[00:00:00] Speaker 02:
And we have a double matinee today.

[00:00:02] Speaker 02:
So the next case we will hear is Revis versus Coverall.

[00:00:07] Speaker 00:
All right.

[00:00:07] Speaker 00:
Thank you, Your Honors.

[00:00:09] Speaker 00:
Again, may I reserve five minutes for rebuttal?

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

[00:00:15] Speaker 00:
So I believe the Revis case, which is related to the Gonzalez case, is really actually quite simpler procedurally.

[00:00:27] Speaker 00:
The Revis case,

[00:00:30] Speaker 00:
In the Revis case, we now have a pretty straightforward roadmap, I believe, of what needs to happen.

[00:00:41] Speaker 00:
And that's in light of this court's recent decision in Johnson, as noticed in our supplemental authority that we filed yesterday.

[00:00:49] Speaker 00:
In light of this court's decision in Johnson, I think the appropriate path here would be for this court to remand the case to the district court.

[00:01:00] Speaker 00:
to consider the case in light of Adolf and Viking River and in light of Johnson itself.

[00:01:10] Speaker 02:
Can you address the Article III standing issue here?

[00:01:16] Speaker 02:
So in the post Viking River, post Adolf world, TACA claims can be split.

[00:01:22] Speaker 02:
So you have the individual claim in arbitration, and then you have the representative non-individual claim in court.

[00:01:30] Speaker 02:
So suppose Mr. Rivas resolves his individual claim in arbitration and wins and gets awarded some amount.

[00:01:42] Speaker 02:
So then we go to the federal court action, which has been split for the representative claim.

[00:01:49] Speaker 02:
Would Rivas still have Article III standing to pursue that, given that

[00:01:57] Speaker 02:
By this point, he's prevailed in his arbitration, so he's been compensated for any loss.

[00:02:03] Speaker 02:
Do we have Article III jurisdiction?

[00:02:07] Speaker 00:
Well, I believe that we do, but I don't think that is the issue that is before this court now.

[00:02:14] Speaker 00:
That is really a question for another day.

[00:02:18] Speaker 00:
In the Johnson decision, I know Judge Lee, you raised some issues in your concurrence about that question, but noted that it wasn't an issue in Johnson itself.

[00:02:33] Speaker 00:
It's not clear whether or not it would be an issue here either.

[00:02:38] Speaker 00:
I think in light of the Supreme Court's decision in Viking River,

[00:02:46] Speaker 00:
I believe that there would be Article 3 jurisdiction.

[00:02:49] Speaker 00:
But again, this is something that hasn't even been briefed in this case, which is why I would ask that the court consider remanding so that these issues can actually be briefed and addressed before they get resolved here in the first instance.

[00:03:01] Speaker 00:
But let me step back and try to explain it this way.

[00:03:08] Speaker 00:
In this court's decision in the Megidia case, there was a decision made that, I'm sorry, a lot of recent cases here.

[00:03:19] Speaker 00:
I wanna make sure that I'm getting these right.

[00:03:25] Speaker 00:
There was a decision made in Megidia about Article III standing that even though under California state law, there may be standing

[00:03:38] Speaker 00:
for Paga plaintiffs to pursue penalties for violations that they did not personally experience, but that they wouldn't have

[00:03:52] Speaker 00:
So there wouldn't be Article 3 standing in federal court, even though the state court might allow it.

[00:04:00] Speaker 00:
The reasoning behind the decision in Megidia was based on the court's decision that Paga cases are very different from key Tom cases where federal courts have recognized that

[00:04:17] Speaker 00:
key Tom plaintiffs have standing, even though the real party in interest is not the plaintiff themselves.

[00:04:25] Speaker 00:
However, that conclusion by this court in Megidia, I believe, was undermined by the Supreme Court's decision in

[00:04:36] Speaker 00:
viking river which um and then the california supreme court's decision aid off which made clear that paga claims really are like key tom actions and federal courts have recognized plaintiffs in key tom actions do have article three standing again we're in an area here where there has been no briefing on this and i think it would be proper for the parties to to brief it and

[00:05:02] Speaker 00:
get a decision that this court is actually reviewing, so I'm kind of wading into new territory here.

[00:05:08] Speaker 00:
But Judge Lee, to go back to your concurrence in the Johnson case, I just don't think we're at that point yet.

[00:05:17] Speaker 00:
The question about what would happen if the plaintiff were to go to arbitration and were to succeed in his individual claim, if he even seeks to give it preclusive effect at that point,

[00:05:30] Speaker 00:
That would be the time that the District Court could then determine whether issue preclusion was appropriate based on the various standards, including whether Coverall had a fair opportunity to litigate the case.

[00:05:45] Speaker 00:
I mean, the truth of what is happening these days with these arbitration cases and Paga cases is that

[00:05:51] Speaker 00:
I have not seen any employers actually send their law clerks or paralegal staff to go handle these cases in arbitration.

[00:06:00] Speaker 00:
I've seen defense firms muscle all of their energies into these arbitrations just the way they were in court because they're well aware of the potential preclusive effect.

[00:06:11] Speaker 02:
But again, we'll- Sorry to interrupt.

[00:06:13] Speaker 02:
If you can go back to the arbitrary jurisdictions.

[00:06:15] Speaker 02:
I know you put the caveat that it hasn't been fully briefed.

[00:06:18] Speaker 02:
So would your position be that Rivas himself may not have standing in federal court, but it's under kind of a key Tam exception or the, you know, California has some interests apart from him.

[00:06:37] Speaker 02:
Is that your position?

[00:06:40] Speaker 00:
Well, yes.

[00:06:41] Speaker 00:
So the federal courts have recognized that Keetam plaintiffs have standing, even if they are not the ones who actually suffered the injury, if they're suing on behalf of the state.

[00:06:54] Speaker 00:
In Megidia, this court thought that Paga was very different from Keetam, but that decision has been undermined by Viking River and Adolph.

[00:07:06] Speaker 00:
which show that Paga really are essentially ketom cases, ketom-like.

[00:07:12] Speaker 00:
It is a ketom-like provision, where it is the state of California that actually has the claim.

[00:07:21] Speaker 00:
And the plaintiff is simply empowered to bring the claim on the state's behalf.

[00:07:28] Speaker 00:
Um, one possible solution, which is actually noted in coveralls response letter that it filed yesterday in response to our notice of supplemental authority of Johnson, um, is that it noted, um, I believe from the Urbino case that if the federal court ends up not having jurisdiction, the case could be remanded to state court if Article three is the concern.

[00:07:53] Speaker 00:
But I would say that in light of Johnson, the binding authority in the circuit for what should happen in this situation is the case should be remanded to the district court to address the repercussions of Adolf and Johnson itself.

[00:08:13] Speaker 01:
Isn't it obvious after Viking River and Adolf that your representative claim can go forward in district court?

[00:08:21] Speaker 00:
Yes, I think it is.

[00:08:23] Speaker 01:
Okay.

[00:08:24] Speaker 01:
So the question then is what do we do with the individual claim?

[00:08:28] Speaker 01:
The district court has sent that to arbitration.

[00:08:31] Speaker 01:
Should that proceed through arbitration?

[00:08:34] Speaker 00:
Well, no, because Mr. Rivas, again, like Mr. Gonzalez, tried to go to arbitration and he was sent a bill for $4,000 that he couldn't afford.

[00:08:44] Speaker 00:
So that is an issue to be addressed back in the district court about whether or not, um, cover all waived arbitration by not just agreeing to pay the fees in arbitration or whether Mr Mr Rivas was not able to vindicate his rights in arbitration because

[00:09:01] Speaker 00:
of the impediment of the cost splitting that the AAA enforced, and that he wasn't even able to get in front of an arbitrator to be able to argue that that provision should not be enforceable.

[00:09:14] Speaker 03:
Perhaps what Judge Bybee was asking is, are you withdrawing your arguments on unconscionability?

[00:09:28] Speaker 03:
there before the court here?

[00:09:30] Speaker 03:
Oh, no, no.

[00:09:32] Speaker 00:
No, I'm not.

[00:09:33] Speaker 00:
I'm sorry.

[00:09:33] Speaker 00:
I was focusing on the third argument we made because I feel like this Johnson case was just positive on it.

[00:09:39] Speaker 00:
But we do have those other arguments that are fully briefed.

[00:09:42] Speaker 00:
In particular, I would say, yes, we briefed the vindication of rights issue, but we also briefed and have the waiver argument.

[00:09:52] Speaker 01:
So I'm confused, Council, because you just told me that a minute ago, I thought I heard you say that we should remand to the district court to consider the waiver argument.

[00:10:01] Speaker 01:
I thought the district court had already addressed all of this.

[00:10:06] Speaker 00:
No, no, no, I'm sorry.

[00:10:10] Speaker 00:
I asked this court to remand to the district court based on our third argument, which was that under Viking River,

[00:10:19] Speaker 00:
the PAGA representative claim could proceed in court in light of what the California Supreme Court has decided to aid off.

[00:10:31] Speaker 01:
Let me see if I can clear some of the underbrush here, because now I'm more confused than when I started.

[00:10:40] Speaker 01:
So let us suppose for purposes of my question,

[00:10:43] Speaker 01:
that I believe that Adolf has resolved the question and your representative claim, district court is wrong on that.

[00:10:51] Speaker 01:
He did his best under Viking River.

[00:10:53] Speaker 01:
We now have further information from Adolf.

[00:10:56] Speaker 01:
The representative claim can go forward in district court, and we should remand that to the district court.

[00:11:01] Speaker 01:
The district court may wish to stay that pending the arbitration.

[00:11:04] Speaker 01:
We worry about all the questions that Judge Lee had about representation.

[00:11:08] Speaker 01:
But the district court has still said, this matter goes back to arbitration.

[00:11:11] Speaker 01:
And I thought that the district court said that they didn't waive anything.

[00:11:16] Speaker 01:
I thought you presented that argument to him and that you were now appealing to us to reverse the district court on the question of waiver and the question of unconscionability.

[00:11:25] Speaker 00:
Yeah, yes.

[00:11:26] Speaker 00:
Yes, we are.

[00:11:27] Speaker 00:
Yes.

[00:11:28] Speaker 00:
Yes, all of those.

[00:11:30] Speaker 00:
All of those arguments that are in there.

[00:11:31] Speaker 01:
OK.

[00:11:31] Speaker 01:
But I thought I heard you say just a minute ago, and here's maybe the source of my confusion, that we should remand to the district court to consider the question of waiver.

[00:11:39] Speaker 01:
I thought that's what happened here.

[00:11:42] Speaker 00:
No, no.

[00:11:43] Speaker 00:
No, no.

[00:11:43] Speaker 00:
I believe I only said that Johnson suggests that the court should remand, because what happened when Johnson was the court remanded for consideration in light of Adolf.

[00:11:55] Speaker 00:
I wasn't saying to remand to consider waiver.

[00:11:58] Speaker 00:
We've already briefed waiver.

[00:11:59] Speaker 00:
I think waiver is clear under the case law and under the briefing that we have provided that coverall did waive arbitration here.

[00:12:11] Speaker 00:
We did also brief the issue about how Mr. Rebus tried to arbitrate and wasn't able to get his foot in the door.

[00:12:18] Speaker 00:
So all of that is before the court.

[00:12:20] Speaker 00:
I was just saying that if the court has any question about those two issues,

[00:12:25] Speaker 00:
On the third point, we now have the precedent of Johnson.

[00:12:29] Speaker 01:
If we were to agree with the district court as to the individual claim, what's left?

[00:12:38] Speaker 01:
Then you either have to go and arbitrate.

[00:12:39] Speaker 01:
Can you waive your right to arbitrate?

[00:12:41] Speaker 01:
Can you just say, I'm going to dismiss the arbitration amount and then the arbitration and just proceed on your representative claim in the district court?

[00:12:49] Speaker 01:
I think you can.

[00:12:53] Speaker 01:
Presumably that might raise some of the Article 3 concerns that Judge Lee had.

[00:12:57] Speaker 00:
Maybe, maybe, maybe not.

[00:13:03] Speaker 00:
I guess we're not quite there yet.

[00:13:04] Speaker 01:
It might sharpen the question.

[00:13:08] Speaker 00:
Okay, before my time runs out, I do also just want to note that in coveralls response to our supplemental authority that we filed yesterday, it also, it disagrees with Johnson on the ground that there is no jurisdiction and that in Johnson, the parties didn't argue or in the court didn't consider jurisdiction.

[00:13:29] Speaker 00:
But of course, federal courts have an independent obligation to review their jurisdiction.

[00:13:34] Speaker 00:
So it should be understood that there was jurisdiction in Johnson.

[00:13:38] Speaker 00:
So I just wanted to note that.

[00:13:44] Speaker 00:
Unless the court has any other questions for me, I will reserve now until rebuttal.

[00:13:52] Speaker 04:
Thank you.

[00:13:53] Speaker 04:
Thank you.

[00:13:55] Speaker 04:
Thank you, Your Honors, and may it please the court.

[00:13:58] Speaker 04:
Your Honors, as with the Gonzalez case, I'd like to start off by discussing the jurisdictional issues associated with that prong of the district court's order.

[00:14:07] Speaker 04:
which dismissed the non-individual portion of the Paga claim.

[00:14:13] Speaker 04:
That decision should be affirmed because the district court held correctly that it wouldn't have jurisdiction to hear that claim.

[00:14:20] Speaker 04:
And I've had a chance to review the Johnson decision.

[00:14:23] Speaker 04:
And it's true that Johnson recognizes that under Adolf, an individual who has been compelled to arbitrary maintains standing to pursue representative claims under Paga.

[00:14:34] Speaker 04:
But with respect,

[00:14:36] Speaker 04:
Johnson never addressed the issue that we raised, which is in federal court, where jurisdiction is defined and circumscribed by Article 3.

[00:14:46] Speaker 04:
A plaintiff who lacks injury cannot prosecute a claim, even if that same plaintiff has the ability to do so in state court.

[00:14:54] Speaker 04:
In fact, this court was never even asked to address that issue.

[00:14:58] Speaker 04:
I reviewed the briefing that was submitted in Johnson, and I looked at the supplemental briefing the parties submitted in response to this court's order that they addressed the impact of Adolf.

[00:15:07] Speaker 04:
The only arguments the defendant presented were first, that California state law precluded an individual from acting as a Pago representative if that person lacked a continuing injury.

[00:15:18] Speaker 04:
And second, in the supplemental briefing, that allowing someone to continue to act as a Pago representative after their claims were resolved

[00:15:26] Speaker 04:
in arbitration was preempted by the FAA.

[00:15:29] Speaker 04:
The court was never asked to consider whether the California State Court's view on standing controlled the ability of a person who no longer had an injury to establish standing at federal court, where standing is a necessary element of the court's jurisdiction that must be maintained throughout all points in the litigation, which is something I know Judge Lee that you raised in your concurrence.

[00:15:52] Speaker 04:
As a matter of principle,

[00:15:54] Speaker 04:
This court only addresses the issues the parties present.

[00:15:57] Speaker 04:
And of course, an opinion is already only for the issues actually decided.

[00:16:01] Speaker 04:
Johnson didn't decide on the issue.

[00:16:04] Speaker 04:
But other panels of this court, a lot of them have.

[00:16:07] Speaker 04:
There's this court's 2021 opinion in Magadha, which held that a plaintiff lacked standing to pursue a Paga claim in federal court because he personally lacked injury.

[00:16:16] Speaker 04:
Viking didn't undercut that.

[00:16:18] Speaker 04:
Viking never concluded that a Paga claim was a key to him action and didn't even discuss that issue and compare it

[00:16:24] Speaker 04:
Aga claims to class actions, but there's no discussion of whether or not it's a PTAB suit.

[00:16:29] Speaker 04:
This court's opinion in Lee, which held that a plaintiff lacks standing to pursue a claim as a private attorney general in federal court because he suffered no injury from the defendant's conduct.

[00:16:40] Speaker 04:
There's this court's opinion in Hangar, which came to the exact same conclusion.

[00:16:44] Speaker 04:
There's the opinion in Stanford, which came to the exact same conclusion.

[00:16:48] Speaker 03:
Maybe I'm misunderstanding something here.

[00:16:53] Speaker 03:
If you read Johnson, which everybody has, it seems the procedural posture of this case right now is the individual claim is pending in arbitration.

[00:17:08] Speaker 03:
Correct?

[00:17:09] Speaker 03:
Correct, Your Honor.

[00:17:11] Speaker 03:
So at this stage, how can you say that Mr. Rivas doesn't have an injury?

[00:17:21] Speaker 03:
He's seeking relief from that injury.

[00:17:28] Speaker 03:
There might be a point as which I think Johnson says, if you lose your individual claim, then you lose your ability to continue with your representative claim.

[00:17:41] Speaker 03:
But I'm talking about right now.

[00:17:43] Speaker 04:
I think, Your Honor, the reason the district court's decision to dismiss is right for two reasons.

[00:17:50] Speaker 04:
The first is that

[00:17:51] Speaker 04:
no matter what happens with Mr. Rebus' claim, he will no longer have an injury.

[00:17:56] Speaker 04:
If he wins, his injury will have been redressed in arbitration.

[00:18:00] Speaker 04:
If he loses, he obviously had no injury to begin with.

[00:18:04] Speaker 04:
Either way, when he comes back to the district court, he has no standing to prosecute any claims under Article 3.

[00:18:12] Speaker 04:
That's why all of the cases from the circuit that have addressed this issue

[00:18:15] Speaker 04:
say that even if state law provides a litigant with statutory standing to continue to act as a private attorney general in state court, in federal court, you must also satisfy Article III requirements.

[00:18:27] Speaker 04:
If I could count.

[00:18:29] Speaker 02:
I'm sorry.

[00:18:29] Speaker 02:
Can I ask a logistical question?

[00:18:31] Speaker 02:
I understand your point that Viking River, Adolf, and Johnson, they were all focused on statutory standing under PAGA, and now we're addressing Article III standing.

[00:18:43] Speaker 02:
I mean, is it better to have you guys provide supplemental briefing on Article 3 jurisdiction, or should we remand it back to the district court to consider Article 3 standing, or you can raise Article 3 standing.

[00:18:57] Speaker 02:
Obviously, you can raise it at any time.

[00:19:01] Speaker 02:
What's the option?

[00:19:03] Speaker 04:
That issue has been addressed multiple times, Your Honor.

[00:19:06] Speaker 04:
Actually, we briefed it

[00:19:08] Speaker 04:
to this court.

[00:19:09] Speaker 02:
It was, but it was very brief.

[00:19:11] Speaker 02:
It was at the very end, a couple of pages, because Adolf hadn't come in.

[00:19:13] Speaker 02:
So you guys were kind of spit balling of, well, if Adolf comes out this way, maybe it's this way.

[00:19:18] Speaker 02:
It wasn't full briefing.

[00:19:20] Speaker 02:
I mean, I still have a lot of questions on the Article III jurisdiction issue.

[00:19:27] Speaker 02:
So I mean, so my question logistically, is it better to remand to the district court and

[00:19:34] Speaker 02:
let the district court decide, or you raise it in district court, or for the parties here to provide supplemental briefing?

[00:19:41] Speaker 04:
Well, I think, Your Honor, with respect, this exact issue was briefed in full to the motions panel here when plaintiffs moved to have this case stayed pending the resolution of Adolf.

[00:19:51] Speaker 04:
We briefed to the court that Adolf didn't warrant a stay because its resolution of whether or not standing existed in state court made no difference in this court, in Article III court,

[00:20:03] Speaker 04:
or in the district court.

[00:20:05] Speaker 04:
That's why the motions panel here denied the plaintiff's motion to stay.

[00:20:09] Speaker 04:
We also briefed it to the district court, the exact same argument that Adolf's resolution of the state standing issue made no difference to whether or not there was standing in federal court because, of course, state courts and state legislatures have no role, no authority

[00:20:25] Speaker 04:
to expand Article III jurisdiction.

[00:20:27] Speaker 04:
That's set by statute in the Constitution.

[00:20:29] Speaker 01:
Can a plaintiff come in and bring only a representative PACA claim in district court?

[00:20:37] Speaker 04:
I honestly don't know the answer to that question, Your Honor.

[00:20:40] Speaker 01:
Well, if the answer to that question is we don't know, what would happen if Rivas here decided to dismiss his individual claim?

[00:20:50] Speaker 04:
I don't know the answer to that.

[00:20:51] Speaker 04:
I do know the answer, Your Honor, is that

[00:20:53] Speaker 04:
If the plaintiff has no claim at all, if there is no injury period, then they could not pursue either an individual or a non-individual.

[00:21:02] Speaker 01:
But that's not true in the Ke Tam action.

[00:21:04] Speaker 01:
And to the extent that this may be analogous to Ke Tam, then he may have standing to bring a representative claim.

[00:21:11] Speaker 04:
Well, that brings me to my second point, Your Honor.

[00:21:14] Speaker 04:
If it was a true Ke Tam action, then there's another reason that it needs to be dismissed.

[00:21:20] Speaker 04:
And that's because of lack of

[00:21:22] Speaker 04:
subject matter jurisdiction.

[00:21:25] Speaker 04:
Clearly, once Mr. Rivas's individual Paga claim is resolved in arbitration, the only thing he would even arguably have standing to pursue on individual Paga claims, which lets us assume for conversation that they are true key TAM claims and a Scania that was indicated as much.

[00:21:49] Speaker 04:
Under those circumstances,

[00:21:51] Speaker 04:
It is the state of California that is the real party in interest.

[00:21:54] Speaker 04:
In fact, because Mr. Rivas would no longer have an individual claim, the state is not just the real party in interest.

[00:22:01] Speaker 04:
It's the only party in interest.

[00:22:03] Speaker 04:
You won't even have an interest in the 25% recovery of any penalties that were awarded.

[00:22:09] Speaker 04:
That means that under this court's precedent in Urbino, in addressing the district court's jurisdiction, it is the state's citizenship that needs to be considered, not Mr. Rivas's.

[00:22:20] Speaker 04:
That's what Urbino held.

[00:22:21] Speaker 04:
And both this circuit and the Supreme Court have recognized that the state has no citizenship for purposes of the diversity analysis.

[00:22:30] Speaker 04:
And because the state has no citizenship, the district court will act jurisdiction once Mr. Rivas's individual claims are arbitrated, regardless of how the arbitration turns out, whether it turns out in his favor or in Coverall's favor.

[00:22:43] Speaker 04:
That will be the end of it.

[00:22:44] Speaker 04:
The only claims that will still persist will be those that belong to the state.

[00:22:50] Speaker 02:
Don't we look at diversity jurisdiction at the time of the filing and at the time this lawsuit was filed that was diversity jurisdiction?

[00:22:59] Speaker 04:
Well, I think that's an interesting question, Your Honor, in light of the Supreme Court's decision that Paga consists of two separate claims.

[00:23:07] Speaker 04:
The individual claim here, where plaintiff has alleged that there is diversity jurisdiction, is not before the court.

[00:23:15] Speaker 04:
It is now in arbitration the only claim before the court.

[00:23:19] Speaker 04:
is the non-individual claims.

[00:23:22] Speaker 04:
So I don't see how the District Court ever had jurisdiction.

[00:23:26] Speaker 01:
I don't think you answered Judge Lee's question, because it's a very, very good question.

[00:23:30] Speaker 01:
Ordinarily, we measured subject matter jurisdiction at the outset, and that would have been measured at the time that there was both an individual claim and representative claim before the District Court.

[00:23:40] Speaker 01:
If there was diversity jurisdiction, then the other one comes along through supplemental jurisdiction, even if the individual claim is ultimately going to be sent over to an arbitrator.

[00:23:48] Speaker 01:
But the district court surely had subject matter jurisdiction at that point, didn't it?

[00:23:53] Speaker 04:
At least that was the allegation that the plaintiff made, Your Honor, correct.

[00:23:57] Speaker 01:
I mean, the fact that they've now been split and are on two separate tracks, we don't get to go back and say, well, now we've decided that maybe we wouldn't have subject matter jurisdiction if it had been presented to us in this procedural posture years ago.

[00:24:10] Speaker 01:
That's why we measure it at the time of the filing of the lawsuit.

[00:24:14] Speaker 04:
I do think.

[00:24:15] Speaker 04:
I understand that, Your Honor.

[00:24:16] Speaker 04:
I do think the court obviously always has the power to go back and determine whether or not it ever had original subject matter jurisdiction.

[00:24:22] Speaker 04:
I agree with the point that Your Honor made.

[00:24:25] Speaker 03:
Yeah, but you're saying it can go back to determine whether it ever had, it still would have had originally, would have had subject matter jurisdiction.

[00:24:37] Speaker 03:
It's not gonna change the original aspect of jurisdiction, of diversity jurisdiction.

[00:24:44] Speaker 04:
only if the Court concluded on inquiry that the amount in controversy was not, in fact, $75,000 as it concerns Mr. Reavis's individual club.

[00:24:54] Speaker 03:
Okay.

[00:24:55] Speaker 03:
That's another question.

[00:24:56] Speaker 04:
Yes.

[00:24:58] Speaker 04:
I did want to briefly address the waiver issue, unless the Court has additional questions on the jurisdictional issue.

[00:25:07] Speaker 04:
And just a few quick points I did want to make.

[00:25:11] Speaker 04:
Plaintiff continually notes that 18 months

[00:25:14] Speaker 04:
elapsed here to try to create the impression that there was unreasonable delay in bringing this motion.

[00:25:19] Speaker 04:
Well, that's just not true.

[00:25:22] Speaker 04:
Coverall advised the court that it was likely going to file a motion to compel arbitration in light of lamps.

[00:25:26] Speaker 04:
Plus, on May 2nd of 2019, that was just 82 days after it filed its response and pleading.

[00:25:35] Speaker 04:
Coverall refrained from filing the motion at that point only because the plaintiff asked it to do so to allow the parties, again, to try mediation.

[00:25:42] Speaker 04:
That's at page four of the supplemental excerpts of record, and that fact is undisputed.

[00:25:49] Speaker 04:
And of course, the district court concluded correctly that the little litigation that took place during those 82 days did not address the merits.

[00:25:57] Speaker 04:
They were procedural motions that address things like whether or not the plaintiff exhausted his administrative remedies, and whether or not coverall had, or whether or not the plaintiff's claims substantively were governed by the Borrello test or the ABC test.

[00:26:11] Speaker 04:
Now, as to the futility issue, Your Honors, plaintiffs never really take head on the issue that we've raised, which is that prior to Lamps Plus, there was a serious question as to whether or not if arbitration was compelled at all, it would have been compelled on a representative basis in light of the fact that our rules arbitration agreement did not mention representative or collective actions.

[00:26:36] Speaker 04:
They keep trying to focus on the second part of our argument, which was that

[00:26:41] Speaker 04:
Epic Systems preempted Saqab and Iskandian.

[00:26:45] Speaker 04:
But before we could even argue that Epic Systems preempted any law that invalidated the party's agreement to arbitrate their disputes individually, we first had to establish that such an agreement existed with respect to the Paga claim.

[00:26:59] Speaker 04:
And we couldn't do that until the Supreme Court reversed this court's decision in LAMP's.

[00:27:04] Speaker 04:
Plus, because the arbitration agreement here contained no reference to collective or representative actions, had we moved

[00:27:13] Speaker 04:
I'm sorry.

[00:27:14] Speaker 04:
Had we moved to LAMS+, is there a question?

[00:27:19] Speaker 04:
I'm getting some feedback.

[00:27:22] Speaker 04:
I apologize.

[00:27:23] Speaker 04:
I thought it was a question.

[00:27:24] Speaker 04:
Had we moved to compel before LAMS+, the best we could have hoped for was a decision, a likely unappealable one, compelling some sort of representative action, which is why the district court properly held the coverall reasonably believed it would have been futile to file a motion seeking individual arbitration before LAMS+,

[00:27:42] Speaker 04:
The plaintiff raises nothing, which brings into question the correctness of that decision.

[00:27:47] Speaker 04:
More importantly, he never explains why his position makes sense.

[00:27:51] Speaker 04:
In every single case that has been filed against Coverall, most by plaintiffs' counsel, Coverall has responded to those complaints with motions to enforce the party's arbitration agreement.

[00:28:01] Speaker 04:
We cite some of those in our brief.

[00:28:03] Speaker 04:
That includes the Gonzales case, of course, which raises the same claims in the same court before the same judge.

[00:28:10] Speaker 04:
Aside from its reasonable concern that existing law would have precluded arbitration altogether or resulted in some sort of collective arbitration, there's no reason why Coverall would have refrained from seeking to enforce the arbitration agreement here, and the plaintiff certainly offers none.

[00:28:26] Speaker 04:
I notice my time is already almost up.

[00:28:29] Speaker 04:
If the court has any questions on the vindication of rights or the unconscionability issue, which hasn't been proved either procedurally or substantively, I'm happy to address them.

[00:28:38] Speaker 04:
Otherwise, we rest on our briefs.

[00:28:42] Speaker 02:
Thank you.

[00:28:43] Speaker 04:
Thank you.

[00:28:51] Speaker 00:
So, Your Honors, I would like to say that what we spent the bulk of the time arguing about, the third argument that we made, hasn't been briefed.

[00:29:04] Speaker 00:
And I would leave it to this Court to determine whether it's appropriate

[00:29:08] Speaker 00:
if supplemental briefing is to be had, whether it should be done here or on remand to the district court.

[00:29:15] Speaker 00:
But I will note that the court can avoid all of those thorny issues that haven't been addressed yet by deciding this case based on waiver or based on our unconscionability argument.

[00:29:28] Speaker 00:
I think waiver is particularly clear here under the Supreme Court's decision, Morgan versus Sundance.

[00:29:35] Speaker 00:
It's not required.

[00:29:36] Speaker 00:
The plaintiff shows prejudice based on the delay.

[00:29:40] Speaker 00:
The delay that Coverall engaged in was not merely an 18-month gap in time before it moved to compel arbitration.

[00:29:49] Speaker 00:
It filed multiple motions, including substantive motions.

[00:29:54] Speaker 00:
to determine what law would apply here.

[00:29:57] Speaker 00:
Essentially, it was seeking another bite at the apple, a couple of bites at the apple by seeing how it did in court before deciding whether to go to arbitration.

[00:30:07] Speaker 00:
It's engaged in discovery, it engaged in multiple mediations.

[00:30:10] Speaker 00:
Waiver could decide this case without getting into all of these thorny post-adoff Viking River questions.

[00:30:17] Speaker 00:
But if the court is going to look at those questions, I would suggest

[00:30:20] Speaker 00:
there's a need for supplemental briefing because we're sort of just arguing this on the fly right here without having set forth in thorough briefing these important issues involving Article III jurisdiction and standing issues.

[00:30:37] Speaker 00:
And these are very important issues that the courts are grappling with in California.

[00:30:44] Speaker 02:
Thank you.

[00:30:45] Speaker 02:
Thank you both for very helpful arguments.

[00:30:48] Speaker 02:
The case has been submitted, and we are adjourned for the day.

[00:30:51] Speaker 00:
Thank you.

[00:30:51] Speaker 00:
This core for this session stands adjourned.