[00:00:02] Speaker 04:
Good morning, everyone.

[00:00:04] Speaker 04:
We're delighted to be sitting here in Pasadena. I'm especially delighted because it's 106 in Las Vegas.

[00:00:14] Speaker 04:
The cases will be called in the order listed on the docket. The first case on calendar for argument is Velazquez versus Lazatica.

[00:00:28] Speaker 03:
Good morning, Your Honors. Cheryl Chang of Blank Room on behalf of defendant appellant Luxottica of America, Inc. I reserve five minutes on rebuttal, please.

[00:00:36] Speaker 04:
Yes. Counselor, please be reminded that the time shown on the clock is your total time remaining.

[00:00:41] Speaker 03:
Thank you, Your Honors. And I'm hopeful, given the discussion of Ruiz, that I won't be using all my time.

[00:00:47] Speaker 03:
I'm not sure if the panel did see our Rule 28J letter that we filed on June 22nd.

[00:00:55] Speaker 03:
But it is our belief that since the court recently clarified in Ruiz that district courts are empowered to remand a removed case to state court for lack of equitable jurisdiction, but only after the removing defendant is given the opportunity to waive the adequate remedy at law issue, that this court should remand to the district court to allow defendant to waive or exercise the waiver of the adequate remedy. remedy at law.

[00:01:25] Speaker 04:
So is it your position that that opportunity was not provided in the district court previously?

[00:01:32] Speaker 03:
We did not have that opportunity, Your Honor. As soon as we were moved, there was a motion for remand, and the motion for remand was decided on the papers without oral argument. So that issue wasn't raised. I believe that that issue should be allowed to be raised by the defendant at the district court level so that we can discuss with the district court the parameters of such a waiver.

[00:01:53] Speaker 01:
But, Counsel, are you intending to waive the adequate remedy of law issue?

[00:01:59] Speaker 03:
At this point, we are still considering the complete waiver. Part of our consideration would be the extent of the waiver. Would it be a waiver to all pleadings, not just the original complaint, but if there is any amendment by the plaintiff of the current pleadings and the claims in the case? The extent of the waiver would have to be ironed out, I believe, at the district court level, whether or not it would extend to merits decisions after discovery and perhaps on a motion for summary judgment or summary adjudication.

[00:02:32] Speaker 03:
And so, therefore, we believe that the opportunity to exercise that waiver needs to be considered once we are back in the district court.

[00:02:41] Speaker 04:
So, Counselor, is it your position that the waiver can be partial? No.

[00:02:49] Speaker 03:
I believe that the waiver would be partial because courts tackling this issue have specifically addressed the fact that the waiver may go, well, not the waiver specifically, but that the adequacy at law remedy can be explored at the pleading stage, but it might not be fully dispositive once the parties have had an opportunity to conduct discovery and look at the issue not just at the pleading stage but at the merit stage.

[00:03:21] Speaker 03:
And so potentially, if we were to waive the adequacy at remedy issue with regard to the complaint or at the pleading stage in total, it may be raised not only by us but by the court at the time of the merits decision.

[00:03:36] Speaker 04:
So are you contemplating a conditional waiver?

[00:03:38] Speaker 03:
It may be.

[00:03:45] Speaker 03:
Not conditional, Your Honor. Either we provide a notice of waiver as it relates to the UCL and fair advertising claim for the original complaint, or we stipulate with plaintiff's counsel about the extent of the waiver. For example, if the plaintiff's counsel, who is also plaintiff's counsel in the Young decision that was decided by a part of this panel, decides that they're going to amend to add a CLRA claim, which was done in Young, we might have a different position on the adequacy at remedy defense.

[00:04:21] Speaker 03:
And so we would want to explore that with the district court before we decide on a complete waiver or the extent of the waiver.

[00:04:29] Speaker 00:
So if you then, on remand, you waived or conditionally waived or partially waived, then as the proceedings develop, you decide to reassert the defense of adequacy at law. What is the court, what is the federal court to do At that point, is the federal court then to remand back to state court mid-litigation?

[00:04:51] Speaker 03:
It's possible the court could remand back to state court, and then we would decide what to do at that point. I think that if the court were to remand a portion of the case and part of the case were to continue, let's assume hypothetically that plaintiff's counsel were to add a CLRA claim or some other claim for damages that could be adjudicated,

[00:05:15] Speaker 00:
But currently they don't have a claim for damages as alleged in their complaint, right?

[00:05:20] Speaker 03:
That's correct.

[00:05:21] Speaker 00:
So your position is conditional on what they possibly might amend their complaint to include.

[00:05:29] Speaker 03:
That's correct, Your Honor.

[00:05:31] Speaker 03:
I wouldn't, on behalf of my client, without discussing it with them, waive all potential ability to raise the adequacy at law defense if, in fact, the plaintiffs are planning to alter the scope and shape of their claims. And so I think that we should be allowed to return to the district court, have the notice of waiver either entered on the docket or stipulate to the extent of the waiver with plaintiff's counsel, and then proceed before the district court on what claims are before the court at that point in time.

[00:06:06] Speaker 04:
Do you think Rui's contemplated proceeding in the way you are suggesting?

[00:06:14] Speaker 03:
I don't think Ruiz reached what I'm contemplating. Ruiz decided that a defendant always has the right to exercise the waiver of the adequacy at remedy defense and return that to the district court. And then the parties in this district court would then address the issue of the extent of the waiver. I don't think Ruiz or Young ever dealt with the scope and characterization of the waiver and how it would be presented to the district court once it was remanded.

[00:06:47] Speaker 01:
But in your view, in some ways this is a black and white issue. For plaintiffs to step foot in federal court on equitable grounds, they can't have an adequate remedy at law.

[00:07:00] Speaker 01:
And they have one here. They've acknowledged it in their complaint. And so defendants can either opt to waive that defense and remain in federal court or agree to remand, I'm not sure why further amendment for damages would change that calculation.

[00:07:20] Speaker 01:
It almost seems like you're complicating things more than maybe they ought to be. And I understand that might be for client reasons and other things, but how does a party's participation affect the jurisdictional analysis at that point from Ruiz? The party's participation in... Well, you know, let's say plaintiffs do want to amend to add a damages claim.

[00:07:49] Speaker 01:
So your position would then be that you do want to remand at that point?

[00:07:55] Speaker 03:
It's possible. Again, as Your Honor pointed out, this is a client issue. The client wants the opportunity to consider...

[00:08:02] Speaker 03:
its position once it's back in district court and has the opportunity to exercise the waiver.

[00:08:08] Speaker 03:
If, in fact, the plaintiff does amend to file a first amended complaint that includes some form of damages, whether it's under CLI or otherwise, at that point, I believe that we would either proceed in the district court on whatever responsive pleading is available, or the client may decide, in fact, it would want to exercise well let me back up either the waiver would continue and we would agree to waive as to the first amended complaint with the damages claim and we proceed in the district court either with an answer or responsive pleading or we would decide that we would stipulate to a remand to state court I think it just depends on how the district court looks at the various claims One concern that I think might arise is, is there a possibility of two separate actions proceeding in parallel course?

[00:09:10] Speaker 03:
For example, if the court were to decide that it could take, it had subject matter jurisdiction over the restitutionary relief because we had waived the adequacy at law issue, but it did not have subject matter jurisdiction over the injunctive relief portion and it wanted to split that off, either dismiss it without prejudice, in which case the plaintiff may actually amend or actually may refile in state court or to remand it, that would create a multiplicity of pleadings.

[00:09:42] Speaker 03:
It would prejudice the defendant. It would also create the opportunity for conflicting rulings by the parallel proceedings. And so in that situation, we may in fact want to return to state court.

[00:09:58] Speaker 01:
I mean, I suppose all of that will have to be sorted out by the district court because, at least on our end, it's fairly clear that we have to give you a chance to effect that waiver. That's what defendants choose to do under Ruiz.

[00:10:12] Speaker 03:
Yes, that is our position. Go ahead, Your Honor. So, again, we believe that this is properly before the district court to allow our clients to determine whether or not it wants to exercise that waiver unless the panel has further discussions. questions. I think that is the total of my argument.

[00:10:31] Speaker 04:
Thank you, counsel. You have four minutes and 56 seconds left for rebuttal. Thank you.

[00:10:46] Speaker 02:
Good morning, Your Honors. Tom Warren on behalf of the Appalachian.

[00:10:51] Speaker 02:
So a few things. I actually don't think not to overtly complicate things that are in my favor, but I don't actually think Ruiz is precisely on point here for the reason that opposing counsel just articulated, which is that one piece of this is something over which the court lacks subject matter jurisdiction, and that is the request for injunctive relief. Now, it's certainly true that under Ruiz, if the court has the ability to remand those claims over which it lacks equitable jurisdiction, It certainly also would have the ability to remand that component over which the court lacks subject matter jurisdiction.

[00:11:34] Speaker 02:
It wouldn't make doctrinal sense to be able to do the one over which the court lacks subject matter jurisdiction. But I don't think it fits precisely under Ruiz for that issue. But I think the necessary result of the logic of Ruiz is that the entire matter would have to be remanded.

[00:11:55] Speaker 04:
So you agree with opposing counsel that there was never an opportunity given to waive the defense?

[00:12:03] Speaker 02:
Oh, no, I do, Your Honor. I do disagree. I disagree.

[00:12:07] Speaker 04:
I thought you said it would have to be remanded.

[00:12:10] Speaker 00:
That's why I – I think there's an ambiguity in the term remand here because you're suggesting remand to the state court, right? And we're talking here – a lot of our questions are directed at remanding to the federal district court.

[00:12:20] Speaker 02:
Correct.

[00:12:21] Speaker 00:
Thank you, Your Honor.

[00:12:22] Speaker 02:
Okay. So then the question becomes one of what does the waiver concept mean in Ruiz?

[00:12:31] Speaker 04:
Before you answer that question, I just wanted to see what your position is on whether or not, regardless of what the waiver concept is, was the opportunity given for LaZotica to state that defense, to waive the defense of adequate remedy at law?

[00:12:49] Speaker 02:
Yes, many times there are.

[00:12:52] Speaker 02:
So

[00:12:53] Speaker 04:
So could you point us in the record to where Luxottica was given the opportunity to waive that defense?

[00:13:01] Speaker 02:
Well, remember, Your Honor, that the arguments that Luxottica made below as to why remand was inappropriate, one of the arguments that they made was that under cases like Atlas Life Twist and those sorts of cases, that equitable jurisdiction was something that could be waived. That was a predicate of the argument that they made below that it was waivable. And if it was waivable, then it wasn't jurisdictional. So the entire factual predicate or legal predicate for their argument, which ultimately Ruiz disagreed with, was that it was a waivable or I would say forfeitable defense.

[00:13:44] Speaker 02:
Now, the logical implication of that is that if that's the argument that they're making and that argument is not predicated on Ruiz – but predicated on the Supreme Court precedent.

[00:13:53] Speaker 00:
But Ruiz hadn't been decided at the time of the district court's proceedings.

[00:13:58] Speaker 02:
That's true, Your Honor, although the district court case and Ruiz had been decided, and the arguments that were being made by Luxottica at the district court were that essentially that issue of equitable jurisdiction could be forfeited or waived. So the necessary logical implication of that is to the extent that is true – then they should have exercised their opportunity to do so. Remember, as you well know, this is a court of error correction.

[00:14:29] Speaker 02:
And in both Ruiz and in Young, the issue of waiver was raised below. And if you look at the decision in Ruiz, it says that Bradford specifically raised the issue of waiver below and should be given the opportunity to to waive it, again, if it so chooses. In Young, although the issue wasn't entirely, we argued, properly raised, at the oral argument below, my opposing counsel said there is this issue of waiver, which we would need to consider if the court ultimately finds as Ruiz did.

[00:15:10] Speaker 02:
Now, in this case, not only was the issue of waiver not raised below, it was specifically disclaimed, and it was disclaimed here on appeal.

[00:15:20] Speaker 02:
The issue that was argued in the reply brief here on appeal was that the issue was not before the court. It wasn't, it was, it's not relevant. So there at no point in this case, and by the way, there was also a request for a stay that was made by Luxottica below. That request was predicated on the appeal in Ruiz.

[00:15:40] Speaker 02:
And the argument was made that perhaps the issues in Ruiz will affect the decision. And so there should be a stay. So There were any number of times on which the issue that was raised in Ruiz regarding waiver, because that issue was front and center in that case, could have been raised.

[00:15:59] Speaker 04:
But, counsel, isn't our definition of waiver the relinquishment of intentional relinquishment of a known right? Do you agree that that's the definition of a waiver?

[00:16:14] Speaker 02:
It's the definition of a waiver.

[00:16:15] Speaker 04:
Do you think that's what happened here? Do you think that? the right was known before Ruiz?

[00:16:21] Speaker 02:
Well, I don't think this is an issue of waiver, Your Honor. This is an issue of forfeiture. The question here is whether or not the appellant's right to waive was forfeited by the actions that they took below. And as Olano makes clear, there's a distinction between waiver and forfeiture.

[00:16:39] Speaker 04:
But Ruiz says that they have to be given an opportunity to waive, not to forfeit.

[00:16:46] Speaker 02:
Right, because in both Ruiz and in Young, the issue of waiver was raised below.

[00:16:54] Speaker 02:
But that wasn't dispositive.

[00:16:55] Speaker 01:
You know, I mean, that was a factor in Young, as I recall. But at the same time, whether or not a party had previously signaled an intent or a desire to waive and remain in federal court, in Ruiz, it went ahead and said, you just have to be given the opportunity. And I think what Judge Walton, what my colleagues are pointing to is the fact that the implication of the waiver wasn't clarified until Ruiz was published. And so Ruiz set forth, here's how you can stay in federal court.

[00:17:28] Speaker 01:
You waive the advocate remedy law issue. And without the benefit of Ruiz, it's hard to fall to Luxottica for whatever arguments he was making pre-Ruiz without being given the opportunity now.

[00:17:40] Speaker 02:
I mean, respectfully, Your Honor, with Ruiz, Prior to the decision in Ruiz, the question of whether or not the case could be remanded or not hadn't been resolved by the Ninth Circuit either. But the arguments that were made by opposing counsel were not predicated on a decision that hadn't come out. They were based on Supreme Court precedent. And that Supreme Court precedent that they relied on, which was ultimately adopted on the issue of waiver, was that equitable jurisdiction was a – or an objection to the lack of equitable jurisdiction was waivable or forfeitable.

[00:18:13] Speaker 02:
That is the language of the decisions in Twist and in Atlas Life. I mean, if you look at the actual quote from Atlas Life that is cited in the reply brief here on appeal by Luxottica, it cites Atlas for the proposition that the failure to raise equitable jurisdiction can be forfeited or waived if not objected to seasonably. This is a court of error correction. They had the opportunity to make that argument even if the decision in Ruiz had not yet been decided.

[00:18:46] Speaker 02:
One doesn't only make arguments in court based upon when, you know, there is an on point on all fours decision by the Ninth Circuit.

[00:18:54] Speaker 04:
Do you think the district court would have made a different decision if Ruiz had been decided before the arguments?

[00:19:02] Speaker 02:
Well, you're talking to a lawyer who was unsuccessful in convincing the Supreme Court that this court's decision on waiver was in Ruiz was incorrectly decided. I continue to believe that equitable jurisdiction is a limitation on the authority of this court. I do not believe that it is waivable or that it is akin to personal jurisdiction. I believe that if that were true, then the Supreme Court's decision in Trump versus Casa, which held that district courts can't have universal injunctions, could be simply circumvented by having a district court or by having a cooperating defendant waive the lack of equitable jurisdiction.

[00:19:44] Speaker 02:
I don't think that that's correct.

[00:19:46] Speaker 02:
And so I think that that portion of Ruiz is incorrectly decided. But nevertheless, you know, I believe that so on that basis, I would say that the district court would likely have done would have likely rejected the waiver just as every other district court.

[00:20:01] Speaker 00:
Also, I think you're right to suggest that our equitable jurisdiction doctrine is a little bit odd. But here, there is an independent basis for subject matter jurisdiction, correct?

[00:20:15] Speaker 02:
Well, there is for one component of the claim for relief. That's right. That's what's different about this case.

[00:20:22] Speaker 04:
But, Counsel, you didn't answer my question. My question was if Ruiz had been decided before the case was decided by the district court, do you think the district court would have decided the case differently?

[00:20:36] Speaker 02:
Well, it depends on what Luxottica would have done with the waiver. I mean, even as they stand here today, they don't have any idea whether they're going to exercise the right to waive or not.

[00:20:47] Speaker 04:
But do you think the district court would have explicitly given the opportunity to waive?

[00:20:55] Speaker 02:
No, I think that if Ruiz is the law of the case, the next case comes along.

[00:21:02] Speaker 02:
They don't waive.

[00:21:04] Speaker 02:
They know what the law is.

[00:21:06] Speaker 02:
We make a motion to remand. They don't say they're going to waive.

[00:21:11] Speaker 00:
My understanding is that, at least in part, their decision, Luxottica's decision to waive or not waive is conditional upon whether you will assert or amend your complaint to add a damages component.

[00:21:25] Speaker 00:
So I guess my question is, is that a possibility here?

[00:21:28] Speaker 02:
I don't think so. I don't think that the doctrine of waiver could be extended to the point where one waits until, you know, two years into a case to see what the plaintiffs decide to do and then decide whether they're going to exercise their right to waive. The whole point of the waiver is an acknowledgement that there is an adequate remedy at law lurking around out there that the plaintiffs have decided that they weren't going to avail themselves of. And under, you know, Royal Canaan and Haynes Celestial and these other cases that have recently come out from the Supreme Court, that is the plaintiff's prerogative to do so.

[00:22:01] Speaker 04:
But if the complaint is amended... would that then invoke an additional right to waive?

[00:22:12] Speaker 02:
We don't know what the four corners of the waiver are, Your Honor. I would suggest no. And again, it gets back to the issue that I raised with you earlier, which is forfeiture. So one has to timely assert. Think about it like personal jurisdiction, because that's what the Ruiz Court equated equitable jurisdiction to. Now, under 12H1, if if you don't move to dismiss on personal jurisdiction grounds, you waive it. You forfeit it, essentially. You forfeit the right to contest personal jurisdiction.

[00:22:43] Speaker 02:
Now, if that logic applies to equitable jurisdiction, you only have one shot. And if you don't do it, you forfeit your right to do that. Will we amend the complaint to add a claim under the CLRA if there's a possibility that they're going to waive? I mean, probably. The whole point of of pleading the case in the way that we did, which was to stay out of federal court, was to, I mean, that was the reason, stay out of federal court. Now, if we're going to stay in federal court because they're going to elect, as they have the right to do, if they haven't forfeited it, to give up that defense, essentially, to the presence of this case in federal court, well, then I'm sure a CLRA claim for damages would look mighty attractive for the plaintiffs at that point.

[00:23:33] Speaker 02:
That's what we did in the Young case. So if we have to stay in federal court because they elect to waive, then we intend to presumably avail ourselves of all the remedies that would be available to us if we had filed this case in federal court in the first instance. So it can't be conditional. If this court is going to use this opportunity to sort of define what the scope of waiver is based upon the oral argument here, I would suggest that it's a one or done kind of a situation.

[00:24:03] Speaker 04:
Well, we generally remand for the district court to sort it out first before we, I'm just speaking for myself.

[00:24:10] Speaker 02:
Of course.

[00:24:11] Speaker 04:
I don't know what we're going to do on this case, but we generally like the district court to take the first cut at it.

[00:24:17] Speaker 02:
And that, you know, look, that makes sense, I think, in most circumstances. I have argued that I think they forfeited it, but if you disagree... And the case goes back. I would ask the court to do one thing, though, which is it would be great if we didn't have to come back up here again for a second time under 1453 or however on this issue of public injunctive relief. So with my last remaining minute, if I might just touch on that issue. There's no question that the request for public injunctive relief lacks subject matter jurisdiction.

[00:24:50] Speaker 02:
And so the question is going to be, even if they waive, What happens to the claim for subject for public injunctive relief, for the claim for relief, public injunctive relief? And we would submit that at least at a minimum has to be allowed to be remanded so that we can proceed in state court.

[00:25:09] Speaker 00:
But why can't we let the district court sort that issue out as well?

[00:25:12] Speaker 02:
I just would prefer as part of the mandate for this court not to have to see us again in two years and before any of the issues in this case have actually been litigated in some court.

[00:25:23] Speaker 02:
We would submit that under Guzman and Davidson, this court says that you cannot prevent the state court from proceeding on a public injunctive relief claim, that we not be required to dismiss it and then refile it in state court only to have the Luxottica re-remove that issue again or challenge the court's ability to

[00:25:49] Speaker 01:
challenge the district court's ability to remand as opposed to dismiss it, which would... But, counsel, wouldn't you agree that if Luxottica decides to waive and the case remains in the district court, wouldn't it be more appropriate to allow the district court to decide whether to keep the public injunctive relief side of the case as well? It can't.

[00:26:09] Speaker 02:
There's no subject matter jurisdiction over it because of the way that the case is pled. Even under Davidson, and I see my time has expired. May I answer? Yes, please. even under Davidson, which provided plaintiffs with some creative options in terms of having Article III standing in cases in which they have been previously injured. And it did. In this case, the plaintiff does not contend that there is a likelihood of future harm. And so that particular claim for public injunctive relief cannot be heard in federal court.

[00:26:43] Speaker 04:
I'm sure the district court will be capable of... ascertaining whether your argument is persuasive or not. So thank you, counsel. Thank you, Your Honors.

[00:26:54] Speaker 04:
Rebuttal.

[00:26:59] Speaker 03:
Thank you, Your Honors.

[00:27:01] Speaker 03:
As Judge Rawlinson was asking my opposing counsel, would the district court, Judge Scarcy, have ruled the same way if, in fact, Ruiz was decided before the motion to remand was ruled upon? And I believe... council's response is controlling. He said, it depends on what Luxottica would have done with the waiver. And so that statement alone explicitly indicates that Luxottica shouldn't be able to have the waiver, exercise it in the district court before Judge Scarcy or the district court decides what to do.

[00:27:38] Speaker 03:
And so I believe the Ninth Circuit should properly remand to the district court for that purpose.

[00:27:45] Speaker 03:
In terms of the district court sorting out the public injunctive relief, I don't believe that that issue was before the Ninth Circuit today. It wasn't an issue on appeal. And so, again, contrary to counsel's statement, it should be brought to the district court for decision.

[00:28:01] Speaker 03:
And if, in fact, as I believe counsel is leaning, as he did in Young, there is an amended complaint that includes a monetary – component for relief, either under CLRA or otherwise, the district court should decide what it has before it at that time and decide what it wants to do with the injunctive relief portion as well as the waiver. Thank you.

[00:28:26] Speaker 00:
Council, if let's say you do waive on remand to the federal district court and your friend on the other side amends the complaint to add a damages component, What happens next? Can't the district court in his power say, well, then there's an adequate remedy at law, it's being asserted, and I don't have equity jurisdiction, so I have to remand to the state court?

[00:28:52] Speaker 03:
The judge could do that, but if our waiver extends to the amended complaint and we want to proceed in federal court despite the CLRA claim, then the entire action would proceed before the district court and we would deal with it there.

[00:29:04] Speaker 00:
So you're saying that the federal district court judge, Judge Scarcy, would be bound by your waiver? even though there is a clear assertion of inadequate remedy at law on the face of the complaint.

[00:29:15] Speaker 03:
Yes, I believe that that is what the waiver provided for under Ruiz is meant to do.

[00:29:22] Speaker 04:
All right. Thank you, counsel. Thank you to both counsel for your helpful arguments. The case just argued is submitted for a decision by the court.