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

[00:00:01] Speaker 00:
My name is William Moran.

[00:00:02] Speaker 00:
I am appearing today for Christina Ballin, the appellant.

[00:00:07] Speaker 00:
The threshold issue before this Court is jurisdiction.

[00:00:13] Speaker 00:
The district court did not have diversity subject matter jurisdiction to confirm what was on its face, a $0 award of dismissal.

[00:00:25] Speaker 00:
That is so under this circuit's existing precedent in these research, which only allows a court to look through to find a mountain controversy, to look through to the arbitration demand, to find a mountain controversy when the petitioner seeks to remand

[00:00:42] Speaker 00:
back to arbitration.

[00:00:44] Speaker 00:
The appellees who are the petitioners did not seek to remand back to arbitration.

[00:00:49] Speaker 00:
Furthermore, that is so under the Supreme Court's precedent in Badrow, which outright prescribed the practice of looking through to an arbitration demand.

[00:00:59] Speaker 00:
But then there's an even more obvious issue.

[00:01:02] Speaker 00:
There's no demand here to look through, too.

[00:01:05] Speaker 00:
The appellees didn't include the demand in their petition to confirm arbitration.

[00:01:10] Speaker 00:
They didn't make it part of the appellate record here.

[00:01:12] Speaker 00:
They didn't even include it in their request for judicial notice.

[00:01:17] Speaker 02:
One thing that sort of puzzled me by the arguments, your arguments, is what do you

[00:01:25] Speaker 02:
What is gained here?

[00:01:28] Speaker 02:
Let's assume that you get your way and this matter is reversed.

[00:01:33] Speaker 02:
What's the next step?

[00:01:35] Speaker 00:
Well, jurisdiction can always be challenged and there needs to be jurisdiction to confirm an award.

[00:01:43] Speaker 00:
regardless of what well it goes back and they add the demand they presented to the district court judge so what i would be speculating a bit but a few things can happen for one at the state court we would be able to argue uh... you know your position is even if they add all these demands and stuff they still lose that's your

[00:02:02] Speaker 03:
top-line position, right?

[00:02:04] Speaker 03:
Pretty much.

[00:02:05] Speaker 03:
And so your position is they can only do this in state court, unless you bring it, unless your side brings something in federal court, they can only bring it in state court, right?

[00:02:12] Speaker 00:
They can only bring it in state court.

[00:02:15] Speaker 00:
And so, yes, we would be able to challenge it again at the state court.

[00:02:20] Speaker 00:
You know, some of the procedural posture, my client was a pro se litigant throughout this process, so speaking really practically, I would be able to develop the record more.

[00:02:33] Speaker 00:
as a technical matter they need jurisdiction to confirm that award.

[00:02:38] Speaker 03:
That's why don't they want to go to state court.

[00:02:42] Speaker 03:
Why do you want them to stay court I'm just trying to figure out the practical why is the reason because you think that that's a better form for.

[00:02:50] Speaker 00:
attacking the arbitrary i think it's the form that congress would have wanted uh... in this circumstance but also to be really honest with you we would get another bite at the apple again my client was a pro se throughout the process in another by the apple in the sense that you would be able to say that arbitration was you make your own contraband arguments et cetera it's interesting yes i would be able to develop that record better than a person i thought would have been able to uh... that's that's the honest answer there so uh...

[00:03:21] Speaker 00:
So there's no jurisdiction based off Badgerow and Theis, and to the appellee's credit, they concede that point.

[00:03:29] Speaker 00:
They actually say for jurisdictional purposes, this is not a section nine case.

[00:03:35] Speaker 00:
They don't argue that our reading of Badgerow or Theis is incorrect.

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Instead, they try to pivot and say that there's a different jurisdictional basis through section three of the FAA.

[00:03:46] Speaker 00:
Um, and section three of the FAA is for a party that requests a stay pending arbitration.

[00:03:53] Speaker 00:
They claim based on new Supreme court precedent and Smith versus Bezzeri that, um, the district court, the Western district of Washington aired when they closed balance 2019 liable claim.

[00:04:07] Speaker 00:
And that liable claim was only against, um, against Tesla.

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It wasn't against Musk.

[00:04:15] Speaker 00:
The problem is they didn't actually request a stay, and they actually, arguing in a different motion in the Western District of Washington, and I quote, they say they moved to compel arbitration and dismiss balance complaint in its entirety, and never requested that court retain jurisdiction or otherwise stay the case pending arbitration.

[00:04:38] Speaker 00:
So they didn't request a stay, and actually, at the conclusion of the filing that they refer to, to say that they requested a stay, it says that they were requesting a dismissal.

[00:04:49] Speaker 00:
At one point in that filing, they essentially restate the rule, which is, we request that the court dismiss or stay.

[00:05:00] Speaker 00:
That would be like an appellant saying, I request that the court

[00:05:06] Speaker 00:
reverse or affirm.

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It's a binary.

[00:05:10] Speaker 00:
You have to request one or the other.

[00:05:12] Speaker 00:
What they requested was a dismissal.

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What they got is a dismissal.

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And so there's no longer a jurisdictional hook under Section 3 because that case was closed.

[00:05:23] Speaker 00:
Additionally, another problem that they face in that argument is that they're trying to collaterally attack the 2019 case order, which was in April 2021, three and a half years after the fact.

[00:05:38] Speaker 00:
That's no longer on direct review here.

[00:05:44] Speaker 00:
That issue would be the liable case.

[00:05:46] Speaker 00:
What's before the court on direct review, and as Badger explained,

[00:05:52] Speaker 00:
A petition to confirm an arbitration award is essentially a contract issue.

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It's if parties have a dispute over a contract after a case, which is frequently done in state court, even when the underlying matter starts in federal court.

[00:06:11] Speaker 00:
So here we have the contract matter, the matter that sounds in contract, and they're trying to ping it off of

[00:06:21] Speaker 00:
The 2019 case that was dismissed, April 2021, that was a libel matter that sounds in tort.

[00:06:30] Speaker 00:
Another issue that they face is that Musk was not part of that 2019 complaint.

[00:06:38] Speaker 00:
That 2019 complaint was only against Tesla.

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And in fact,

[00:06:44] Speaker 00:
The 2019 case was dismissed in April, 2021, and Musk was not added to the case via the arbitration until a month later, May, 2021.

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So they're arguing that section three gives them a return ticket.

[00:06:59] Speaker 00:
It gives Musk and Tesla a return ticket.

[00:07:03] Speaker 00:
How does Musk get a return ticket to federal court that he's never been to?

[00:07:09] Speaker 00:
There's no hook there for them.

[00:07:15] Speaker 00:
One moment, Your Honors.

[00:07:19] Speaker 00:
And finally, they misread Smith v. Spazeri.

[00:07:26] Speaker 00:
Looking at the text of Section 3 of the FAA, the text of Section 3 talks about a court staying a trial until

[00:07:39] Speaker 00:
until the arbitration has been had, a petition to confirm an arbitration award is a post-arbitration function.

[00:07:46] Speaker 00:
And what's really informative is to look at Section 8 of the FAA, which is the only provision of the FAA that actually allows to retain jurisdiction up through the petition to confirm an arbitration award.

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And that Section 8 says,

[00:08:04] Speaker 00:
that court shall retain jurisdiction to enter its decree upon the award.

[00:08:11] Speaker 00:
Section 8 is for Admiralty and maritime cases.

[00:08:14] Speaker 00:
This case didn't involve any boats or ships.

[00:08:16] Speaker 00:
It was a liable case.

[00:08:18] Speaker 01:
So you're saying that even if the district court had formally entered a stay of the litigation, they couldn't come back?

[00:08:26] Speaker 00:
uh... i am saying that on the fourth circuit actually said that in smart sky on looking at it they said that there's no doctrine of continuing jurisdiction that the purpose of sections of what does it mean to stay a case if it's not still there and there still isn't jurisdiction so badger explain that these are essentially like two different cases right so you have the arbitration which is dealing with the underlying metal matter here libel and then

[00:08:54] Speaker 00:
A petition to confirm an arbitration award or a petition to vacate an arbitration award is like after a case, let's say there was a case in federal court, after a case in federal court,

[00:09:05] Speaker 00:
the parties want to enforce their judgment or they wish to contest some sort of settlement agreement, that's often done at the state court, depending on you look at the face of that claim or that petition.

[00:09:24] Speaker 00:
And so even because the underlying matter would have started in federal court,

[00:09:31] Speaker 00:
Essentially, it doesn't provide continuing jurisdiction.

[00:09:35] Speaker 00:
And I think that's really clear.

[00:09:37] Speaker 03:
Your theory is that, say you had jurisdiction because it exceeded the amount of controversy.

[00:09:44] Speaker 03:
It's diversity and exceeded the amount of controversy.

[00:09:46] Speaker 03:
Then the court sends it and properly stays it under the Supreme Court's latest guidance.

[00:09:52] Speaker 03:
And then as soon as the arbitrator says, this is worth nothing,

[00:09:57] Speaker 03:
that they lose jurisdiction, but that doesn't happen in a court.

[00:10:02] Speaker 03:
The case is state in the courts.

[00:10:03] Speaker 03:
That wouldn't normally happen if it had never been sent to arbitration when they found that it was zero.

[00:10:09] Speaker 03:
The fact that you have an amount of controversy that exceeds the amount and then you get awarded, nothing doesn't make you suddenly lose jurisdiction.

[00:10:17] Speaker 00:
Sorry, Your Honor, for that.

[00:10:20] Speaker 00:
The case ends with the arbitration.

[00:10:22] Speaker 00:
The arbitration is like court one.

[00:10:25] Speaker 03:
But it doesn't, because the case was stayed.

[00:10:27] Speaker 03:
I mean, maybe this is all, it wasn't stayed here.

[00:10:32] Speaker 00:
So there's that issue.

[00:10:35] Speaker 00:
It wasn't stayed here.

[00:10:38] Speaker 01:
But what happens in normal litigation with the settlement, parties have a settlement.

[00:10:42] Speaker 01:
It's a contract.

[00:10:43] Speaker 01:
They file a dismissal.

[00:10:45] Speaker 01:
And there's no entry of a judgment.

[00:10:48] Speaker 01:
But when a case is sent to arbitration and it's stayed, then why can't they come back?

[00:10:55] Speaker 01:
Because the act says that if the award is confirmed, it's equivalent to a judgment in the case.

[00:11:02] Speaker 01:
So it isn't just a private contract.

[00:11:05] Speaker 01:
It gets confirmed and then is a judgment of the court.

[00:11:07] Speaker 01:
And the litigation has been stayed.

[00:11:09] Speaker 01:
It is basically the resolution of the litigation.

[00:11:13] Speaker 00:
Well, for one, the Supreme Court in Badgerow said that it is like a contract, and in fact, they specifically like it.

[00:11:18] Speaker 01:
It is like it, yeah, but they were dealing with the context where you come back in a new lawsuit.

[00:11:24] Speaker 01:
Then it's like enforcing a contract settlement.

[00:11:27] Speaker 00:
Well, the initial arbitration, that was not dealing with the contract.

[00:11:31] Speaker 00:
That was dealing with the underlying, which is

[00:11:34] Speaker 00:
the libel matter in tort.

[00:11:36] Speaker 00:
Going back to what Judge Van Dyke said, though, there was just no stay here.

[00:11:42] Speaker 01:
It was a bit of a law school exercise, because there's no stay.

[00:11:46] Speaker 01:
OK.

[00:11:46] Speaker 01:
Do you want to save any time for rebuttal?

[00:11:51] Speaker 01:
Yes.

[00:11:52] Speaker 01:
OK.

[00:11:55] Speaker 01:
Then we'll hear now from Mr. Weil.

[00:12:01] Speaker 02:
Thank you, Your Honors.

[00:12:03] Speaker 02:
Excuse me.

[00:12:05] Speaker 02:
There is no meritorious argument on the underlying order.

[00:12:10] Speaker 02:
Excuse me.

[00:12:12] Speaker 02:
It's not even a close call.

[00:12:13] Speaker 02:
It wasn't discussed by counsel today whether Justice McAdams' final award in the arbitration was meritorious or not.

[00:12:22] Speaker 02:
And that's why, Your Honor, raised the pragmatic issue of what is to be gained if this Court agrees

[00:12:30] Speaker 02:
with the appellant and sends it back to the district court.

[00:12:33] Speaker 01:
He was pretty honest.

[00:12:34] Speaker 01:
If there's no jurisdiction, you get another bite at the Appleton State Court.

[00:12:37] Speaker 02:
And the answer is nothing.

[00:12:38] Speaker 02:
So maybe he gets another bite at the state court, but the standard's not going to be different.

[00:12:42] Speaker 02:
But he gets a chance to try to knock it out.

[00:12:44] Speaker 02:
Try to knock it out on his own.

[00:12:45] Speaker 02:
It gets out of this court.

[00:12:46] Speaker 02:
It gets out of this court with the exact same standard.

[00:12:49] Speaker 03:
But it seems to me the briefing was interesting here, because when you came in, you said I think he was right in saying that you kind of shifted your

[00:13:00] Speaker 03:
your argument a little bit in light of the Supreme Court from your perspective's unfortunate decision in Smith, right?

[00:13:06] Speaker 03:
And so what you had to say, you had to say, well, we should have gotten a stay.

[00:13:14] Speaker 03:
But the Supreme Court in Smith says, it says, when a federal court finds a dispute of subterritorial arbitration and a party has requested a stay,

[00:13:24] Speaker 03:
the court does not have discretion to dismiss.

[00:13:27] Speaker 03:
But you said you could either stay or dismiss to the district court with the second.

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And so I don't know.

[00:13:37] Speaker 03:
This would be a very different case and much harder case, I think, if you had

[00:13:43] Speaker 03:
insisted on a stay, as happened in other cases I've been on, and the court had dismissed.

[00:13:48] Speaker 03:
But here, you invited the court to dismiss.

[00:13:52] Speaker 03:
The court did that.

[00:13:54] Speaker 03:
And so your Smith argument, I don't see how that works.

[00:13:59] Speaker 03:
You kind of ignore in your Smith argument that you had asked to dismiss.

[00:14:03] Speaker 03:
So what is your response to that?

[00:14:05] Speaker 02:
Well, I don't know if there's necessarily magic language when you say you want a stay.

[00:14:11] Speaker 02:
We said, can you just stay or dismiss?

[00:14:13] Speaker 02:
And my interpretation of the Smith Court, although there was an alternative presented to the district court, stay or dismiss, according to the Supreme Court, when a stay is requested, the

[00:14:27] Speaker 02:
the Supreme Court emphasized the shall language in the statute, you shall stay.

[00:14:33] Speaker 03:
So although— As I suppose you could say, it doesn't—they don't address the Supreme Court in the Smith case when you give the district court options, which is what you did.

[00:14:44] Speaker 03:
You gave the—it does say when the parties request to stay, and you did request to stay, but you also said that they could—or they could—the district court could dismiss the case.

[00:14:57] Speaker 03:
I suppose the Supreme Court could have gone so far to say you can't dismiss a case even when the party asks you to dismiss the case.

[00:15:04] Speaker 03:
But it seems that this language I was just quoting, what's implied in that language is that the district court errors when it dismisses a case when you ask for a stay consistent with statutory language, but you dismiss it.

[00:15:19] Speaker 03:
It's not saying you can't dismiss the case if the party wants to dismiss the case.

[00:15:23] Speaker 02:
Yeah, but if that's the only request made of the party, that'd be fair.

[00:15:26] Speaker 02:
If all we say is, we want a dismissal, OK, fine.

[00:15:29] Speaker 02:
We didn't even ask for a stay.

[00:15:30] Speaker 02:
There's no magic language.

[00:15:32] Speaker 02:
But in black and white, it says,

[00:15:34] Speaker 02:
We want to stay.

[00:15:35] Speaker 03:
So your position is, so if you just said, give me a dismissal, I do not want to stay.

[00:15:40] Speaker 03:
And the district court can give you a dismissal.

[00:15:43] Speaker 03:
And if you say, I want to stay, then we know under Smith they have to give you a stay.

[00:15:48] Speaker 03:
But if you say, give me one or the other, I don't care, then the district court has to give you a stay.

[00:15:52] Speaker 03:
Is that your position?

[00:15:53] Speaker 03:
That is.

[00:15:54] Speaker 02:
And the reason why, and perhaps before Smith I wouldn't have had this opinion, but what the Supreme Court taught us all in doing that, it reversed

[00:16:03] Speaker 02:
authority in this circuit and many others, it said, you must do it.

[00:16:10] Speaker 02:
It was a short opinion.

[00:16:11] Speaker 02:
It was a unanimous opinion.

[00:16:12] Speaker 03:
But if that's true, if that's true, then why is it okay for the district court to dismiss even if you ask for, because if the district court must stay the case, then you asking for a dismissal, I don't understand why that's consistent with your position that you can't ask for a dismissal and get a dismissal.

[00:16:31] Speaker 02:
Well, I mean, if you ask for the dismissal, and this is all hindsight.

[00:16:35] Speaker 02:
Nobody had the benefit of Smith at the time.

[00:16:37] Speaker 02:
There was a lot of decisions being made by the courts, by the parties.

[00:16:42] Speaker 02:
Both parties went back to the federal court, not just us.

[00:16:46] Speaker 02:
The appellants went back to the Western District of Washington, and a lot of decisions were being made without benefit of the Supreme Court's guidance on what the statute means.

[00:16:55] Speaker 02:
And what the Supreme Court did for all of us, both through Badgerow and through Smith, was teach us all, what does this statute mean?

[00:17:02] Speaker 01:
And so with... But also the reality is the order you got is not a stay, it's a dismissal.

[00:17:09] Speaker 01:
Correct.

[00:17:09] Speaker 01:
And it was not appealed.

[00:17:11] Speaker 01:
And so even if it's wrong under Smith,

[00:17:14] Speaker 01:
It's still a dismissal, and so I don't see how you now can pretend, well, it should have been a stay, so we'll act as if it is a stay.

[00:17:22] Speaker 01:
It isn't a stay.

[00:17:23] Speaker 01:
It's a dismissal.

[00:17:24] Speaker 01:
The case is over.

[00:17:25] Speaker 01:
So you need to file a new case, which now means you need a basis of jurisdiction, and that's your problem.

[00:17:34] Speaker 02:
If at that point in time, the authority in this jurisdiction is the court had the right to do that.

[00:17:40] Speaker 02:
So an appeal of a dismissal at that point, because quite frankly, we asked for a motion to compel arbitration.

[00:17:47] Speaker 02:
The court granted the motion to compel arbitration.

[00:17:49] Speaker 02:
And to then appeal the dismissal at that point wouldn't have made a whole lot of sense.

[00:17:55] Speaker 03:
So that makes sense, but the problem is jurisdiction is jurisdiction.

[00:17:59] Speaker 03:
Fairness doesn't get you past a jurisdictional bars.

[00:18:02] Speaker 02:
That's the problem that we would have even if if you were tugging at my heartstrings Well, and I understand I understand that point but the the point that we make is that

[00:18:11] Speaker 02:
We should never have been in this place in the first instance, because the Western District of Washington should have stayed.

[00:18:19] Speaker 02:
To get to your point question, my view is that it didn't.

[00:18:23] Speaker 01:
It gave you a judgment we now know to have been erroneous.

[00:18:27] Speaker 01:
But erroneous judgments are as binding as anything else.

[00:18:30] Speaker 01:
It's final.

[00:18:31] Speaker 01:
You didn't move to set it aside.

[00:18:33] Speaker 01:
This isn't the place for a collateral attack.

[00:18:35] Speaker 01:
So you need a new lawsuit, and you filed a new lawsuit.

[00:18:39] Speaker 01:
And so the question before us is, do we have jurisdiction over your new lawsuit?

[00:18:43] Speaker 02:
But the new lawsuit was effectively a Section 3 effort to come back, because the stay should have been granted in the first instance.

[00:18:54] Speaker 02:
And I imagine the courts are about to be inundated with these.

[00:18:57] Speaker 02:
I think we're going round and round on the same issue.

[00:18:59] Speaker 02:
You're calling it a Section 3 case, but it was a dismissal, so it can't be a Section 3 case.

[00:19:03] Speaker 02:
Well, it's a Section 3 case because we were entitled to that ticket to return that the Supreme Court talked about.

[00:19:09] Speaker 02:
We should have had that ticket to return because we did request the stay, and there was a dismissal granted instead.

[00:19:18] Speaker 02:
The order says the case is closed, which frankly is a little bit confusing on what that would even mean.

[00:19:26] Speaker 02:
I don't know if it's closed means a dismissal or a stay.

[00:19:28] Speaker 02:
It's just closed.

[00:19:30] Speaker 02:
But the point is that we were entitled to that ticket to return to the court at that time.

[00:19:37] Speaker 02:
And because we were entitled to the ticket to return, therefore, it creates this pragmatic issue that we would never have been in the position that we were in to have to file in Section 9

[00:19:55] Speaker 02:
which at the time was the proper procedure before Badgerow, and all this happens before Badgerow was decided was to file Section 9 in the Northern District of California, which is

[00:20:08] Speaker 02:
What do you think would have been necessary in the way this case is set?

[00:20:14] Speaker 02:
Would have, including the demand, the original demand, been sufficient to cure this $75,000 issue?

[00:20:24] Speaker 02:
I think there's a couple things.

[00:20:26] Speaker 02:
And one thing is a pragmatic issue.

[00:20:30] Speaker 02:
I mean, again, no one's talking about the merits of this.

[00:20:32] Speaker 02:
We're all talking about procedural issues.

[00:20:34] Speaker 02:
But as a pragmatic result,

[00:20:37] Speaker 02:
might be to remand to the district court to clean up the record.

[00:20:42] Speaker 02:
Because what we have in the record below is- Well, hold on.

[00:20:45] Speaker 02:
You didn't submit to confirm the award.

[00:20:47] Speaker 02:
You didn't submit the demand, though, right?

[00:20:50] Speaker 02:
I believe that's right.

[00:20:51] Speaker 02:
Okay.

[00:20:51] Speaker 02:
My question is, what would you have needed to do?

[00:20:55] Speaker 02:
Submit perhaps- Do you think that would have been enough?

[00:20:59] Speaker 02:
to have established jurisdictions?

[00:21:01] Speaker 02:
Yes.

[00:21:02] Speaker 02:
Well, I believe it would have been enough to establish diversity jurisdiction, but the reality is that this dispute was sent to arbitration

[00:21:18] Speaker 02:
appropriately at the time based on the authority that existed before the Supreme Court.

[00:21:22] Speaker 01:
Why would that establish jurisdiction?

[00:21:24] Speaker 01:
I don't understand that.

[00:21:26] Speaker 01:
Why would it establish jurisdiction, diversity jurisdiction, the way you just said?

[00:21:32] Speaker 02:
Well, as I understand it from the appellant, because we didn't submit the demand that would show the diversity of the citizenship and of the parties,

[00:21:44] Speaker 02:
that we hadn't established just sufficiently.

[00:21:46] Speaker 01:
Well, how is the amount in controversy satisfied?

[00:21:50] Speaker 02:
By the demand?

[00:21:51] Speaker 02:
From the demand itself?

[00:21:52] Speaker 01:
Of the original lawsuit?

[00:21:54] Speaker 02:
I think that's what I understand.

[00:21:56] Speaker 01:
But that's not how I read the Supreme Court's decision in Badgerow.

[00:22:01] Speaker 01:
If you're starting with a new lawsuit and the arbitration order is equivalent to a settlement,

[00:22:08] Speaker 01:
then you can't go back to the original dispute before the settlement.

[00:22:13] Speaker 01:
You're talking about enforcing a contract now.

[00:22:16] Speaker 01:
That's how they looked at it.

[00:22:19] Speaker 01:
And the contract

[00:22:21] Speaker 01:
says zero.

[00:22:22] Speaker 01:
So there's no amount in controversy that's going to get that back to $75,000.

[00:22:29] Speaker 02:
If we change the facts, and this went immediately to arbitration and had not started in Western District of Washington where there was a request for a stay,

[00:22:40] Speaker 02:
I would agree that under the Badger Road decision, we would not be able to have federal court jurisdiction.

[00:22:45] Speaker 00:
So let me ask this question.

[00:22:47] Speaker 02:
Let me ask this question, though.

[00:22:49] Speaker 02:
In the context, let's say you went to arbitration.

[00:22:51] Speaker 02:
You're now trying to confirm that award.

[00:22:54] Speaker 02:
And that award is less than $75,000.

[00:22:56] Speaker 02:
Could you ever confirm an arbitration award?

[00:22:58] Speaker 02:
Absolutely.

[00:22:59] Speaker 02:
How?

[00:23:00] Speaker 02:
After Badger Road.

[00:23:02] Speaker 02:
If you started out in arbitration and never existed in the federal court, my reading of Badgerow is you could not have federal jurisdiction under diversity jurisdiction because you wouldn't have the amount of controversy.

[00:23:15] Speaker 02:
That's my reading of Badgerow by itself.

[00:23:17] Speaker 01:
Well, you would if the plaintiff had won in its large award.

[00:23:20] Speaker 01:
It's over $5,000.

[00:23:22] Speaker 02:
Right.

[00:23:22] Speaker 02:
I mean, if the plaintiff wins, then you do.

[00:23:26] Speaker 02:
I haven't gotten my head around why that makes sense to me, but it is what the Badgero says.

[00:23:30] Speaker 02:
But if it's under, though, if it's under, if it's under that $75,000 award in federal court?

[00:23:36] Speaker 02:
I think under Badgero, you can't.

[00:23:39] Speaker 02:
Well, you can.

[00:23:40] Speaker 02:
You go to state court.

[00:23:42] Speaker 02:
Well, you can't in federal court.

[00:23:45] Speaker 02:
I understand that point.

[00:23:47] Speaker 02:
But my point is that this case is not that case.

[00:23:50] Speaker 02:
This case is a case that started in federal court.

[00:23:54] Speaker 02:
It's been in this court before.

[00:23:55] Speaker 03:
This is the second trip here.

[00:23:56] Speaker 03:
It sounds like your position is all roads for you lead through the fact that you asked for a stay.

[00:24:02] Speaker 03:
Because your argument depends on that you asked for a stay, even in response to these questions.

[00:24:10] Speaker 03:
If, like you're saying, if it never even started in court and you went straight to arbitration.

[00:24:14] Speaker 03:
And so, again, going back, but if your case was dismissed, you know, we're sort of in the same position as if you had asked for, as if you went straight to arbitration, because that case is no longer here, and I don't know how that case gives us jurisdiction.

[00:24:35] Speaker 02:
the case gives us jurisdiction because it should have been state because it should have been state and it had it been stayed had the court followed the Supreme Court guidance had the benefit of the Supreme Court guidance at the time the court should have given us the ticket to return

[00:24:54] Speaker 02:
which is what the Supreme Court says we're entitled to.

[00:24:56] Speaker 02:
Instead, the court sent us on a journey without a ticket to return.

[00:25:00] Speaker 02:
But we were entitled to that ticket to return to confirm the award.

[00:25:06] Speaker 02:
So going forward, your position would be that all litigants are going to request motions for stay and or dismissal.

[00:25:14] Speaker 02:
Yes.

[00:25:14] Speaker 02:
And then if they choose the dismissal, you still have the opportunity to go back and say, ah, you should have stayed it.

[00:25:24] Speaker 02:
Well, that is not my argument on this point.

[00:25:28] Speaker 02:
My argument on this point is that when presented with the stay, with the request for the stay, the court needed to have done so and stayed the action.

[00:25:40] Speaker 02:
Because what you ask for after that point probably doesn't matter under the new Smith case, which made it very clear that if a

[00:25:48] Speaker 02:
party asks for a stay, the court shall stay the case, regardless of what the party may ask for in the alternative.

[00:25:59] Speaker 03:
That's what Smith says.

[00:26:02] Speaker 03:
Smith just says if they ask for a stay, but I'm not sure Smith addresses if you give the court a menu of things and the court does what you say, just not to stay, that somehow it's committed error.

[00:26:14] Speaker 03:
I'm struggling with the fact that you

[00:26:16] Speaker 03:
You think it's fine for the court to grant a dismissal if that's all you ask for, even though the law says that the courts shall grant a stay.

[00:26:26] Speaker 03:
So why can't you say, what if you said, we'd like a dismissal, but if you're not willing to give us a dismissal, our second, much lower choice.

[00:26:38] Speaker 03:
We really don't want to stay, but we'll take it if you won't give us a dismissal.

[00:26:41] Speaker 03:
What if you said that?

[00:26:42] Speaker 02:
And that's not before the court, but... I just don't understand why, if you give a menu of things, how you can rely on the court having erred under... I mean, parties present lots of things to courts, and then the courts say, no, I can't do that because of various reasons, maybe statutory reasons they can't do it.

[00:27:00] Speaker 02:
So a party may say to the court, I want this or that, and the court may say, well, I can't give you that because you asked for the first thing first.

[00:27:07] Speaker 02:
And the Supreme Court said, I got to give it to you, and I have no choice in the matter.

[00:27:12] Speaker 01:
Thank you, Council.

[00:27:14] Speaker 01:
We'll hear rebuttal now.

[00:27:21] Speaker 00:
Thank you, Your Honors.

[00:27:23] Speaker 00:
I would just reiterate that they didn't really request a stay, that these are really binary things, dismissal or a stay.

[00:27:31] Speaker 00:
They said later on in the Western District of Washington, we never requested a stay.

[00:27:37] Speaker 00:
We never requested you retain jurisdiction.

[00:27:40] Speaker 00:
In the subject filing, they asked for a dismissal repeatedly.

[00:27:43] Speaker 00:
They found one spot where I think they were just really restating the rule.

[00:27:49] Speaker 00:
they said dismiss or stay.

[00:27:51] Speaker 00:
Again, the court can't just dismiss or stay.

[00:27:55] Speaker 00:
And Spazeri is informative as to why they wouldn't have actually been requesting a stay.

[00:28:01] Speaker 00:
So in Spazeri, the party actually did request a stay, and the situation was

[00:28:07] Speaker 00:
The plaintiff brought a case, the defendants compelled arbitration, then the arbitration fell apart.

[00:28:14] Speaker 00:
Either the defendants didn't pay for the arbitration or they didn't participate in the arbitration.

[00:28:22] Speaker 00:
So it's to avoid that situation.

[00:28:24] Speaker 00:
That's really why Section 3 is talking about stay a trial.

[00:28:30] Speaker 00:
the plaintiff in that situation they were in court they got tossed out of court into an arbitration that was defunct and now they were sitting on this defunct arbitration they now had to go back and refile their case which was a huge burden to them they also would have faced potential issues of statute of limitations or tolling and refiling a case so it was really section three exists to prevent that gamesmanship and that was not the posture that

[00:28:59] Speaker 00:
Tesla and really only Tesla, Elon Musk was not actually part of that case at that point.

[00:29:05] Speaker 00:
That's not the posture they were in.

[00:29:07] Speaker 00:
They had compelled arbitration.

[00:29:10] Speaker 00:
They were real excited about arbitration.

[00:29:12] Speaker 00:
Arbitration was their thing.

[00:29:17] Speaker 00:
they didn't want the western district of washington overseeing proceedings there was you know they didn't want them to exist as essentially that helicopter parent they wanted much the opposite and which is why they said again in the western district of washington later on arguing first to file that they

[00:29:39] Speaker 00:
never requested a stay they never requested that jurisdiction be retained because that's really the reality uh... council also mentions on closed versus dismissed on in their filing they refer to it as dismissed in their first to file arguments in the western district they make note that this is a separate case and that these are with distinct claims et cetera they know very well that it was dismissed options being

[00:30:08] Speaker 00:
that it's on the court's docket or not.

[00:30:11] Speaker 00:
Thank you, Your Honors.

[00:30:11] Speaker 01:
All right.

[00:30:12] Speaker 01:
Thank you, Counsel.

[00:30:13] Speaker 01:
The case just argued will be submitted.