[00:00:00] Speaker 04: Our next case is Rome Semiconductor versus Max Power Semiconductor, 2021 1709. [00:00:34] Speaker 04: We're ready when you are, Mr. Frankel. [00:00:42] Speaker 00: Thank you, Your Honors. [00:00:43] Speaker 00: Good morning. [00:00:44] Speaker 00: May it please the court? [00:00:47] Speaker 00: The decision below should be vacated because incorporation of the California Code of Civil Procedure cannot be clear and unmistakable delegation of arbitrability disputes. [00:01:01] Speaker 03: Before you get to that point, can I ask for a little bit of background? [00:01:05] Speaker 03: It doesn't look like you ever moved to stay arbitration pending this appeal, did you? [00:01:10] Speaker 00: We did not, and arbitration has commenced. [00:01:12] Speaker 03: It has commenced, and so the arbitrator's been appointed? [00:01:14] Speaker 03: You've already started? [00:01:15] Speaker 00: An arbitrator has been appointed. [00:01:17] Speaker 02: OK. [00:01:18] Speaker 02: Has the arbitrator reached the threshold question of arbitrability? [00:01:22] Speaker 00: The arbitrator has not. [00:01:24] Speaker ?: OK. [00:01:26] Speaker 00: There are multiple disputes between the parties. [00:01:29] Speaker 00: This case, the case that's on appeal, was a request by Rome Semiconductor USA for a declaration of non-infringement. [00:01:38] Speaker 00: There are also breach of contract disputes between the parties. [00:01:42] Speaker 00: It's not disputed that the breach of contract dispute is subject to arbitration. [00:01:46] Speaker 00: And for that reason, the arbitration is proceeding at least on the breach of contract. [00:01:53] Speaker 00: But the order of the district court to dismiss the case for declaratory judgment should be vacated because there was no delegation of the arbitrability dispute merely by incorporation of the California Code of Civil Procedure. [00:02:11] Speaker 03: You cite in your gray brief. [00:02:13] Speaker 03: cases that you never cited below or never cited to us in your opening brief with respect to AAA arbitration, but we're bound by what the Ninth Circuit has said with respect to these particular provisions, are we not? [00:02:27] Speaker 00: Well, of course, it's the Supreme Court's first options case that ultimately controls. [00:02:33] Speaker 00: This is a Ninth Circuit case, so Ninth Circuit law does apply. [00:02:38] Speaker 03: But the Ninth Circuit interpreted first options and said that, in fact, this is consistent with first options. [00:02:44] Speaker 00: Well, if your honor is referring to the Oracle case, it is distinguishable on a critical basis. [00:02:51] Speaker 00: So the cases that Max Powell relies on [00:02:56] Speaker 00: involved incorporation of a single set of rules that provided that the arbitrator could decide arbitrability and did not also provide that courts could decide arbitrability. [00:03:09] Speaker 00: The California Code of Civil Procedure, as this court found in the Qualcomm decision, specifically permits courts to decide arbitrability disputes. [00:03:20] Speaker 00: And I would refer the court. [00:03:22] Speaker 03: But the problem is you're looking [00:03:26] Speaker 03: provisions that don't relate to international disputes, right? [00:03:31] Speaker 00: There are at least 16 different sections within the California Code of Civil Procedure that relate to arbitration issues. [00:03:41] Speaker 00: And the parties did not specify in the agreement the Title IX.3 controls. [00:03:47] Speaker 03: But they don't have to, because it is, by definition, an international dispute, is it not? [00:03:53] Speaker 00: Well, the declaratory judgment is a dispute between two domestic parties applying California law about US patents. [00:04:03] Speaker 00: That's plainly a domestic dispute. [00:04:06] Speaker 02: Now, the question is- It was party Japan that was a party to this agreement. [00:04:12] Speaker 02: Isn't that right? [00:04:13] Speaker 00: Rome Japan is a party to- To the agreement. [00:04:19] Speaker 00: Well, Max Power has taken the position that it was all of the Rome companies, including Rome USA. [00:04:25] Speaker 03: But there is a provision in the agreement that talks about all affiliates, right? [00:04:29] Speaker 00: Correct. [00:04:31] Speaker 03: I think trying to say that this is just a purely domestic dispute when the arbitration agreement actually encompasses all affiliates, I think that's the weakest point of your argument. [00:04:44] Speaker 00: Well, the point is this. [00:04:47] Speaker 00: It's that it's not clear that it was intended to have the delegation. [00:04:54] Speaker 00: Title 9.3, which is the portion of the California code that covers international arbitration, merely says that an arbitrator can decide arbitrability. [00:05:05] Speaker 00: The parties very easily, in their contract, could have said that they would arbitrate under Title 9.3. [00:05:12] Speaker 00: They actually could have said, even though this is an international agreement, we're going to arbitrate under the general provisions of California law. [00:05:20] Speaker 03: Well, but they didn't say that. [00:05:21] Speaker 00: That would be the exceptional action. [00:05:24] Speaker 00: Well, the point is that they didn't say anything. [00:05:26] Speaker 00: Now, there are others. [00:05:27] Speaker 03: Well, they said we're incorporating these rules. [00:05:29] Speaker 03: And once you get to the international rules, you have a different provision. [00:05:33] Speaker 00: So that's the very kind of daisy chain of inferences that the Supreme Court made clear cannot be clear and unmistakable delegation. [00:05:43] Speaker 00: I mean, what the Supreme Court made clear in the ninth circuit, no one else has ever disagreed with this, there has to be an actual meeting of the minds. [00:05:53] Speaker 00: The parties had to have sat down at the. [00:05:56] Speaker 02: But I thought there's plenty of case law that says once an agreement incorporates a set of arbitration rules, then if those arbitration rules contain a provision that says the arbitrator is going to handle the threshold question of arbitrability, [00:06:11] Speaker 02: then that's enough to say that that's a clear and unmistakable delegation to the arbitrator. [00:06:17] Speaker 02: That's basically Oracle America, right? [00:06:20] Speaker 00: Well, I think Oracle America is wrongly decided. [00:06:25] Speaker 00: But a critical distinction, it's not necessary for your honors to agree with me on that point. [00:06:32] Speaker 00: A critical distinction. [00:06:33] Speaker 03: Well, we pretty much can't because we're bound by it, right? [00:06:38] Speaker 00: The controlling precedent is first options. [00:06:41] Speaker 00: The Ninth Circuit itself, subsequent to Oracle in the SEIU case, has recognized that some of its prior precedent has not given full credit to first options. [00:06:52] Speaker 00: And other circuit courts have criticized the Oracle decision. [00:06:56] Speaker 00: And in particular, in instances where there are multiple rules that could apply, they have said that that's not a clear and unmistakable delegation. [00:07:05] Speaker 03: But in those cases where that [00:07:09] Speaker 03: where there's any criticism, they are not sophisticated international parties, right? [00:07:15] Speaker 00: Well, I don't believe that that was the case in the Third Circuit's Chesapeake Appalachia case. [00:07:22] Speaker 00: 809 f 3rd 746 which talked about the fact that there were a number of different Triple-a rules and you know the logic of that case is you shouldn't have to go through the steps of first Finding which rule applies then looking at what it says about delegation When you've gone that far, that's not clear and unmistakable delegation again here. [00:07:45] Speaker 00: I [00:07:46] Speaker 03: But again, those cases, I mean, putting aside whether you ever cited them in a timely manner, and some of the cases you're citing are non-prec. [00:07:56] Speaker 03: But even putting all that aside, there's a big difference between whether someone would understand all the AAA rules when they're not a very sophisticated international party. [00:08:08] Speaker 03: I mean, there's a reason that there's an exception for international agreements, right? [00:08:13] Speaker 00: But the Chesapeake litigants were corporations, just like the corporations here. [00:08:20] Speaker 00: The fact that the party signed the agreement as a foreign corporation, I don't think would make them, it wouldn't. [00:08:28] Speaker 00: That should, if anything, suggest that they would be less familiar with the nuances here. [00:08:33] Speaker 03: Let me just quote you what the Third Circuit held. [00:08:36] Speaker 03: It said, virtually every circuit to consider the issue has determined the incorporation of the AAA arbitration rules constitutes clear and unmistakable evidence that the parties agreed to arbitrate arbitrability. [00:08:48] Speaker 03: But it then found an exception for certain kinds of class actions. [00:08:54] Speaker 03: So it doesn't really. [00:08:55] Speaker 03: supports you, this isn't a class action. [00:08:59] Speaker 00: Well, it's not the fact it's a class action. [00:09:02] Speaker 00: It's that there has been, to use the Third Circuit's language that is on point here, it requires a daisy chain of inferences. [00:09:10] Speaker 03: Again, to go back to the basic principles of- But its primary holding isn't directly against the point that you're arguing. [00:09:19] Speaker 00: The primary holding is that it shouldn't be inferred for multiple steps. [00:09:25] Speaker 00: that the parties agreed to delegate arbitrability. [00:09:28] Speaker 00: And that's what is required here. [00:09:32] Speaker 00: Again, to say that the district court got it right on the de novo review, your honors would find that the two parties negotiated and decided it was their intention. [00:09:44] Speaker 00: They had a real meeting of the minds, not a constructive meeting of the minds. [00:09:48] Speaker 00: They had, in fact, reached agreement on this issue. [00:09:51] Speaker 00: They decided, we understand that the default is that the court should decide this. [00:09:56] Speaker 00: The courts are the gatekeepers, because if you ask arbitrators, [00:10:00] Speaker 00: If a dispute is subject to arbitration, they're probably going to say yes. [00:10:04] Speaker 00: The presumption is flipped here by the Supreme Court. [00:10:06] Speaker 00: There has to be clear and unmistakable evidence, which I think of as a patent litigator. [00:10:11] Speaker 00: It's like clear and convincing evidence. [00:10:13] Speaker 00: And that can't be the case here. [00:10:15] Speaker 00: If the parties wanted to reach that decision, they would have said that. [00:10:19] Speaker 00: They could have very easily. [00:10:20] Speaker 00: That's what typically a well-drafted arbitration provision would say. [00:10:23] Speaker 03: But again, every circuit to have considered the issue says when you incorporate rules that say that, you have therefore said it. [00:10:30] Speaker 00: The decisions that have come to that point have all been based on selection of a single rule. [00:10:37] Speaker 00: Now, can you move on? [00:10:39] Speaker 02: Let's just assume the court is going to accept that the wealth of case law out there tells us that the incorporation of any arbitration rules constitutes a clear and unmistakable [00:10:52] Speaker 02: delegation to the arbitrator if those rules actually say that the arbitrator decides the threshold question. [00:11:01] Speaker 02: So really, can we go to the next question, which is whether these particular arbitration rules, in fact, do that in the context of an international dispute? [00:11:11] Speaker 02: Let's just go there. [00:11:13] Speaker 00: Right. [00:11:14] Speaker 00: Understood, Ron. [00:11:16] Speaker 00: You know, that is the primary argument that we're making. [00:11:20] Speaker 00: May rule. [00:11:21] Speaker 00: I'm sorry. [00:11:23] Speaker 00: Yes. [00:11:23] Speaker 02: The provision says may rule, and that's not good enough in your view. [00:11:27] Speaker 00: Well, right. [00:11:28] Speaker 00: What I meant by the primary argument that we're making is that the California Code of Civil Procedure has multiple sections. [00:11:35] Speaker 00: And the fact that the international section says that an arbitrator may rule [00:11:41] Speaker 00: does not preclude the courts from also deciding. [00:11:45] Speaker 00: And again, I'll refer, Your Honors, to its own Qualcomm decision, which notes that under California law, the rule, unless the parties specifically agree otherwise, is that the court should decide. [00:11:58] Speaker 00: That decision is dated 2006. [00:12:00] Speaker 00: That's one year before the parties entered into this agreement. [00:12:05] Speaker 00: Oracle came in 2013. [00:12:06] Speaker 00: That's five years after the parties entered into the agreement. [00:12:11] Speaker 00: So if we're going to assume, and I respectfully submit that this is a fiction, it's a legal fiction, to assume that the parties were aware of all these nuances when they entered into the agreement. [00:12:22] Speaker 00: But if they had hired an international arbitration expert who was up on the most current case law, and she said, yeah, the Federal Circuit just issued a decision a couple of months ago and said, if you select California law, you're saying that [00:12:40] Speaker 00: the courts will decide, not an arbitrator. [00:12:42] Speaker 00: That would be the most recent authority available to them. [00:12:45] Speaker 04: Counsel, you wanted to save four minutes for a buttle, which means you're into your rebuttal time. [00:12:52] Speaker 04: We're having trouble with the lights here. [00:12:55] Speaker 04: But you're down about three and a half minutes. [00:12:57] Speaker 04: Do you want to continue or save your time? [00:12:59] Speaker 00: I'll save my time unless there's a question I can answer for any of your honors. [00:13:03] Speaker 00: OK. [00:13:03] Speaker 04: Thank you. [00:13:04] Speaker 04: We will hear from Mr. Cook. [00:13:07] Speaker 04: I see. [00:13:09] Speaker 04: Sorry, I don't have your name. [00:13:11] Speaker 01: Sorry to disappoint you, Your Honor. [00:13:13] Speaker 04: I'm not disappointed. [00:13:14] Speaker 04: I'm happy to have any good argument in the form of your argument. [00:13:21] Speaker 01: Nancy Tompkins for Max Power. [00:13:23] Speaker 01: Good morning. [00:13:27] Speaker 01: I'd first like to say that my friend just said the primary argument they're making [00:13:32] Speaker 01: is that the Code of Civil Procedure has multiple rules. [00:13:37] Speaker 01: And I need to point out to the court that this is an argument that the district court never heard before. [00:13:43] Speaker 01: I heard you make reference, Judge Lurie, to judges are not pigs searching for truffles in Greece. [00:13:53] Speaker 01: And this is an argument that Judge Chabrien could not have even found had he been rooting among the arguments that were offered. [00:14:02] Speaker 01: What Rome argued below was not that oracle was decided in error. [00:14:09] Speaker 01: What Rome argued below was that oracle was inapposite, because the United Nations rule discussed in oracle is unlike the Code of Civil Procedure rule that's incorporated into this contract. [00:14:26] Speaker 01: And Judge Tabria invited counsel at that argument on February 4 [00:14:31] Speaker 01: to explain the difference between those two rules. [00:14:34] Speaker 01: And counsel did not offer any difference. [00:14:37] Speaker 01: The only point I'm making is that Judge Chabria, based on the rule, the Supreme Court said it in a slightly less succinct way, the argument you make about judges not being pigs rooting for truffles. [00:14:51] Speaker 01: In a recent case called United States against Sinek Smith, which is 140 S Court 1575, a 2020 case, [00:14:59] Speaker 01: that judges are just charged with adjudicating the arguments that the parties frame for them. [00:15:07] Speaker 01: And so the arguments that we've just heard were never framed for the district court. [00:15:11] Speaker 01: My point is simply that the district court committed no error in this case based on the arguments presented to him. [00:15:19] Speaker 01: In that case, Rome conceded that the United Nations rule, the Ninth Circuit discussed in Oracle, [00:15:26] Speaker 01: actually delegated arbitrability to the arbitrator, Rome has made that same concession in its opening brief in this case. [00:15:33] Speaker 01: So that's just a primary point I want to make. [00:15:36] Speaker 01: Going on to the question. [00:15:37] Speaker 03: So meaning his contention today that it was wrongly decided. [00:15:43] Speaker 03: It's not supported by anything that was argued before. [00:15:46] Speaker 01: That's correct. [00:15:48] Speaker 01: The other point I would make about that is that [00:15:50] Speaker 01: I think that Rome has consistently misread Judge Chabria's statement that he made at the oral argument on February 4th. [00:15:58] Speaker 01: He said, [00:16:00] Speaker 01: I think one could say that clear and unmistakable is no longer clear and unmistakable after oracle. [00:16:06] Speaker 01: And Rome has consistently repeated that quote, but that's not the full quote. [00:16:13] Speaker 01: Judge De Bria says, I think one could say that clear and unmistakable is no longer clear and unmistakable after oracle and all of the other cases that said that you delegate that to the arbitrator with language like that. [00:16:23] Speaker 01: So it's actually every circuit that has ever looked at this issue has concluded that in the ordinary case that AAA rules constitute a clear and unmistakable delegation. [00:16:35] Speaker 01: This is simply the direction the law has taken. [00:16:37] Speaker 01: And we said the same thing at Qualcomm, right? [00:16:39] Speaker 01: Yes, the Ninth Circuit did. [00:16:41] Speaker 01: And Qualcomm in the Ninth Circuit is the one case, or excuse me, you said the same thing in Qualcomm. [00:16:48] Speaker 01: Thank you, yes. [00:16:50] Speaker 01: The Ninth Circuit in Oracle is the one court, handily, that actually shut the door on this concern about may and shall, this permissive language, because in that court, in Oracle, [00:17:03] Speaker 01: The Ninth Circuit was reversing the District Court on that very ground. [00:17:07] Speaker 01: The District Court in Oracle had said, well, looking at this United Nations rule, the language is permissive. [00:17:14] Speaker 01: It confers authority, but it's a permissive grant. [00:17:18] Speaker 01: It doesn't say shall. [00:17:19] Speaker 01: It says may. [00:17:21] Speaker 01: And the Ninth Circuit [00:17:22] Speaker 01: just close the door on that. [00:17:25] Speaker 02: But the language is different from the relevant 1291 provision here. [00:17:30] Speaker 02: I mean, judges, courts, we're all very disciplined to have a knee-jerk reaction whenever we see the word shall in a statute or a contract or something like that. [00:17:41] Speaker 01: versus when we see the word may and those two words have very different understandings under the but but the the United Nations rule and a rule doesn't say shall it says shall have the power to Which is just a conferral of authority and you can understand why [00:18:05] Speaker 01: Well, the reason why it wouldn't say shall is because, as we argue in our brief, you don't want to open an arbitrator to reversal for simply failing to address his own jurisdiction at the initiation of the case. [00:18:19] Speaker 01: In some cases, the parties don't dispute arbitrability. [00:18:22] Speaker 02: I guess I'm just wondering why isn't the right understanding of shall have the power to, it means transfer of power to a particular authority. [00:18:34] Speaker 02: Whereas, may just simply opens the door to allow someone to decide an issue, but doesn't necessarily assign and transfer the power in the same way as shall have the power to. [00:18:50] Speaker 01: I, like Judge Tabria, I don't, respectfully, I don't see the distinction between you may and you shall have the power to do something. [00:19:02] Speaker 01: I see them both as a [00:19:03] Speaker 01: conferral of authority. [00:19:04] Speaker 01: But if you think of the reason why. [00:19:06] Speaker 02: I don't know how to write that shoulder shrug into an opinion. [00:19:10] Speaker 01: Sorry. [00:19:11] Speaker 01: You may. [00:19:12] Speaker 01: Well, I'll go on to say, if you think about the chaos that can ensue when there is, in fact, concurrent jurisdiction between courts and arbitrators to decide that threshold question of arbitrability, consider two scenarios. [00:19:31] Speaker 01: a scenario where a party goes to each. [00:19:35] Speaker 01: The arbitrator says, well, only the court has jurisdiction over this. [00:19:39] Speaker 01: And the court says, only the arbitrator has jurisdiction over this. [00:19:43] Speaker 01: Where do you take your dispute? [00:19:44] Speaker 01: And then consider another scenario, much like our scenario here, well, much like a scenario where the court says, I have jurisdiction, and the arbitrator says, I have jurisdiction. [00:19:59] Speaker 01: and everybody you take it to says, we have jurisdiction too. [00:20:02] Speaker 01: And that kind of thing defeats, leads to the subversion of every principle that the Federal Arbitration Act and 90 years of case law is trying to advance. [00:20:15] Speaker 01: We have an arbitration clause in this contract. [00:20:18] Speaker 01: And if you look at our statement of related cases, you see that there's a dispute [00:20:25] Speaker 01: There are nine disputes all around the globe. [00:20:27] Speaker 01: Two more have been filed since we wrote that statement of related cases. [00:20:32] Speaker 01: We're in the PTAT. [00:20:32] Speaker 01: We're in the district court. [00:20:33] Speaker 01: We're in the superior court. [00:20:35] Speaker 01: We're in Korea. [00:20:36] Speaker 01: We're in Taiwan. [00:20:37] Speaker 01: And we're in China. [00:20:38] Speaker 01: And we have as broad an arbitration clause as any California case has ever seen. [00:20:43] Speaker 01: So that's the problem. [00:20:47] Speaker 01: If May is interpreted as some permissive thing, [00:20:52] Speaker 02: Is there something we should take away from the fact that 1281, which isn't for international disputes, has a provision that's really devoted to the court handling an issue like this, whereas distinctively 1297 for international disputes is really contemplating [00:21:16] Speaker 02: and calling out the arbitral tribunal itself. [00:21:20] Speaker 02: And so maybe there's some kind of comparison there that we should understand that one is really devoted to one thing and the other is not. [00:21:28] Speaker 01: You're correct about that, Your Honor. [00:21:30] Speaker 01: And it's actually the incorporation of the Code of Civil Procedure into this dispute does not introduce any ambiguity at all. [00:21:39] Speaker 01: It's crystal clear, actually. [00:21:40] Speaker 01: It's a statute. [00:21:41] Speaker 01: It's meant to be very clear. [00:21:43] Speaker 01: I'm sure you've come across the ambiguous statute, but this isn't one of them. [00:21:49] Speaker 01: What you do, and the flavor of your dispute, you don't look to the parties. [00:21:54] Speaker 01: Are they both California cases? [00:21:56] Speaker 01: You look at 1297.13, and it says, if your agreement has any of these many attributes, has any one of them, it is an international agreement, an international commercial agreement, and then you [00:22:10] Speaker 01: follow these rules, and in this case, not only do you follow these rules, but these other rules, including 1281.2, are superseded. [00:22:20] Speaker 01: So there's no, in the Code of Civil Procedure, there's no case in which these two possibilities are operating alongside each other. [00:22:28] Speaker 01: If you have an international dispute, 1281.2 is superseded, and you're going along under 1297. [00:22:35] Speaker 01: And this contract, Rome has never disputed, has not just one but three of the attributes that make this an international commercial contract. [00:22:45] Speaker 01: And so it's crystal clear, it's clear as a bell that we proceed under 1297. [00:22:49] Speaker 01: And incidentally, it's typical in international commercial agreements that the arbitrator, that arbitrability is delegated to the arbitrator because [00:23:05] Speaker 01: Foreign companies don't want to submit to our courts for any reason, no offense, Your Honor. [00:23:10] Speaker 01: They want a neutral party to decide both arbitrability and the underlying merits of the dispute. [00:23:18] Speaker 01: And I've cited a few things in the red brief, extra authorities, a law review article, and a treatise. [00:23:26] Speaker 01: But this competence-competence doctrine is the norm in international commercial arbitration. [00:23:31] Speaker 03: Do you agree with my reading of Chesapeake Appalachia? [00:23:34] Speaker 03: Or do you think that the Third Circuit has really raised severe questions about Oracle? [00:23:43] Speaker 01: I agree with your reading, Your Honor. [00:23:45] Speaker 01: And I will also say that Rome has certainly found [00:23:50] Speaker 01: several Third Circuit cases that have some very unusual facts. [00:23:54] Speaker 01: And those cases have gotten down into the weeds, where you're talking about unconscionability and invalidity, and does the contract exist at all, as in the Field Intelligence case. [00:24:04] Speaker 01: But if you really want to know what the Third Circuit thinks about all this, I commend you to an unpublished case called Richardson v. Coverall, North America, that was decided April 28, 2020. [00:24:19] Speaker 01: That was a case where there was an unsophisticated party who was trying to, he was a franchisee for a janitorial service. [00:24:27] Speaker 01: And the court held in an unpublished decision that it had no trouble concluding that this unsophisticated party was bound to arbitrate arbitrability because of the incorporation of AAA rules. [00:24:42] Speaker 01: And the Third Circuit said in that case, [00:24:45] Speaker 01: We can't imagine a more clear and unmistakable delegation of authority to the arbitrator to decide arbitrability than this incorporation of the AAA rules. [00:24:54] Speaker 01: And the Supreme Court denied cert on that case in March 2021. [00:25:00] Speaker 01: So certainly there are some fringe cases, many of them rising in the Third Circuit. [00:25:07] Speaker 01: where it is much more ambiguous what the parties intended or whether that arbitrability should apply to the particular facts of that case. [00:25:19] Speaker 01: But in the normal case, and I submit this is the normal case, the Third Circuit has sort of accepted this without blinking and without publishing, in fact. [00:25:36] Speaker 04: Anything further? [00:25:38] Speaker 01: Well, let's see. [00:25:40] Speaker 01: Let me see if there's anything else I should say. [00:25:54] Speaker 01: I have nothing further, to be honest. [00:25:56] Speaker 04: Thank you, Ms. [00:25:56] Speaker 04: Tompkins. [00:25:57] Speaker 04: I want to make clear that we judges get a list of attorneys. [00:26:03] Speaker 04: And generally, if it's to be changed, it's changed when attorneys check in at the clerk's office. [00:26:10] Speaker 04: So why you were not listed, I don't know. [00:26:13] Speaker 04: I was only joking, Your Honor. [00:26:15] Speaker 01: Thank you for your argument. [00:26:16] Speaker 01: Thank you very much. [00:26:18] Speaker 04: Mr. Franklin has a little rebuttal time. [00:26:26] Speaker 00: Thank you, Your Honors. [00:26:28] Speaker 00: It's clear here that the parties did not select the California Code of Civil Procedure as a shorthand for agreeing to delegate arbitrability. [00:26:39] Speaker 00: And that's what Your Honors would need to find on de novo review, that they came to a meeting of the mind, they decided they wanted to deviate from the standard rule, and they wanted to give that responsibility to an arbitrator. [00:26:53] Speaker 00: But they were so confident about that, [00:26:55] Speaker 00: that they just said California Code of Civil Procedure. [00:26:58] Speaker 00: They didn't add that extra sentence, which is very common in arbitration provisions. [00:27:03] Speaker 00: And even more so, they were confident that [00:27:05] Speaker 00: Whoever adjudicated this dispute would conclude that only the international rules apply. [00:27:11] Speaker 03: Your friend on the other side argued, and looking at the record below, I think that she is right, that you never argued this wasn't an international dispute or that the international rules didn't control. [00:27:24] Speaker 00: I have to respectfully disagree with my friend. [00:27:26] Speaker 00: I would direct the court to appendix 887. [00:27:29] Speaker 00: where we made the argument to Judge Chabria that a critical distinction between the incorporation of the California rules is that the California rules have multiple sections. [00:27:43] Speaker 00: And the other rules that are typically the case in Oracle and the other cases do not. [00:27:48] Speaker 00: And we absolutely briefed below as well the issue that this was a [00:27:53] Speaker 00: a domestic dispute, and therefore it was not clear which set of rules applied. [00:27:58] Speaker 00: We've talked a lot about the Chesapeake [00:28:02] Speaker 00: case, I would refer the court to page 753 to 754. [00:28:06] Speaker 00: That's where the Third Circuit notes that the burden of overcoming the presumption is onerous, as it requires express contractual language, unambiguously delegating the question of arbitrability to the arbitrator. [00:28:21] Speaker 00: And then it goes on to say, in that case, there [00:28:24] Speaker 00: several different AAA rules that could apply. [00:28:27] Speaker 00: And the fact that it was ambiguous which rule might apply meant that the incorporation of AAA rules generally was not clear and unmistakable delegation. [00:28:40] Speaker 00: Here we have the same situation was argued below that [00:28:44] Speaker 00: The California Code of Civil Procedure has different rules. [00:28:47] Speaker 00: They didn't specify the international rules. [00:28:49] Speaker 00: If that was really a shorthand for their agreement, they could have just said, well, we're going to do this under Title IX.3 instead of other titles. [00:28:59] Speaker 00: Judge Chen, to your point, May is permissive. [00:29:02] Speaker 00: It's not exclusive. [00:29:04] Speaker 00: And under California law, the court has jurisdiction to decide arbitrability disputes. [00:29:12] Speaker 00: The international section does not vest exclusive jurisdiction with an arbitrator. [00:29:17] Speaker 00: And if the parties really decided that they wanted that to be the case, they should have said it in the agreement, and they did not. [00:29:24] Speaker 00: So we would respectfully submit that there is not clear and unmistakable evidence of the parties reaching a meeting of the mind on this issue. [00:29:36] Speaker 00: Council said that this would invite chaos. [00:29:41] Speaker 00: But the way to avoid chaos is if you reach an agreement to delegate arbitrability, to expressly state it in the agreement. [00:29:49] Speaker 00: That's what parties should do, and that's what they typically do when they want a specific set of rules to apply [00:29:54] Speaker 00: and they want a specific person to make that decision. [00:29:58] Speaker 00: Are there any final questions I can address? [00:30:00] Speaker 00: Thank you. [00:30:01] Speaker 00: It's a real pleasure to be back here in person. [00:30:03] Speaker 04: Thank you to both counsels. [00:30:04] Speaker 04: The case is submitted. [00:30:07] Speaker 00: All rise.