[00:00:00] Speaker 02:
Good morning, counsel.

[00:00:01] Speaker 02:
Good morning, your honors.

[00:00:03] Speaker 02:
I'm Jeff Gutkin from the Cooley firm, appearing for appellant tile in Life360.

[00:00:11] Speaker 02:
I'd also like to reserve probably four or five minutes of my time for rebut.

[00:00:17] Speaker 01:
Always somewhat aspirational.

[00:00:20] Speaker 02:
Yeah.

[00:00:20] Speaker 02:
Just going to set myself a timer just in case.

[00:00:25] Speaker 02:
Well, we would submit there are several bases on which the court should

[00:00:28] Speaker 02:
reverse the district court's ruling, in part denying the motion to compel arbitration.

[00:00:34] Speaker 02:
I just want to briefly start with the October of 2023 terms of service, which expressly delegated the decision.

[00:00:45] Speaker 02:
Any dispute about arbitrability to the arbitrator?

[00:00:48] Speaker 02:
Again, I'll just discuss this briefly, but Tile sent a short, clear email

[00:00:55] Speaker 02:
informing all users that it was updating its terms.

[00:00:59] Speaker 01:
You were relying on inquiry notice, right?

[00:01:01] Speaker 01:
Because the plaintiffs didn't see it.

[00:01:03] Speaker 01:
I think one went into the junk box and the other one didn't see it.

[00:01:08] Speaker 02:
Yeah, well, what I would note, Your Honor, is obviously there's evidence that we sent it.

[00:01:13] Speaker 02:
We know that Ms.

[00:01:15] Speaker 02:
Broad received it.

[00:01:17] Speaker 02:
And as to Ms.

[00:01:18] Speaker 02:
Doe, she only says that she didn't review it, hasn't reviewed it.

[00:01:23] Speaker 02:
Of course, had I would guess, knowing the diligence of my opposing counsel, that there was a review of her email box to see if she had received it, and had she not received it, I think there would be evidence saying I performed a search.

[00:01:37] Speaker 01:
So let's assume they did receive it.

[00:01:38] Speaker 01:
Yes.

[00:01:39] Speaker 01:
Do you have a case that mass email under these circumstances are sufficient to put a reasonable person on inquiry notice?

[00:01:46] Speaker 01:
I get thousands of junk email, and I have to confess, I don't often check my junk email box.

[00:01:54] Speaker 01:
It's just the volume in today's world, especially people with multiple email addresses, which many of us have, it's just simply overwhelming.

[00:02:04] Speaker 01:
So what's your best case for that proposition?

[00:02:06] Speaker 02:
That would be, I'm not sure if I'll pronounce it correctly, but Gaza Zeta.

[00:02:11] Speaker 02:
versus Coursera is the best case.

[00:02:13] Speaker 02:
That's Judge Davila here in the Northern District ruling that where there is an email that provides conspicuous notice of an update to terms, in that case, unlike what my opposing counsel asserted in their answering brief, in that case, the plaintiff said that they never saw or recalled receiving the email, and yet Judge Davila said the combination of

[00:02:36] Speaker 02:
a set of terms that says we may update our terms and if you continue to use our service, you're bound, plus a very conspicuous clear email saying we're updating our terms plus continued use equals being bound to the new terms.

[00:02:51] Speaker 02:
And I would also add the PsyED versus Microsoft case, which is another instance where there was an email saying we're updating our terms and a plaintiff who claimed not to have seen it.

[00:03:02] Speaker 02:
But in both cases, they were bound.

[00:03:04] Speaker 03:
I'm sorry.

[00:03:06] Speaker 03:
So, counsel, am I correct that we have to make a call on which terms and conditions are binding?

[00:03:20] Speaker 03:
Because even if we were to disagree with the district court on the supposed ambiguity, the latest terms and conditions are jams.

[00:03:30] Speaker 03:
and the prior ones are AAA, and so there's no way to avoid making a call, right?

[00:03:39] Speaker 02:
I suppose that's right, Your Honor, and we began our brief with the discussion of the October 2023 terms because we do feel as though they were on inquiry notice and their continued use bind them to those terms.

[00:03:54] Speaker 02:
But this is sort of a waterfall.

[00:03:57] Speaker 02:
If your honors conclude they're not bound to those terms, then we move on to the terms that they concede they agreed to, which also included an arbitration provision, just an arbitration.

[00:04:07] Speaker 03:
And then we would just simply need to decide if we agreed with your friends that October 2023 isn't the right terms to look at, then we have to decide whether the district court was correct as to the disqualifying ambiguity.

[00:04:24] Speaker 03:
That's correct, your honor.

[00:04:25] Speaker 01:
So getting to that next level of the waterfall, if you will, if we think the October 2023 terms don't apply, then how do you reconcile the conflict here without reading out certain words?

[00:04:38] Speaker 01:
The venue clause has an exclusivity reference, right?

[00:04:43] Speaker 01:
The exclusive jurisdiction shall be in the state and federal courts located in NDECAL.

[00:04:50] Speaker 01:
It also has

[00:04:52] Speaker 01:
the all-encompassing, which we interpret broadly, all disputes and claims and controversies arising out of relating to these terms.

[00:05:00] Speaker 01:
That to me, to be completely inconsistent with the incorporation of the AAA rules and the delegation of the arbitrability question to the arbitrator.

[00:05:11] Speaker 02:
So I would say there are two errors in the district court's ruling.

[00:05:15] Speaker 02:
One relates to

[00:05:16] Speaker 02:
Whether there's an ambiguity or it was a clear and unmistakable delegation, the other relates to this concept.

[00:05:22] Speaker 01:
Well, let's assume that it is a clear and unmistakable delegation and that it's exclusive.

[00:05:27] Speaker 01:
Let's give you that and say, okay, well, the incorporation under our case law, Brendan, the incorporation of the AAA rules is an indication of clear and unmistakable delegations.

[00:05:39] Speaker 01:
You've got that, but on the other hand,

[00:05:41] Speaker 01:
you have a provision that says the exclusive jurisdiction is in the state and federal courts in Northern California, and that applies to all claims and disputes arising out of these terms.

[00:05:53] Speaker 01:
And how do you reconcile that without reading out words from the venue provision?

[00:05:57] Speaker 02:
So I would point, Your Honor, to the Mohammed versus Uber Technologies Ninth Circuit decision, because that has the same conflict.

[00:06:07] Speaker 02:
And nonetheless, the Ninth Circuit ruled

[00:06:10] Speaker 02:
that there is no ambiguity because, as stated in the Dream Theater case, in every instance there are going to be cases that have to go to court.

[00:06:22] Speaker 02:
The tile terms expressly have carve-outs for copyright, trademark, and patent cases.

[00:06:28] Speaker 02:
So there's no question that there could be some disputes that have to go to court.

[00:06:33] Speaker 02:
So under Uber versus Mohammed,

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In that situation, despite a reference, an exclusive jurisdiction provision just like this one, the court said that plainly applies to non-arbitrable disputes.

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Now, the district court, what it did is latched onto what I would describe as a distinction without a difference between the tile terms and the Muhammad terms, which is that the tile terms said

[00:07:04] Speaker 02:
It kind of provided a list of the different kinds of disputes over which the court would have exclusive jurisdiction.

[00:07:12] Speaker 02:
After saying all claims and disputes, it said, and that also covers disputes about breach and termination and enforcement and interpretation and validity.

[00:07:23] Speaker 02:
And the district court said, aha, that list, what I would describe as a belt and suspenders list of the kinds of claims that are

[00:07:33] Speaker 02:
covered makes this totally different than Mohammed v. Uber and makes it instead like the in-ray Tesla decision.

[00:07:43] Speaker 02:
And in-ray Tesla actually had a clause in the terms that said in the event that a court rules that part of the arbitration agreement

[00:07:55] Speaker 02:
is unenforceable.

[00:07:57] Speaker 01:
Right.

[00:07:57] Speaker 01:
The district court did tackle with Muhammad and found that the distinction is that under the Muhammad venue provision, it did not reserve the questions of the interpretation of the arbitration to the courts.

[00:08:12] Speaker 01:
And here it does.

[00:08:14] Speaker 01:
What do you make of that distinction?

[00:08:16] Speaker 02:
It does.

[00:08:17] Speaker 02:
Respectfully to her honor in the district court, this does not reserve

[00:08:22] Speaker 02:
interpretation or validity of the arbitration provision to the courts.

[00:08:29] Speaker 02:
It just references interpretation and validity in a list of the kinds of claims that may arise, but the arbitration provision is completely separate.

[00:08:38] Speaker 02:
Indeed, the title of the provision on which the district court relied is general provisions.

[00:08:45] Speaker 02:
There's no question, Your Honors, this is

[00:08:49] Speaker 02:
sort of a boilerplate venue provision that governs... Yes?

[00:08:53] Speaker 03:
The supposed ambiguity on ER 116 general provisions and the arbitration provision on the next page says as a heading claims covered by arbitration.

[00:09:05] Speaker 03:
Yes, Your Honor.

[00:09:06] Speaker 03:
And if we were to credit this ambiguity, basically we would be reading out the entire provision of claims covered by arbitration.

[00:09:18] Speaker 02:
Well, there would be many ways in which it's a completely counter-textual result.

[00:09:25] Speaker 02:
It would be reading out the claims covered by arbitration.

[00:09:30] Speaker 02:
It would be ignoring the delegation to AAA and finding an ambiguity under the very same circumstances where the Mohammed v. Uber decision said the ambiguity was artificial and reversed the district court on that basis.

[00:09:46] Speaker 02:
And then when the court went on to reach whether the claims were covered, there was also reading out of various provisions, including the provision that just simply says you're going to arbitrate any dispute about tile products.

[00:10:00] Speaker 02:
That also has to get read out of the agreement.

[00:10:03] Speaker 02:
in order to reach the conclusion the district court reached.

[00:10:06] Speaker 01:
Yeah.

[00:10:06] Speaker 01:
I think the difficulty is that going one way reads out certain provisions in one venue provision.

[00:10:13] Speaker 01:
Going the other way reads out certain language as to the delegation.

[00:10:18] Speaker 01:
But continuing on with the waterfall analogy, if we decide that there is ambiguity, then we have to reach the question of unconscionability.

[00:10:28] Speaker 02:
Yes.

[00:10:29] Speaker 02:
Just to respond briefly to what you said, Judge Nguyen,

[00:10:32] Speaker 02:
I do not think you have to read anything out of the general provisions term on exclusive jurisdiction, because interpretation and validity, they can come up in a dispute over trademark, copyright, patent.

[00:10:46] Speaker 02:
These are all expressly excluded from the reach of the arbitration provision.

[00:10:52] Speaker 02:
So you can fully harmoniously apply the general provisions venue clause and severability clause

[00:10:59] Speaker 02:
and the arbitration agreement.

[00:11:01] Speaker 02:
So that would be my response to that.

[00:11:04] Speaker 03:
Council, in doing that, we're required to apply Civil Code 1641, right?

[00:11:12] Speaker 02:
Forgive me your honor off the top of my head 1641 that is that you must read all provisions of a contract meaning I'm going to ask your friend this to the whole of a contract is to be taken together So as to give effect to every part if reasonably practicable each clause helping to interpret the other Yes, your honor so in our view the court's interpretation created a conflict created an ambiguity

[00:11:41] Speaker 02:
so that she could say, well, it's ambiguous and it's for me to decide.

[00:11:45] Speaker 02:
But I think, frankly, that was because there was a resistance to, given the sensitive nature of this case and the serious harms that allegedly befell the plaintiffs, I think there was a resistance to allowing this to go to arbitration.

[00:12:01] Speaker 02:
But there is no ambiguity.

[00:12:04] Speaker 02:
This contract can be read exactly as is because there are arbitrable claims.

[00:12:08] Speaker 02:
and there are non-arbitrable claims.

[00:12:10] Speaker 02:
And just like Mohammed v. Uber technologies, the venue provision covers the non-arbitrable claims, and the arbitration clause can be read as it is.

[00:12:21] Speaker 02:
I see I only have three minutes left, but Your Honor, I don't want to ignore your question about what if we reach the last layer of the waterfall.

[00:12:28] Speaker 02:
Should I address that?

[00:12:31] Speaker 01:
Yes, please do.

[00:12:32] Speaker 02:
And I'm sorry.

[00:12:33] Speaker 02:
Oh, no, not at all.

[00:12:36] Speaker 02:
I mean, I think that the short answer to this, so I can reserve some of my time, is that this is not a case where we're talking about something occurring that's wildly outside of the plain text of the provision.

[00:12:49] Speaker 02:
There were two plaintiffs in the case, the Ireland Gordies, who are not tile customers.

[00:12:55] Speaker 02:
And there was no motion to compel us to them.

[00:12:58] Speaker 02:
We litigated their cases in the district court, and those cases are now resolved.

[00:13:03] Speaker 02:
But these are two people who

[00:13:06] Speaker 02:
acquired tiles, one buying it directly, the other getting it and using it as part of a promotion for a different product.

[00:13:15] Speaker 02:
They acquired tiles.

[00:13:16] Speaker 02:
They had agreed to the terms of service.

[00:13:17] Speaker 02:
The terms say any dispute between you and tile about tile products, you're agreeing to arbitrate.

[00:13:23] Speaker 02:
There's nothing surprising or unfair about that.

[00:13:27] Speaker 02:
This is not a situation where they're claiming product defects.

[00:13:31] Speaker 02:
Including reaching out to third party conduct.

[00:13:33] Speaker 01:
I think that's the part where the district court split off.

[00:13:36] Speaker 02:
So I don't see how a product defect claim about the actual product that these people acquired really is surprising or hidden in prolix or otherwise procedurally unconscionable.

[00:13:49] Speaker 02:
I don't think it's substantively unconscionable.

[00:13:51] Speaker 02:
But there's also the point that we made that it is very difficult to disentangle the supposedly arbitrable and non-arbitrable claims.

[00:14:01] Speaker 02:
And that's because for Miss Broad, one, she found

[00:14:05] Speaker 02:
two tiles allegedly hidden in her car.

[00:14:09] Speaker 02:
One of them is the tile she bought.

[00:14:11] Speaker 02:
So what exactly is this going to look like?

[00:14:13] Speaker 02:
Is there going to be an arbitration hearing about, well, was her location determined by the tile she bought that she signed up for and she gave her alleged stalker access to her account?

[00:14:24] Speaker 02:
And a separate trial about the one that she asserts she didn't buy?

[00:14:29] Speaker 02:
That's difficult to disentangle.

[00:14:31] Speaker 02:
And the complaint is also full of

[00:14:34] Speaker 02:
accusations about how the reason that the tile is defectively designed is because you can't do things like precisely locate it using the Scan and Secure app.

[00:14:45] Speaker 02:
You can't cause it to emit a sound so it's easier to find.

[00:14:50] Speaker 02:
You can't use the Scan and Secure app to disable it.

[00:14:53] Speaker 02:
These are all actually claims that the app that the plaintiffs are using to try to protect themselves is defective.

[00:15:04] Speaker 02:
And any claim that the app that they signed up for in the terms of service is unsafe, we have an absolute right to arbitrate that.

[00:15:14] Speaker 02:
So the court has really drawn an unworkable line between these trial claims and these arbitrable claims.

[00:15:19] Speaker 01:
I understand your argument.

[00:15:21] Speaker 01:
I'd want to take up all of your time, Bill.

[00:15:22] Speaker 01:
I'll give you a couple of minutes back.

[00:15:24] Speaker 02:
Thank you.

[00:15:33] Speaker 00:
Good morning, Your Honors.

[00:15:35] Speaker 00:
May it please the Court?

[00:15:36] Speaker 00:
I'm happy to address any of the questions that Your Honors asked of my colleague, or I can immediately begin addressing the points as I see them, whichever your preference.

[00:15:46] Speaker 01:
Why don't we start with the waterfall?

[00:15:48] Speaker 00:
Super.

[00:15:49] Speaker 01:
And the inquiry notice question.

[00:15:51] Speaker 01:
Absolutely.

[00:15:54] Speaker 01:
If the appellant's view prevails, then that ends the analysis at the inquiry notice stage?

[00:16:00] Speaker 00:
I believe so.

[00:16:01] Speaker 00:
The October 23rd terms very clearly delegate arbitrability, unlike my position, the previous terms.

[00:16:10] Speaker 00:
However, the district court found that Tile had failed to meet its evidentiary burden, showing that plaintiffs had in fact received the

[00:16:21] Speaker 00:
October 2023 email and so I believe that that it was not clear.

[00:16:25] Speaker 01:
I'm not sure that the burden of proof I know there were some discussions about that I don't know under these facts that it really makes a difference and the email was sent right right and whether you whether it went to the junk box or whether it got lost in the you know giant shuffle of multiple emails coming in

[00:16:42] Speaker 01:
Somebody signs up for service.

[00:16:45] Speaker 01:
The terms get updated periodically by email.

[00:16:48] Speaker 01:
People know that.

[00:16:49] Speaker 01:
I mean, whether they check it or not is another question.

[00:16:52] Speaker 01:
And the mass emails were sent out.

[00:16:55] Speaker 00:
So I appreciate that, but I think that... Tell me why it's not enough inquiry notice.

[00:16:58] Speaker 00:
I think that there is an assumption in there that is not on the record and that Tyler's not proven, and that has been an important distinction in other cases, which is that Tyler has averred that an email was sent.

[00:17:10] Speaker 00:
But whether or not it was sent to our people

[00:17:12] Speaker 00:
was not something apart from the spam receipt from Plaintiff Broad is not something that's in the record.

[00:17:19] Speaker 00:
And, you know, setting aside Broad, there is no evidence.

[00:17:22] Speaker 01:
But the spam receipt is not in the record?

[00:17:24] Speaker 00:
Well, no, no, no.

[00:17:25] Speaker 00:
The spam receipt is in the record.

[00:17:26] Speaker 00:
I'm sorry.

[00:17:27] Speaker 00:
But setting aside Plaintiff Broad's receiving the email on the spam inbox, Plaintiff Doe, there is not necessarily evidence or at least evidence to, I would say, chin the bar

[00:17:42] Speaker 00:
to confirm that in fact she received it.

[00:17:44] Speaker 00:
We know that a mass email went out.

[00:17:45] Speaker 00:
We don't know that it went out to her email address.

[00:17:48] Speaker 00:
And this is important because if you look at a case like Jackson, this court's opinion, there was no evidence that plaintiffs received a mass email from Amazon with updated terms that were sent to the plaintiffs.

[00:17:59] Speaker 00:
And that was a critical point for this court.

[00:18:03] Speaker 00:
Following that, there's the Sellers v. Bleacher Report opinion where the defendant, like the defendant tile here, had failed to provide

[00:18:11] Speaker 00:
any indication that there was a recipient in the to field of the email.

[00:18:15] Speaker 00:
So it is evident that an email was sent to Broad and it went into her spam folder.

[00:18:22] Speaker 00:
But there is no further evidence that I would believe is sufficient under Jackson and its progeny in the Northern District of California to suggest that there's proof of receipt by plaintiff Doe.

[00:18:35] Speaker 00:
So that is an important point.

[00:18:38] Speaker 00:
But I would also submit that, you know, inquiry notice then, I guess this sort of moves into maybe a subpart of the waterfall.

[00:18:50] Speaker 00:
Inquiry notice also needs to be conceived of in the context of Tile's underlying terms, which say that they may update the terms from time to time, but those updated terms, they don't specify how, first of all.

[00:19:02] Speaker 00:
But then they say that the updated terms will not take effect absent express consent.

[00:19:07] Speaker 00:
Now, they don't define what express consent is, but I think that it's relatively weak tea to think that the indicia that are in the record exhibited by both Doe and Broad

[00:19:20] Speaker 00:
chin the bar for being expressed consent for the updated terms.

[00:19:24] Speaker 03:
So counsel, keeping with the waterfall analogy, let me move downstream a little bit.

[00:19:30] Speaker 00:
Yes, your honor.

[00:19:31] Speaker 03:
So here is my biggest problem with your argument as to the January 21 and the February 23.

[00:19:41] Speaker 03:
I think Civil Code 1641, 150 years old, is binding.

[00:19:49] Speaker 03:
And I don't see how looking at the district court's analysis that comports with 1641 because to me taking this ambiguity reads out of the contracts language that says for example in the January 2021 all disputes, claims or controversies

[00:20:14] Speaker 03:
shall be determined exclusively by binding arbitration.

[00:20:17] Speaker 03:
It seems like to me your friends reconciliation argument works, although imperfectly.

[00:20:25] Speaker 03:
But 1641 tells us they have to all be given effect if reasonably practicable, each clause helping to interpret the other.

[00:20:35] Speaker 03:
And so this is not exactly the common law.

[00:20:38] Speaker 03:
So it seems to me that your friend's analysis is reasonably practical, practicable with each clause, helping to interpret the other.

[00:20:47] Speaker 03:
Why am I wrong?

[00:20:48] Speaker 00:
Well, Your Honor, I think it's important to look at the precise language.

[00:20:52] Speaker 00:
So the claims covered by arbitration in the agreements are all disputes, claims or controversies arising out of or relating to this agreement.

[00:21:00] Speaker 00:
Any tile product or service and its marketing, so it has to be the marketing conjunctively with the tile product or service, or the relationship between you and tile, disputes shall be determined exclusively by binding arbitration.

[00:21:14] Speaker 00:
Absent from that clause is the language that we see in Muhammad, for example, and let's see here, I apologize, my notes are a little scattered.

[00:21:22] Speaker 00:
Such disputes include without limitation disputes arising out of or relating to interpretation

[00:21:28] Speaker 00:
or application of this arbitration provision, including the enforceability, revocability, or validity of the arbitration provision.

[00:21:35] Speaker 03:
But even if we were to say that we're arguable, if this provision isn't read out and if we were to agree with your friend that sophistication doesn't matter, wouldn't that go to the arbitrator?

[00:21:53] Speaker 00:
I do not believe it would, Your Honor.

[00:21:56] Speaker 00:
Why?

[00:21:57] Speaker 00:
because I believe that disputes within the scope of the arbitration provision go to arbitration.

[00:22:04] Speaker 00:
It is certainly not, it is not clear that whether the arbitration agreement, whether it contracts to arbitrate, or enforceability is within that scope, and then you have more specific language a little bit further down that says the exclusive jurisdiction

[00:22:21] Speaker 00:
for all disputes, claims, or controversies arising out of or relating to these terms will be, you know, the forum for those is the Northern District of California.

[00:22:32] Speaker 00:
So it's very clear to determine whether or not an agreement to arbitrate was ever entered into when goes to the court, which is where there's a federal presumption, right, like threshold issues of delegability or rather arbitrability are presumed to be the province of courts.

[00:22:48] Speaker 00:
So that's not

[00:22:49] Speaker 00:
you know, hostile to arbitration, but then if there is then found to be an agreement to arbitrate the specific claims, off to JAMS or off to AAA it goes.

[00:23:00] Speaker 00:
I genuinely believe that there is not an irreconcilable tension there.

[00:23:05] Speaker 00:
And, you know, this sets aside to the additional carve-outs that my colleague discussed before about IP infringement, things of those natures.

[00:23:14] Speaker 00:
This does not displace

[00:23:17] Speaker 00:
an agreement to arbitrate arbitrable claims.

[00:23:20] Speaker 00:
And arbitrable claims are what are the subject of this provision A that says claims covered by arbitration.

[00:23:26] Speaker 00:
Indeed, the title says claims, not issues relating to arbitration.

[00:23:31] Speaker 00:
So I think that if you look at the very specific language of the two provisions, they're harmonious.

[00:23:37] Speaker 00:
They do not preclude arbitration of the party's agreement.

[00:23:42] Speaker 00:
They don't do violence to the party's agreement.

[00:23:45] Speaker 00:
They simply say that

[00:23:47] Speaker 00:
if there is a dispute about whether or not an arbitration agreement encompasses a specific claim, it must be resolved by a court.

[00:23:55] Speaker 00:
And then based upon that resolution, you either go to arbitration or you stay in court, much like what happened here.

[00:24:01] Speaker 01:
Yeah, the problem with your argument is Brennan, right?

[00:24:04] Speaker 01:
Because it has the incorporation of the AAA rules.

[00:24:07] Speaker 01:
That is a clear and unmistakable indication that

[00:24:13] Speaker 01:
that the arbitrability question is going to be determined by the arbitrator.

[00:24:18] Speaker 01:
So for me, the difficulty really isn't the section about all disputes shall be determined by arbitration.

[00:24:27] Speaker 01:
It's the fact of the incorporation.

[00:24:29] Speaker 01:
Now, who gets to decide the threshold question of arbitrability?

[00:24:33] Speaker 01:
Now, the district court reconciled that by saying that it's different from Mohammed because of the interpretation and validity thereof.

[00:24:41] Speaker 01:
What do you make of your

[00:24:42] Speaker 01:
opposing counsel's response that really is a distinction without a difference.

[00:24:48] Speaker 00:
I would disagree with my very excellent opposing counsel on this.

[00:24:54] Speaker 00:
We must agree to disagree.

[00:24:56] Speaker 00:
I think the thing with Brennan and similarly with Flylow is that they simply contemplated the incorporation of the AAA rules without anything more.

[00:25:09] Speaker 00:
So if I

[00:25:10] Speaker 00:
sit down this morning and order breakfast and say, I would like eggs, then it is clear and unmistakable evidence that I would like eggs.

[00:25:16] Speaker 00:
But if I then say, but if the kitchen is making eggs benedict, I would like that instead, it ceases to become clear and unmistakable evidence.

[00:25:24] Speaker 00:
The incorporation of the venue provision, which was not at issue in Brennan and which was not a fact in the record or part of the court's analysis in Brennan,

[00:25:33] Speaker 00:
much like, or Flylow, I believe, and I believe your honor wrote that opinion, so I'm not going to pontificate too much on it.

[00:25:42] Speaker 00:
But I believe that in those instances, a sort of counter-puntal venue provision was simply not contemplated.

[00:25:51] Speaker 00:
And I think the addition of the venue provision creates, I don't want to say an ambiguity.

[00:25:58] Speaker 00:
I think it's very, very clear.

[00:26:00] Speaker 00:
Obviously, it's my position.

[00:26:04] Speaker 00:
Brennan is a shorthand for, in a vacuum, if you incorporate AAA rules or if you incorporate an arbitral forum's rules, the likelihood is great that that is clear and unmistakable evidence of an intent to arbitrate.

[00:26:17] Speaker 00:
If, however, there are other terms within the contract, much like Your Honor directed us, we must read the entirety of the contract to harmonize it.

[00:26:25] Speaker 00:
And that is the object here.

[00:26:27] Speaker 00:
And this is what distinguishes this matter from Brennan, from Flylow, and those progeny.

[00:26:33] Speaker 01:
So before you run out of time, can I have you address the unconscionability question?

[00:26:39] Speaker 01:
Because that's the next level.

[00:26:41] Speaker 00:
Of course, the final level of the waterfall.

[00:26:44] Speaker 00:
The district court got it perfectly right.

[00:26:47] Speaker 00:
The district court split, you know, in its unconscionability analysis claims that arise.

[00:26:54] Speaker 01:
What about the unworkability issues?

[00:26:55] Speaker 00:
Excuse me.

[00:26:56] Speaker 00:
Sorry, Your Honor.

[00:26:57] Speaker 00:
What about the unworkability issues?

[00:26:59] Speaker 00:
I entirely disagree with my colleague on the other side.

[00:27:02] Speaker 00:
It's quite workable to the extent that, I mean, what we are ultimately saying is that tile negligently designed and introduced into the stream of commerce

[00:27:13] Speaker 00:
a product which it knew third parties would use to stalk and hunt human beings.

[00:27:20] Speaker 00:
Those third parties would purchase their own tiles and use their own tiles to do this thing.

[00:27:26] Speaker 00:
I wish it were different that this one plaintiff broads, in one instance, plaintiff broads own tile was used.

[00:27:37] Speaker 00:
I think that the court probably got it correct on balance and in fairness that

[00:27:42] Speaker 00:
that becomes a dispute that she would have vis-a-vis tile.

[00:27:45] Speaker 00:
But it cannot be said that an arbitration provision entered into between two parties should be read to also encompass the ultra-virus actions of third parties over whom the plaintiff in this instance has absolutely no control, who has engaged in a commercial interaction with tile that is separate and apart from anything that our plaintiffs have

[00:28:10] Speaker 00:
you know, have contemplated, it just, it broadens the scope of the arbitration provision to the point, you know, that shocks the context.

[00:28:20] Speaker 01:
Am I correct in understanding that the underlying conduct, there's overlap there, but the parties are different.

[00:28:28] Speaker 01:
That's what the court split it on, right?

[00:28:30] Speaker 01:
Correct.

[00:28:30] Speaker 01:
Conduct by third party.

[00:28:32] Speaker 01:
And so what troubles me is that the Supreme Court has already said that any ambiguities on scope of arbitration,

[00:28:39] Speaker 01:
basically solidly falls in favor of arbitration in here, you're not trying to split completely different claims.

[00:28:45] Speaker 01:
They're the same.

[00:28:46] Speaker 01:
allegations of conduct, it's just you're trying to split parties.

[00:28:52] Speaker 00:
Well, no, Your Honor.

[00:28:54] Speaker 00:
I would say ultimately, perhaps if the claims involving plaintiff broads tile, certainly we're not splitting parties with plaintiff doubt, I would submit.

[00:29:03] Speaker 00:
But if they are unworkable as to the acts that involved one tile versus the acts that involved another, we actually are splitting claims because the parties are always the same.

[00:29:15] Speaker 00:
But, and I don't want to use the claim splitting word, but some claims may have to be arbitrable.

[00:29:21] Speaker 00:
That is the nature of the beast.

[00:29:23] Speaker 00:
But I would, I believe a cogent, a very cogent analysis of what to do in these situations is the Chuncho v, goodness, I'm blanking, but the Chuncho case where multiple, multiple claims were not arbitrable because they were wholly outside of the scope of the contract.

[00:29:43] Speaker 00:
But one or two,

[00:29:44] Speaker 00:
were.

[00:29:45] Speaker 00:
The invasion of privacy claim was arbitrable because there was a provision in the contract that expressly contemplated T-Mobile securing and making safe people's data.

[00:29:56] Speaker 00:
I believe that that's sort of addressing theoretically data breaches, but at the same time the court held that this was within the ambit of the arbitration provision.

[00:30:07] Speaker 00:
But the acts of the employee to then go and look up people's records

[00:30:11] Speaker 00:
Outside of that, the negligence claims, the criminal larceny claims, things of those natures, those simply weren't arbitrable.

[00:30:21] Speaker 00:
So I believe that it is ultimately a sorting of the claims and not a sorting of the parties.

[00:30:27] Speaker 00:
And if we have to sort those claims, Judge Lynn is a very, very capable jurist, and I'm confident that she will put us to our proof.

[00:30:34] Speaker 00:
That is my time.

[00:30:35] Speaker 01:
Judge Gould, do you have any questions before counsel sits down?

[00:30:39] Speaker 03:
No question.

[00:30:40] Speaker 01:
That's been it.

[00:30:42] Speaker 01:
Thank you.

[00:30:42] Speaker 01:
Thank you, Your Honors.

[00:30:49] Speaker 02:
Thank you, Your Honors.

[00:30:50] Speaker 02:
I'll try to be brief.

[00:30:55] Speaker 02:
What I would say is that in many ways, this feels to me like it's coming down to the difference between Mohammed v. Uber and the in-ray Tesla decision.

[00:31:04] Speaker 02:
And I would strongly encourage, Your Honors, to look closely at the tile terms and ask

[00:31:10] Speaker 02:
Which of those two cases is more on point?

[00:31:13] Speaker 02:
Because in Ray Tesla, there is a specific statement in the terms of service that says the court may render unenforceable part of the arbitration provision.

[00:31:26] Speaker 02:
That is what makes, in Ray Tesla, a different situation.

[00:31:32] Speaker 02:
The terms are expressly acknowledging, whether it was intentional or inadvertent, I don't know.

[00:31:38] Speaker 02:
But it creates an ambiguity.

[00:31:40] Speaker 02:
because it expressly says the court may determine that part of the arbitration provision is unenforceable.

[00:31:47] Speaker 02:
Now, that is inconsistent with sending the claims to arbitration under the AAA rules and delegating arbitrability disputes to the arbitrator.

[00:31:57] Speaker 02:
Tile's terms do not say that.

[00:32:00] Speaker 02:
They just say any claims and disputes will be sent to court, and it says that that goes for breach, enforcement, termination, interpretation, validity,

[00:32:09] Speaker 02:
But that's just like Mohammed.

[00:32:12] Speaker 02:
While Mohammed didn't include an enumerated list of the particular kinds of disputes, it was exactly the same thing.

[00:32:20] Speaker 02:
Any disputes or claims have to go to court.

[00:32:23] Speaker 02:
So I think that is sort of the nub of the decision about whether the AAA delegation was clear and unmistakable.

[00:32:32] Speaker 02:
It was under Brennan.

[00:32:33] Speaker 02:
Council don't even address the Gigi versus Valve unpublished Ninth Circuit decision that applied the Brennan rule in the context of unsophisticated minors using a video game platform.

[00:32:46] Speaker 02:
But I would just ask, Your Honors, to look closely at that.

[00:32:49] Speaker 02:
Look at those two decisions.

[00:32:50] Speaker 02:
And I believe you'll conclude that tile is right, that the district court created an ambiguity that, just like they said in Muhammad, was artificial.

[00:33:00] Speaker 02:
Just a couple of other quick points.

[00:33:05] Speaker 02:
Council said we don't know if it was sent to Ms.

[00:33:08] Speaker 02:
Doe's email, the notice of the terms.

[00:33:12] Speaker 02:
I think you should look at ER 97 for that because that's the declaration of Mr. Klinker saying it was sent to all tile users, including Ms.

[00:33:21] Speaker 02:
Broad and Ms.

[00:33:22] Speaker 02:
Doe.

[00:33:23] Speaker 02:
We haven't even talked about how unworkable it is to say that whether or not somebody recalls or read terms like that determines whether or not an update applies.

[00:33:33] Speaker 02:
That's an unworkable standard that the court should not adopt.

[00:33:39] Speaker 02:
Regarding unconscionability, Your Honor, Judge Nguyen is certainly right that the rule is you have to resolve all doubts in favor of arbitration and if

[00:33:52] Speaker 02:
I think that that's probably most of the points that I wanted to make regarding this.

[00:34:02] Speaker 02:
But Judge Bennett asked if you have to decide which terms apply, I think you could say, you also could rule that assuming the earlier terms apply,

[00:34:17] Speaker 02:
then this is the outcome and these disputes have been delegated to arbitration.

[00:34:22] Speaker 02:
So you could reach that without actually concluding.

[00:34:24] Speaker 03:
Except the problem with that is that one set has one arbitration forum, the other set has the other arbitration forum.

[00:34:33] Speaker 03:
So my problem with assuming without deciding determines, I mean, JAMS and AAA are both excellent services, but they're different.

[00:34:43] Speaker 02:
Yeah.

[00:34:44] Speaker 02:
I mean, and it was,

[00:34:45] Speaker 02:
Frankly it was a very astute question that I hadn't considered whether you have to resolve it just to decide where it goes although I We have a good relationship with my colleague.

[00:34:54] Speaker 03:
I doubt we would end up like a dispute about which I'm sure is a practical matter that would that would be true, but I Still don't see how we can avoid it Well I

[00:35:08] Speaker 02:
What occurred to me is whether or not my client could just stipulate to go to AAA under the earlier terms.

[00:35:13] Speaker 02:
But if I frankly haven't discussed it with my clients, I'm not in a position to make that representation here and now.

[00:35:19] Speaker 01:
But it does seem to me like- If it changes, will you send us something?

[00:35:25] Speaker 02:
Oh, yes.

[00:35:26] Speaker 01:
Within the next seven days?

[00:35:29] Speaker 02:
Absolutely, Your Honors.

[00:35:30] Speaker 02:
We could do that.

[00:35:32] Speaker 01:
Okay.

[00:35:32] Speaker 01:
Thank you very much, counsel, which we took it over time.

[00:35:35] Speaker 01:
I appreciate both sides' very helpful arguments and the matters submitted.