[00:00:02] Speaker 05:
We'll next hear argument in the government of the Lao People's Democratic Republic versus Baldwin and Bridge Capital LLC case number 25-2562. Am I to go, Your Honor? Yeah, let's see. So you...

[00:00:33] Speaker 05:
Yep. Go ahead, Mr. Branson.

[00:00:36] Speaker 04:
Yes, I'm Mr. Branson.

[00:00:38] Speaker 04:
May it please the court.

[00:00:41] Speaker 04:
My name is David Branson, and together with my co-counsel in Saipan, Mr. Colin Thompson, we represent the government of the Lao People's Democratic Republic. First, I thank you for allowing me to appear remotely because I'm in Hong Kong.

[00:01:00] Speaker 04:
I would like to make three statements and then take your questions and reserve two minutes for rebuttal.

[00:01:08] Speaker 04:
The government's position is, one, the district court had subject matter jurisdiction under FAA 9 U.S.C.

[00:01:17] UNKNOWN:
203.

[00:01:18] Speaker 04:
Two, this court has jurisdiction under 9 U.S.C. 161D because the district court, in fact, denied enforcement of three foreign arbitration awards.

[00:01:30] Speaker 04:
And third, there was one case the government principally relies upon that answers these jurisdictional questions in total. It's your decision in Al-Qarqani versus Chevron, which you decided in 2021. And now I take your questions. So I was,

[00:01:55] Speaker 05:
trying to grapple with our jurisdiction here.

[00:02:00] Speaker 05:
You think we have jurisdiction, right?

[00:02:02] Speaker 04:
Of course.

[00:02:03] Speaker 05:
Yeah. And do you think it's under 1291, or do you think it's under Section 16D of the FAA?

[00:02:14] Speaker 04:
Under the FAA 16A1D.

[00:02:18] Speaker 04:
It's interlocutory.

[00:02:21] Speaker 04:
It's an interlocutory decision.

[00:02:23] Speaker 05:
But you agree that we don't have jurisdiction under 1291?

[00:02:27] Speaker 04:
There's not a final decision of the district court.

[00:02:32] Speaker 05:
So then my question is how is section 16, it's A1D, that's what you're talking about, and that talks about confirmation or rejection of an arbitral award, right?

[00:02:50] Speaker 04:
Yes, the exact wording is confirming or denying confirmation of an award or partial award. And this district court decision denied the confirmation of three foreign arbitral awards.

[00:03:04] Speaker 00:
Well, the district court actually just dismisses saying, I don't have jurisdiction. So why is that? Why should we treat a dismissal for lack of jurisdiction as an order on confirmation or not confirmation?

[00:03:16] Speaker 04:
Because the district court erred when the district court said it did not have subject matter jurisdiction. That was an absolutely erroneous decision.

[00:03:26] Speaker 04:
And it's critical to the argument before you on both your jurisdiction, because you have to first decide what the jurisdiction of the district court was.

[00:03:36] Speaker 04:
And several of your recent cases.

[00:03:39] Speaker 05:
That's part of the problem. We don't have to first decide. We first have to decide our own jurisdiction before we decide the jurisdiction of the district court. And that's why I'm struggling here because it's not intuitive. What's your best case? I mean, basically you're suggesting that A1D is an exception, which it may be, is an exception to the finality rule. Right. You're arguing that because you're saying if this is confirming or denying as to any party, then you automatically get an interlocutory appeal.

[00:04:14] Speaker 04:
Well, yes.

[00:04:19] Speaker 04:
One primary authority is Arthur Anderson versus Carlisle, where the Supreme Court held that Arthur Anderson, which had asked to compel arbitration, The district court said you can't compel arbitration because you're a non-signatory, and the Court of Appeals said we agree with that. The Supreme Court took jurisdiction under 16A1C because...

[00:04:57] Speaker 04:
Maybe it was either denying a stay or denying a motion to compel.

[00:05:03] Speaker 05:
Right, but that seems different.

[00:05:05] Speaker 04:
That seems different because that's, well, maybe it's different. It was interlocutory.

[00:05:11] Speaker 05:
Yeah, you're right.

[00:05:13] Speaker 04:
There were others.

[00:05:14] Speaker 05:
Your point is these separate ways in which you can have appellate jurisdiction under the FAA don't superimpose a finality, right? they all anticipate an interlocutory appeal.

[00:05:31] Speaker 04:
There are other parts in 16D that deal with final awards. For example, 16A3 is a final decision with respect to an arbitration that is subject to this title. So there is a finality section in Rule 16, but Rule 16A1, they're all interlocutory.

[00:05:54] Speaker 00:
So my question is different in that Setting aside finality, if we're under A1D, which is what you say we're under, and as you've read, it refers to confirming or denying confirmation. The district court here expressly said she wasn't addressing confirmation because she lacked jurisdiction. So what do we, I come back to, like, why should we call that order something different than what she thought it was?

[00:06:20] Speaker 04:
I disagree with that. The district court for 20, first of all, the district court had before her only a motion to dismiss under 12 B six. The respondents never made a 12 B one motion.

[00:06:32] Speaker 04:
So for 20 pages of the decision, the district court says, I'm not, we are denying confirmation of the awards, the motion the petition before me is to confirm arbitration awards. It was only in the last sentence that the court said, I don't have subject matter jurisdiction. Now, the reason I believe you have to revisit that is because two of your cases, I'll cite you, Hay Day Farms versus FedEx and Voltage Pictures versus Goosey.

[00:07:03] Speaker 04:
Both of those district court decisions said we have diversity jurisdiction and they confirmed arbitral awards. But this court said, we have to look at the jurisdiction because we don't think you have diversity jurisdiction. And in Hay Day Farms, for example, this court then said, you actually have section 203 jurisdiction. Well, that's what is the situation here. This court had section 203 jurisdiction. And the reason and what you need to examine in my opinion, is your decision in Alcorcani versus Chevron.

[00:07:38] Speaker 04:
And let me explain this because it's very important.

[00:07:44] Speaker 04:
The district court in the oral argument was given the Alcorcani district court decision of 2019. The Alcorcani district court decision said, and there was a debate in the circuits up until Alcorcani in the circuit, that the New York Convention was different than Section 1 of the FAA. In Section 1 of the FAA, it's been the law for decades that a non-signatory can bring a claim and compel arbitration or can move to enforce an arbitral award against the non-signatory.

[00:08:23] Speaker 04:
There was a line of authority in several of the circuits that said Section Chapter 2 was different than under Chapter 2 because the New York Convention said a party must present an arbitration agreement in writing that it was a jurisdictional requirement.

[00:08:41] Speaker 05:
So many circuits... I don't mean to cut you off because this is actually helpful, but the question I have, even if you're right that this ultimately is sort of a merits-based decision...

[00:08:59] Speaker 05:
We could make that determination after there's a final award and it comes up.

[00:09:06] Speaker 04:
No, you can't. Because if... Sure we could. I'm sorry. I may disagree.

[00:09:17] Speaker 04:
We have two...

[00:09:20] Speaker 04:
defendants in the district court at the moment. They've both moved to dismiss on personal jurisdiction grounds. We've argued that there's the nerve center is in Saipan and therefore there is personal jurisdiction. Well, let's assume that, and we win that argument. The district court then grants a judgment against those two defendants. So the case is over. We can't then come back to this court and ask you to revisit the alter ego question. We have two judgments in the district court, and those judgments then become enforceable in the state court under the Uniform Foreign Judgments Act.

[00:09:56] Speaker 04:
That's where we lose the right to use the New York Convention if you don't claim this case back.

[00:10:03] Speaker 04:
We're unable to use the New York Convention in any other district court because the three-year statute's expired.

[00:10:11] Speaker 04:
These awards go back to 2019. Well, okay.

[00:10:16] Speaker 05:
I'm thinking about it. I got to think about what you just said, but I'm thinking about it more simplistically that, I mean, this, this is a case where there's two parties and then three alter egos, or maybe I have the numbers wrong, but that's right. Okay.

[00:10:34] Speaker 05:
And the, the alter egos were dismissed. Yeah. The district court said, I don't have jurisdiction. You're saying, no, that was on the merits.

[00:10:44] Speaker 04:
No, no, no. Excuse me. Let me restate that. Yep.

[00:10:49] Speaker 04:
The district court goes through the merits for 20 pages.

[00:10:54] Speaker 04:
and relies on the Orion Court decision that it's too complicated. And then on the last sentence of the decision says, I'm granting the motion because there's a lack of subject matter jurisdiction.

[00:11:06] Speaker 05:
I understand your argument. But I mean, the district court says it's jurisdiction. You're saying it's not. And look at these 20 pages.

[00:11:16] Speaker 04:
What is important to me is the way your court looked at Hay Day Farms and Volted Pictures.

[00:11:24] Speaker 04:
You said, let us examine what the district court's jurisdiction was. The district court in both of those cases said we have diversity jurisdiction. And this court said, we don't agree that you have diversity.

[00:11:38] Speaker 05:
I'm really not trying to be difficult with you here. I understand your argument. I'm very familiar with Hay Day Farms. I think I wrote that opinion.

[00:11:47] Speaker 05:
So I'm not disagreeing with you.

[00:11:51] Speaker 05:
That is an issue. But Hay Day Farms did not address this question of our appellate jurisdiction to get up here. And you're trying to use Hay Day Farms and bootstrap it up front into the appellate jurisdiction, into our appellate jurisdiction.

[00:12:09] Speaker 04:
Maybe we should, maybe we shouldn't. But that's a different issue. I don't want to say it that way. It's not a bootstrapping argument. What this district court said over 20 pages is I have before me a motion to confirm arbitral awards. I'm going to deny the motion to confirm arbitral awards. The district court said that at least eight times.

[00:12:32] Speaker 04:
And it wasn't until the last sentence that she said, I also don't have subject matter jurisdiction. But in fact, what is the result? The result is the government's motion to confirm arbitral awards has been dismissed. The motion was denied.

[00:12:49] Speaker 05:
So is there another case where there have been multiple parties, an award as to one of those parties has been denied, and there was an interlocutory appeal of that order? That would be really helpful if that existed.

[00:13:10] Speaker 04:
Say that again.

[00:13:12] Speaker 05:
Can you cite to me a case where the district court had five parties or multiple parties before it, all subject or potentially subject to an arbitral award, the district court ruled on one or two less than all of those parties, and an interlocutory appeal of that denial was taken up on appeal?

[00:13:37] Speaker 04:
Well, I said Anderson versus Liberty Lobby. There were... there were multiple defendants who were sued in the class action by the, I'm sorry, by the people that got bad tax advice. And several of them had an arbitration agreement. I'm sorry, Brickledge is the party that had an arbitration agreement. Arthur Anderson did not have an arbitration agreement. So when Arthur Anderson moved to compel arbitration and the district court denied it and the Sixth Circuit affirmed, then coming up to the Supreme Court, the Court of Appeals and to the Supreme Court are just two of the defendants.

[00:14:15] Speaker 04:
One of the other defendants was still in the district court with an agreement motion to compel arbitration. So Arthur Anderson has the interlocutory notion where somebody's still in the district court.

[00:14:31] Speaker 05:
And that came up, I thought that was under C, not D.

[00:14:36] Speaker 04:
Well, it was a motion to compel, but it's, you know... You're saying by analogy it should apply the same way.

[00:14:44] Speaker 04:
Well, they're all the same. I mean, there are five rules, five reasons why you have interlocutory jurisdiction in Section A1.

[00:14:54] Speaker 04:
A, B, C, D, and E. Let me think of another one.

[00:15:03] Speaker 04:
Uh...

[00:15:04] Speaker 05:
Well, and counsel, I think, I think, yes, I know.

[00:15:07] Speaker 04:
I think, I think, yeah, I'd like to go. Why don't we move on?

[00:15:10] Speaker 05:
Because we've got some questions.

[00:15:12] Speaker 04:
Can I ask one more? Give me one more citation. Okay. There's a Sixth Circuit case, dealer computer services versus Dub Herring Ford, 623, Fed Third, 348, Sixth Circuit, 2010. There was a class action case.

[00:15:27] Speaker 04:
claim bought against the various dealers. And one of them sought an order from the district court to confirm an interim award. And the district court said it did not have jurisdiction because the issue was not ripe. And the DCL appealed to the Sixth Circuit relying on 16A1D.

[00:15:49] Speaker 03:
But anyway, thank you. Okay. So, counsel, my question is just a little bit different. It goes more to the merits and to the nomenclature. In CBF industry, the Second Circuit adopted a framework for analyzing these cases that distinguished between arbitrations that were held inside the United States and arbitrations held outside of the United States. And it seemed to criticize the language that's used in the FAA because it said with respect to arbitrations that are conducted outside the United States, these really are enforcement actions, not actions to confirm.

[00:16:24] Speaker 03:
And thus they allowed in those cases veil piercing, that is to you to employ an alter ego approach.

[00:16:33] Speaker 03:
theory because you were actually enforcing a foreign judgment rather than confirming an arbitration inside the United States?

[00:16:44] Speaker 04:
Well, Your Honor, this is a very good question. The question of whether it's enforcement or confirmation, what the Second Circuit said and the Eleventh Circuit said is that they're the same. They have the same meanings. There's not two separate issues, two separate processes. Confirmation and enforcement are the same thing. Now, the issue of whether you have a foreign judgment or a non-domestic judgment or a domestic judgment, there are three different types that you can have under the FAA.

[00:17:19] Speaker 04:
If the arbitration is under FAA Chapter 1, the parties are both Americans and the venue is in California, it's a domestic arbitration. If, however, there's an arbitration venue in California, but one of the parties is foreign and it's a foreign activity, then under the law, it's called a non-domestic arbitration, which means that when you challenge it, if you're trying to set it aside or vacate it, you can use not only the grounds under the New York Convention, you can use Chapter 10, I mean, Section 10 of Article 9 of the first chapter of the FAA.

[00:17:59] Speaker 04:
If it's a foreign arbitration award, and this is the teaching of CBF Industria, if it's a foreign arbitration award, you can only challenge the award under the New York Convention, under Section 209. So the three different types really are significant only in the justification for challenging them.

[00:18:25] Speaker 04:
trying to vacate them. You can vacate a foreign award only under the New York Convention, Chapter 2. You can vacate a non-domestic award under Chapter 2 or Chapter 1, Section 10. And you can only vacate a domestic award under chapter one.

[00:18:41] Speaker 03:
So the reason I'm pressing the question is I'm going to push back just a little bit on your reading of CBS and Deuce because as I read the case, the Second Circuit said there is some confusion in these terms and it's sort of regrettable that we've used confirm to mean both to confirm an award and to enforce an outside award and said that we encourage the parties to be more precise. And the Second Circuit has been more precise. We have district courts, however, that have gone both ways on the question of alter ego and as to whether you can challenge it here or whether you have to bring a separate action to establish the alter ego liability and then bring it back for- Your Honor, Your Honor, Your Honor, you're right on.

[00:19:21] Speaker 04:
This is the most important part of the debate.

[00:19:25] Speaker 04:
Al-Qarqani versus Chevron answers that question.

[00:19:30] Speaker 04:
The- This circuit used to have a rule on a case called Yang versus Majestic Blue Fisheries.

[00:19:38] Speaker 04:
and in Yang versus domestic blue fisheries, this court said that under chapter two, because the New York Convention says that a party must have an agreement in writing and bring an award to the enforcement proceeding, that you must have the parties. You can't use the state law doctrines to get alter egos or other parties involved under chapter two. All right.

[00:20:05] Speaker 04:
In Arthur Anderson, the Supreme Court said for domestic arbitration, you can use state law. In Otocompo in 2020, the Supreme Court said the same rule applies to Chapter 2. You can use the state law doctrines of piercing the veil and alter ego in Chapter 2 cases. Therefore, Yang was abrogated. If you look at Otocompo, it says we took this case in the 11th Circuit because we were resolving a conflict between the circuits on this issue.

[00:20:38] Speaker 04:
And the footnote number two says, the cases that the conflict arises in are from the 11th Circuit, the case we're taking, and also from the Ninth Circuit, Yang versus Majestic Blue Fisheries. On the other side of the conflict was the First and the Fourth Circuit. So the Supreme Court, by adopting the rule that non-signatories can use state law to become, to use, alter egos, Yang was abrogated.

[00:21:10] Speaker 04:
It's no longer the law. So when this court gets to Al-Qarqani, what has happened is the district court has applied Yang. The district court in Al-Qarqani said there's no jurisdiction over these cases because neither of these defendants were parties.

[00:21:29] Speaker 04:
Otukampo changes that, abrogates Yang. You then get to Al-Qarqani, and Judge Miller wrote one of the best opinions in the arbitration canon. And he says, we start from a clean slate.

[00:21:42] Speaker 04:
And Judge Miller writes that under the Federal Arbitration Act, we must look at...

[00:21:53] Speaker 04:
Section 207 to determine what is this actual meaning. And first, the court says there's a split between the circuits on Section 207 between Sarhank in the Second Circuit and Zarina in the Eleventh Circuit.

[00:22:11] Speaker 04:
The ARCA County, your decision in ARCA County says we believe Sarhank is correct. It's a merits issue. It's not a jurisdictional issue. Now, the court then goes through, and this is the the best part of the decision. It says, when you're deciding whether Section 207 is jurisdictional or merits, you first look at Arbaugh versus, what's the Arbaugh second name? It's the Supreme Court case, Arbaugh versus Walters.

[00:22:39] Speaker 04:
Arbaugh, the Supreme Court said, When Congress passes a statute and you're trying to decide whether it's jurisdictional or not jurisdictional or it's merits, you have to look in whether Congress said it was jurisdictional. And the Supreme Court in Albraz said the 15-person requirement employment required under Title VII is not jurisdictional.

[00:23:01] Speaker 03:
Okay, and I'm familiar with that jurisprudence. Okay. So I just want some clarification here, Counsel. Under the Second Circuit's refined terminology in CBF and our decision in the Chevron case. Is this an enforcement action?

[00:23:20] Speaker 03:
It has to be brought as a confirmation action because that's the term the FAA uses, but it is technically an enforcement action. Is that correct?

[00:23:29] Speaker 03:
In the Second Circuit's terminology.

[00:23:31] Speaker 04:
I mean, well, first of all, I believe the Second Circuit and the Eleventh Circuit in an en banc decision after CBF's industrial, both said that confirmation and enforcement are the same thing. They're not separate actions. You bring eight actions to confirm and enforce the award.

[00:23:48] Speaker 03:
That's because that's the language that the FAA uses. But they've tried to distinguish between the two because they're analytically slightly different, even though we have to use the same terminology because that's what the statutory phrase is.

[00:24:02] Speaker 04:
Well, but wait a minute. Under the FAA...

[00:24:11] Speaker 04:
You bring a Section 207 action when it's a foreign arbitration award covered by the New York Convention. You bring, let me read it so I don't make a mistake.

[00:24:29] Speaker 04:
The heading of Section 207 is award of arbitrators confirmation jurisdiction proceeding. Within three years of an arbitral award, a party may a part of the arbitration may apply to any court having jurisdiction for an order confirming the award is against any other party.

[00:24:47] Speaker 03:
Sure. And that's what the Second Circuit said, is the term confirm is used in the statute. So we have to use that term, but it's technically an enforcement.

[00:24:55] Speaker 04:
But you confirm the award unless it finds one of the grounds for refusal, deferral, or recognition, or enforcement. So it's... You're trying to... I'm sorry. Okay.

[00:25:11] Speaker 01:
Let me see.

[00:25:15] Speaker 03:
Well, I've taken you way over your time. I think I've got the point.

[00:25:21] Speaker 01:
Have I talked too long?

[00:25:24] Speaker 05:
Well, why don't we give you, we'll give you a couple minutes for rebuttal. And thank you for taking time with us. And we'll turn now to the athletes.

[00:25:49] Speaker 06:
Good morning, and may it please the court. My name is Jeff Prudhomme, and I'm appearing on behalf of Appalese, John Baldwin, and Bridge Capital Management.

[00:25:57] Speaker 06:
There are really two issues before the court today, which I think you recognize. It's first, whether this court has appellate jurisdiction to hear this interlocutory appeal under FAA section 16A1D. And secondly, whether the district court had subject matter jurisdiction to adjudicate a summary proceeding to enforce foreign arbitral awards under FAA Section 207, against two parties who were neither parties to the arbitrations nor subject to the arbitral awards.

[00:26:25] Speaker 05:
Okay, so I think a lot is packed into that last portion, so I don't want to miss it. Two parties that were not subject to the arbitration and not subject to the awards. The problem is, that's not entirely, that's the whole issue that's before the district court, right? Because the question is, are they parties in the sense that they're alter egos of parties that were already there? You would agree that if they're alter egos, they would be a party to the arbitral award?

[00:26:56] Speaker 06:
Not necessarily, Your Honor. And the problem with that is we're not dealing with a situation where there's some determination, some preexisting determination that they're alter egos.

[00:27:04] Speaker 05:
So all the court has to say is. As I was thinking through this, one thing would be to send it back to arbitration and And I don't even know if you could do this and have the arbitrator figure this out. But we seem to have a lot of district court cases out there that say, no, the alter ego issue is properly before the district court to determine in the first instance.

[00:27:31] Speaker 06:
I'm not aware of that body of law, Your Honor. I'm aware of the body of law that, to the contrary, that says, no, we don't do that. There is a... The summary proceeding in Section 207 is fundamentally at odds with an alter ego action, right? So you've got a summary proceeding in which all the court is able to do is look and see whether seven reasons to deny... I thought Judge Mill... I mean, the case...

[00:28:00] Speaker 05:
I thought Judge Miller's case said basically this point. Is that Al-Qarqani?

[00:28:04] Speaker 06:
Yeah. Your Honor, I agree that we can decide this case on Al-Qarqani.

[00:28:09] Speaker 05:
I just think Al-Qarqani... You think it cuts the other way.

[00:28:11] Speaker 06:
I do, in a major way. And I'm happy to get into that.

[00:28:15] Speaker 05:
Why don't you do that? Because I did not interpret Al-Qarqani...

[00:28:21] Speaker 05:
I thought that it did give us jurisdiction, so I want to hear why you think it doesn't. Yeah, certainly.

[00:28:26] Speaker 06:
And it's important to really be crisp in Al-Qarqani on Chevron Corp., which was a party to the arbitration, and Chevron USA, which was not a party to the arbitration, but like Apollos here, is an alleged alter ego. So why is Al-Qarqani different than here? And two reasons. One is you had a single district court opinion

[00:28:47] Speaker 00:
I'm sorry to interrupt you, but I just want to make sure we still have appellants counsel, right? Kathy?

[00:28:54] Speaker 02:
Mr. Branson, are you still with us?

[00:28:59] Speaker 04:
I thought I was supposed to turn off my video while he was talking.

[00:29:03] Speaker 02:
Just please leave your video on so we know you're there. That's all. Just on mute. Thank you.

[00:29:09] Speaker 04:
Do I? Wait a minute.

[00:29:12] Speaker 04:
Is that okay? Yep. I'm sorry.

[00:29:15] Speaker 02:
No problem.

[00:29:17] Speaker 06:
So in Al-Qarqani, you had a single district court opinion that addressed two differently situated parties. One is Chevron Corp., which was a party to the arbitration, and then Chevron USA, which was not.

[00:29:31] Speaker 06:
And they were treated very differently. As to Chevron USA, this court said Chevron USA was not a party to the arbitration and is therefore dismissed, we affirm, the dismissal for want of subject matter jurisdiction. But as to Chevron Corp, the question was different. The question was whether there was a valid agreement to arbitrate between the parties. And that's where the court got into whether that was a question of the merits or a question of jurisdiction. And the court said, it's a question of the merits here because whether...

[00:30:03] Speaker 06:
there is an agreement to arbitrate between the parties is not found in a part of the FAA that is under a jurisdictional heading. It's not a clearly jurisdictional issue. And secondly, the district court went ahead and said the court would deny the petition on the merits of Chevron's defenses under Article 5 of the convention. That's at page 7. So the district court ruled on the fact that there was no agreement to arbitrate, which it, incorrectly under the Ninth Circuit's opinion, determined to be a jurisdictional issue.

[00:30:39] Speaker 06:
But it also got into the merits. And it said there were procedural deficiencies under Article IV. There were valid defenses under Article V. And this court said, OK, You called it a subject matter jurisdiction issue, but we think it's a merits issue because of the posture of the question of whether there's a valid agreement to arbitrate, and you got into the merits. So it is properly a denial of confirmation on the merits only as to Chevron USA. Excuse me, only as to Chevron Corp. As to Chevron USA, none of that mattered.

[00:31:11] Speaker 06:
It was Chevron USA, the alleged alter ego, is not a party to the arbitration, period.

[00:31:17] Speaker 00:
Well, I...

[00:31:18] Speaker 00:
I think that's correct, but in the Al-Qarqani decision, it also notes that in that case, there was...

[00:31:25] Speaker 00:
I think what Judge Miller calls it, a vague reference to the alter ego issue, right? And then, so he leaves open the door that if you had more than a vague reference and you actually built out that issue and had some more concrete allegations, that it would go the other way because that would be a merits question and not a jurisdiction question.

[00:31:42] Speaker 03:
And the paragraph prior to the one that Judge Forrest is referring to, I'm sorry, the sentence before it says that the heirs have advanced no non-frivolous theory of enforcement, right?

[00:31:52] Speaker 06:
Right, they didn't say they've advanced no non-frivolous theory of alter ego, right? So let's look at the next sentence. It says, as to Chevron USA, the heirs have advanced no non-frivolous theory of enforcement. The very next sentence is Chevron USA is not named in the arbitral award the heirs seek to enforce, period, right? That's the gravamon of that issue. They go on, I acknowledge.

[00:32:16] Speaker 00:
That I just referenced, though, where he, I mean, you don't think he's leaving the door open there to say that you could have done more here, and if you had, the outcome might have been different.

[00:32:23] Speaker 06:
I don't, and that's because of the text of 207.

[00:32:26] Speaker 06:
I agree he said that. I think that's acknowledging the facts of the case, but I do not read it as the court, because the court doesn't say that. The court didn't say, but if. They acknowledged that there was just a toss-away, right? They just said alter ego. He did not come back and say, but if you had, then we have a different situation.

[00:32:45] Speaker 00:
What's the implication of him saying anything about it at all, if that's not the inference?

[00:32:50] Speaker 06:
He's acknowledging the facts of the case and that there was a toss-away, right? And so he would have to look at 207, right? And Section 207 says you can bring an action to enforce as against any other party to the arbitration.

[00:33:07] Speaker 00:
So, okay, so you're trying to make an argument that 207 embeds within it a jurisdictional rule, correct? Correct.

[00:33:15] Speaker 06:
The title of Section 207 has the word jurisdiction. So there's no question that Section 207 is jurisdiction.

[00:33:21] Speaker 00:
How do you make 207 and 203 work? Because frankly, I think there's a fair way to read these as 203 is your jurisdictional provision. Do you fall under the convention or not? And then if you do, jurisdiction is there, and then we'll get to merits issues, and maybe you'll be able to conform or enforce and award whichever terminology we're going to use as against the party at issue, or maybe you're not. But those aren't jurisdiction questions.

[00:33:47] Speaker 06:
Let me answer that in two ways. One is let me explain 203 and 207, and then let me explain why we have Orion, because I think that's helpful in kind of understanding this.

[00:33:55] Speaker 06:
So Section 203 is just a confirmation that there's federal jurisdiction for an action arising under the convention, regardless of the amount of controversy.

[00:34:06] Speaker 00:
Right, jurisdiction. You would agree, that's jurisdiction.

[00:34:08] Speaker 06:
I agree. There's two jurisdictional provisions. If you look at the title of 203, it has the word jurisdiction. If you look at the title of 207, it also has the word jurisdiction. Because 203 says an action arising under the convention. So you have to determine whether you have an action arising under the convention to know if you have 203 jurisdiction. And you get that from 207, right? So you cannot have an action arising under the convention against anyone but another party to the arbitration based on that text.

[00:34:36] Speaker 00:
So that's where you run up against Judge Miller's opinion, I think, because he says he reminds us in that opinion that not everything that gets labeled jurisdiction is actually jurisdictional in the formal sense. Sure. And so why isn't that the distinction here? 203 is formal jurisdiction. 207 is not.

[00:34:52] Speaker 06:
He was talking about whether there was a valid agreement to arbitrate under New York Convention Article 2. And that's where he said, we don't have a clear jurisdictional section. And that's a merits question. That is a totally different question than whether there's jurisdiction under 207 for an action to confirm an award. And that's why you get the two different treatments by this court between Chevron USA and Chevron Corp. Chevron Corp. was a denial of confirmation on the merits. Chevron USA was a dismissal for want of subject matter jurisdiction.

[00:35:24] Speaker 06:
And they're treated differently because it didn't matter whether there was an agreement to arbitrate with Chevron USA, because Chevron USA isn't a party to the arbitration.

[00:35:32] Speaker 03:
Counsel, what do you do with Ministry of Defense, the Iranian case, 1992?

[00:35:36] Speaker 06:
So Ministry of Defense, in Ministry of Defense, they had diversity jurisdiction. The very first sentence of that opinion is, And I'll paraphrase, but it's a foreign plaintiff brings an action against U.S. citizens, right? So you had jurisdiction. And if you look at the GE transportation case out of the Southern District.

[00:35:57] Speaker 03:
I'm also seeing references here to Section 203 in the opinion.

[00:36:01] Speaker 06:
In the Ministry of Defense? Yep. Yeah, so Ministry of Defense, like I said, they had a separate – basis for jurisdiction. So in the GE case, if you look at Orion, there's a couple exceptions, one being if you have a successor jurisdiction, where it's really not a fact-intensive alter ego question, it's really a simple successor liability issue. And then what you have in the Ministry of Defense case was that they had diversity jurisdiction.

[00:36:32] Speaker 06:
So here, we're confined to 207.

[00:36:33] Speaker 03:
Can you tell me where the diversity jurisdiction is?

[00:36:38] Speaker 03:
I'm seeing Section 203, Section 203.

[00:36:42] Speaker 06:
Yes. Here's the issue. I'm not saying it's not under 203 and 207. What I'm saying is they also had diversity jurisdiction, which the district court here asked for supplemental briefing on. Because if there's a separate basis for jurisdiction, then this court could say, well, we're not really looking at the alter ego allegations in a confirmation action under 207, which we're not allowed to do. We're looking at it as a separate case under diversity jurisdiction. We have a separate basis for jurisdiction. The district court didn't have that. The district court only had the FAA.

[00:37:14] Speaker 06:
There was no diversity jurisdiction. We fleshed that out on supplemental briefing. And so in Gould, you had that different situation. Moreover, the Ministry of Defense case doesn't address this issue about alter egos and whether you can bring an alter ego action into 207. That wasn't before the court, and it wasn't decided.

[00:37:32] Speaker 00:
I think the point, though, is that Picking up, I think, on what Judge Bybee is trying to get at is in Ministry of Defense, it references 203 and talks about jurisdiction is triggered when it falls under the convention. And then it lays out three elements for when that's met. And none of them reference 207 or the arguments that you're making.

[00:37:50] Speaker 06:
Because it wasn't an issue in that court, right?

[00:37:54] Speaker 06:
It wasn't before the court whether the as against any party of the arbitration in 207 decided no.

[00:38:01] Speaker 06:
issue, right? They already had jurisdiction. They just went ahead and analyzed it. There was no one saying, hey, wait, no, you can't do that, right?

[00:38:08] Speaker 00:
I think that's an interesting way to read Ministry of Defense because it doesn't seem to be limiting it to that. It seems to be saying, we're looking at 203. We're trying to explain and establish what 203 is and what it requires. Here's the elements, period.

[00:38:24] Speaker 00:
And it seems like you want to cabin that to just the specific facts at issue there. And I don't think it's written that way.

[00:38:30] Speaker 06:
I guess what I'm saying is 203 can't be read in a vacuum, right? And that's why there's another section, 207. There's four, I think, phrases or words in the title of 207. One of them is jurisdiction.

[00:38:41] Speaker 03:
Yeah, but it's really not a jurisdictional section. The reference is to any court having jurisdiction. It's a jurisdictional reference. It's not jurisdiction conferring. Jurisdiction conferring would be section 203. That would be 1332, be 1331.

[00:38:59] Speaker 03:
A whole host of other things that refer to district courts having jurisdiction. That's 203.

[00:39:05] Speaker 03:
207 does not have any of that language. It assumes jurisdiction. Any court having jurisdiction.

[00:39:13] Speaker 06:
203 only gives jurisdiction as to actions arising under the convention. So you have to have an action arising under the convention.

[00:39:19] Speaker 00:
And you don't really dispute that that's true here, right? Because it's a foreign arbitration.

[00:39:23] Speaker 06:
I'm not disputing that the award is a foreign award subject to Article 2.

[00:39:29] Speaker 06:
I'm saying that there – and nor am I disputing that there is a valid action as against the award debtors, right? You're saying that the three alter egos don't fall under 207. Exactly. Right. 207 doesn't apply to them. They can bring the case all day long, right, against the award debtors. That's what 207 is for.

[00:39:46] Speaker 06:
207 is not for bringing alter ego claims.

[00:39:48] Speaker 05:
So can I, if the district court had written this differently, I mean, I guess your position is the district court shouldn't have written it differently. It is a jurisdiction. She didn't have jurisdiction. She did not have jurisdiction. Okay. But if she had written this differently and said, I don't view this as a jurisdictional issue. I just think they're out on the merits.

[00:40:13] Speaker 05:
Would we have appellate jurisdiction? In your view, there would be no question we have appellate jurisdiction.

[00:40:18] Speaker 06:
If she said I'm denying confirmation on the merits, then you've got jurisdiction under Section 16.

[00:40:24] Speaker 05:
Okay, so you don't have a problem with an interlocutory appeal as to one party that's not final or reversal or confirmation. No. That's not an issue. The only issue here is it really does boil down to is this merits or is this jurisdictional?

[00:40:40] Speaker 06:
Right, and that's why the distinction in Al-Qarqani is so important, right? Chevron USA is what you just described, right? You have a party to the arbitration. There's no question. You've got an action under the convention, and there was a misnomer in the district court, but you ended up having a denial of confirmation on the merits. But in that same opinion, as to Chevron USA, you have the court affirming and saying, we agree. That is a dismissal for lack of subject matter jurisdiction because they're not a party to the arbitration.

[00:41:10] Speaker 00:
Do you disagree with your friend across the other side on the import of this decision is to make it so that there would be no further proceedings in terms of the alter ego issues? There's no other way to get these things reviewed.

[00:41:24] Speaker 06:
That's absolutely, yes, I disagree entirely.

[00:41:28] Speaker 00:
Tell me how if the district court decision stands and we don't exercise appellate jurisdiction here, how is that ever going to get heard?

[00:41:35] Speaker 06:
So what happens is they go back to the district court and they proceed against the award debtors. And if they are successful in getting confirmation, enforcement, however we want to phrase it, right, and a judgment against the award debtors, then they've got a judgment against the award debtors. They take that judgment and they go enforce it like you would go enforce any other judgment. And you bring an enforcement action against the alter egos. So they're not left without an alter ego remedy. You just can't do it in a 207 action. They can do it.

[00:42:06] Speaker 00:
Would that work in the Second Circuit under its case law?

[00:42:10] Speaker 06:
Certainly. The Second Circuit is the one that laid that out in Orion.

[00:42:13] Speaker 00:
They said the proper... They seem to be ignoring CBF.

[00:42:17] Speaker 06:
No, let's look at Ellison, which specifically quoted CBF, right? And Ellison said it laid out the process, right? Ellison said, and Ellison I think is 2024, But it was certainly after CBF. And it said, the proper vehicle is not an application under the FAA or the New York Convention to confirm the award issued in connection with the proceeding in which the third party did not participate and was not compelled to participate.

[00:42:47] Speaker 06:
If the prevailing party seeks to hold the alter ego responsible for the relief awarded by the arbitrator, it must do so through a separate action in court to pierce the corporate veil. And that's at 589 to 590 in the Southern District of New York opinion.

[00:43:03] Speaker 03:
Yeah, that's a Southern District of New York decision. That's not a Second Circuit decision. It's a decision from the Second Circuit area, but it's not a Second Circuit decision. Right, but there is no Second Circuit decision to the contrary. Okay, but I thought you were telling us that Ellison was the Second Circuit decision that was post-CBS. No, I apologize if I gave that impression. It's a Southern District of New York decision that comes after CBF.

[00:43:30] Speaker 03:
Correct, and recognizes CBF.

[00:43:32] Speaker 06:
So it's not as if he was ignorant of CBF.

[00:43:34] Speaker 03:
Right. When I read Ellison, reread Ellison this morning, I have to say I was very confused by it after having read CBF. Yeah, so if I may, do I have a minute?

[00:43:44] Speaker 00:
Can I come back to my question? And I thank you, Judge Bybee, for the clarification because I had forgotten where that decision was coming from. My question was, how do you deal with CBF and the answer that you just gave? Because CBF, if we were to follow the Second Circuit's approach and adopt CBF, basically what CBF laid out. I'm not quite sure how that jives with what you're trying to get us to do here.

[00:44:06] Speaker 06:
Let me say this about CBF, right? No other court that I'm aware of has ever followed CBF to say that you can bring an alter ego action in a Section 207 proceeding. No court. No court has ever done that. CBF stands alone on an island. And let me tell you why you shouldn't follow CBF.

[00:44:22] Speaker 05:
Most of these cases come in the second, sir. I mean, in some cases, that might be a pretty... big argument, but most of these cases come in the Second Circuit, so it has a little more prominence that they actually said that.

[00:44:37] Speaker 06:
No one's followed CBF since CBF.

[00:44:41] Speaker 00:
And let me tell you why CBF... That's still not an answer to my question, though. I'm asking you to wrestle with CBF.

[00:44:46] Speaker 06:
I'm about to do that. So CBF quoted Section 207 when they went into their decision-making. And guess what part of 207 they left out of their quotation? as against any other party to the arbitration. They omitted it. They pretended like it didn't exist, and they went and analyzed Section 207 without the very critical language that we need to know whether you can bring an alter ego claim in Section 207. They cut it out. They analyzed a statute that isn't there.

[00:45:13] Speaker 03:
I think the implication of that is that when you have an alter ego doctrine, it is the party to the, you've pierced the veil. We found the parties that are the real parties in interest.

[00:45:25] Speaker 06:
So here's then the factual distinction with CBF. There was a company that had ceased to exist. It couldn't be sued, right? It had been erased from the Swiss register. So there was no company that the award creditor could go and have a 207 action against.

[00:45:42] Speaker 00:
I just don't read CBF as focusing on that detail. I know you did from your briefing, but I read CBF as trying to demonstrate the history of what was going on here and the difference between the Geneva Convention and the New York Convention and the implications that those changes had. And that's where its reasoning is rooted, not in the distinction or the factual point that you're focused on.

[00:46:03] Speaker 06:
So let me leave you with one more quote from CBF then. And that's because, right, it was talking about whether there had to be one or two actions. And what CBF said, it said one action, but it said as against the award debtor. It said the New York Convention and Chapter 2 of the FAA require only that the award creditor of a foreign arbitral award file one action in a federal district court to enforce the foreign arbitral award against the award debtor. It didn't go on and say, or the alter ego, as...

[00:46:34] Speaker 06:
my friend wants it to say, right? It just said, as against the award debtor. CBF does not provide license to this or any court to consider subject matter jurists, excuse me, to consider alter ego in 207. Al-Qarqani is where this court needs to focus. And Al-Qarqani says, Chevron Corp., it was a decision on the merits. We have jurisdiction. Also, it treated them differently. And it treated them differently because one was a party to the arbitration and the other was not.

[00:47:05] Speaker 06:
And for the one, and if you look at the district court footnote, it says they're not a party to arbitration and they're dismissed on that basis alone. That's all it takes.

[00:47:16] Speaker 06:
I recognize We're not wrestling with an instance here where you have a proven alter ego. We don't have that. We would have to go have a case, a very fact-intensive, discovery-intensive alter ego case, within what is supposed to be a confirmation proceeding, a summary confirmation proceeding, in which the court is restricted to seven reasons under Article V of the Convention. How do you even do that? So let's take that. If you have a denial of confirmation, if you have a denial of confirmation under 207, The only way you can do that is by finding one of those seven reasons under Article V. If you don't find one of those seven reasons under 207, you have to confirm, right?

[00:47:55] Speaker 06:
The court has to confirm. So if the court decides it's not an alter ego, and therefore it's not going to confirm against the alter ego, Well, it's doing that based on alter ego law, not under one of the seven reasons of the convention. So by even making that decision, the court would have to violate Section 207, which says it has to confirm unless it finds a reason to deny under the convention. And alter ego law is not a reason under the convention, right? So it would be caught in either.

[00:48:26] Speaker 06:
So any award creditor then brings an alter ego, and the court can't say, no, you're not the alter ego. It can't even make that decision in a 207. action.

[00:48:34] Speaker 00:
I think that argument that you're making, I understand it, and I think it made a lot of sense, certainly under prior law, but I think that the argument you're making cannot be squared with CBF. So if we found that convincing, it doesn't seem like your argument works under that regime.

[00:48:53] Speaker 06:
I don't think that CBF is really the case that courts should be wanting to follow here, and I think it's because of The successor liability factual issue in that case, and I also think it's because the point of that case is off point here. They weren't trying to say, and if they had of, they would have said it, that you can bring an alter ego action. They said against the award debtor, it's a single stream. They were trying to say, no, there's no...

[00:49:22] Speaker 06:
two-pathway thing we have, a one-pathway thing. But when they said that, they said as against the award debtor. They didn't get into the alter ego question. They cut the important part out of 207. It's just not the right case to go stake Ninth Circuit law on. I submit that Al-Qarqani is that case. And I submit that if you read Al-Qarqani, you'll see the distinction between Chevron Corp and Chevron USA. And the Apollies here sit in the shoes of Chevron USA, which this court affirmed were properly dismissed for a lack of subject matter jurisdiction, which in Al-Qarqani, there was a hook for jurisdiction.

[00:49:53] Speaker 06:
Here, there's no such hook. So while I think it might be interesting for you to opine on the merits of what we just talked about, I think under Al-Qarqani, you lack the jurisdiction to even reach that issue because this is an interlocutory appeal over which you have no jurisdiction.

[00:50:09] Speaker 05:
Okay. Thank you. We'll give you two minutes for rebuttal.

[00:50:15] Speaker 04:
Thank you, Your Honor. Let me make one point.

[00:50:19] Speaker 04:
I believe counsel has conceded that if you don't remand, then the result is going to be that the government cannot use the New York Convention, the Federal Arbitration Act, to enforce the awards against the alter egos. We'll have judgments against the other people who are insolvent, and we will have to then bring actions wherever we can find the defendants again under the Uniform Foreign Judgments Act. We will be barred from using the United States treaty that the United States signed when it signed the New York Convention.

[00:50:53] Speaker 04:
Now, second point. I believe, Judge Forrest, you were focusing on Al Kharkhani and the section where the court says that although the requirements of a non-frivolous claim is a low bar, the heirs have managed to clear it only in part. In particular, as to Chevron USA, the heirs have advanced no non-frivolous theory of enforcement. Chevron USA is not named in the arbitral award the heirs seek to enforce.

[00:51:24] Speaker 04:
USC 207, authorizing petitions to confirm awards as against any other party to the arbitration. Although the heirs make a vague reference to an alter ego, they have not attempted to demonstrate that Chevron USA is Chevron Corporation's alter ego, or that there is any other basis for enforcing the award against Chevron USA. It is their that the court is saying they didn't make a non-fibrillous, I'm sorry, a non-fibrillous allegation in their pleadings or before the district court that would allow them to proceed on an alter ego basis.

[00:52:02] Speaker 04:
But if they had, they would have been able to proceed on an alter ego basis. And that's when the court then turns to Chevron. corporation and said the claim against them is not frivolous and it's a merits claim. And this all goes back in the Elkirk County decision to the part of the decision where they're talking about Bellevue Hood establishing the rule. If the pleading states a cause of action, a federal claim, and we did state the cause of action, then if it's a non-fivolous claim, the court has jurisdiction.

[00:52:33] Speaker 04:
And I want to point out that in the district court's opinion, the district court said three times that she was not disturbing her prior judgment that we have stated a non frivolous claim for alter ego. When we amended our petition, the respondents filed a motion to prohibit the amendment on the grounds that it was a futile amendment. The district court held that we could amend the complaint and it was not a non frivolous claim.

[00:53:07] Speaker 04:
And that's in the district court's opinion of ECF 111. The court says twice, I'm not deciding that there's not a non, I'm not disturbing that prior decision on alter ego. So the district court is recognizing that we have already pled a non frivolous claim of alter ego. She's held that.

[00:53:30] Speaker 04:
And let me find it in my notes so I can tell you.

[00:53:32] Speaker 05:
No, counsel, I think we have your argument now.

[00:53:36] Speaker 04:
Okay.

[00:53:37] Speaker 05:
So, you know, look, thank you to both counsel for your arguments and helping clarify a somewhat thorny issue. And the case is now submitted. And that concludes our arguments for the day.

[00:53:51] Speaker 04:
Thank you, Your Honor.

[00:53:53] Speaker 02:
All rise.