[00:00:01] Speaker 01:
Welcome to the Ninth Circuit.

[00:00:04] Speaker 01:
Judge Schroeder, Judge Gould, and I are happy to be with you.

[00:00:07] Speaker 01:
We've got a full slate of cases today.

[00:00:11] Speaker 01:
We've got four cases, so we would ask everyone to be sensitive to your time.

[00:00:16] Speaker 01:
If you want to reserve time for rebuttal, please pay attention.

[00:00:19] Speaker 01:
Ask for it.

[00:00:21] Speaker 01:
and try and sum up as your time is expiring, because we're going to try and hold to the timing here.

[00:00:29] Speaker 01:
We'll just jump right into it and go ahead and call our first case, which it looks like the parties are already ready for, Netsil versus American Express Company, case number 23-16083.

[00:00:41] Speaker 01:
We'll hear from Mr. Pivtorek.

[00:00:48] Speaker 01:
Yes, Ron.

[00:00:49] Speaker 04:
All right.

[00:00:49] Speaker 04:
Perfect.

[00:00:50] Speaker 04:
Good morning, Your Honors.

[00:00:52] Speaker 04:
May it please the Court, my name is David Piftorak, and I represent the appellants Brian Netzel, Nancy Larson, Eric Langkamp, and Travis Smith.

[00:01:02] Speaker 04:
And I would like to reserve three minutes for rebuttal, please.

[00:01:07] Speaker 04:
So Amex's arbitration agreement in this case is unenforceable because it prohibits the plaintiffs from seeking public injunctive relief that would stop Amex from continuing to engage in its racially discriminatory practices and policies that impact not only its workers, but all its customers as well.

[00:01:33] Speaker 01:
I want to get the procedural history right here.

[00:01:35] Speaker 01:
This is a putative class action, correct?

[00:01:38] Speaker 01:
This is, Your Honor, yes.

[00:01:39] Speaker 01:
And we have four named representative plaintiffs, is that correct?

[00:01:44] Speaker 01:
At this stage, yes.

[00:01:45] Speaker 01:
Okay.

[00:01:46] Speaker 01:
Well, how do we apply that in the choice of law provision?

[00:01:50] Speaker 01:
Because it seems like each of these four representative plaintiffs have different interests and theoretically you could say Hey, three of these don't have any connection to California and what you know, but one if I Forget the name

[00:02:08] Speaker 01:
The one that Larson has the most.

[00:02:11] Speaker 01:
But can we split that up in that way?

[00:02:14] Speaker 01:
Is it even possible, I don't know if you're even asking for this, to basically, assume we don't agree with you on the three, can we send a class action with three representative plaintiffs, well, could we send three representative plaintiffs to New York and then keep a class action with just Larson in California?

[00:02:32] Speaker 01:
Is that even permissible?

[00:02:34] Speaker 04:
Absolutely, Your Honor, because at this point,

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This case is not at issue.

[00:02:40] Speaker 04:
We just have the, I believe it's a second amended complaint that's been filed in this motion, isn't in response to the second amended complaint.

[00:02:48] Speaker 04:
So there's no really class action at this point.

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Nothing has been certified.

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So essentially, I think before it's certified, and I may be incorrect, but at this point, we just really have four individual cases that have been

[00:03:03] Speaker 01:
But it impacts the choice of law provision because in a putative class action, as I understand it, what we would do that.

[00:03:11] Speaker 01:
So the district court said there's just too much here.

[00:03:14] Speaker 01:
We can't it would be too difficult to do a choice of law provision on the different interests of all the potential class members.

[00:03:23] Speaker 01:
That's either right or it's wrong.

[00:03:25] Speaker 01:
If your theory is all we're looking at are the four named plaintiffs, then it seems like the district court's analysis might be wrong because you could distinguish between just the four.

[00:03:37] Speaker 01:
But if you have to do a choice of law analysis based on the putative class as a whole, which includes what, 7,000, 10,000 potential plaintiffs, you mentioned customers, could include 20,000.

[00:03:50] Speaker 04:
So, Your Honor, in this complaint, we're only alleging as class members, employees only.

[00:03:58] Speaker 01:
OK.

[00:03:59] Speaker 04:
Yeah, the UCL claim, as far as the customers go, just speaks to this.

[00:04:02] Speaker 01:
But you could still have 7,000 plaintiffs, right?

[00:04:06] Speaker 04:
Potentially, yes.

[00:04:08] Speaker 01:
And don't we need to look at all of that for purposes of the choice of law provision?

[00:04:16] Speaker 04:
I think at this stage it's too early.

[00:04:19] Speaker 04:
I believe that's sort of a class certification issue and this isn't in the briefs, but I believe other cases that have looked at this issue have basically said we can't decide it at this stage because we don't even know if it's going to be ever certified as a class action.

[00:04:34] Speaker 04:
So we really have to punt that decision down the road and initially determine just this threshold issue of

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for these plaintiffs alone, which choice of law provision applies.

[00:04:47] Speaker 04:
And that's the Barba case that we cited.

[00:04:50] Speaker 04:
Just for, it's the District of Arizona case, that when deciding choice of law provisions, you really have to look at each plaintiff individually.

[00:05:00] Speaker 04:
Because again, if Amex is seeking to enforce this agreement against an individual plaintiff, then really the threshold question is just between this plaintiff and Amex.

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So we have to decide the interpretation of this agreement between just these two parties to the agreement.

[00:05:20] Speaker 04:
I think it would almost be putting the cart before the horse if we were just to certify a class and say we're just deciding choice of law when there has been no class.

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When we really just have sort of two parties who are

[00:05:36] Speaker 01:
Well, five parties, because each plaintiff would be different.

[00:05:40] Speaker 01:
Can I ask, sorry, just trying to move this along, but the DeCarlo case, why doesn't the DeCarlo case control this?

[00:05:52] Speaker 01:
Because DeCarlo said, don't you have to show that you could not get public interest relief in arbitration?

[00:06:01] Speaker 01:
DeCarlo said, you clearly can't.

[00:06:04] Speaker 04:
DiCarlo for the reasons we stated in our opposition.

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DiCarlo here is inapplicable, and if I may try to explain this.

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It's a little bit convoluted, but I think the best way to look at it is all the case law determining or trying to interpret or apply McGill have really found or identified three, you can call them categories of clauses in these arbitration provisions.

[00:06:33] Speaker 04:
which is what we have in DiCarlo, is the class action and representative action waiver, which essentially says you have to proceed as an individual lawsuit.

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The second one is the non-mutual collateral stopple clause, which this Court mentioned in Patrick, which Amex cited in its Rule 28 letter, which is also present in the agreement.

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Finally, and this one is the dispositive one, it's the individualized relief clause, right?

[00:07:06] Speaker 04:
And here, in our agreement, we have- But that was what was at issue in DiCarlo.

[00:07:11] Speaker 04:
Oh, no, it wasn't.

[00:07:12] Speaker 04:
It was individual lawsuit, right?

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So the only question that DiCarlo settled was, does a case that proceeds as an individual lawsuit preclude public injunctive relief?

[00:07:24] Speaker 04:
In this case, in the cases like Blair, in cases like Jack V. Ring, which we cited, the question was not on whether this is an individual lawsuit, because an individual lawsuit can obtain public injunctive belief.

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The question is, is this individualized

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Is the plaintiff limited to individualized relief rather than an individualized lawsuit?

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Meaning, can the relief only benefit the plaintiff?

[00:07:50] Speaker 01:
And DiCarlo did not decide that question.

[00:07:51] Speaker 01:
I'm not tracking.

[00:07:52] Speaker 01:
Because to me, your whole argument is plaintiff Larson cannot get public relief in the arbitration.

[00:08:04] Speaker 01:
That's not true.

[00:08:06] Speaker 01:
DiCarlo says she can't.

[00:08:08] Speaker 01:
And I think, we'll hear from American Express, but what I hear from, what I thought I read from American Express was that's what distinguishes this from the other cases is they've said, no, you can get that relief in arbitration.

[00:08:22] Speaker 01:
So if she can get, if all these four plaintiffs can get this relief in arbitration, then the only thing is you can't have a class action.

[00:08:34] Speaker 01:
But we already know that that's okay.

[00:08:37] Speaker 01:
The Supreme Court has said you can't have a class action in arbitration.

[00:08:44] Speaker 01:
So I'm confused by what you're, you seem to be mixing up whether it's multiple plaintiffs in a class action with whether it's public conjunctive relief.

[00:08:54] Speaker 04:
No, Your Honor, let me try to drill this down a little bit.

[00:08:58] Speaker 04:
Because like I said, under California law,

[00:09:01] Speaker 04:
an individual plaintiff proceeding just as, you know, let's say John Doe.

[00:09:07] Speaker 04:
John Doe sues Amex.

[00:09:08] Speaker 04:
John Doe can get, in a court of law, can get an injunction that says, or let's use the DiCarlo example, right?

[00:09:15] Speaker 04:
John Doe can get an injunction that keeps a company from making robocalls to the entire California public, right?

[00:09:26] Speaker 04:
That is public injunctive relief.

[00:09:28] Speaker 04:
Now, our agreement limits the relief that John Doe can seek to just John Doe only, meaning he can't say stop making robocalls to every person in California.

[00:09:42] Speaker 04:
The agreement that we have here would limit him to individualized relief, meaning you can only get an injunction that says stop making robocalls to John Doe only.

[00:09:52] Speaker 04:
Not the entire public, which is public injunctive relief.

[00:09:55] Speaker 01:
But you can't get an injunction for the entire public in this case.

[00:10:00] Speaker 01:
Because you only have a narrow set of potential plaintiffs.

[00:10:08] Speaker 04:
Well, so like the, I'm sorry.

[00:10:13] Speaker 03:
No, no, go ahead.

[00:10:14] Speaker 04:
I'm confused.

[00:10:17] Speaker 04:
So this is very similar to the Tesla case where

[00:10:21] Speaker 04:
Tesla had policies that racially discriminate against employees and Tesla said that an injunction, public injunction seeking to stop workplace discrimination or specific policies that discriminated is public injunctive relief.

[00:10:36] Speaker 04:
That's the exact same thing we have here.

[00:10:37] Speaker 04:
What we're asking for is basically injunction that says, MX, no more racial quotas.

[00:10:43] Speaker 04:
No more racial quotas, no more setting different financial criteria

[00:10:48] Speaker 04:
for people based on race, for credit card customers, merchants, and things like that.

[00:10:54] Speaker 04:
So that is the definition of an injunctive relief.

[00:10:57] Speaker 04:
And the plaintiffs, without this clause here in the agreement, the plaintiffs would be allowed to seek such relief.

[00:11:03] Speaker 04:
However, the individualized relief clause that says the arbitrator's authority to make awards is limited to awards to the plaintiffs alone, just the plaintiff, meaning Amex has to stop discriminating against just you, plaintiff.

[00:11:18] Speaker 04:
But you can't get relief that eliminates Amex's racial quotas.

[00:11:24] Speaker 01:
And I guess that's the question we need to ask Amex and see what they say about it.

[00:11:29] Speaker 04:
Yes, Your Honor.

[00:11:29] Speaker 04:
And based on cases, I think specifically Jack V. Ring, Amex's interpretation of the agreement is obviously not dispositive because they do have a concerted interest in

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in applying a certain position before this court.

[00:11:51] Speaker 04:
What this court has to look at is the actual individual claims only provision.

[00:11:56] Speaker 04:
It can't just ask Amex, you know, what do you guys think because they have a vested interest in their legal position, right?

[00:12:07] Speaker 04:
You have to look at the actual language of the agreement, which we believe

[00:12:12] Speaker 04:
prohibits the plaintiffs from seeking public injunctive relief because, again, you only have that, the arbitrator's authority to make awards is limited to those parties alone.

[00:12:24] Speaker 04:
That language would be superfluous if it did not limit the type of relief that plaintiffs can seek to just them only, meaning stop discriminating against this plaintiff only rather than

[00:12:38] Speaker 04:
eliminate racial quotas, eliminate different financial qualifications for customers.

[00:12:43] Speaker 04:
And I see I'm running out of time.

[00:12:45] Speaker 03:
Well, let me just ask you a question, because I am a little confused.

[00:12:50] Speaker 03:
You're contending that California law applies to everybody here.

[00:12:54] Speaker 03:
Is that correct?

[00:12:55] Speaker 04:
No, Judge Schroeder.

[00:12:56] Speaker 04:
So we're actually contending.

[00:12:58] Speaker 03:
Well, that's what I did.

[00:12:58] Speaker 03:
I thought you were.

[00:13:00] Speaker 04:
So California law, with respect to McGill, would only apply to plaintiffs Larson, Netzel, and Smith.

[00:13:08] Speaker 04:
Lancamp, we do not allege, has any connection to California.

[00:13:11] Speaker 03:
Oh, OK.

[00:13:12] Speaker 03:
Lancamp is out, but the other two are in.

[00:13:15] Speaker 03:
And if we were to disagree with you on that and say only Larson really has the connections to California, what would we do then?

[00:13:27] Speaker 04:
So at that point, the agreement is unenforceable.

[00:13:31] Speaker 04:
I mean, obviously, I think it applies to all three.

[00:13:33] Speaker 04:
But in that instance, Your Honor, the agreement would be unenforceable as to Larson.

[00:13:41] Speaker 04:
And if the court rules that it's enforceable as to the other plaintiffs, then the case would just split at that point.

[00:13:48] Speaker 04:
And Ms.

[00:13:48] Speaker 04:
Larson can proceed in court, although we've raised other arguments as to why it's unenforceable as to the other plaintiffs as well.

[00:13:56] Speaker 03:
Well, I thought at some point that you were suggesting that Larson would represent a subclass of California folks.

[00:14:05] Speaker 04:
She could potentially if the district court eventually certifies it.

[00:14:09] Speaker 04:
But at this point, it's just her.

[00:14:13] Speaker 03:
OK.

[00:14:14] Speaker 03:
Thank you.

[00:14:16] Speaker 04:
Thank you.

[00:14:34] Speaker 00:
May it please the court, Robert Loeb for Epilly American Express.

[00:14:40] Speaker 00:
Judge Nelson, you are correct.

[00:14:41] Speaker 00:
DiCarlo controls on the issue of whether public injunctive relief is barred by this contract, and it clearly

[00:14:48] Speaker 01:
so it's not okay let let me ask you this because what i heard was that uh... and and i think this is helpful clarification the the property you said no you can get public conjunctive relief in the arbitration you've taken that position correct and we are getting is there a brief to my issues what do you think public conjunctive relief means do you think that any injunction that the arbitrator could issue would only apply to larson

[00:15:17] Speaker 01:
and the four plaintiffs, or would it bind American Express beyond that?

[00:15:25] Speaker 00:
The arbitrator is authorized under this agreement to issue any relief and any remedy that's authorized by the facts and the law.

[00:15:32] Speaker 00:
It would be an award to the individual, because this is an individual action, as McGill recognized, as DiCarlo recognized.

[00:15:40] Speaker 00:
But the adjunction, unlike the cases which have been considered barred under McGill, barring public injunctive relief, does not bar an injunction that affects or benefits third parties.

[00:15:53] Speaker 00:
So that, you know, we sent in the Patrick decision.

[00:15:57] Speaker 00:
Patrick explains that very clearly.

[00:15:59] Speaker 00:
It says the distinction on things that bar public relief and that not.

[00:16:03] Speaker 00:
are the ones that bar public relief speak to limiting the relief, limiting the relief to just the plaintiff and barring things that will affect other plaintiffs or other parties.

[00:16:13] Speaker 00:
That's the language in Patrick.

[00:16:16] Speaker 00:
That's the language you also find in all the other cases distinguishing what is barred and what is not.

[00:16:22] Speaker 00:
So we raise in our brief argument

[00:16:25] Speaker 00:
that public injunctive relief is allowed here.

[00:16:29] Speaker 00:
And of course, if you agree with this, almost all the other issues fall out of this case, and I can do a road map on that for you.

[00:16:36] Speaker 00:
But in their response and their reply, they only raised two arguments of why... And just to put a final point on that, we wouldn't have to get into the preemption arguments.

[00:16:44] Speaker 00:
You wouldn't have to get into preemption arguments.

[00:16:46] Speaker 00:
You wouldn't have to get into the argument about what the nature, whether what's being requested here is public conjunctive relief, because whatever.

[00:16:51] Speaker 01:
We wouldn't even need to get into the choice of law.

[00:16:54] Speaker 00:
Exactly.

[00:16:55] Speaker 00:
You wouldn't have to parse.

[00:16:56] Speaker 01:
Because there wouldn't be a conflict.

[00:16:57] Speaker 00:
You wouldn't have to parse which state has more significant interest, because that's only relevant if there's a fundamental policy of California being violated.

[00:17:04] Speaker 00:
And if this contract allows public conjunctive relief.

[00:17:07] Speaker 01:
Then it's not violated.

[00:17:08] Speaker 00:
It's not.

[00:17:08] Speaker 00:
And all we have would be just like where the district court was, that just New York law would apply.

[00:17:14] Speaker 01:
For the choice of law analysis, are we only looking at these four plaintiffs, or are we supposed to be looking at the putative class as a whole?

[00:17:24] Speaker 00:
No, there's no class that's been certified.

[00:17:26] Speaker 00:
See, we just look at these individuals.

[00:17:27] Speaker 01:
But again, that the would you agree that the district court's analysis on that was was slightly incorrect, not to say that you couldn't be upheld on different grounds.

[00:17:36] Speaker 01:
But the district court said basically threw up her hands and said, well, I can't figure out all the interests here because they're so disparate.

[00:17:44] Speaker 01:
But you can if there's just four that we're dealing with.

[00:17:46] Speaker 00:
I don't read it that way.

[00:17:47] Speaker 00:
I read the judge went through each one of the individual plaintiffs and talked about their nexus and found it was insufficient to trump the choice of law of New York.

[00:17:56] Speaker 00:
But again, there's no need to even think about that because the context issue only comes up if there's also a violation of a fundamental value or principle of California.

[00:18:07] Speaker 00:
And again, the only thing here that's being cited by the plaintiffs is that they are

[00:18:12] Speaker 00:
red herring, their false premise that this contract bars public injunctive relief.

[00:18:18] Speaker 00:
So let me just get to the two things they put in their reply brief to say why DiCarlo wasn't controlling.

[00:18:23] Speaker 00:
So first they say, well, unlike DiCarlo, this has a provision that bars preclusive effect to third parties.

[00:18:33] Speaker 00:
Well, Patrick, which we sent into the court,

[00:18:35] Speaker 00:
which, by the way, existed at the time they filed the reply brief.

[00:18:38] Speaker 00:
It was just ignored by them.

[00:18:40] Speaker 00:
It expressly says, as the same verbatim provision we have here, as in the Patrick contract, and they say, that does not bar public injunctive relief.

[00:18:49] Speaker 00:
That's just the background rule in California.

[00:18:51] Speaker 00:
So you can still issue public injunctive relief even when that is in the contract.

[00:18:55] Speaker 00:
So they have two arguments.

[00:18:57] Speaker 00:
One of them is clearly barred by Patrick.

[00:18:59] Speaker 00:
The second one is they point to language in the contract, ER 126,

[00:19:05] Speaker 00:
Roman 2D, which says the arbitrator's authority is limited to awards to the plaintiff alone, right?

[00:19:13] Speaker 00:
So none of that speaks to relief.

[00:19:15] Speaker 00:
None of that, we have another provision saying that the arbitrator has authority to grant any and all relief required and supported by the facts and the law.

[00:19:25] Speaker 00:
So it doesn't bar public conjunctive relief, but it also has no application here.

[00:19:30] Speaker 00:
If you look at the provision, if you look at page 126, there's a subsection A and there's a subsection B. Subsection A deals with claims about the individual pursuing a claim against American Express.

[00:19:46] Speaker 00:
This language does not apply to it.

[00:19:48] Speaker 00:
It only appears in subsection B. Subsection B is about individual versus individual claims, and there you have this extra sentence about making it clear that when you have two employees who have a conflict and they're suing each other or they're suing a supervisor,

[00:20:04] Speaker 00:
that whatever the arbitrator's gonna decide is gonna be as to those plaintiffs alone.

[00:20:09] Speaker 00:
So that's where that language comes in.

[00:20:10] Speaker 00:
It doesn't even apply to this context, but even if it applied, it just speaks to what we know from DeCarlo and from Patrick that saying that this is an individual action, that's what McGill says.

[00:20:23] Speaker 00:
They say, it says a public injunctive relief is consistent with bringing individual action.

[00:20:28] Speaker 00:
The problem in McGill was that the contract said,

[00:20:31] Speaker 00:
It couldn't benefit third parties.

[00:20:33] Speaker 00:
It couldn't affect third parties.

[00:20:35] Speaker 00:
That was the same thing in Blair.

[00:20:36] Speaker 00:
And Patrick points that out and says, what made Blair different is it had expressed language saying,

[00:20:45] Speaker 00:
I couldn't affect third parties.

[00:20:47] Speaker 00:
We don't have that here.

[00:20:48] Speaker 00:
He kept saying, well, there's something in here barring the relief.

[00:20:51] Speaker 00:
There is nothing barring.

[00:20:52] Speaker 00:
The only thing that speaks to relief is the all remedies and relief provision, which is broader than DiCarlo.

[00:20:58] Speaker 01:
Yeah, that's what I thought.

[00:20:59] Speaker 01:
Because that's what DiCarlo relied on was the all remedies provision.

[00:21:02] Speaker 01:
And as I read it, this is even broader.

[00:21:05] Speaker 01:
So I was just trying to figure out how that maps out.

[00:21:07] Speaker 01:
The difference here is the injunctive relief, the putative class action, the injunctive relief that's being sought.

[00:21:13] Speaker 01:
That was not an issue in DiCarlo, correct?

[00:21:15] Speaker 00:
At this stage, where it's a puto class action, I don't think it matters.

[00:21:18] Speaker 00:
If the individuals, they have signed arbitration agreements.

[00:21:22] Speaker 00:
If it's not unconscionable, those should be enforced and there's just an order to compile.

[00:21:26] Speaker 00:
They've all agreed that the arbitration doesn't have a class action, so there wouldn't be class action.

[00:21:31] Speaker 01:
So we would have to say, in order to rule for the plaintiffs here, we would have to say that under California law, public injunctive relief requires

[00:21:43] Speaker 01:
plaintiffs to be able to seek a class action.

[00:21:47] Speaker 00:
And I don't see any place for that.

[00:21:54] Speaker 00:
makes very clear, if that was the case, it would be preempted.

[00:21:58] Speaker 00:
So the California courts and this court have been very careful to say, no, no, public injunctive is relief.

[00:22:04] Speaker 00:
It's not a class action.

[00:22:06] Speaker 00:
It's an individual action.

[00:22:08] Speaker 00:
You're seeking injunctive relief.

[00:22:09] Speaker 00:
Here, if they get relief saying that the policies that they're attacking of American Express, policies that don't exist and are not meritorious in their challenge.

[00:22:17] Speaker 00:
But if there was such an injunction, they would have an injunction.

[00:22:20] Speaker 00:
And if it benefits third parties and affects third parties,

[00:22:23] Speaker 00:
That is fine under this agreement.

[00:22:26] Speaker 00:
Now, whether you call that public injunctive relief or you don't call it, we've agreed to it.

[00:22:30] Speaker 01:
So this court doesn't need to get into that whole question of- That does distinguish this case from some of the- because in a lot of the prior cases, if I read them correctly, the defendants were disagreeing that public injunctive relief was available.

[00:22:44] Speaker 01:
And the question was, does this fall within public injunctive relief or not?

[00:22:47] Speaker 01:
You, I think, are saying,

[00:22:50] Speaker 01:
We agree that you're seeking public conjunctive relief and we agree that you can seek it under California law and you can seek it in arbitration We've said that to the district court.

[00:22:59] Speaker 00:
We argued it extensively in this court and Whether what we're arguing it's under controlling Ninth Circuit law that Carlo and now Patrick that is the only appropriate way to read this contract as providing the ability to get public conjunctive relief and to

[00:23:13] Speaker 00:
read the contract contrary to circuit precedent and contrary to its plain language to create this whole maelstrom of other issues about what is the nature of relief here?

[00:23:21] Speaker 00:
Is it more like McGill?

[00:23:22] Speaker 00:
Or is it more like something else?

[00:23:24] Speaker 00:
And to get into the whole preemption issue which we raised, there's no need for this court to get into any of that.

[00:23:30] Speaker 00:
This court should just simply say this contract allows for public injunctive relief.

[00:23:35] Speaker 00:
There's no need to address those other issues.

[00:23:37] Speaker 00:
that all that's left is then the application of New York law to their unconscionability arguments.

[00:23:43] Speaker 00:
And the district court dealt with that correctly, saying that under New York law, you need to have both procedural and substantive and ran through and made factual findings as to why there is no procedural unconscionability.

[00:23:53] Speaker 00:
So this court should simply affirm that without getting into any of the other decisions or issues in the case.

[00:24:01] Speaker 01:
the uh... can you address briefly the tesla decision because uh... i mean tesla has now come in and said well and i think i know your answer but i want to hear it that uh... discrimination claims now are public injunctive relief and so therefore they basically expanded the court of appeals is expanded the definition of public injunctive relief from mcgill

[00:24:27] Speaker 01:
I take it that has no bearing here because your point is just going to be the same thing.

[00:24:32] Speaker 01:
You can seek the same relief.

[00:24:34] Speaker 00:
Their question is, can you bar public conjunctive relief or not?

[00:24:37] Speaker 00:
And is what they're seeking their public conjunctive relief, which only comes up when you're actually trying to bar it.

[00:24:43] Speaker 00:
But if we aren't barring public conjunctive relief, it all becomes a moot issue in the case.

[00:24:50] Speaker 00:
I'm happy to address any of the unconscionability arguments in the case, but otherwise, I think this is a very straightforward case where they're just trying to take a contract, which gives them the public injunctive relief.

[00:25:00] Speaker 00:
The forum is available in arbitration.

[00:25:02] Speaker 00:
They just don't want that forum, but there's a binding arbitration agreement which has to be enforced here.

[00:25:08] Speaker 01:
Judge Gould, do you have any questions?

[00:25:12] Speaker 02:
No, no questions.

[00:25:14] Speaker 01:
Thank you, counsel.

[00:25:29] Speaker 04:
Okay, Your Honor, so briefly I just want to address the issue of whether this agreement allows public injunctive relief and our position is that it doesn't because of the plain language of this individual claims only clause and the only natural... It just doesn't seem to square with McGill.

[00:25:46] Speaker 01:
That's the problem.

[00:25:48] Speaker 01:
McGill doesn't hinge public injunctive relief on whether a class action or individual release being sought.

[00:25:54] Speaker 04:
Yeah, Your Honor, I agree that whether it's a class action or not is completely irrelevant in this case.

[00:26:04] Speaker 03:
I have no class.

[00:26:06] Speaker 04:
No, yeah.

[00:26:07] Speaker 04:
Yeah, we have no class.

[00:26:08] Speaker 04:
And I think some of the cases go into the difference between what is class relief versus what is public injunctive relief.

[00:26:15] Speaker 04:
And this court, Blair Hodges, they explain that public injunctive relief means that it benefits the diffused public without actually, while benefiting the class members only,

[00:26:30] Speaker 04:
only incidentally versus a class action, which the benefits flow directly to the class members rather than the public in general.

[00:26:39] Speaker 04:
But very briefly, I just want to further explain why this agreement bars public injunctive relief despite Amex's assertions.

[00:26:48] Speaker 04:
And I think the Patrick case, it's interesting because

[00:26:52] Speaker 04:
The Patrick case doesn't discuss whether it was a arbitration based on California procedural law or the FAA.

[00:26:58] Speaker 04:
And that makes a huge difference because the Vandenberg case, which prohibited public injunctive relief under, or sorry, prohibited non-mutual collateral estoppel, that was based on strictly California procedural law.

[00:27:16] Speaker 04:
And the court specifically said, we're not discussing the FAA.

[00:27:19] Speaker 04:
This decision does not apply to the FAA.

[00:27:22] Speaker 04:
At the same time, the California Supreme Court said that non-mutual collateral estoppel is one of the pillars of public injunctive relief.

[00:27:30] Speaker 04:
And the FAA, this court has said that FAA arbitrations can have collateral estoppel effect.

[00:27:37] Speaker 04:
Most circuits allow non-mutual collateral estoppel effect.

[00:27:40] Speaker 04:
So by AMEX prohibiting people or prohibiting non-mutual collateral estoppel effect, it just goes to show their intent to prohibit public injunctive relief.

[00:27:49] Speaker 04:
because that's one of the things.

[00:27:51] Speaker 01:
If this goes to arbitration, you're going to be making a different argument to the arbitrator.

[00:27:57] Speaker 01:
You'll be arguing, no, we can get all that relief, I assume.

[00:28:01] Speaker 04:
Well, we're going to seek every avenue of relief possible, obviously, especially if AMEX concedes it.

[00:28:07] Speaker 04:
But I think the natural reading is that it is prohibited.

[00:28:11] Speaker 04:
OK.

[00:28:11] Speaker 04:
And I see I'm over time.

[00:28:13] Speaker 02:
I have a question for you.

[00:28:14] Speaker 04:
Yes, Judge.

[00:28:17] Speaker 02:
Because AMEX has said that you can seek the public injunctive

[00:28:24] Speaker 02:
belief in arbitration.

[00:28:28] Speaker 02:
What's the problem for your clients if they go to arbitration and you ask the arbitrator to enforce what Amex has said today and they consider the inductive relief on the merits?

[00:28:47] Speaker 04:
Yes, Mr. Guglod.

[00:28:47] Speaker 04:
So, you know, as an initial matter, I think the issue is that the agreement actually

[00:28:52] Speaker 04:
prohibits this kind of relief and the court should interpret the contract as is.

[00:28:57] Speaker 04:
But secondarily, like I just mentioned, under the FAA, if we get an injunction that gets converted to a judgment in the district court, most circuits allow non-mutual collateral estoppel effect, which is kind of one of the purposes of a public injunction.

[00:29:16] Speaker 04:
Here, the agreement specifically says no.

[00:29:19] Speaker 04:
you know, another person that's, or a member of the public that's discriminated against, can't come in and have this arbitrator award that's now a judgment and say, I want to enforce this, or I want to enforce the injunction that says no more racial quotas at AMEX.

[00:29:36] Speaker 04:
So it defeats the, one of the main purposes of public injunctive relief, even if we could get such an award in arbitration.

[00:29:46] Speaker 04:
Thank you.

[00:29:48] Speaker 01:
All right, thank you very much.

[00:29:50] Speaker 01:
Thank you, your honor.

[00:29:50] Speaker 01:
For all counsel for your arguments and the case is now submitted.