Tell me what change in position either side will undergo if we declare this case moot, or if we don't declare this case moot, and reach your jurisdictional argument. How will either side be differently situated than they are today?

[00:02:28] Speaker 02:
ByteDance is currently pursuing a malicious prosecution counterclaim against Mr. Yu, seeking $6 million in tort damages, arguing that the district court's order reflects a favorable... In state court? In arbitration.

[00:02:41] Speaker 04:
Yeah, in arbitration. And he can pursue it. He may win, he may lose. My question is, you don't get out of arbitration no matter what we do, correct?

[00:02:50] Speaker 02:
We do not get out of arbitration.

[00:02:51] Speaker 04:
Okay, and in arbitration, all your underlying claims against... ByteDance are being addressed, correct?

[00:03:00] Speaker 04:
Yes, Your Honor. Okay, so tell me again.

[00:03:04] Speaker 04:
Tell me again, as a practical matter, if we rule in your favor, how is Mr. Yu any better off than he is today? I want to ask the same question to the other side, because I have no idea what their position is on mootness. But it just seems to me you're asking for an advisory opinion.

[00:03:21] Speaker 02:
Your Honor, ByteDance would not be able to pursue a malicious prosecution counterclaim against my client.

[00:03:28] Speaker 00:
Really what you're looking for is vacatur of the district court order. So you don't actually care whether or not we find this case to be moot because your client has voluntarily initiated arbitration. The case could be moot as long as what you're really asking for is Munsing War, vacatur of the district court. decision, is that correct?

[00:03:52] Speaker 02:
Yes, to prevent the collateral legal consequences.

[00:03:54] Speaker 04:
And if we were to find mootness, we would vacate the decision, we would vacate the decision below, would we not?

[00:04:02] Speaker 02:
We certainly would invite the court to vacate.

[00:04:04] Speaker 00:
Okay, so if your own conduct, if your client's own conduct was the cause of the mootness, don't we have cases that say vacatur is not appropriate?

[00:04:15] Speaker 00:
It is an extreme remedy to award to a party who took the conduct in the first instance to create the mootness.

[00:04:24] Speaker 02:
That case law does exist, Your Honor. And to be clear, we're not asking the court to vacate because this is moot. We're asking the court to vacate for lack of subject matter jurisdiction. And this case is not moot.

[00:04:34] Speaker 00:
I'm asking you to assume for a moment that we think this appeal or this case is moot because your client initiated arbitration. which is the very subject of this appeal, which is whether or not he signed an agreement that would force him to arbitrate his claims. So if we find that that issue is moot because now arbitration has commenced, then talk about why you think you're entitled to vacature.

[00:04:59] Speaker 02:
because of the collateral legal consequences extending from the court's order. I'd point this court to its decision in EEOC versus Federal Express Corporation. An appeal is not moot if the court can grant real effectual relief.

[00:05:11] Speaker 04:
Okay, tell me what real effectual relief. See, I'm not sure. Maybe I'm missing something here. What are the collateral consequences that flow from the district court's order, which merely said you signed the agreement and this case is subject to arbitration? What are the collateral consequences that flow from that? I don't find any ruling on the merits of any claim there.

[00:05:36] Speaker 02:
The court adjudicated the legal relationship between the parties as to all terms of four separate agreements. And so that order went beyond just compelling arbitration.

[00:05:47] Speaker 01:
I don't understand why they couldn't, why you wouldn't still be subject to the counterclaim, if you will, in arbitration. even if the case is moved and the district court's opinion is vacated or judgment is vacated, why couldn't they still pursue it?

[00:06:09] Speaker 02:
Because a malicious prosecution counterclaim, Your Honor, requires a favorable termination on the merits, and that would not exist if the order they're relying on was vacated.

[00:06:18] Speaker 04:
Where is there a favorable termination on the merits in the district court's order? The district court's order simply says... It's a sanction order.

[00:06:27] Speaker 00:
They're terminating sanctions. I think the concern is that there is an order that grants termination of the litigation as a sanction, and your position is that that judgment is the hook by which the malicious prosecution claims are based.

[00:06:44] Speaker 02:
Yes, that is correct, Your Honor. And as well, it's giving rise to arguments of issue preclusion. ByteDance has already tried to dismiss Mr. Yu's entire arbitration demand under a theory of fraud estoppel and bankruptcy estoppel, relying on factual findings in the district court's order.

[00:07:00] Speaker 01:
It's also currently trying to dismiss... There aren't what factual findings are in the district court's decision. It's a sanctions order, right?

[00:07:07] Speaker 02:
That Mr. Yu, for bankruptcy estoppel, signed the bankruptcy petition. That was a finding the court made.

[00:07:14] Speaker 04:
Well, that's precisely what doesn't make any difference now because you voluntarily, the only consequence of signing these contracts is that you're subject to arbitration. And you voluntarily submitted yourself to arbitration. And as to the sanctions, all that the sanctions establish is that, who knows what they establish because they haven't been imposed yet, but that your client, committed misconduct in this litigation about whether or not the case was arbitrable.

[00:07:53] Speaker 04:
You weren't seeking relief in this litigation in federal court. That's what you're seeking in state court. In federal court, all you were seeking was a declaration that the dispute is not arbitrable. So I don't see how any of the underlying claims have been subject to a final determination by any court.

[00:08:16] Speaker 01:
And frankly, just while you're thinking about that, perhaps your friends on the other side should be thinking about this as well. I don't see that that is a favorable determination on the merits. It's not on the merits.

[00:08:31] Speaker 02:
Two points, Your Honor. First, the JG action was not whether this case was about arbitration. It was about whether he signed the ECI.

[00:08:37] Speaker 04:
That's right, and

[00:08:38] Speaker 02:
The court found that he didn't.

[00:08:41] Speaker 04:
The court found that he did. That he did, I'm sorry. And the only consequence of that is that the claims that are being, that the claims covered by those agreements are subject to arbitration. That's the only consequence of them having signed the agreements. And unfortunately, you voluntarily submitted to arbitration before the court's order even came down. And so I'm still, I don't see where the determination on the merits of any claim is involved here.

[00:09:14] Speaker 04:
You weren't pursuing a malicious prosecution claim in federal court. That's still sitting in state court. There's nothing here, there's nothing in the federal court order that's a determination on the merits of any claim other than whether the case is arbitral.

[00:09:30] Speaker 02:
Your Honor, I think the court is speculating as to how the arbitrator might rule on ByteDance's malicious prosecution counterclaim against my client based on the order.

[00:09:39] Speaker 04:
I'm not speculating about anything. I'm trying to figure out what the effect of the federal court order is. And it is, unless you can suggest to me otherwise, it seems to me clear that the effect of the federal court order was to force the parties into arbitration. You didn't want arbitration because you said my client never signed the agreement. The judge made factual findings that he did.

[00:10:05] Speaker 04:
They went and wanted arbitration because the agreements called for arbitration. And the judge says, yes, I'm going to order arbitration. That's all the federal judge did. If you were appealing, if you hadn't submitted to arbitration, we'd then face, as you candidly pointed out, the difficult question of whether we have appellate jurisdiction to review those orders in the first place. But I'm still trying to figure out how either side is either advantaged or disadvantaged, would be advantaged or disadvantaged by anything we said on appeal.

[00:10:37] Speaker 04:
Now, unless we reached beyond the issues posed to the district court.

[00:10:42] Speaker 02:
Your Honor, I would direct this court to EEOC versus Federal Express Corporation, a decision from the Ninth Circuit saying an appeal is not moot.

[00:10:50] Speaker 02:
if the order can give rise to collateral legal consequences.

[00:10:54] Speaker 04:
I hear you. I can't imagine what collateral consequences an order sending you to arbitration imposes on you if you had voluntarily agreed to arbitration before that.

[00:11:08] Speaker 02:
Because the district court also adjudicated that Mr. Yu signed four total documents. In all terms in those documents, including an undertaking agreement, Your Honor... that was presented in the record that did not have a signature on it at all. The court declared that Mr. Yu signed that.

[00:11:22] Speaker 04:
And if you wanted to appeal that finding, then you shouldn't have voluntarily submitted to arbitration. Your client chose to, your client's actions are what moots this case. Nobody said, you know, we could fight about whether that finding is appealable, but that finding by the court was solely for the purpose of forcing arbitration.

[00:11:45] Speaker 01:
I would like to ask a separate question, if I may. In terms of the timing, as I read the record, you submitted the case to arbitration on December 5th of 2024, and the district court's judgment was not issued until December 12th.

[00:12:05] Speaker 01:
So was the case moot, and should the district court's Judgment be vacated for that reason and not the reasons that you have argued.

[00:12:20] Speaker 02:
There's a jurisdictional manner Yeah, I did not represent mister you below, but I believe that timeline that you presented your honor is correct Certainly would would certainly would invite the court to vacate the district court order on that basis the question of whether the district courts order was moot at the time that it issued terminating sanctions I think I think the answer is yes and There is case law saying that a district court may award sanctions under Rule 11 even if it lacks jurisdiction and, for example, mootness, but that is only for monetary sanctions. In fact, the Supreme Court precedent, Willie v. Coastal Corp., expressly says it's because the court's sanctions order was not ruling on the merits.

[00:12:59] Speaker 02:
But here, it's the exact opposite. The court ruled on the merits.

[00:13:02] Speaker 04:
We don't have sanctions in front of us, correct?

[00:13:05] Speaker 02:
You have subject matter jurisdiction.

[00:13:06] Speaker 04:
Right. So if the court imposes sanctions on you, on your client, but you as your client. That's why this is so confusing.

[00:13:16] Speaker 04:
You can appeal that.

[00:13:19] Speaker 04:
And you can say it didn't have the power to because it lacked subject matter jurisdiction. That's just not an issue in front of us at the moment, is it? No, that issue is not in front of us. So I think sanctions are probably irrelevant to our analysis of this case. The sanctions were imposed for what I would call discovery abuses. Maybe that's too broad a term, but for things that occurred during the discovery process, right?

[00:13:42] Speaker 02:
Correct.

[00:13:43] Speaker 02:
I just want to point out again, Your Honors, the court adjudicated the legal relationship between the parties as to four contracts, declared that Mr. Yu signed all four agreements, also made factual findings that he committed perjury, that he signed a bankruptcy petition, and those findings are giving rise to real collateral consequences in the arbitration. They are currently supporting a malicious prosecution counterclaim that could not exist if the order were vacated, and they're also giving rise to arguments of issue preclusion.

[00:14:12] Speaker 04:
Okay, so if we were to...

[00:14:15] Speaker 04:
Put aside Judge Desai's question for a moment. If we were to find that this case has moved and vacate the district court's judgment, is there anything more you would need out of us?

[00:14:28] Speaker 02:
No, Your Honor.

[00:14:29] Speaker 04:
Okay.

[00:14:31] Speaker 02:
I see I've used up the majority of my time.

[00:14:33] Speaker 00:
We'll put two minutes on the clock for rebuttal since we took up most of your time. Thank you.

[00:14:41] Speaker 03:
May it please the court, Ben Snyder appearing for Apolli by dance. Mr. Iskender is also here on behalf of Ms. Gao, but I'll be presenting argument for both Apollis. I'm going to read the room and start with mootness.

[00:14:52] Speaker 04:
And that's where you're going to finish, I think, too.

[00:14:55] Speaker 03:
There's not a lot that I agree with my friend on in this case, but I agree with him that the case is not moot.

[00:15:01] Speaker 03:
The district court's decision here granted judgment on all of the claims in the case. So it dismissed the claim for a declaration that Mr. Yu did not sign the ECIAA, and then it granted affirmative relief to my client, with respect to the four counterclaims addressing four different agreements, only one of which was invoked as the basis for initiating arbitration when Mr. Yu attempted to moot the case before the district court entered her sanctions order.

[00:15:32] Speaker 03:
And so in an ordinary case, having the relief just confirming that the person who signed the agreement signed the agreement might not seem like very much

[00:15:42] Speaker 00:
For my client, having gone through this years-long ordeal of trying to establish that Mr. You... Would you be making the same argument if we determined that the case was moot, but we did not vacate the lower court judgment?

[00:15:54] Speaker 03:
So I would be pleased to have an order along those lines.

[00:15:58] Speaker 00:
And I think your question about the role of the party seeking vacator... Yeah, so I'm having difficulty because both of you are sort of arguing both sides of the coin, depending on whether or not it favors your client's position. And it It doesn't really help us a whole lot because, you know, we are not going to issue an advisory opinion and we don't want to reach issues that we don't need to reach. It seems pretty clear to me that this case is moot. I think it would benefit you to really address the vacatur issue because we're having a difficult time seeing how this case isn't moot and having you stand up here and say you agree with the other side.

[00:16:33] Speaker 00:
And I'm not even sure they're saying what you're saying. So maybe focus on the vacatur issue.

[00:16:40] Speaker 03:
So let me be very precise about what I mean to be saying, and I will address the vacator issue too. I mean to be saying that we agree that the case is moot. Now, on vacator, I think the key consideration for whether you would vacate the district court's order is if you were to conclude that it was moot. And again, I strenuously disagree with that. But if you were to conclude that it was moot, The question will be whether it became moot before or after the district court entered the order imposing terminating sanctions.

[00:17:11] Speaker 01:
So let me focus on that. If it became moot before the court entered its order, do we even have a choice?

[00:17:18] Speaker 03:
So if it became moot before she entered her order, I don't believe that the court has a choice. Now, the district court said that he had provided an unsworn assertion that he had initiated arbitration, and that therefore she was going to resolve the sanctions motion before her.

[00:17:35] Speaker 04:
I want to focus on that precise thing. You knew, your side knew, because you were the other party to the arbitration, that whether or not this declaration was sworn or unsworn, arbitration had in fact been initiated.

[00:17:49] Speaker 01:
And it is sworn, I will add, I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. That seems to me to be sworn.

[00:18:00] Speaker 03:
So I apologize, Your Honor. I was relying on the district court's description of that.

[00:18:03] Speaker 01:
Well, the district court was in error on that.

[00:18:06] Speaker 03:
I take the point, and I don't mean to push that further. I was not aware of that, and I apologize for the mistake.

[00:18:11] Speaker 04:
And you never tried to, you never went to the district court, and you were just silent.

[00:18:15] Speaker 04:
You knew that arbitration had been initiated, did you not?

[00:18:18] Speaker 03:
We knew that arbitration had been initiated.

[00:18:19] Speaker 04:
Okay, so why didn't you tell the district court that?

[00:18:22] Speaker 03:
We did not believe that the initiation of arbitration mooted this case.

[00:18:27] Speaker 04:
That's a separate question. The district court wanted to know whether arbitration had been initiated and issued an order which said, gee, I'm not crediting for whatever reason Mr. Counsel's declaration that it has been initiated. and you knew it had been initiated and never told the district court it had been initiated. If the district court knew that, it might well have said, I'm done, this case is moot. But you never brought that to the attention of the district court, did you?

[00:19:00] Speaker 04:
Your Honor, I don't believe we ever, I'm confident we never disputed it. I'm confident you never disputed it. That's not the question I ask.

[00:19:07] Speaker 04:
The court said, this makes a difference to me. I'm not sure arbitration has been initiated from whatever has been submitted to me. And you could have said to the district judge, oh, I'm sorry, arbitration was initiated. And it was done so weeks ago. So you didn't need to enter this order. But you never did that, did you?

[00:19:27] Speaker 03:
We did not, Your Honor. To my knowledge, we did not. But we did not think that it mattered. And I don't read the district court's decision as suggesting that it mattered either. What the district court said was that the motion for terminating sanctions had already, the briefing on that had already been completed. Now, put aside terminating sanctions.

[00:19:41] Speaker 04:
That's not what I'm worried about here. What I'm worried about is whether the district court needed to reach the issues raised by you's complaint and your counterclaim. And once... Those were the issues raised before the district court, putting aside discovery abuse or whatever. And had the district court known that arbitration had been voluntarily entered into before the time the district court entered its order, I can't imagine that the court wouldn't have regarded that as an important fact.

[00:20:12] Speaker 04:
And indeed, its opinion said, gee, I might have declared this moot, but I'm not sure I can I'm not sure that arbitration actually was initiated because for some reason I don't credit this declaration. And you know, you knew at that time that arbitration had been initiated, correct?

[00:20:30] Speaker 04:
Yes, we knew that. You can tell people why your failure to tell the court that didn't matter, but it seems to me that both sides knew before the court got to the issues that this case posed to it that arbitration because those issues only related to whether arbitration should be initiated, put aside sanctions, there's nothing left for the court to decide.

[00:20:56] Speaker 03:
Respectfully, Your Honor, I disagree with the idea that the only thing that these related to was whether the arbitration in California under the ECIA only was going to go forward.

[00:21:09] Speaker 01:
But all of the claims are in arbitration, as I understand it.

[00:21:14] Speaker 03:
So there's a dispute in arbitration about where some of the claims against ByteDance Limited, the ultimate parent company, could be inserted, for example. Those claims are subject to one of the ancillary agreements dealing with arbitration that requires arbitration in Hong Kong. So the fact that Mr. Yu initiated arbitration... You can make that argument to the arbitrators. Your Honor, we could make that argument to the arbitrators, but one of the things that we would need to establish in that is that Mr. Yu signed that other arbitration.

[00:21:43] Speaker 01:
Well, so you have to prove it instead of doing it via sanctions, but I don't understand why the case wasn't moot at the time the district court entered the terminating sanctions order. which is what you're relying on.

[00:21:57] Speaker 03:
Because we were still attempting to prove that, Your Honor. We brought those counterclaims in order to prove that. We attempted to prove it for years.

[00:22:05] Speaker 01:
Except if arbitration was initiated to deal with the question of what agreements, if any, were signed...

[00:22:18] Speaker 01:
I truly don't understand your position. Is there something about the arbitration that doesn't permit you to make the argument that these documents were signed?

[00:22:29] Speaker 03:
Your Honor, as Mr. Yu points out in his brief, ordinarily the question of whether an arbitration agreement has been signed is a question for the court rather than for the arbitrator. And so we came to court seeking a declaration that he had signed those agreements.

[00:22:44] Speaker 01:
If we lose the declaration... What difference does that make? Because the only reason... It doesn't matter whether... We have cases, I think, saying this. It doesn't matter whether technically a person has to go to arbitration or not if they... begin the arbitration, then before the court gets to it, the court doesn't get to it.

[00:23:11] Speaker 01:
In other words, if you could prove in the arbitration that had already begun that Mr. Yu had signed one or all of these agreements, then the district court had no business dealing with whether he signed those agreements.

[00:23:31] Speaker 03:
Respectfully, Your Honor, I don't think that that's right. The fact that he had initiated an arbitration in California on the underlying state law claims does not require us to submit the question of whether he signed other ancillary agreements that call for arbitration in Hong Kong to that California-based arbitrator. So when the district court ruled here, she still had before her the counterclaims involving arbitration agreements that he had not acknowledged that he had signed, that he was not then proceeding under in arbitration.

[00:24:03] Speaker 03:
So at a bare minimum, the district court still had jurisdiction over our counterclaims about those ancillary agreements.

[00:24:12] Speaker 04:
And I would also add that... What did the district court rule about those ancillary agreements?

[00:24:16] Speaker 03:
The district court ruled that he signed them. And his complaint, as I recall, sought a declaration that he didn't sign them. So his complaint sought a declaration that he had not signed the ECIAA. We removed to federal court, excuse me, And we asserted counterclaims seeking a declaration that he signed.

[00:24:35] Speaker 04:
That he signed not only that agreement but other ones. But three other agreements as well. And what's being arbitrated now in state court? Claims under which agreement?

[00:24:45] Speaker 03:
So the state court proceeding is in arbitration under the ECIAA. the claims that are sort of originating in his second state court action. No, I understand.

[00:24:57] Speaker 04:
What agreements are at issue in the state court arbitration?

[00:25:01] Speaker 03:
So the district court is, or excuse me, the arbitrator has authority under the ECIAA. One of the issues that's in dispute in the arbitration is whether certain claims can be brought, can be arbitrated.

[00:25:14] Speaker 04:
No, I understand. I'm asking a very different question, so I don't need the... I don't need the whole history of the case. I'm asking a very specific question.

[00:25:24] Speaker 04:
The arbitration that is now taking place, to which both sides have voluntarily submitted, is it an arbitration based on the agreement that they, in which his signature was put at issue by the federal court thing, federal court action, or is it an arbitration based on the arbitration clauses in all of the agreements?

[00:25:49] Speaker 03:
Not quite either.

[00:25:50] Speaker 04:
Both.

[00:25:51] Speaker 03:
In a way, both.

[00:25:52] Speaker 04:
In the sense that... Okay, so in a way, both. And then your contention is, wait a minute, arbitrator, you shouldn't be hearing this case here because you should be hearing it in Hong Kong under those agreements, right?

[00:26:06] Speaker 03:
Not the entire case. There are some parts of it.

[00:26:10] Speaker 04:
So tell me why the district court's ruling... which doesn't seem, it precludes any side from arguing back and forth on that issue.

[00:26:19] Speaker 03:
Because, so the district court said, this is a quote from Excerpt of Record 13, the court declares that you executed the four disputed agreements at issue.

[00:26:30] Speaker 00:
And one, let me just make sure I understand so that it's helpful to the panel. The first had to do with the declaration that was sought by Mr. Yu in his action that was filed, and the other three were the agreements that were sought to be determined through deck action in the counterclaims file.

[00:26:48] Speaker 03:
That's correct. So at most, by submitting to arbitration under the ECIAA, Mr. Yu – I think acknowledged, although if you read his brief, he doesn't seem to acknowledge, but I think acknowledged that he was bound by the ECIAA. But submitting to that arbitration didn't acknowledge anything with respect to the three ancillary agreements. And so those agreements remained alive before Judge Ilsten when she entered this order. She had jurisdiction, and she exercised that jurisdiction.

[00:27:17] Speaker 04:
Okay, let's assume that she did. I'm still back to the question, what difference does it make? The party is now having... voluntarily agreed to arbitrate their dispute. And I think that voluntary agreement has to mean that we're arbitrating all disputes that we have against each other, does it not?

[00:27:35] Speaker 00:
So maybe this would be a good time to address my question of vacatur, because I really would like for you to address that. And I think it sort of bakes in this question, which is it matters. I think your position is that it matters that this not be vacated because there are still rulings with respect to the three ancillary agreements on which you filed your counterclaims. Those are not directly subject to the arbitration proceeding that was commenced by Mr. Yu. And so your preference would be to not – you would be fine with this case being moot if this wasn't vacated?

[00:28:10] Speaker 00:
That's correct. Okay. Tell me why this doesn't get vacated based on, I think, the questions that my colleague Judge Graber asked on the timing – of when this was decided versus the commencement.

[00:28:20] Speaker 03:
And Your Honor, you asked me to be candid. I cannot give you a reason that this case, that that decision below should not be vacated if you decide that it's moot because of the timing. So I would like to be able to give you that answer. I have thought creatively about how to give you that answer. I cannot give you that answer.

[00:28:37] Speaker 04:
Well, both sides have been very candid about sort of the issues of appellate jurisdiction and other stuff like that. So I'm still coming back to Describe for me what the facts were on the ground once the arbitration was initiated voluntarily on both sides.

[00:29:02] Speaker 04:
They initiated the arbitration. What was their claim?

[00:29:06] Speaker 03:
So we had a counterclaim for malicious prosecution, I believe, in that arbitration.

[00:29:12] Speaker 04:
Well, you didn't have any until it was initiated. So I'm just trying to figure, just take me through the chronology of what had happened in the arbitration before the district court. entered its order.

[00:29:23] Speaker 03:
So the arbitration had just been initiated.

[00:29:26] Speaker 01:
I mean, the reason that Mr. That's about a week or two, 10 days, something like that. Correct.

[00:29:32] Speaker 03:
And it's not as though the arbitration suddenly you're like sort of in the thick of things. I mean, we are still at the pleading stage in the arbitration. So Mr. Yu pretty transparently suddenly agreed to arbitration in order to under the ECIA only in order to he saw the writing on the wall So the other thing that I think makes this case not moot, and may I, Your Honor?

[00:29:58] Speaker 00:
Yes.

[00:29:59] Speaker 03:
Is that I don't think you can rely on the fact that Mr. Yu voluntarily agreed to arbitration to mean that he's never going to back out of that. So another thing that the district court's order gives us is that it ensures that Mr. Yu cannot decide, all right, Now I am no longer sort of sitting under the threat of sanctions from the federal court, and I'm going to go back to what I said in my opening brief, which is in Mr. Yu's opening brief, that I didn't sign this.

[00:30:26] Speaker 01:
But, counsel, we have case law that specifically says that submission, voluntary proceeding to arbitration conclusively waives any objection to the authority of the arbitrator. So I don't think he can back out. as a matter of law, from the arbitration and come back to court on any of the same claims.

[00:30:51] Speaker 03:
Your Honor, I agree that if he tried, we would have incredibly strong arguments, but that doesn't mean that an injunction ordering him to continue isn't helpful. Courts enter injunctions all the time, directing parties that have violated the law in the past not to violate the law again in the future, because enforcing those injunctions is easier than initiating an entirely new claim. So again, for all of those reasons, I do not think that this case is moot. If the court would find it helpful, I would be glad to address the appellate jurisdiction issue as well.

[00:31:22] Speaker 04:
I don't need that at the moment, but I do want to ask another question about mootness.

[00:31:24] Speaker 01:
Yeah, I have a question about that too. Go ahead.

[00:31:27] Speaker 04:
On mootness. So I'm not sure I got an answer to my prior question. I'm just looking for facts at the moment, not legal conclusions.

[00:31:36] Speaker 04:
They initiated arbitration under, and that arbitration says, I have claims against your client.

[00:31:46] Speaker 04:
and they arise under what agreement?

[00:31:49] Speaker 04:
So their claims do not arise under any agreement. Right, right, okay. And so then you file a counterclaim in the arbitration, right? To be clear, my client filed a counterclaim.

[00:32:00] Speaker 03:
Yeah, you.

[00:32:01] Speaker 04:
The problem with using you here is a problem. Your side files a counterclaim in the arbitration.

[00:32:07] Speaker 03:
Yes. What do you ask for? So, Your Honor, I have not been closely involved in the arbitration, so I'm reluctant to get too far into that. Well, what do you ask for in general? So we have sought, we have asserted malicious prosecution claim, a malicious prosecution claim.

[00:32:22] Speaker 04:
You're asking the arbitrator to consider a malicious prosecution claim? Yes, that is my understanding. Okay. Is there anything in the court's order?

[00:32:31] Speaker 04:
This district court's order, which says whether or not a malicious prosecution claim is arbitrable.

[00:32:37] Speaker 03:
So I understand, and Judge Graber, I heard your question earlier. You were asking about this. I think in a circumstance where a party has attempted to establish that the opposing party signed an agreement, and ends up with an order declaring that the opposing party signed an agreement based on the fact that the opposing party repeatedly lied, committed perjury on multiple occasions throughout that process. I think that that judicial order would be effective.

[00:33:06] Speaker 04:
But that wasn't the question I asked. So that's the argument you've made now pretty repeatedly for 20 minutes. I understand that argument. I'm asking a factual question. You asserted a malicious prosecution counterclaim, correct? Yes. Did you assert, and is there anything in the court's order that determines whether or not that counterclaim is arbitrable? Whether it's a great claim or a crappy claim, whether or not you get some support for it from the court's order, I'm asking just a very narrow question.

[00:33:41] Speaker 04:
Did the district court ever address whether or not a malicious prosecution claim would be arbitrable? No, Your Honor. That's the only answer I need.

[00:33:50] Speaker 01:
Okay, I have a question about appellate jurisdiction, and this is a chicken and egg question.

[00:33:57] Speaker 01:
We've been discussing this as if the mootness as the initial jurisdictional question comes first.

[00:34:06] Speaker 01:
And my question to you, And also on rebuttal, I'd appreciate hearing from the other side on this. Do we have to address appellate jurisdiction first? In other words, do we have jurisdiction to consider whether the case is moot before we know whether we have jurisdiction over what has been brought to us?

[00:34:33] Speaker 03:
So, Your Honor, under cases like Rourgas and Sinochem, the Supreme Court cases talking about the basically ordering of jurisdictional issues, I think this court can take any of the jurisdictional issues before it in whatever order it wants. So we have suggested that the – we suggested before this court's question about newness that the proper order in which to take those questions was to address the question of the district court's subject matter first and then appellate jurisdiction second. We pointed to a Second Circuit case that does exactly that in our brief.

[00:35:02] Speaker 03:
And I think this court could address mootness sort of at any stage in that process because all of them go to subject matter jurisdiction.

[00:35:12] Speaker 00:
Counsel, I have one last question for you, and I know we've taken you well over your time, but I know that Judge Hurwitz asked a very narrow question, which is whether or not your cross claims or counterclaims in the arbitration process specifically the one with respect to the malicious prosecution, has anything to do with the arbitrability of that claim that came from this district court judgment? I have a sort of broader question, which is at ER 13, which is the page that you cited to, which is the end of the judgment order from the district court, it says the court declares that you executed the four disputed agreements at issue and then cites them.

[00:35:52] Speaker 00:
Do any of the counterclaims that have been brought in the arbitration process relate, that's not the malicious prosecution claim, and I know that you're not the counsel who's working on the arbitration, but to the extent that you can answer the question, I'm interested to know if any of the other counterclaims, or if there are any other counterclaims that deal with any of those other agreements.

[00:36:11] Speaker 03:
So I'm not aware of other counterclaims dealing with it, but let me explain how one of the claims that Mr. Yu has brought in the arbitration is relevant to those other agreements.

[00:36:20] Speaker 03:
Mr. Yu has argued that he can assert claims under the ECIAA against, and I'm reasonably confident of all of this and will submit a letter correcting it if I say anything that is incorrect here. Mr. Yu has asserted a claim against ByteDance Limited, the parent corporation in that case. asserting that it's bound by the ECIA. My understanding is that one of the arguments we have made in response is that the arbitrability of the claims there is actually governed by a separate agreement, one of the ancillary agreements, that would require it to be arbitrated in Hong Kong.

[00:36:57] Speaker 03:
And so this decision is critical to that argument. because Mr. Yu, by submitting to arbitration in California under the ECIAA, has not acknowledged that that other arbitration agreement is binding on him. But as a result of page 13 of the excerpts of record, we can say you are bound by that other arbitration agreement, and that would require arbitration of these claims in Hong Kong.

[00:37:22] Speaker 00:
So it's...

[00:37:24] Speaker 00:
you're seeking to divide the arbitration as it currently exists in California into potentially separate claims that might need to be arbitrated in a different jurisdiction.

[00:37:33] Speaker 03:
I'm not sure I'd put it exactly that way. I think my understanding of our position there is we are asserting that he cannot assert certain claims in the arbitration in California because of that agreement.

[00:37:43] Speaker 00:
Okay. Thank you, Counselor. Are there any other questions?

[00:37:45] Speaker 04:
Yeah, one other question. So let's assume the whole world goes, explodes, and There are no arbitration orders, and he backs that of arbitration. Isn't the result that all these claims just simply get litigated in the California Superior Court?

[00:38:06] Speaker 03:
Your question is if we're unable to enforce our arbitration agreement.

[00:38:10] Speaker 04:
You're fighting now. Obviously, there's a voluntary arbitration that he's initiated about at least some of the claims.

[00:38:18] Speaker 04:
You've brought...

[00:38:20] Speaker 04:
counterclaims in the arbitration, saying, well, we have some claims against you, and they ought to be arbitrated, too. And I'm trying to figure out, the arbitrators decide that case one way or another.

[00:38:33] Speaker 04:
They decide they're arbitrable.

[00:38:36] Speaker 04:
What's your damage? They decide that all the claims that you wish to assert against his side are arbitrable. What's the damage to you?

[00:38:49] Speaker 03:
There's no...

[00:38:50] Speaker 04:
Okay, so why isn't the appropriate thing here to do to let the arbitration proceed to its conclusion if Mr. Yu then wants to argue that part of the arbitration is improperly decided because it's based on a district court decision that was entered without jurisdiction? The district court can consider that when we get to compelling enforcement of the award. But it seems to me the arbitration may clear up all these issues.

[00:39:25] Speaker 03:
I'm struggling. Forgive me.

[00:39:27] Speaker 04:
Maybe it's too complicated. Maybe we've gone on for too long. So I'll withdraw the question.

[00:39:32] Speaker 00:
All right. Thank you, counsel. You're off the hook.

[00:39:44] Speaker 02:
We invite the court to vacate the order. The simple fact is, unless and until that order is vacated, this appeal is not moot because it is giving rise to real collateral legal consequences. It is supporting a malicious prosecution counterclaim against Mr. Yu, and he is having to defend against that in arbitration.

[00:40:02] Speaker 00:
And unless this court vacates that order, it has the ability... You're not suggesting that they can't pursue their malicious prosecution counterclaim even without this order?

[00:40:14] Speaker 02:
I am, Your Honor, because an element of a malicious prosecution counterclaim is a favorable termination on the merits. And if the order is vacated, they would not be able to show a favorable termination on the merits.

[00:40:27] Speaker 04:
Yeah, but I don't understand how the favorable termination on the merits arises out of the district court's order. The merits of the claim have to do with the case being brought in State court, correct?

[00:40:40] Speaker 02:
The merits of the state action before the district court was whether Mr. Yu signed the ECIAA.

[00:40:46] Speaker 04:
No, I understand, but their claim is that your state action constitutes malicious prosecution.

[00:40:53] Speaker 02:
No, it is that the declaratory judgment action constitutes malicious prosecution. This case. Yeah, this case. This case. That's why this case is not moot, because this case is giving rise to the malicious prosecution counterclaim. And I apologize if I was not clear on that point earlier. This case is giving rise to the malicious prosecution counterclaim.

[00:41:12] Speaker 04:
Oh, and so what they're saying is that your claim that you didn't sign the agreement... was malicious.

[00:41:20] Speaker 02:
Yes, it lacked probable cause. Mr. Yuke filed it with malice, and it resulted in a favorable termination on the merits because the district court concluded he did sign the ECIA.

[00:41:30] Speaker 04:
So tell me why the arbitrators have jurisdiction over that claim.

[00:41:34] Speaker 02:
We are arguing that the arbitrator does not.

[00:41:36] Speaker 04:
ByteDance is arguing that the arbitrator... Right, so that led to the question I was asking you.

[00:41:39] Speaker 02:
Does. So that's a dispute right now.

[00:41:41] Speaker 04:
If the arbitrators find, gee, we don't have jurisdiction over that claim, nobody agreed to arbitrate that claim, then...

[00:41:48] Speaker 04:
there is no collateral consequence from the district court's decision, correct?

[00:41:52] Speaker 02:
Unless and until they refile in state court that same claim, which they're entitled to do.

[00:41:57] Speaker 04:
But that's exactly the same as their argument, is that you might back out of the arbitration. We're not being asked to predict the future. But it does seem to me that if the arbitrators address the issue of whether or not, even assuming you signed the agreements, they have jurisdiction over a malicious prosecution claim, which is not obvious to me at all, we're in a very different situation than we are now, right?

[00:42:22] Speaker 02:
You're right. But as things stand right now, we are having to defend against this claim. And the conclusion that I think Your Honor is going to is based on the idea, the speculation, that the arbitrator will conclude he doesn't have the jurisdiction.

[00:42:33] Speaker 04:
But what is one of your defenses? That claim is not subject to arbitration, even if we signed the agreements?

[00:42:42] Speaker 02:
The argument is that claim is not subject to arbitration because it does not fit within the scope of any of the arbitration clauses. That's right.

[00:42:48] Speaker 04:
So even whether or not you signed them really doesn't matter to that argument.

[00:42:54] Speaker 04:
You have a separate argument that we never signed the agreements and put that aside for a second. But your argument that this malicious prosecution counterclaim, if you would, is not an arbitrable claim, is independent of whether or not you signed the agreements.

[00:43:11] Speaker 04:
Correct, Your Honor. Okay, and that's something that either the arbitrators can take up or is outside their jurisdiction to take up, and you can argue that later when we get to confirmation of an award. So I'm not sure why the district court's ruling in this case has any bearing on whether or not the arbitrators have jurisdiction over a malicious prosecution. We have no idea. I understand that it might have bearing How do they resolve it if they find they have jurisdiction?

[00:43:45] Speaker 02:
We have no idea how the arbitrator is going to rule on the jurisdictional question. What we do know is right now that claim is being asserted against my client, and it's not hypothetical or speculative. It's concrete. We're having to defend against this right now, and therefore it is not impossible for this court to grant effectual relief by vacating the order.

[00:44:01] Speaker 00:
All right. Thank you, counsel. Thank you. The case just argued is submitted.