[00:00:02] Speaker 01:
May it please the court.

[00:00:04] Speaker 01:
I'd like to reserve three minutes for rebuttal.

[00:00:10] Speaker 01:
Your honors, this court's recent decision in Avery demonstrates exactly why the district court's order in this case should be reversed.

[00:00:20] Speaker 01:
Avery held that a district court may invalidate an arbitration provision under Rule 23D, but confirmed that to do so, the court must engage in a Gulf oil analysis, weighing the need for a limitation against the potential interference with the rights of the parties.

[00:00:38] Speaker 01:
That right being the right to enforce an arbitration agreement under the FAA.

[00:00:43] Speaker 03:
In Avery, the court conducted... I realize golf is discussed a lot, but golf dealt with restrictions on communications with class members, right, remember?

[00:00:57] Speaker 01:
Yes, yes, class members.

[00:00:58] Speaker 03:
That's not really what's happening here.

[00:01:00] Speaker 03:
This is just the district court's decline to enforce the arbitration agreement against... I forget what her name is, but... Against plaintiffs' amendments, yes.

[00:01:11] Speaker 01:
That's a fair point, Your Honor.

[00:01:13] Speaker 01:
If this is just a matter of enforcing the arbitration provision, then I think the arbitration must be enforced.

[00:01:21] Speaker 01:
The issue is that the court chose not to enforce the arbitration provision.

[00:01:26] Speaker 01:
under a Rule 23D analysis.

[00:01:29] Speaker 01:
And that's the only basis for the court refusing to enforce the arbitration agreement.

[00:01:34] Speaker 01:
And so we have to conduct the Gulf oil analysis to determine whether that was a proper limitation on Paula's choice.

[00:01:44] Speaker 01:
Otherwise, absent 23D and it being considered a communication with putative class members, there's no basis for refusing to enforce the arbitration agreement in this case.

[00:01:57] Speaker 00:
I'm sorry, your honor, could you repeat your question?

[00:02:12] Speaker 01:
I think Gulf oil does provide a basis for reversal in this case.

[00:02:16] Speaker 01:
And I think it's apparent when you compare and contrast the facts of this case as compared to the court's decision in Avery that Gulf oil does necessitate the reversal.

[00:02:30] Speaker 01:
The court in Avery.

[00:02:32] Speaker 03:
On the substantive concern in Gulf oil, that is there was no real interference, there was no, you know,

[00:02:41] Speaker 03:
Or the procedural part.

[00:02:43] Speaker 03:
The court in Gulf oil says that then there's got to be findings and an explanation.

[00:02:48] Speaker 03:
You're talking about the substance.

[00:02:49] Speaker 01:
Yeah, I'm talking about the substance.

[00:02:51] Speaker 01:
The fact that there is findings written, like 1, 2, 3, is not our issue.

[00:02:58] Speaker 01:
It's that the court's order does not reflect the analysis that's required to issue an order restricting communications under Gulf oil.

[00:03:09] Speaker 01:
And like I said, Avery is a perfect example.

[00:03:13] Speaker 01:
In Avery, the court conducted a very careful analysis, as Gulf oil requires, covering four pages that reviewed the agreement to determine whether there were misleading and coercive communications that led to the agreement.

[00:03:27] Speaker 01:
The court found that the agreement was coercive in nature.

[00:03:30] Speaker 01:
that the employees were deemed to agree to it if they did not quit their jobs.

[00:03:35] Speaker 01:
The court found that the defendant's communications in that case disparaged class actions.

[00:03:41] Speaker 01:
And the court found that the defendant's communications were internally inconsistent, presumably designed to prevent class members from opting out of arbitration and into the class action.

[00:03:54] Speaker 01:
The court in Avery went to great lengths

[00:03:57] Speaker 01:
to discuss the need for the limitation, comparing it to a laundry list of similar cases with justifying circumstances.

[00:04:05] Speaker 01:
In those cases, each one of those cases involves coercive and misleading behavior on the part of the defendant.

[00:04:14] Speaker 04:
I think there's a little bit of an ambiguity in the district court's order.

[00:04:21] Speaker 04:
In one respect, it says that she didn't have the proper notice of the effect of the arbitration agreement, but it also said that she didn't have notice of the arbitration agreement at all.

[00:04:33] Speaker 04:
How do you read the district court's order?

[00:04:35] Speaker 01:
Yes, Your Honor.

[00:04:36] Speaker 01:
So to step back, before we dealt with Mrs. Simmons, we dealt with eight other named plaintiffs.

[00:04:47] Speaker 01:
In that case, the court ordered three named plaintiffs to be compelled to arbitration because they were on notice of the arbitration provision.

[00:04:57] Speaker 01:
On the other, the other five, the court determined that a need for many trials was required to determine whether they actually consented to the arbitration agreement and knew the arbitration agreement was there.

[00:05:08] Speaker 01:
Right.

[00:05:09] Speaker 01:
So those, we need to go to a mini trial to see whether Paula's Choices purchase flow was sufficient to bind them to that agreement.

[00:05:17] Speaker 01:
With Ms.

[00:05:18] Speaker 01:
Simmons, the court took a step further and basically said that, you know, it doesn't matter whether she agreed to it because I'm going to refuse to enforce this on a more general principle that it's never appropriate to enforce an arbitration agreement against a class member or a putative class member or named plaintiff that was entered into after the case was filed.

[00:05:44] Speaker 01:
unless the arbitration agreement specifically advises of the particular class action.

[00:05:53] Speaker 04:
Essentially in the district court order they assumed she had knowledge and just said the notice wasn't enough because of the effect on the class action.

[00:05:59] Speaker 01:
Exactly, or the opposite.

[00:06:01] Speaker 01:
They determined it on this grounds instead of

[00:06:05] Speaker 01:
going back to the court for another mini trial.

[00:06:08] Speaker 04:
The district court could find that she did not have notice, right?

[00:06:12] Speaker 01:
Our position would be that she did have notice because she made the purchase after we had already filed a motion to compel in a case that she's the main plaintiff, but... She wasn't named in the... They make a big deal that she wasn't named in the original motion.

[00:06:25] Speaker 03:
You're right, Your Honor.

[00:06:26] Speaker 03:
And you just added her to the reply.

[00:06:30] Speaker 01:
Yeah.

[00:06:30] Speaker 03:
I mean, that's not, you know, copacetic.

[00:06:35] Speaker 01:
Yeah, so she was not named in the original motion because she had not yet made a purchase pursuant to which she agreed to arbitration.

[00:06:44] Speaker 03:
Let me ask you this.

[00:06:45] Speaker 03:
With respect to Simmons, before she made any of her purchases, well, I don't even know how to, maybe my question's not quite accurate, but when did Paula's choice first adopt an arbitration clause?

[00:07:00] Speaker 01:
Paula's Choice first adopted an arbitration clause before this case was filed in March of 2023, I want to say.

[00:07:07] Speaker 01:
And plaintiffs actually allege that they allege the presence of that arbitration agreement and plead their class around that arbitration agreement, including plaintiff's sentence.

[00:07:21] Speaker 03:
Some of these plaintiffs were longtime users of Paula's Choice, correct?

[00:07:26] Speaker 01:
Yes.

[00:07:27] Speaker 03:
And they had their own accounts?

[00:07:29] Speaker 01:
They had their own accounts.

[00:07:30] Speaker 01:
Yes.

[00:07:32] Speaker 03:
So how did the arbitration agreement affect?

[00:07:36] Speaker 03:
How was that all put together?

[00:07:39] Speaker 01:
Yes, Your Honor.

[00:07:40] Speaker 01:
So the issue is some of them are long time, I guess, or purchased something from Paulist Choice a long time ago, I guess I should say.

[00:07:51] Speaker 01:
The issue here is we move to enforce the arbitration agreement against only those plaintiffs who subsequently purchased additional products after the lawsuit was filed, that in doing so, went through the purchase flow, agreed to the terms of use that included the arbitration provision.

[00:08:12] Speaker 03:
So we are not trying... I gather, though, that with respect to some of the plaintiffs, especially the three that were referred to,

[00:08:20] Speaker 03:
the mini trials.

[00:08:22] Speaker 03:
There's some questions about whether or not they even got the notice.

[00:08:25] Speaker 01:
I mean, they were advised of the... Is that what the dispute is about?

[00:08:31] Speaker 01:
That is what the dispute as to the other named plaintiffs is about.

[00:08:34] Speaker 01:
That's what the mini trial is about, is whether going through the purchase flow, the terms of use were conspicuous enough, and the statement that says by clicking the purchase button, I agree to the terms of use.

[00:08:48] Speaker 01:
So that is the issue left with respect to the other five plaintiffs.

[00:08:54] Speaker 01:
Did you appeal that issue or could you have appealed that issue?

[00:08:56] Speaker 01:
It was not a denial of a motion to compel arbitration yet, because we have a mini trial.

[00:09:01] Speaker 01:
So we have not appealed that.

[00:09:02] Speaker 04:
I have two questions.

[00:09:05] Speaker 04:
For our purposes, you're saying we don't have to reach whether or not Simmons had notice of the arbitration agreements, all the other stuff?

[00:09:12] Speaker 01:
Exactly, yes.

[00:09:14] Speaker 01:
It's whether or not the district court can create under a Gulf oil analysis without coercion, without misleading communications, whether the court can just create a bright line rule that it's never okay to enforce an arbitration agreement,

[00:09:29] Speaker 01:
against a named plaintiff unless it specifically advises of every class action that might be filed at any point in time.

[00:09:37] Speaker 01:
So the court's order essentially would require any time any class action gets filed in federal court, whether it has merit or at all, we would have to adjust our terms of use or the arbitration agreement that was otherwise enforceable would cease to be enforceable.

[00:09:54] Speaker 04:
My other second question, under Rule 23D, under what provision is the district court's authority under in this case?

[00:10:02] Speaker 04:
Because it seems like this doesn't fit any of those fact patterns that Simmons voluntarily purchased something on her own and then clicked on an arbitration agreement.

[00:10:12] Speaker 04:
So I'm not exactly sure which provision under 23D this would fit into.

[00:10:17] Speaker 01:
I agree with you, Your Honor.

[00:10:19] Speaker 01:
It's a transaction that's completely different than us imposing an arbitration agreement on someone and saying you have to sign it and us telling them that you need to sign it because class actions are unfair.

[00:10:34] Speaker 01:
I was just going to say it is a voluntary transaction where in the ordinary course the plaintiff came to us

[00:10:42] Speaker 01:
Purchase additional products that she said she wasn't ever going to purchase in the first place again in her complaint and then agreed to the arbitration What do we know which sub provision the district court purported to act under 23d?

[00:10:55] Speaker 01:
It's not entirely clear exactly which provision I think it is the provision that allows you to limit the communications of the parties or conduct other procedural matters Would you enlighten us as to what you think are the limits then

[00:11:12] Speaker 00:
of Rule 23D in terms of the court's ability to kind of stop mid-arbitration and class, et cetera?

[00:11:22] Speaker 00:
Yes, Your Honor.

[00:11:23] Speaker 00:
Because before you said, you know, this can't be a right-line rule which you impute to the district court.

[00:11:28] Speaker 00:
So what are the limits then of 23D?

[00:11:32] Speaker 01:
I think the limits of 23D are described in Gulf oil.

[00:11:36] Speaker 01:
That's where you have to conduct this analysis, and I think Avery did a very good job of doing this, looking at the defendant's behavior and determining whether the defendant's behavior, including coercive or misleading communications, warrants a limitation to protect the fairness of the class action.

[00:11:56] Speaker 01:
not a situation where there is an ordinary course agreement that a plaintiff enters into afterwards.

[00:12:02] Speaker 01:
So I think Avery did a very good job of showing that you have to look to see if there's something that the defendants or others are doing that requires the limitation.

[00:12:17] Speaker 01:
And then you have to balance that limitation, whatever it may be, to the

[00:12:24] Speaker 01:
against the right of the party to enforce the arbitration agreement, and then you have to decide what the most appropriate remedy, if there is a need at all.

[00:12:33] Speaker 03:
I was just going to ask, suppose Ms.

[00:12:36] Speaker 03:
Simmons were just a class member.

[00:12:38] Speaker 03:
Same argument?

[00:12:39] Speaker 01:
Yes, your honor.

[00:12:40] Speaker 01:
Yes, your honor.

[00:12:41] Speaker 01:
In my argument, there would be a class member before the, or a putative class member before the class action is filed would go to our website, would agree to be bound by arbitration, would be out of the class.

[00:12:54] Speaker 01:
There shouldn't be a distinction between that person and a person that comes to our website, agrees to the terms after every time a class action.

[00:13:05] Speaker 03:
Doesn't that somewhat interfere with the whole idea of a class action, which is it's an opt out?

[00:13:10] Speaker 01:
And not in this situation, because they are opting into our arbitration agreement by making the purchase.

[00:13:16] Speaker 01:
They are taking an affirmative step.

[00:13:19] Speaker 01:
It's distinguished against Avery where it was imposed upon them, and then they had to opt out of the arbitration agreement, opt out of the agreement, into the class action.

[00:13:28] Speaker 01:
That's not the case here, because she came to us, and she signed the agreement.

[00:13:33] Speaker 01:
And by doing so, she took herself out of the class action.

[00:13:36] Speaker 01:
Do you want to reserve the rest of your time?

[00:13:37] Speaker 01:
Thank you.

[00:13:38] Speaker 01:
Yes, Your Honor.

[00:13:45] Speaker 02:
Morning may it please the court.

[00:13:47] Speaker 02:
Kevin Green for Apley's.

[00:13:50] Speaker 02:
And that's actually a good place to begin because there's only one plaintiff of interest here and that's Samantha Simmons.

[00:13:55] Speaker 02:
There are 106 other plaintiffs in the district court awaiting the conclusion of this proceeding.

[00:14:02] Speaker 02:
So I want to talk about, start with the proposed disposition and look at this case through the lens of that and the Gulf oil analysis in particular.

[00:14:11] Speaker 02:
We've argued that that's waived because there was no request for findings.

[00:14:15] Speaker 02:
I know that's a tough argument.

[00:14:16] Speaker 02:
Waiver is a tough argument, but I want to explain why it's so important.

[00:14:20] Speaker 02:
First of all, in this case, there was an opportunity to make the request.

[00:14:24] Speaker 02:
I understand the district court said, okay, well, here's where I'm going.

[00:14:27] Speaker 02:
There was no indication of that even from the opposing parties.

[00:14:30] Speaker 02:
But at SCR 13, in our opposition to the motion to clarify, we cited

[00:14:37] Speaker 02:
a number of Rule 23D cases, and then Paula's choice had a reply at SCR 6, where those simply aren't addressed.

[00:14:45] Speaker 02:
I don't see how you can take a US Supreme Court decision and then appeal and say, well, look what we found.

[00:14:51] Speaker 02:
I mean, a Gulf oil, which is really synonymous with the whole analysis in this area, and it's never cited below.

[00:14:56] Speaker 02:
There was a chance to cite it, to give the district court a chance to address this.

[00:14:59] Speaker 04:
Well, if Gulf lawyers requires those findings to rule under Rule 23D, isn't it the district court's responsibility to know the law and follow the law?

[00:15:08] Speaker 02:
Well, I think party present, yes, in short, yes.

[00:15:10] Speaker 02:
But party presentation also plays a role in it.

[00:15:13] Speaker 02:
I mean, judges are reacting to the arguments made to them.

[00:15:16] Speaker 02:
So doesn't a party have an obligation to say, especially not just, oh, well, there are findings generally required, but there's this US Supreme Court case that you're not citing.

[00:15:26] Speaker 02:
And I want to explain why.

[00:15:27] Speaker 00:
But even isn't, though,

[00:15:28] Speaker 00:
going back to Judge Bumate's question, whether the party missed it or not, doesn't Gulf oil basically say that is the responsibility of the district court?

[00:15:40] Speaker 00:
So how do we, you want us to basically ignore the requirements of Gulf oil?

[00:15:47] Speaker 02:
No, not at all, your honor.

[00:15:49] Speaker 02:
I think the requirements of Gulf oil actually were met.

[00:15:51] Speaker 02:
If you look at the cases cited in the briefs,

[00:15:55] Speaker 02:
And by that I mean that the findings do not have to be perfect or extremely meticulous.

[00:16:00] Speaker 02:
There are plenty of orders where that simply wasn't the case.

[00:16:03] Speaker 02:
Take the Logitech writ proceeding, okay, unpublished, but that shed some light on the quality of findings that are necessary.

[00:16:12] Speaker 02:
And there weren't specific findings in that case, and it certainly wasn't enough for clear error.

[00:16:18] Speaker 00:
Now there's another piece of- Can you point to where the weighing took place, even if somewhat

[00:16:24] Speaker 00:
elliptical in this case?

[00:16:27] Speaker 02:
Your Honor, I don't have the order in front of me, but I think the district court considered that the impact on a class action of this sort of gambit, frankly, of there's a pending case and the defendant understandably wants to get rid of a plaintiff or try to resolve with the plaintiff or not have them argue in court.

[00:16:47] Speaker 02:
And so, I mean, the findings aren't perfect, but here's the problem I have with that.

[00:16:52] Speaker 02:
Now, if the case goes back for findings, on the face of it, that's a procedural reversal that looks fairly innocent, because the court isn't saying, well, one side needs to arbitrate or not.

[00:17:06] Speaker 02:
But what does that lead to?

[00:17:08] Speaker 02:
That leads to potentially a second appeal, because the district court makes findings.

[00:17:13] Speaker 02:
Adding a little bit to what is already done, probably comes out the same way.

[00:17:16] Speaker 02:
There wouldn't be any guidance that would change that.

[00:17:19] Speaker 02:
And then we're back here a year or two later.

[00:17:22] Speaker 02:
with over 100 plaintiffs that aren't affected and in a full stay of proceedings under the Supreme Court's Coinbase decision.

[00:17:30] Speaker 02:
So I'm just asking the court to keep that context in mind.

[00:17:33] Speaker 02:
That's why we argued waiver and that's the practical effect.

[00:17:36] Speaker 02:
And so to cut to how this could turn out in the disposition.

[00:17:39] Speaker 02:
I think the strongest that could occur would not be that arbitration has to be compelled, but that plaintiff Simmons is similarly positioned as the five other plaintiffs, where it's a genuine fact dispute.

[00:17:54] Speaker 02:
And the order pointed out that, well, the standard under Wilson v. Hughes, Ninth Circuit decision, is what did the plaintiffs know?

[00:18:03] Speaker 02:
Did they have reasonable notice?

[00:18:05] Speaker 02:
And the court went through very, very carefully and meticulously

[00:18:08] Speaker 02:
all the evidence on the motion to compel arbitration and concluded that I can't tell.

[00:18:14] Speaker 02:
I need the full run of purchases.

[00:18:16] Speaker 02:
And I think that was a measured decision.

[00:18:18] Speaker 02:
So I think the worst that could happen here from our perspective is that it goes back with directions that the district court follow the same disposition, meaning hold in abeyance.

[00:18:30] Speaker 02:
And that's at ER 37, 38.

[00:18:31] Speaker 02:
So what's the harm here then?

[00:18:33] Speaker 04:
I don't understand that.

[00:18:34] Speaker 04:
Then it would just go back to what's happening already.

[00:18:38] Speaker 02:
It would go back to what's occurred with the five other places.

[00:18:41] Speaker 04:
You're saying that Ms.

[00:18:42] Speaker 04:
Simmons would be part of the class of the five that are having the mini trial?

[00:18:46] Speaker 02:
Yes, and I want to be very clear that I think that's the strongest thing the court could do and might do here.

[00:18:51] Speaker 04:
Well, we wouldn't have to do that because the district court never made any findings on Ms.

[00:18:55] Speaker 04:
Simmons's notice, right?

[00:18:57] Speaker 02:
Well, yes, and the order is a little bit fuzzy on that, and understood.

[00:19:03] Speaker 02:
And I think the court essentially assumed that she had some kind of knowledge of it.

[00:19:09] Speaker 03:
But I want to get to... So I thought you did that because of the counsel, because...

[00:19:13] Speaker 03:
You know, it's a notice of motion, and she's a plaintiff, not just a class member, a putative class member.

[00:19:18] Speaker 02:
Right.

[00:19:19] Speaker 02:
Right.

[00:19:19] Speaker 02:
She's a class representative.

[00:19:21] Speaker 02:
But on the notice from the motion to compel, I think that's a really important point, because the defendant has emphasized that quite a bit.

[00:19:31] Speaker 02:
And I think the problem with that is Paula's choice moves to compel as to eight plaintiffs of 107.

[00:19:43] Speaker 02:
And now it's saying later and saying here that Samantha Simmons should have known.

[00:19:50] Speaker 02:
Well, what does it tell you if they move as to only 8 out of 106 and they don't move as to her?

[00:19:56] Speaker 02:
Doesn't that send the opposite signal?

[00:19:58] Speaker 02:
That we're not moving to Capella as to you.

[00:20:00] Speaker 02:
And that's exactly the kind of confusion and uncertainty that Rule 23 is designed to get at.

[00:20:05] Speaker 02:
that kind of thing shouldn't go on.

[00:20:06] Speaker 02:
The defendant has to be more consistent about that.

[00:20:10] Speaker 02:
And the motion wasn't directed to her, and I think there was an opposite inference.

[00:20:14] Speaker 02:
Well, it doesn't concern me, much less that, well, I'm supposed to connect the dots, this motion doesn't apply to me, and somehow I'm in the same position as the other people, even though that hasn't even been litigated.

[00:20:26] Speaker 02:
So I don't think that's the notice that really would satisfy that she had reasonable notice.

[00:20:31] Speaker 04:
What about the pleadings?

[00:20:32] Speaker 04:
I mean, it was in the pleadings and she's, what was the name, plaintiff?

[00:20:36] Speaker 02:
Correct.

[00:20:37] Speaker 02:
She's the name plaintiff.

[00:20:38] Speaker 02:
And so that actually heightens her rights, I think.

[00:20:41] Speaker 02:
But doesn't that also prove her notice?

[00:20:43] Speaker 02:
Yes, but notice of what?

[00:20:45] Speaker 02:
Of the arbitration agreement.

[00:20:46] Speaker 02:
Yes.

[00:20:46] Speaker 02:
Well, it's notice that there's an arbitration clause and it's alleged in the original complaint.

[00:20:50] Speaker 02:
and the amended complaint.

[00:20:51] Speaker 02:
There's no dispute about that.

[00:20:53] Speaker 02:
And the class is defined as to people who purchased before the arbitration clause in March of 2023.

[00:20:59] Speaker 02:
So that's no secret.

[00:21:01] Speaker 02:
That's alleged.

[00:21:02] Speaker 02:
But the effect of that on her case is a legal conclusion.

[00:21:07] Speaker 02:
I mean, she's a lay person.

[00:21:08] Speaker 02:
She's supposed to conclude that, well, there's an arbitration clause.

[00:21:11] Speaker 02:
I've alleged it.

[00:21:12] Speaker 04:
She's not charged with knowledge of things in her complaint?

[00:21:17] Speaker 02:
She is charged with knowledge of it, but to go back to... How do you say that she didn't have knowledge of the arbitration agreement if the complaint said it?

[00:21:23] Speaker 02:
No, I'm not saying that, Your Honor.

[00:21:24] Speaker 02:
I'm saying that, of course, she knew about it.

[00:21:26] Speaker 02:
There was an arbitration clause, but the legal effect was a legal determination for the court.

[00:21:32] Speaker 02:
I mean, she's not in a position as a layperson.

[00:21:34] Speaker 04:
That's a Rule 23D question, and you're saying...

[00:21:37] Speaker 02:
Yes, exactly.

[00:21:39] Speaker 02:
What notice should she take from that?

[00:21:41] Speaker 02:
The fact that she knows there is an arbitration clause and she later challenges it.

[00:21:46] Speaker 02:
And the district court finds, in fact, that nobody is bound by this.

[00:21:49] Speaker 04:
How does that then not run into FAA issue then?

[00:21:51] Speaker 04:
If we're saying that notice of an arbitration agreement is not enough,

[00:21:57] Speaker 04:
that you have to, whenever there's a pending class action, there has to be special notice or heightened notice about the effect of it on the class action.

[00:22:04] Speaker 04:
That seems to be targeted directly at arbitration agreements.

[00:22:09] Speaker 02:
I don't think it's heightened notice, and I think Avery really addresses this, and if it doesn't foreclose a lot of where this appeal started, which was Rule 23D doesn't authorize

[00:22:20] Speaker 02:
in validation of an arbitration agreement.

[00:22:22] Speaker 02:
And that's really what was at the core of when we first got up here.

[00:22:26] Speaker 02:
And Avery, I think, settled that recently as a matter of Ninth Circuit law.

[00:22:30] Speaker 02:
And so it holds squarely that Rule 23D authorizes that.

[00:22:35] Speaker 02:
And no conflict with the FAA or the Rules Enabling Act.

[00:22:40] Speaker 03:
The circumstances in Avery are a bit different than here.

[00:22:44] Speaker 02:
Unquestionably, Your Honor.

[00:22:47] Speaker 02:
I'll freely concede that factually it may be a stronger case, but the question is whether it applies to this one.

[00:22:52] Speaker 02:
And reviewing the district court orders, there is a theme really that, and there's more from district courts on this and I understand those are unlikely to be cited and they're less persuasive, but that's just where the issue comes up a lot more, that there's a theme that it's not enough simply to say something like all claims that have arisen.

[00:23:14] Speaker 02:
and assume that someone's going to understand that's going to apply to my pending class action.

[00:23:18] Speaker 02:
And again, getting back to the purposes of Rule 23D.

[00:23:22] Speaker 02:
And I think the cases say, that I wouldn't be very clear about this, that there's not some sort of absolute rule or compelled speech that a defendant has to disclose this or that.

[00:23:32] Speaker 02:
But what it does have to do to comply with the Rule 23D, and I think the cases say this, is do something more.

[00:23:39] Speaker 02:
Something more than saying, well, have a reason.

[00:23:42] Speaker 02:
And I think the court, to get to Judge McEwen's question earlier, doesn't have to decide what are the outer edges of this.

[00:23:48] Speaker 02:
Because I think under any standard, just saying have a reason isn't enough.

[00:23:51] Speaker 02:
And so there are a couple of cases where

[00:23:54] Speaker 02:
Cater versus Churchill Downs is one case that was cited in the district court's order.

[00:23:58] Speaker 02:
That's the Big Fish casino case.

[00:24:00] Speaker 04:
But, you know, Avery says, you know, you could enjoin the arbitration agreement if it was misleading or attempted to disrupt the opt-out process, but here none of that happened, right?

[00:24:10] Speaker 04:
No one's accusing Paula's choice of being misleading or attempting to avert the opt-out process.

[00:24:18] Speaker 02:
Yes, but I'm not sure what opting out, how that would apply to this.

[00:24:23] Speaker 04:
To me, that suggests that this is an arbitration-only rule, like the way the district court ruled, because she didn't make any findings.

[00:24:30] Speaker 04:
The district court did not make any findings that there was anything misleading, that there was an attempt to disrupt the pending class action, and the district court seemed to say, because this is an arbitration agreement with the pending class action, you have to have special notice.

[00:24:45] Speaker 04:
That's how I read it.

[00:24:45] Speaker 02:
I don't think so, Your Honor, respectfully.

[00:24:48] Speaker 02:
I think the district court said, and a finding can carry a lot of weight qualitatively, and said, summed it up, that Paula's Choice didn't let Ms.

[00:24:57] Speaker 02:
Simmons know what she was getting into.

[00:24:58] Speaker 02:
Isn't that really pulling up on Judge Bumate?

[00:25:04] Speaker 00:
Isn't that really kind of a custom notice rule in this arbitration setting, which kind of goes against the FAA?

[00:25:14] Speaker 02:
Well, if that weren't true, I think Avery would have come out differently.

[00:25:17] Speaker 00:
Well, but Avery, as we already talked about, is really quite different circumstances.

[00:25:22] Speaker 00:
So maybe just to turn it around, what would they need to say to meet your criteria?

[00:25:32] Speaker 02:
I expected this question.

[00:25:34] Speaker 02:
Good.

[00:25:37] Speaker 02:
And that's why I say something more is required than

[00:25:40] Speaker 02:
have, you know, claims that have arisen must be arbitrated.

[00:25:43] Speaker 02:
And that's that's all we've got here.

[00:25:45] Speaker 00:
I hear you, but then to answer the more specific question, something more, what would one need to put into the agreement to meet the something more?

[00:25:56] Speaker 02:
One example is to say that this this agreement could affect claims in pending litigation, including the case name of X.

[00:26:06] Speaker 02:
I'm not saying that's sufficient, but I'm saying that that would be one option, one way to approach it that is pretty bare bones.

[00:26:13] Speaker 02:
And again, this is compliance with Rule 23D.

[00:26:16] Speaker 02:
And these are general principles applied to Rule 23D to control the class action process and prevent confusion and disruption, which the court has the authority to do in a pending case.

[00:26:26] Speaker 02:
To go back to the cases that I had in mind on this, Judge McKeown.

[00:26:30] Speaker 03:
I want to clarify one thing.

[00:26:31] Speaker 03:
Before the suit was filed,

[00:26:34] Speaker 03:
That they already adopted their arbitration agreement?

[00:26:37] Speaker 02:
Yes.

[00:26:38] Speaker 03:
OK, thank you.

[00:26:39] Speaker 02:
Yeah, it was adopted about a year before.

[00:26:43] Speaker 02:
And the cases, Judge McKinnon, that I have in mind on this, well, what's the other edge and how far to go, are Cater versus Churchill Downs, where the notifications do at least mention the lawsuits, but fail to meaningfully inform users about their rights.

[00:26:55] Speaker 02:
That's one example.

[00:26:57] Speaker 02:
There is the Monroe case.

[00:26:58] Speaker 02:
I think it's Eastern District of Virginia.

[00:27:02] Speaker 02:
as illustrations of that, but I think whatever the edge is, the court doesn't need to get to it here, because have arisen, and that's just not enough.

[00:27:12] Speaker 02:
I want to talk just briefly about... Counsel, do you mind answering my question?

[00:27:17] Speaker 04:
Do you have a view under which sub-provision or Rule 23D the District Court purported to rule under?

[00:27:25] Speaker 02:
I think it's encompassed by the extremely broad other procedural matters.

[00:27:30] Speaker 02:
Other procedural and rule 23 similar procedural similar procedural matters in rule 23 when that's discussed in Avery, which says gives very broad power, which is all consistent with what's going on.

[00:27:42] Speaker 02:
Okay.

[00:27:43] Speaker 02:
Thanks.

[00:27:46] Speaker 02:
Now on the disposition again, I just want to be very clear because I don't want to concede something that is misunderstood.

[00:27:51] Speaker 02:
And that is that I think the furthest the court could go here if it doesn't affirm is for Ms.

[00:27:57] Speaker 02:
Simmons to be in the same position as the other five plaintiffs.

[00:28:02] Speaker 03:
I'd like to ask you the last... Does it make a difference here, substantively, that she is a named plaintiff?

[00:28:11] Speaker 02:
I think it does, Your Honor.

[00:28:12] Speaker 03:
It's not just a putative class member that they've decided they're going to go after.

[00:28:15] Speaker 02:
Right.

[00:28:16] Speaker 02:
I think it does.

[00:28:17] Speaker 02:
And the case name is sort of slipping from me, but I think it's Dominguez, or at least it's cited in our brief that, yeah, a named plaintiff makes a difference.

[00:28:23] Speaker 03:
How so, from your perspective?

[00:28:25] Speaker 02:
Well, because she's a champion for the class under the body of law under Rule 23.

[00:28:29] Speaker 02:
I mean, fiduciary responsibilities to the class.

[00:28:33] Speaker 02:
And this isn't really going to come up much, pre-certification with absent class members.

[00:28:38] Speaker 02:
I mean, they're not going to be in this position.

[00:28:40] Speaker 02:
But again, there's a case that we've cited.

[00:28:42] Speaker 02:
I think it's Dominguez in our brief.

[00:28:43] Speaker 02:
OK.

[00:28:44] Speaker 04:
Why would we have to decide whether or not Ms.

[00:28:47] Speaker 04:
Simmons is part of that class of five if we were to reverse this, you know, this 23-D ruling, the district court can then decide that, right?

[00:28:57] Speaker 02:
Yes, it could decide that, but I'm wary of any resolution that creates a second appeal here that isn't necessary.

[00:29:05] Speaker 02:
And I just respectfully ask the court to keep that in mind.

[00:29:08] Speaker 04:
Thank you, counsel.

[00:29:09] Speaker 02:
Thank you.

[00:29:21] Speaker 01:
May I please the court?

[00:29:23] Speaker 01:
I'll start by addressing the last thing that counsel addressed.

[00:29:29] Speaker 01:
I don't think that this needs to be remanded back to the district court to determine whether plaintiff Simmons actually consented to this agreement because plaintiff Simmons is more situated to the three plaintiffs that have already been compelled to arbitration than she is to the other three.

[00:29:47] Speaker 04:
Well, not based on the district court's ruling.

[00:29:49] Speaker 04:
The district court ruled because they were named in the motion to compel.

[00:29:54] Speaker 01:
You're right.

[00:29:55] Speaker 01:
And I disagree with the district court's ruling on that point.

[00:29:58] Speaker 01:
I think because she's a named plaintiff, because she's charged with knowledge of her pleadings, and because she's charged with knowledge of the class, she's a named plaintiff that has to know what's going on in this case.

[00:30:11] Speaker 01:
She's representing a class.

[00:30:13] Speaker 01:
For her to claim that she didn't know that a motion to compel was filed,

[00:30:16] Speaker 01:
or that she wasn't agreeing to arbitrate her claims, I think is incredible.

[00:30:23] Speaker 01:
So I would say that she was on notice of all of this, and you don't need to take it a step further.

[00:30:28] Speaker 01:
As to the council's waiver argument, I agree with your honors that this is not a situation, this is a rule 23D order requires the Gulf oil analysis.

[00:30:41] Speaker 01:
And frankly, it requires the proponent of that to establish that the specific record that justifies that.

[00:30:49] Speaker 01:
You can't waive that when it's their burden to do that.

[00:30:53] Speaker 01:
And then finally, I'll just say I wholeheartedly agree that this court's order, this enunciation of a principle is specific to arbitration agreements and treats it differently than anything else under the rule.

[00:31:06] Speaker 01:
It is not what Avery said was permissible, which is a Gulf oil analysis to determine whether misleading and coercive communications necessitate the invalidation of an arbitration agreement.

[00:31:17] Speaker 04:
Thank you, counsel.

[00:31:18] Speaker 04:
This case will be submitted.