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is 24-1016 Vaughn v. J.P.

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Morgan Chase.

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Would counsel for appellant please make your appearance and proceed.

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May it please the court, Elliot Sherker, on behalf of the appellants.

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The plaintiff Vaughn is a J.P.

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Morgan Chase customer.

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Her account

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by College AP Morgan Chase Customers is governed by a deposit account agreement, which is referred to as a DAA.

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Vaughn sued Chase, pleading civil rights and tort claims arising from an alleged incident at a Chase branch.

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The district court denied our motion to compel arbitration on Vaughn's claim.

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We submit denying us our contractual right to arbitrate a claim that is plainly within the scope of an undisputedly valid arbitration clause.

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The district court ruled, and Vaughan does not dispute, that the DAA's arbitration clause is a valid agreement to arbitrate claims related to the plaintiff's deposit account.

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The only disputed question is whether Vaughan's claims fall within the DAA's broad arbitration clause.

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That must be resolved, of course, under the clause's plain language.

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This is what the clause says.

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It expressly includes, quote,

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any claims or disputes arising from or relating to this agreement.

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Meaning that, again quoting, any dispute relating in any way to your account or transactions will be resolved by binding arbitration.

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But perhaps most importantly, the clause states, quoting one more time, claims are subject to arbitration regardless of what theory they are based on or whether they seek legal or equitable remedies.

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The only exclusion

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The only stated exclusion is small claims court actions.

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This court held in Kavlovic that arising from or relating to, as used in the DAA, is broad language.

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Indeed, the district court relied on Kavlovic to rule that the arbitration clause is indeed broad, which, as the district court recognized, creates a presumption in favor of arbitrability.

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Now that conclusion is supported by this court's case law.

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Well, that leads into the question of whether the test that the court applied is actually the right test.

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I mean, that was the subject of supplemental briefing.

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Correct.

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And as it relates to that supplemental briefing, at least as I understood your position, it was that Granite Rock

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was essentially inapposite because it involved a narrow arbitration provision as opposed to the broad one here.

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Did I understand that correct?

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Among other reasons, Your Honor.

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Okay, among other reasons.

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Well, the case law that we have that is applied, granted, Rockland, we do have some cases that have, they, for the most part, they involve broad arbitration provisions.

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And so, at least as best I could tell, and so my question to you is what is,

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What is the basis for your conclusion that Granite Rock is restricted to narrow arbitration provisions?

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I didn't see anything in the language of Granite Rock to that effect.

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What's the basis for your position?

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Well, it is true that the Supreme Court described the arbitration clause as relatively narrow in Granite Rock.

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But as I said, among other reasons, and chief among those other reasons,

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is that the party seeking to compel arbitration in granite rock did so on the theory that the very strong policy of compelling arbitration in labor dispute cases would allow for arbitration to be ordered even in the absence of express language in the arbitration clause covering the dispute.

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That's the central holding of granite rock.

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And why I submit it does not appear

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in this court's non-labor dispute arbitration case law, and never has.

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This court's case is construing granite rock, however, if I might, beginning with National Nurses Organizing Committees in 2023, says, if I might, for a court to order arbitration, the parties must have consented to arbitrate the disputed issue.

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At the same time, however,

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we acknowledge the federal policy favoring arbitration of labor disputes, citing Granite Rock.

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We recognize these are competing principles, this court said, but we strike a balance between them by applying a presumption that a dispute is arbitrable unless we may say with positive assurance that the parties intended otherwise.

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The court concluded, with no exception provision excluding a particular grievance from arbitration, only the most forceful evidence of a purpose to exclude the claim from arbitration

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can prevail particularly where the arbitration clause is quite broad.

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That language could have been taken from the Sanchez decision on which we rely.

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That language could have been taken from the Cummings decision on which we rely.

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Well, just a few months ago, obviously, Post Cummings, Post Granite Rock, the panel in Brent Electric versus International Brotherhood

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specifically said that the breadth of the arbitration clause pertains to whether or not the clause is ambiguous.

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In Granite Rock, the Supreme Court predicated the presumption of arbitrability not on the breadth of the clause, but on ambiguity.

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Now, I frankly don't understand.

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I'm not a strategist, but it seems semantic, but it seems like a semantic difference

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that is significant because it involves the legal standard.

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Granite rock, I think, is unambiguous in saying that we are predicating the presumption of arbitrability not on the breadth of the arbitration clause, but on whether or not it's ambiguous.

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What Brent Electric says, rightly or wrongly, binds us that we look at ambiguity based on the language, based on the facts.

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And obviously, the breadth of the arbitration clause would pertain to whether or not

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the applicability of the arbitration clause to the disputed hand is ambiguous or not?

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Yes, your honor.

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I was actually just going to get to Brent Electric because Brent Electric on page, head notes 23 through 25 rather, talks about a presumption of arbitrability in a labor dispute arbitration clause.

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But we are talking as between Cummings-Sanchez presumption that arises from broad arbitration clauses.

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and the presumption of arbitrability that the court was talking about in Granite Rock are two different presumptions.

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Under Granite Rock, there is still a presumption of arbitrability at times in labor dispute cases.

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It does not override plain language, of course, but that presumption is that labor disputes should be arbitrated for the policy reason that the alternative to arbitrating

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labor disputes, unlike commercial disputes, is not that the case goes forward in another form.

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What they call industrial strife.

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Just to make sure that I understand, are you saying that granite rock only applies to the arbitrability of labor disputes?

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No, sir, I'm not.

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I'm not.

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I'm providing the background for the answer to Judge Holmes' question.

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What we are saying is that the presumption that the party seeking arbitration

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and granite rock relied on had nothing to do with whether the clause was broad or narrow.

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It had to do with bootstrapping the presumption into a requirement for arbitration when the plain language would not support it.

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And we commend the Second Circuit's recent decision, which is cited in our supplemental brief, for saying, yes, we still

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we'll look to a presumption of arbitrability, but we won't do that first.

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We don't do that first.

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First, we look at the plain language of the arbitration clause.

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And then down the line, we still look at a presumption of arbitrability.

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But the presumption that we have been talking about throughout in all of our briefing, in this case,

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is what does it mean when there's a broad arbitration clause?

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When you pass all the other tests.

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I get that, but I mean, what I understand you to be saying then is that the presumption of arbitrability that was at play at Granite Rock was different than the presumption that was at play in this case based upon Cummings and the way that you briefed this case, correct?

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Correct, Your Honor.

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Well then, I mean, we have to figure out

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Do we not have to do something with Granite Rock?

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I mean, Granite Rock is a Supreme Court case.

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It comes after Cummings.

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If you are not, which I thought I heard you doing to begin with, but if you are not saying that Granite Rock is limited to the labor context,

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then we have to do something with Granite Rock, don't we?

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I mean, how does Granite Rock in some way, form or fashion, has to be dealt with as it relates to what do we do with it in this case, right?

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Your Honor, I don't disagree at all.

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This court has already spoken to Granite Rock in National Nurses and, as I was saying, in Brent Electric.

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And the language that the court uses in both of those cases could have been written with

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a commercial case in mind.

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As I've read these cases, it's almost as if the granite rock line of labor cases and what I would call ordinary or commercial arbitration cases has proceeded down separate tracks.

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And the tweens, so to speak, never seem to have met in the case law.

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Perhaps because of the policy issues that relate solely to labor disputes, I can't

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I can't say for certain, but what I can say for certain is that when you look at National Nurses and you look at Brent Electric, you see the language that appears in Cummings and in Sanchez and on which we relied in our principal brief, which says, for example, in Brent Electric.

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Fourth and most importantly here, where a contract contains an arbitration clause, there is a presumption of arbitrability, citing to Granite Rock.

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This means that in order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.

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Doubt should be resolved in favor of coverage.

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That just abrogates either ambiguity or breadth as a qualifying initiating requirement.

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Well, Your Honor, my point about that is that breadth has nothing to do

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with Granite Rock or its project.

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The language you read would say not only does breath not have anything to do with it, ambiguity has nothing to do with it either.

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That's what this Court is drawing from from Granite Rock.

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I think you would raise an awful lot of eyebrows if we didn't at least have ambiguity as a conditioning requirement before we invoke a presumption.

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Your Honor, there's

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There is, that language appears in Granite Rock, but that's why I mentioned the Second Circuit's departure from Louis Stryfus, which recognizes that in the commercial context, the presumption still has a role, and the limited, the very limited role, and I don't want to diminish this, but it is a very limited role that the presumption has in a case where we're talking about breath, because if I might, Judge Ebel, continue with what followed that language

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in print electric.

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The presumption of arbitrability arises from congressional policy in favor of disputes by the parties through the machinery of arbitration.

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This is because in the labor context, arbitration is the substitute for industrial strife.

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So the policy issues and labor disputes are very different.

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And as I say, that may be why there hasn't been a cross-cutting of the two lines of authority, but the only... So you're thinking that this presumption

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varies depending on whether it's in the labor context or the non-labor context.

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The opening presumption of arbitrability may be affected by whether we're talking about a labor case or a commercial case.

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But we don't have to worry about a presumption of arbitrability here.

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So in Vaughan, we're not talking about a labor case.

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Correct.

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So you're saying no presumption.

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No, Your Honor, I'm not.

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I'm saying the presumption on which we rely, which is in Cummings, which is in Sanchez, which post-states Granite Rock, and from which this court has never departed, is that in the instance of a broad arbitration clause, there's a presumption that even collateral disputes are included within the arbitration clause.

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That's it.

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if it involves contract construction or the party's rights and obligations under the contract, right?

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Correct, Your Honor.

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OK.

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Correct.

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As I said at the beginning, we start with the plain language of the arbitration clause.

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And we are very comfortable saying that the plain language of the arbitration clause is invoked by Vaughan's complaint, which is where we look.

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And let me play off of that for a second.

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If the plain language of the arbitration clause is essentially determinative in this case, to the extent that one could, and I'm just positing now talking, if arguably there's some tension between granite rock and Cummings as it relates to the order of battle as it relates to the presumption or where the presumption fits in.

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In this case, does the presumption matter at all?

[00:14:24] Speaker 03:
Yes, Your Honor, it does.

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Why does it matter?

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If the plain language, if in granite rock you look at the plain language and you say, boom, is this covered or not?

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In this case, if you look at the plain language, in your view, as I understood it, it's covered.

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Correct.

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You get the same answer under the plain language, then why does the presumption matter?

[00:14:45] Speaker 03:
The only role the presumption plays in our analysis and the only role for any presumption

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when we're talking about breadth, narrow versus broad, is the language in this court's opinions about so-called collateral disputes.

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That's it.

[00:15:06] Speaker 00:
Are you saying this is a collateral dispute?

[00:15:09] Speaker 03:
No, Your Honor, I am not.

[00:15:10] Speaker 00:
Well, then what difference does it make?

[00:15:12] Speaker 03:
Then let me talk about the plain language.

[00:15:14] Speaker 00:
If I take what I understand to be your position, and tell me whether my understanding is correct, if you're saying that this dispute falls within the heartland of the plain language and is therefore a covered dispute, do you agree with that proposition?

[00:15:31] Speaker 00:
Yes, Your Honor, I do.

[00:15:32] Speaker 00:
If you agree with that proposition, then it is not a collateral dispute, right?

[00:15:37] Speaker 03:
I agree.

[00:15:38] Speaker 00:
Okay.

[00:15:38] Speaker 00:
If it is not a collateral dispute, that's where, as I understand you, the presumption comes into effect, right?

[00:15:44] Speaker 00:
Correct.

[00:15:44] Speaker 00:
All right, then why does it matter whether the presumption is considered?

[00:15:48] Speaker 00:
Because you're saying it is not a collateral dispute to begin with.

[00:15:52] Speaker 03:
Then let me talk about the plain language, Your Honor.

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I know my time has expired, but if I could just have a minute to talk about the plain language.

[00:16:00] Speaker 00:
Go ahead.

[00:16:00] Speaker 03:
The only reason, according to the complaint, that Vaughan was at the branch

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was to exercise her rights as a Chase customer governed by the DAA.

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And what she says at page 64 of the appendix in her complaint is, but for Ms.

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Vaughan's race, she would not have been denied the right to enjoy all benefits, privileges, terms, and conditions of her contractual relationship as a Chase member.

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That's the claim.

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The next paragraph reads, the effect of the practices complained of

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has been to deprive Ms.

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Vaughan of the right to enjoy all the benefits, privileges, terms, and conditions of her contractual relationship as a Chase member.

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For the CADA and the 1981 claims you're reading.

[00:16:43] Speaker 03:
That's correct.

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But that's also incorporated in all the other claims.

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OK.

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Can I ask you a question?

[00:16:48] Speaker 04:
Sure, of course.

[00:16:50] Speaker 04:
So I understand your argument about CADA in 1981.

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But let's say it incorporates all of those prior allegations on the negligent infliction of emotional distress and the defamation claims.

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For the emotional distress claims, it specifically predicates the tort in paragraph 158 as the false statement by the police that she was acting aggressively when she was not acting aggressively.

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The defamation claim is saying that she was, the police saying that she was trespassing.

[00:17:23] Speaker 04:
So despite, I mean, this is extraordinarily broad language in the arbitration clause.

[00:17:29] Speaker 04:
But how does that relate, you know, the false statement by the police officer or to the police officer from the manager or the emotional distress, you know, from that, how does that relate in any way to her rights and responsibilities under the account agreement?

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Even under the, even if we,

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say that Cummings' language about collateral issues involving contract construction under the party's rights, those don't, I just don't see how those two state tort claims relate in any way to the account agreement.

[00:18:13] Speaker 03:
Let me answer that two ways.

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Vaughn would not have been in the bank, but for her alleged contractual rights.

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She was there not to get a drink of water, not to get out of the rain,

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Not as someone coming in who didn't have an account saying, I need a roll of quarters.

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She was there.

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She says in her general allegations, and then in the specific allegations in the 1981 claim, which in paragraph 156 are integrated into the negligent infliction for emotional distress claim, specifically incorporates all paragraphs of this complaint as though fully set forth.

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Not just the general allegations, but all paragraphs.

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So her claim is that I was there to exercise my rights, to do business.

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But that's not what the tort was.

[00:19:01] Speaker 03:
I understand that, but that's why she was there.

[00:19:03] Speaker 03:
She would not have been there but for the contractual relationship and her alleged desire to exercise her rights under the contract.

[00:19:12] Speaker 03:
So what happened as a result, perhaps may be considered collateral, and that does get back to the small role that the presumption plays here,

[00:19:22] Speaker 03:
to further respond to Judge Holmes' question with regard to the state tort claims, for example, or more in particular.

[00:19:29] Speaker 03:
But that's the only reason she was there, and her damages are, as she pleads them, that she couldn't exercise her rights.

[00:19:38] Speaker 03:
Now, the tort claim was, you called the police, you lied to the police, you did all this other stuff.

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And she didn't exercise her rights.

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She didn't get her counterchecks.

[00:19:50] Speaker 04:
For the caught in 1981 claims, that's true.

[00:19:52] Speaker 04:
But in 158, for the infliction of emotional distress, the damages were not the inability to make a deposit or to make a withdrawal.

[00:20:02] Speaker 04:
It was the emotional distress that she had incurred having somebody lie to the police.

[00:20:12] Speaker 04:
I understand your argument that it doesn't matter that the tort

[00:20:17] Speaker 04:
does or doesn't fall under it as long as it sprung from her being in the bank.

[00:20:21] Speaker 03:
It's related to her contract with the bank, that she was there.

[00:20:26] Speaker 03:
She didn't walk into the bank, go up as a non-customer, go up to tell her, demand a bag of quarters, and as the magistrate put it, get smacked in the face.

[00:20:34] Speaker 03:
for no apparent reason.

[00:20:35] Speaker 03:
She was there.

[00:20:36] Speaker 03:
She claims in her general allegations and in specifically the incorporated allegations to exercise her rights.

[00:20:42] Speaker 04:
What if her manager just kicked her?

[00:20:44] Speaker 04:
You know, she's sitting there waiting for a deposit.

[00:20:46] Speaker 04:
Let's just take a silly example.

[00:20:48] Speaker 04:
The bank manager comes and kicks her and she says, you know, I'm going to sue you for assault and battery.

[00:20:55] Speaker 04:
And does that relate in any way to the account agreement because the manager assaulted her or battered her

[00:21:04] Speaker 04:
because she was there within her rights under the contract.

[00:21:12] Speaker 04:
So it really doesn't matter what they do to her as long as it took place within the four corners of that bank.

[00:21:18] Speaker 03:
And, Your Honor, I'm not retreating from the position that her damages that she claimed.

[00:21:24] Speaker 03:
For example, in 165, which was within the English Infliction, she says, as a result of defendant's actions, Ms.

[00:21:29] Speaker 03:
Vaughan has suffered significant injuries without any explanation.

[00:21:33] Speaker 03:
The injuries that she pleaded that are incorporated therein is that she was there to exercise her rights and she was treated badly at the bank, which would be the same in your example, is that she was there exercising her rights, they treated her badly, and her damages were, I didn't exercise my rights.

[00:21:52] Speaker 03:
So it comes down to the same.

[00:21:54] Speaker 03:
I know I've gone over my time.

[00:21:58] Speaker 00:
Thank you, counsel.

[00:21:58] Speaker 00:
Thank you.

[00:22:05] Speaker 00:
We'll hear from Appellee, and would you put an additional five minutes on, please?

[00:22:17] Speaker 00:
Council, you don't need to take it, but you have it if you want it, the additional five minutes.

[00:22:23] Speaker 01:
Okay.

[00:22:23] Speaker 01:
Thank you for that.

[00:22:26] Speaker 01:
And may it please the Court, my name is Chris Whitney, proudly representing Appellee Janetta Vaughn.

[00:22:32] Speaker 01:
The issue in this case is whether Ms.

[00:22:35] Speaker 01:
Vaughan's racial discrimination claims and related tort claims are within the scope of the arbitration agreement that concerns financial transactions only.

[00:22:44] Speaker 01:
And it clearly does not, as the district court correctly found.

[00:22:48] Speaker 01:
Now, whether Cummings or Granite Rock, whichever standard this court deems appropriate, plaintiff would win under either standard.

[00:22:57] Speaker 01:
Now, the district court denied Chase's motion under the more stringent Cummings standard.

[00:23:02] Speaker 01:
Now, it's clear that granite rock is the appropriate standard to use.

[00:23:06] Speaker 01:
But again, whichever standard this court selects, the district court must affirm, the district court's decision must be affirmed.

[00:23:15] Speaker 01:
First, I'll discuss the scope of the arbitration provision.

[00:23:18] Speaker 01:
And then I'll discuss why Ms.

[00:23:20] Speaker 01:
Vaughn's claims do not fall within the scope of the DAA undercomings or the granite rock standard.

[00:23:27] Speaker 01:
And then finally, I'll discuss how Chase hasn't provided any evidence

[00:23:30] Speaker 01:
to demonstrate that they can compel arbitration of Ms.

[00:23:35] Speaker 01:
Vaughan's claims.

[00:23:36] Speaker 00:
Let me, before you go through that, and those are all things that I want to hear, but it's sort of a tangential point on, or an offshoot point as it relates to the Granite Rock Cummings dispute.

[00:23:50] Speaker 00:
Did I understand your supplemental briefing to be correct that even though you believe Granite Rock is supplants Cummings, that you nevertheless think we should apply Cummings here?

[00:24:01] Speaker 01:
Well, we would say that the court can apply either standard.

[00:24:05] Speaker 01:
Because under either standard, plaintiff would still prevail.

[00:24:10] Speaker 01:
The coming standard, it favors the presumption of arbitrability.

[00:24:16] Speaker 01:
But what that does is it does run the risk of certain claims that parties did not agree to being swept into the arbitration provision.

[00:24:25] Speaker 01:
Whereas granite rock, it focuses more on the actual principles of contract.

[00:24:30] Speaker 01:
where parties can be compelled to arbitrate issues that they didn't agree to.

[00:24:35] Speaker 01:
And here, the parties did not agree to arbitrate racial discrimination claims and tort claims at all.

[00:24:40] Speaker 01:
And if you look at the plain language of the arbitration provision, the DAA's arbitration provision states, all claims or disputes related to your account or transaction will be resolved by binding arbitration and not through litigation in court.

[00:24:57] Speaker 01:
And then Chase actually goes on to describe further what kind of claims would be included.

[00:25:03] Speaker 01:
Claims between you and us about your deposit account, transactions involving your deposit account, safe deposit box, and any related services.

[00:25:12] Speaker 00:
Do you agree that the plain language here, going back to you win under either test, do you agree that the plain language here is determinative?

[00:25:22] Speaker 00:
In other words, it determines that this

[00:25:24] Speaker 00:
is a not a covered dispute.

[00:25:26] Speaker 00:
So in other words, irrespective of any sort of tension that may or may not exist between Granite Rock and Cummings, if you look at the plain language of the arbitration agreement, it doesn't cover this dispute.

[00:25:38] Speaker 00:
Would that be a fair statement of your position or no?

[00:25:41] Speaker 01:
Yes, it would, Judge Holmes.

[00:25:43] Speaker 01:
And if you look at the plain language, it's limited to banking disputes.

[00:25:47] Speaker 01:
It doesn't go outside and just sweep in racial discrimination claims.

[00:25:52] Speaker 02:
What does it say?

[00:25:53] Speaker 02:
Banking claims are the arbitrable ones.

[00:25:57] Speaker 02:
I thought it said no matter what claim, what your legal right was.

[00:26:03] Speaker 02:
I thought that was a very broad expansion of that opinion.

[00:26:06] Speaker 01:
Well, it's a broad expansion.

[00:26:07] Speaker 01:
But if you're looking at the plain language,

[00:26:11] Speaker 01:
A customer would assume that any legal theory is going to be under a contract or financial theory.

[00:26:19] Speaker 02:
I don't see how that... I mean, that is putting words in that arbitration clause that simply are not there.

[00:26:25] Speaker 01:
I'm sorry, I didn't hear that question.

[00:26:26] Speaker 02:
That's putting words in that are not in that arbitration clause.

[00:26:30] Speaker 02:
That clause says, regardless of the legal claim,

[00:26:33] Speaker 02:
So I would think what the bank is saying is we don't want to have some fine-tuning where you plan a structured complaint around arbitration.

[00:26:45] Speaker 02:
We want arbitration for everything, and that's pretty much the way it was drafted.

[00:26:49] Speaker 01:
Yeah, and I'm not sure a customer would read that like that.

[00:26:53] Speaker 01:
I would think a customer would look at it based on the language of the contract.

[00:26:57] Speaker 02:
I don't see anything in the language of the contract.

[00:27:00] Speaker 02:
I think the language of the contract is to the contrary.

[00:27:03] Speaker 02:
It says, no matter what theory you're asserting.

[00:27:07] Speaker 01:
Yeah.

[00:27:07] Speaker 01:
And so bringing in a racial discrimination claim and tort claims, it doesn't fit into the language of it.

[00:27:14] Speaker 01:
So just for broad language purposes,

[00:27:18] Speaker 01:
That language still isn't broad enough, just to say all claims.

[00:27:22] Speaker 01:
Because based on the plain language, it would appear to be that this is going to be related to banking disputes.

[00:27:28] Speaker 01:
Because within that whole DAA, it doesn't say anything about racial discrimination.

[00:27:35] Speaker 04:
What if she had alleged that because of the racial discrimination, she was denied the right to enjoy all benefits, privileges, terms, and conditions

[00:27:46] Speaker 04:
of her contractual relationship as a Chase member.

[00:27:50] Speaker 04:
And of course, I'm reading from the complaint.

[00:27:52] Speaker 04:
How does that not relate to her contract with Chase?

[00:27:59] Speaker 04:
That's exactly what she alleged for her arcada in 1981 claims.

[00:28:04] Speaker 01:
Yeah.

[00:28:04] Speaker 01:
And to answer your question, the district court correctly found that she wasn't even treated as a member.

[00:28:11] Speaker 01:
When she walked in, she walked into the bank.

[00:28:13] Speaker 04:
I know what the district court said, but how can that possibly be right?

[00:28:18] Speaker 01:
Well, she wasn't treated as a member at all.

[00:28:21] Speaker 04:
So you're talking about the manager's intent.

[00:28:27] Speaker 04:
I'm sorry to talk over you, but just to make sure my question is explained.

[00:28:33] Speaker 04:
But she is arguing that the effect was to deprive her, regardless of the manager's intent, she was deprived of the ability to carry out her contractual rights.

[00:28:45] Speaker 04:
So didn't the district court improperly conflate the manager's intent with the effect of that intent, i.e.

[00:28:54] Speaker 04:
to deprive her of her contractual rights?

[00:28:56] Speaker 01:
No, because under 1981 and CADA,

[00:29:00] Speaker 01:
You don't necessarily need to sign the DAA in order to bring those claims.

[00:29:05] Speaker 01:
I can walk into the bank as a black man, sit down, and then, OK, I'm going to open a bank account.

[00:29:11] Speaker 01:
I don't have to be a member of that bank to bring a 1981 claim.

[00:29:15] Speaker 01:
And that goes back to the case of Barfield v. Commerce Bank.

[00:29:19] Speaker 01:
So the plaintiff in that case, he had walked into the bank, attempted to make change with the teller.

[00:29:25] Speaker 01:
He was denied.

[00:29:27] Speaker 01:
Then a white man comes in shortly after.

[00:29:30] Speaker 01:
He's allowed to make change.

[00:29:32] Speaker 01:
Now, the court in that case explicitly said he did not have to be a customer in order to bring a 1981 claim.

[00:29:39] Speaker 01:
So if Ms.

[00:29:41] Speaker 01:
Fawn is bringing claims based on a denial of her contractual relationship, then that would undermine any argument that Chase would make to compel arbitration based on claims

[00:29:55] Speaker 01:
related to how she was treated and not related to her account.

[00:29:59] Speaker 00:
If you don't mind, let me interrupt.

[00:30:03] Speaker 00:
You didn't have to be a customer to bring a 1981 claim, but she is a customer.

[00:30:08] Speaker 00:
She agreed to this provision.

[00:30:11] Speaker 00:
And so that's the distinction.

[00:30:13] Speaker 00:
I mean, yes, I don't question it all that in a situation where you tried to make change or whatever, you could bring in 1981.

[00:30:20] Speaker 00:
But she is a customer.

[00:30:22] Speaker 00:
And so because she is a customer, and because she was aware of this provision, because she agreed to this provision, why isn't she just bound by the plain terms of the agreement?

[00:30:34] Speaker 00:
And the agreement says, any dispute relating in any way to my account.

[00:30:38] Speaker 00:
And she has an account there, right?

[00:30:41] Speaker 01:
Yeah, and she has an account.

[00:30:42] Speaker 01:
And again, she wasn't treated as if she did have.

[00:30:47] Speaker 01:
She walked in, sat down, and was immediately accused of trespassing.

[00:30:51] Speaker 01:
So she didn't even get to enjoy the benefits of having a contractual relationship.

[00:30:55] Speaker 00:
And that's exactly the point.

[00:30:56] Speaker 00:
Going back to Judge Backer's point, it really doesn't matter what the person who mistreated her was thinking.

[00:31:02] Speaker 00:
What matters is, as a matter of fact,

[00:31:05] Speaker 00:
She had an account, and she was deprived of her ability to exercise her rights under the account, which as Judge Baccarat read, that's exactly what the complaint says.

[00:31:15] Speaker 00:
And if she was an account holder per the agreement, she was deprived of her rights to exercise, you know, she was deprived of the right to exercise her privileges as an account holder, that seems to map right on to this provision.

[00:31:30] Speaker 00:
And that's hard for me to understand why it wouldn't be covered plain language-wise.

[00:31:35] Speaker 01:
And plain language wise, I would see that differently.

[00:31:39] Speaker 01:
I wouldn't see that racial discrimination claims and tort claims would be swept into this arbitration provision, especially when it's stating claims between you and us about your deposit account, transactions involving your deposit account, safe deposit box, and any related services.

[00:31:55] Speaker 01:
It's hard to see how claims related to how she was treated or claims related to

[00:32:01] Speaker 01:
her dignity or claims related to her identity would fall within this plain language.

[00:32:10] Speaker 00:
And again... Do you make a distinction between, just to play up on Judge Bacharach's hypothetical, do you think there is a distinction to be made, and I'm not saying Judge Bacharach was trying to, but I mean do you think there's a distinction to be made

[00:32:25] Speaker 00:
between sort of the assault situation and a situation where you were doing something with your account.

[00:32:32] Speaker 00:
In other words, the idea that they just kicked her when she was in there and as she was sitting down as opposed to trying to engage in actually a transaction here.

[00:32:43] Speaker 00:
A distinction between 1981 and the tort claims.

[00:32:47] Speaker 00:
Is there a distinction with the difference between those two?

[00:32:49] Speaker 01:
Well, under Judge Baccarat's hypothetical,

[00:32:54] Speaker 01:
Those claims would also not fall under this arbitration revision.

[00:32:59] Speaker 01:
It would fall outside of the scope.

[00:33:01] Speaker 01:
And the same thing with what we're talking about here.

[00:33:04] Speaker 01:
Ms.

[00:33:05] Speaker 01:
Vonn didn't even get an opportunity to engage in a transaction before immediately being accused of trespassing.

[00:33:12] Speaker 01:
She was basically barred at the door.

[00:33:14] Speaker 01:
Yes, sure, she was allowed to sit down in the lobby.

[00:33:16] Speaker 01:
But within a minute of her being there, she is confronted by the bank manager

[00:33:22] Speaker 01:
and accused of trespassing, and then Miss Pellick calls the police on her.

[00:33:29] Speaker 01:
And then even after Miss Pellick finds out that she is a member of the bank, she still wants her to leave.

[00:33:38] Speaker 01:
She still wants her to leave.

[00:33:41] Speaker 01:
To your question, that would fall outside the scope and that would be more in lines with your hypothetical as opposed to her just being a member and allowing Chase to enjoy the benefits of the contractual relationship.

[00:33:54] Speaker 04:
What if the manager had said, Ms.

[00:33:56] Speaker 04:
Fawn, we understand you are a member of the bank, we appreciate your business,

[00:34:03] Speaker 04:
But you were very, very rude to my assistant manager.

[00:34:08] Speaker 04:
And we just do not tolerate such rudeness.

[00:34:11] Speaker 04:
You use, and I'm making up facts, so hypothetical.

[00:34:14] Speaker 04:
You use foul language.

[00:34:16] Speaker 04:
We do not permit that.

[00:34:17] Speaker 04:
You are offending other people, patrons of the bank here.

[00:34:22] Speaker 04:
And we have to tell you that you are leaving.

[00:34:27] Speaker 04:
And then she sues.

[00:34:30] Speaker 04:
Now, does that claim relate in any way to her contract?

[00:34:38] Speaker 01:
In both cases, that would not relate to her contract, because that would still be outside the scope of her arbitration revision, which goes to all claims of disputes related to your account.

[00:34:49] Speaker 01:
That would go to her behavior when she came into the bank.

[00:34:53] Speaker 01:
So in that case, Chase would be more

[00:34:58] Speaker 01:
You can actually say that Chase could ask her to leave based on her conduct.

[00:35:03] Speaker 01:
So that would be based on her conduct and not based on her account.

[00:35:07] Speaker 01:
Because she didn't even have to have signed the agreement to walk in and then be ruled.

[00:35:14] Speaker 04:
OK, let me make up another fact.

[00:35:17] Speaker 04:
What if the manager said, ma'am, you have breached the implied covenant of good faith and fair daily?

[00:35:24] Speaker 04:
She had gone to law school.

[00:35:26] Speaker 04:
And because of that,

[00:35:29] Speaker 04:
You have abused your contract, and we have to tell you to leave.

[00:35:33] Speaker 04:
Now, does that relate in any way to the account?

[00:35:39] Speaker 01:
Possibly.

[00:35:39] Speaker 01:
I would say possibly.

[00:35:41] Speaker 04:
So it's really what we're getting bullying down to is, what words did she use when she kicked her out?

[00:35:49] Speaker 01:
Well, no.

[00:35:49] Speaker 01:
No, I wouldn't say what words that she used.

[00:35:51] Speaker 04:
Well, trespass means that you don't have a legal right to be in there.

[00:35:55] Speaker 04:
She's saying, I do have a legal right.

[00:35:57] Speaker 04:
Obviously, that's the basis of it.

[00:35:59] Speaker 04:
you know, of her defamation claim and whether or not she has a legal right to have remained in the bank all relates to, arguably, the bucket of rights that she has as a Chase member to remain in the bank.

[00:36:20] Speaker 01:
So it wouldn't be based on the language that she used because Ms.

[00:36:26] Speaker 01:
Vaughn walking in there within a minute and being accused of trespassing without any kind of the language that you're referring to, like Ms.

[00:36:34] Speaker 01:
Vaughn being rude or Ms.

[00:36:36] Speaker 01:
Vaughn cursing at people, that within a minute that would lead to an inference of racial discrimination.

[00:36:42] Speaker 01:
Like why within a minute am I being told to leave?

[00:36:49] Speaker 01:
And Ms.

[00:36:50] Speaker 01:
Vaughn's claims arise from a dispute where, again, she was denied service.

[00:36:56] Speaker 01:
And her claims of racial discrimination and torsious conduct are independent of her status as a Chase member and unrelated to any transaction involving her deposit.

[00:37:05] Speaker 02:
You say she was denied service.

[00:37:09] Speaker 02:
But it's independent of her bank relationship.

[00:37:13] Speaker 02:
That seems to be a non sequitur.

[00:37:16] Speaker 02:
She was denied service that was absolutely dependent upon her being a bank customer.

[00:37:22] Speaker 01:
Well, I can walk in to a Chase Bank and attempt to open a bank account and be denied service as well and not even sign anything and not being a member of the bank.

[00:37:33] Speaker 01:
I can just simply walk in and then the bank manager can approach me and say, you're not welcome here.

[00:37:39] Speaker 01:
And then if they do say something like that, then that wouldn't have anything to do with my bank account.

[00:37:46] Speaker 01:
That would have to do with the way I was treated when I walked in.

[00:37:51] Speaker 00:
I'm shifting gears for a second.

[00:37:55] Speaker 00:
What is your position on the Chase employee declarations that were part of the briefing below?

[00:38:01] Speaker 00:
Are they intrinsic evidence or are they not?

[00:38:05] Speaker 01:
They would be extrinsic evidence.

[00:38:08] Speaker 01:
We can basically just look at the plain language.

[00:38:12] Speaker 01:
And what the district court did was they just looked at, they found that the plain language, based on the plain language, that Ms.

[00:38:18] Speaker 01:
Vaughn's claims fell outside the scope of the agreement.

[00:38:21] Speaker 01:
So what they did was they tried to determine the intent of the parties.

[00:38:24] Speaker 01:
And so they looked, just for further support of their position, they looked at some of the declarations.

[00:38:32] Speaker 01:
And when they looked at the declarations, they found there was still not any evidence of any intent to sweep racial discrimination claims and tort claims within the arbitration provision.

[00:38:43] Speaker 00:
We don't need those declarations just for you to win, right?

[00:38:48] Speaker 01:
No, no.

[00:38:51] Speaker 01:
Again, the district court decided to use those just to support their position.

[00:38:57] Speaker 01:
But regardless of whether you're looking at the extrinsic evidence,

[00:39:02] Speaker 01:
the plaintiff still would come out on top just because these claims do not fall within the scope of the arbitration provision.

[00:39:12] Speaker 01:
And ordinary principles of contract law will determine whether an arbitration agreement was validly formed and whether the parties consented to arbitrate a particular dispute.

[00:39:23] Speaker 01:
Now, a court may only compel arbitration where it's satisfied that neither the formation of the party's arbitration agreement

[00:39:30] Speaker 01:
nor its enforceability or applicability to the issue is in dispute.

[00:39:35] Speaker 00:
Formation is not an issue here.

[00:39:37] Speaker 00:
You're not questioning that there's a valid arbitration agreement.

[00:39:40] Speaker 01:
There's an arbitration agreement to arbitrate banking disputes.

[00:39:46] Speaker 00:
You're talking about the scope of the agreement.

[00:39:48] Speaker 01:
Yes, we're talking about the applicability to this issue.

[00:39:55] Speaker 01:
Now, both standards recognize that

[00:39:57] Speaker 01:
Arbitration is a matter of contract.

[00:40:01] Speaker 01:
And when deciding whether parties agree to arbitrate a particular matter, courts will usually apply ordinary state law contract principles.

[00:40:09] Speaker 01:
And for an arbitration agreement to be valid, both parties must mutually agree to all essential terms.

[00:40:16] Speaker 01:
And in this case, there was no meeting of the minds regarding the scope of the arbitration provision, especially to the claims of racial discrimination and torsive conduct.

[00:40:27] Speaker 01:
Ms.

[00:40:27] Speaker 01:
Vaughan did not consent to arbitrate such claims, and nor was she notified that such claims could be subject to arbitration.

[00:40:35] Speaker 01:
The party attempting to compel arbitration bears the burden of demonstrating that a valid arbitration agreement exists.

[00:40:43] Speaker 01:
And here, Chase has failed to provide clear evidence that the parties intended for claims like racial discrimination and torsive conduct to be subject to arbitration.

[00:40:54] Speaker 01:
And the lack of explicit language in the DAA

[00:40:57] Speaker 01:
suggest that such claims were not intended to fall within that scope of the arbitration provision.

[00:41:03] Speaker 01:
And given Chase's awareness of prior racial discrimination allegations, the absence of language addressing such claims in the DAA speaks volumes.

[00:41:13] Speaker 01:
If Chase had intended to arbitrate racial discrimination claims, it could have easily included explicit language to that effect.

[00:41:22] Speaker 01:
And in conclusion, I see my time is on its way out.

[00:41:25] Speaker 01:
Chase has not provided sufficient evidence to demonstrate that the arbitration agreement is enforceable with respect to Ms.

[00:41:34] Speaker 01:
Vaughan's claims.

[00:41:35] Speaker 01:
And the lack of clarity and the absence of any meeting of the minds on the scope of the arbitration agreement further supports this.

[00:41:43] Speaker 01:
So we respectfully request that this Court affirm the District Court's decision and deny Chase's motion to compel arbitration, allowing Ms.

[00:41:50] Speaker 01:
Vaughan to pursue her claims in the appropriate judicial forum.

[00:41:54] Speaker 01:
Thank you.

[00:41:54] Speaker 00:
Thank you, Council.

[00:41:55] Speaker 00:
Thank you for your fine arguments.