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I'd like to reserve three minutes for rebuttal, please.

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The District Court erred in two ways in denying Ms.

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Jones's Section 4 petition.

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First, it failed to see that the plain text of the contract requires an arbitrator and not a JANS administrator.

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by severing the offending provision.

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Jam's Rule 6E, which under Starz's reading, delegated key and weighty legal decisions improperly to an administrator and created a non-starting process.

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as recently as Hackman in which this court looked at the validity of a delegation clause.

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We also see it in cases like Patrick and Mohammed in which courts looked

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In fact, the Supreme Court's made it pretty clear that most, or at least many, objections to arbitrations don't wind up getting resolved in court.

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And here we have an agreement where JAMS rules, which are written into the agreement.

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This is a data breach case, right?

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Why hasn't it already been arbitrated?

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What's taken so long?

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I mean, you could have gotten a result once maybe years ago.

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I can't help but feeling that your office doesn't really want a merits result.

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It wants to tie up the system into a knot and make it so burdensome that stars will capitulate because of the cost of the process rather than attaining a result in front of a neutral arbitrator as set forth

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Why don't we have an agreement?

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Why don't we have a result based on that agreement?

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Your Honor, because the terms provide for individual arbitration.

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Well, where do they provide for individual arbitration?

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The terms themselves at Excerpts of Record 496 state that arbitration shall be in an individual capacity, and then turning to the JAMS rules.

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Well, but it can't be a class capacity, but it doesn't say it can't be in a consolidated capacity, and the JAMS rules, which are written into the agreement, provide for consolidation.

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Jim's administrators to decide at the threshold.

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Well, actually, I think they sort of do.

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Rule one provides for decisions to be made before an arbitrator has been selected.

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Your Honor, Jim.

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Why should the, no court would stand for 7,000 separate lawsuits?

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Now, the parties delegated interpretive disputes, including disputes over who are the proper parties to the arbitration, to the one neutral arbitrator that's defined under Jams Rule 7.

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What about Jams Rule 1?

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Jams Rule 1 provides that the National Arbitration Committee, or the Office of Jams General Counsel, or their designee,

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handled under Rule 7 by the one neutral arbitrator.

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Imagine a world in which an arbitrator, an individual arbitrator, is more likely to award an individual that $2,500 than if there is a massive consolidation.

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is true here.

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of arbitration in isolation.

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It's that any of these changes, from the traditional bilateral format that's the prototype under Viking River cruises of what the FAA protects, brought the same changes.

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And so there is a legitimate justification.

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These are brought as lawsuits.

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Do you think there's any court that would tolerate having 7,000 separate cases tried separately?

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You remember, that's what the parties agreed.

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You know that no court would stand for that.

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That's – I – I acknowledge that, Your Honor.

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Okay.

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But that's what the parties agreed.

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And arbitration is a creature of contract.

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The parties here have agreed to a contract that provides for individual bilateral arbitration and a contract in which threshold disputes are determined by an individual arbitrator.

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Okay.

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Let me go back.

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Go ahead, Judge Kuhl.

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Judge Kuhl, I have a question.

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Yes, Your Honor.

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I have a question or two for you, first of all.

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once there's a consolidation of 7,000 individual claims.

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Am I right that the contract terms would permit any one of those 7,000 people to object to the identity of the arbitrator?

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Yes, Your Honor, I think the issue here is that

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that right necessarily impacts the rights of other claimants.

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And so when Jams decided, the answer to your question is yes, that is correct, but the issue is that STARS then submitted to Jams that one individual's disqualification should serve as a disqualification for all of the consolidated claimants.

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the merits of the case ended up never having an individual arbitrator in which it could go before.

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Let me follow up with that.

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If class actions are not available here because the provision states

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its individual capacity and not as a plaintiff or class member in any purported class or representative proceeding.

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And I think we all agree there's no class proceeding at issue here.

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When JAMS consolidated 7,300 cases, does that take on the nature of a representative proceeding or is that still a different term in your view?

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In theory, it is technically

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necessarily.

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But I think in Heckman, the court made clear that even if you call something representative, it's not sort of a talismanic marker.

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The issue in Heckman, or one of the issues in Heckman, was that you had this possibility that there would be binding decisions that would bind one individual and also bind later filed individuals or bind individuals in the same batch.

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And I think in that sense,

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This looks a lot like a consolidated, or excuse me, a representative proceeding.

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I mean, that's what I thought, because if the nature of the efficiencies to be gained by consolidation is that there's this common question about whether there was a statutory violation, that an arbitrator would presumably be focused on one case, perhaps as a bellwether, with a broader impact on others.

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Is that a representative proceeding of a kind, or should we think of this differently?

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No matter how many numbers of people, you can consolidate and it's still not representative.

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You're right, it's a great point, and it's a semantic distinction, I think, without a difference.

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It's not semantics, because either the terms of use prohibit it, or they don't.

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of the cases differ.

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The facts of each individual case will vary wildly, Judge Clifton, because you'll end up with a situation where each individual person has watched at different times, different numbers of videos.

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And so there are significant factual distinctions, and those were down to discovery and the like.

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But you're seeking statutory remedy, a statutory penalty.

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I'm at a loss as to what impact the individual differences will have on the arbitration.

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So one individual might have watched multiple videos in which data was transmitted through the metapixel, and others might have only watched one.

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And so there are going to be variances necessarily between those cases.

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I'll reserve some time for a couple.

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Thank you.

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May it please the court.

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My name is Jeffrey Tsai on behalf of Respondent Stars Entertainment.

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of that artificiality as applied here.

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Just to make this clear, cut at least from me, if the terms of use had said no class or representative or consolidation, and then STARS asked Jams to consolidate and Jams does consolidate, would

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And in my hypothetical, not through consolidation.

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Isn't that now a gateway question?

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question.

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The separate question of how the parties have agreed to arbitrate is a question that's reserved for the arbitrator itself.

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That distinction is pretty key because the issue of when the courts are authorized to come in relate to what the courts have referred to as merits based questions.

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That's the question of arbitrability and in that instance the question of whether the parties have agreed to arbitrate would be something for the court

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And if it's just a blatant contradiction from what the agreement to arbitrate was, that is reserved for jams and the court would have no jurisdiction to review that issue.

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have agreed to arbitrate and are arbitrating.

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So the question then becomes that gating question, which I would submit to the court is the true question, is whether or not in a situation where the parties are already underway, which is this case, in arbitration, does the FAA permit that party to nevertheless be an aggrieved party?

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We would submit no, and that's why we believe the court should affirm Judge Cato's decision in that regard.

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But even if the court

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fundamentally, the petitioner, with a decision that has been made so far in arbitration.

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But that is the decision.

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Could you answer whether you think a mass consolidation of cases, like this one year over 7,000, whether you believe that that might be perceived as a representative proceeding or not, and if not, why not?

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It is not a representative proceeding for a couple of reasons, the first of which is that the notion, including how

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as the court referred to in Viking River, is not, as the court said, two and only two parties in their individual capacities.

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The court there was referring to this idea that bilateral arbitration can include many things more than just one against one, and it is contra, it is opposed to.

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here is that the arbitrator is not going to delve into the facts of 7,000 different cases, but will intend to reach common questions of law or in fact, and specifically, you know, maybe the statutory violation issue and whether it's liable or not, and whatever

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broader.

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Why isn't that representative in a sense?

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I think one might be able to find cases that talk about bellwether cases as being representative for others.

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It's not representative

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given issue is ultimately going to be one that that arbitrator must decide and I will note

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and a set of claimants under separate representation.

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And those individuals don't want to consolidate because they want to have their attorneys litigate their claims.

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things that should tether the court to this reason is that every claimant fundamentally will still have the opportunity to be heard, which is contra to what the court found in Hetman.

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Every claimant… Chancellor, shed gold if I can ask you a question, please.

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Certainly, Ron.

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You said in your answer earlier to one of the questions that the arbitration is underway

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arbitrator ever been selected is one question I have.

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Then second, if there are 7,000 consolidated claimants and any one of them can disqualify an arbitrator, how will there ever be an arbitrator to proceed in the arbitration?

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Thank you, Your Honor.

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The answer to

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every arbitrator who has been proposed so far by Jams.

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That does in part at least answer the court's second question, which is every single claimant at some point in time has objected to one of the arbitrators who's been appointed by Jams, every single one.

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And that itself illustrates

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any of her rights under law.

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able to object, that will happen.

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is one that would allow for, ultimately, the arbitrator to be appointed.

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At that point any other objection that's made to disqualify would have to be one for cause.

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That's correct.

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of certain rules in a doping case.

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It was a track star in a doping case.

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The Second Circuit in that case specifically found that this is a party's objection to, in this case, the application of certain rules is not the equivalent of a refusal to arbitrate.

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The final point I'll make, which hopefully is, to Judge Glipton's point earlier, this notion of the big picture, is that fundamentally,

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both California law and federal law, and it's reflected in numerous different cases, encourages the consolidation of arbitration.

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Those are cases like Compañia Espanola, another Second Circuit case, but also the Viking River Cruises case that was mentioned before.

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a problem with what's happening that is for the arbitrator ultimately to decide, because it's what the parties agreed to do.

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If there are no additional questions, then I want to thank the Court for its time this morning.

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Thank you, Counsel.

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Your Honor, I'd like to start by

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chance administrators have authority under

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In short, to decide that consolidation is inappropriate in all circumstances.

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That is for the arbitrator.

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The parties agree to that.

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But an individual arbitrator is what the Toms and the Jams rules require for the decision on that threshold dispute.

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And it goes pregnant.

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I'm not so sure that's the case, but it also sounds like chicken and egg.

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that simply thwart the process from proceeding.

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You're not prepared to play ball.

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You're not prepared to go to Superior Court.

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We will argue, if we have to, that an individual arbitration is what's required when that arbitrator is appointed.

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got the jams rules that have been agreed to.

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But we have a contractual term that doesn't say, unlike Heckman, no individual arbitration.

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It says the potentially ambiguous phrase that Judge Sanchez was pointing to.

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And we're a stalemate.

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We're not going any further.

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Why don't we go to Superior Court and let that process result in the appointment of an arbitrator?

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And you can make the argument to that arbitrator, it has to be one at a time.

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And as a practical matter, Your Honor, I think we'd be making the same arguments to the Superior Court that we've made to this Court, which is that the only appropriate resolution to this

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It is a refusal.

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You can imagine a scenario, Your Honor, in which the parties have the same claim.

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The parties have a dispute over how the claim should proceed on the merits.

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Say, Ms.

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Jones believes there should be an individual arbitration, and Starrs believes, to take the example from Heckman, that the merit should be decided by a game of ping-pong.

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Now, Ms.

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Jones goes to

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Arbitrator decide that threshold issue of how the merits are decided and stars writes jams and says no actually the threshold dispute needs to be decided by a game of ping-pong as well and in that case you've got a refusal by stars to proceed but I don't see that here I see here a process by which the California law provides you can go to Superior Court to proceed

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to arbitrate, which is what the Federal Arbitration Act

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to arbitrate.

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And I'm missing that.

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In accordance with the terms of the agreement.

[00:36:00] Speaker ?:
That's right, Your Honor.

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The terms of the agreement provide for an individual arbitrator to resolve the dispute.

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And I'm like Heckman actually doesn't say that.

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Is it your view that a Superior Court could decide the issue of whether claims should be consolidated or not?

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I thought the narrow authority would be to pick an arbitrator.

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Is there something broader that the Superior Court could step in and do?

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I think that the statute allows for the appointment of an arbitrator, and we would then have to argue to Jams that an individual arbitrator— You've got an arbitrator once a

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Why doesn't the argument belong there?

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Because the consolidation has been predetermined in violation of the terms.

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And you can argue to the arbitrator that these have to be taken up one at a time.

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And the default rule is just different.

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The terms in the law provide for an individual arbitrator who can decide to

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Understand why that arbitrator can't resolve the issue

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on track, so an arbitration proceeds.

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That we agree with, Your Honor.

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I think the issue is that Ms.

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Jones's position is that individual arbitration is what's appropriate.

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And with that, I thank the Court.

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Could an arbitrator, once appointed, decide to reverse the decision to consolidate?

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Under Jam's Rule 11,

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configuration is important because in that situation you have a completely different scenario than what the terms contemplate, which is that the individual arbitrator makes the threshold determination of whether consolidation is appropriate and not the threshold determination of whether other parties can be deconsolidated.

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I think the configuration does make a difference.