WEBVTT

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<v ->SJC-12813 Philip Landry V. Transworld System Inc.</v>

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<v ->Mr. Shartle, good morning.</v>

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<v ->Morning, Your Honor.</v>

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My name is Bryan Shartle, on behalf of the defendant,

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Apalent Transworld Systems Inc.

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The issue before the court is narrow

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and relates to whether the lower court aired in concluding

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that TSI could not enforce

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the relevant arbitration provision.

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The defendant filed a motion to compel arbitration,

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which the court denied. Concluding that the arbitration

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provision only applied to claims

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between the plaintive renter and Enterprise rental car.

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The court concluded that there was no clear

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and unmistakable evidence that

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the plaintive agreed to arbitrate claims against

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an entity such as TSI.

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We ask that the court reverse

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and order the parties to compel arbitration.

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It's clear, Your Honor, when you look at the arbitration

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prevision that the agreement includes claims

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against agents or representatives of Enterprise

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to accept the lower courts ruling

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and agree with the plaintive here would require

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that the court read out that part

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of the arbitration prevision.

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<v ->Now the reason for the arbitration</v>

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is that there's been a claim made against the debt collector

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for having violated 93A, right?

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<v Shartle>Yes, Your Honor.</v>

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<v ->It has nothing to do with the contract between the--</v>

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<v ->Well, Your Honor, I would disagree because the arbitra--</v>

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<v ->The techniques that we're used</v>

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by the debt collector are the problem here.

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Not the--

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<v ->Correct, correct, but TSI was retained</v>

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to collect what was owed to Enterprise.

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<v Justice Lenk>In a lawful way, presumably.</v>

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<v Shartle>I'm sorry.</v>

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<v ->I presume it was retained to do it in a lawful way.</v>

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<v ->Absolutely, Your Honor, but the arbitration</v>

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prevision includes any claim arising out of

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or relating to that agreement.

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Under which we were trying to collect.

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And so, to accept the argument that it doesn't include

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a claim that relates to the collection of the indebtedness

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would mean that in fact,

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if Enterprise were the defendant here,

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and that they were trying to collect

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what was owed to them under the agreement.

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<v ->Only if they were considered to be subject</v>

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to 93A in the same way, right?

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<v ->Well, Your Honor, actually, and that's an interesting part</v>

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of the case, really not before the court,

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but the statute, the regulation,

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that they're alleging was violated

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here does apply to creditors.

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There's a limitation under the Massachusets AG

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regulation that creditors

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such as Enterprise cannot contact a consumer more than twice

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in a seven day period.

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So if Enterprise were the defendant here,

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under this exact statute,

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which they could be sued under, then it would I suppose

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be plaintive position that because Enterprise

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was collecting what was owed to them that it didn't fall

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within the arbitration prevision.

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<v ->How come you argue agency</v>

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and then you're an independent contractor

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until you don't want to be an independent contractor?

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<v ->Well, Your Honor, the lower court pointed that out.</v>

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That the how can you play this game that the contract

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says one thing but now your taking the position

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that you know you could ignore the contract.

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The case laws clear on that point, though.

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You've got to look behind the curtain and how the parties

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identify themselves is not the end of the game.

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You have to look at the amount of control that the principal

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actually has over the--

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<v ->Does Enterprise tell you how to collect the debt?</v>

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<v ->They do have certain requirements</v>

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relating to how often we have to communicate,

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how often we have to collect, where the moneys got to be

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remitted, and so we lay all that out.

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<v ->How often they communicate to you?</v>

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They don't tell you how to collect the debt.

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<v ->No, No, they do have certain restrictions</v>

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relating to how often we have to attempt to reach out

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and communicate with the consumer.

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<v ->Do they keep those requirements</v>

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consistent with Massachusets law?

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<v ->Yes, I would certainly not argue that they require</v>

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that we violate the law to the contrary.

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I mean, those requirements

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require that we comply with the law.

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But my point is that those factors weigh in

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to the amount of control that they exercise over us.

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Such that we can be deemed an agent.

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But there's another part of the--

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<v Justice Gants>Then why are you</v>

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an independent contractor?

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That's puzzling.

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<v ->Well, that's how our positions were not,</v>

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that's how we're categorized under the contract.

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But again you have to look behind the curtain.

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You can't just simply say because they put

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that label on us that we, in fact, are--

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<v Justice Gants>The label you put on yourself.</v>

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<v ->Well, its true that there's an agreement</v>

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between Enterprise and TSI.

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Which labels us an independent contractor

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but setting aside that issue, which I recognize that--

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<v Justice Gants>It's a big set aside.</v>

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<v ->Well, but again, plenty of cases</v>

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that talk about how you have to look behind the curtain

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and the simple label

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that's placed on you in an agreement is not controlling.

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You have to look at the facts and how much control

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the principal actually exercises

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over the company to determine

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whether they're an independent contractor.

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But setting that issue aside, what really has been ignored

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is that there's another part of this arbitration prevision,

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which includes representatives.

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And that does not have the same issue with respect

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to how we're labeled into the agreement.

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We clearly are acting as a representative for Enterprise

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when we're engaged in collection of this account.

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And again, what the lower courts decision does is

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it reads out completely that term of art in the agreement.

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Reads out the fact that the agreement says that claims

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against Enterprise's representatives

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shall be subject to arbitration.

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And so it's our position

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that by accepting the plaintive

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argument here that you've made that part of the arbitration

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prevision completely allusive.

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<v Justice Budd>I'm really having some</v>

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trouble understanding.

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<v ->Lets look to the agreement.</v>

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Fortunately my eyes are good so I can tell you put

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some part in bold.

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But the rest is small.

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This is a classic adhesion contract, correct?

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You've got to sign this, otherwise you don't rent the car.

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<v ->Sure, if you wanna rent with Enterprise</v>

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this is terms of the agreement.

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<v ->Why have the option of crossing off</v>

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the mandatory arbitration agreement

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when I sign on to Enterprise?

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<v ->I don't think that that would be accepted by Enterprise</v>

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if they were aware of it.

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<v ->So, I am a renter and I look to,</v>

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I've got a claim here

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and I look to the procedure section.

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And the procedure section must send a notice

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of dispute to the owner,

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the owner being Enterprise, correct?

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<v Shartle>Correct.</v>

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<v ->So I've got a claim, now I've got to send a notice</v>

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to the owner and then

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I can't file the claim unless

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I attempt to resolve a dispute with,

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not with Transworld,

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but with the owner.

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<v Shartle>Sure, there are certain previsions--</v>

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<v ->So how am I to resolve, if I'm looking at this,</v>

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why would I think that this effects anything

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other than the owner or persons who have responded

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to that superior relationship

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to the owner if I have to resolve it with the owner?

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With Enterprise?

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<v ->There are certainly previsions in here which relate</v>

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to claims that are being brought against Enterprise.

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The gap filler here would be the AAA rules.

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And in the fact that it doesn't specify exactly

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the procedures when you're dealing

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with a claim against a representative.

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Doesn't mean that those gaps

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can't be filled with the AAA rule.

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<v ->Okay, so I've got,</v>

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so I wanna sue Transworld.

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Actually I want to respect the arbitration agreement

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so I'm supposed to recognize

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that Transworld is a representative.

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I'm supposed to then give notice

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to Enterprise and then I have to negotiate with Enterprise?

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According what this--
<v ->No.</v>

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<v ->That's what the agreement says.</v>

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<v Shartle>Well, again I think--</v>

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<v ->It's saying I should look to below and it say's that</v>

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it should be done according

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to the AAA commercial arbitration rules

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and I should understand from that

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that although it says owner meaning Enterprise

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that it doesn't mean that,

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it means that I should be negotiating with someone else.

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<v ->Again, Your Honor, I understand the point,</v>

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but the answer is that

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you don't have to spell out every single

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step along this process.

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And that the fill gap here would br the AAA rules.

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So to answer your question, yes, you would look

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to the AAA rules with respect to how the arbitration

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process is going to work.

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<v ->Isn't the legal standard that language that the chief</v>

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just read to you has to manifest clear and unmistakable

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intent to benefit a third party, non-secondtory?

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<v ->Well, here it does, Your Honor, because--</v>

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<v ->How is it when he just read through the cosensitize</v>

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where you have to fill in gaps and then you have to know

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as a consumer, the AAA rules?

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<v ->You're focused on just this procedure part here.</v>

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Which specifies the procedure with respect

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to arbitration of claims against Enterprise.

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It doesn't address claims against a representative.

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But you don't have to spell out all of those details.

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Here where there's manifest clear and unmistakable

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intent arbitrary is when you look at the arbitration

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prevision itself which absolutely includes claims

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against a representative and again,

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the rule here is to favor arbitration

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and so that has to be taken into consideration also.

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<v Justice Gants>Isn't there a cotivel on public</v>

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policy rule as well.
<v ->I'm sorry.</v>

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<v ->That's a public policy rule, right?</v>

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<v Shartle>Yes.</v>

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<v ->Don't we also have a policy that favors the vigorous</v>

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enforcement of 93A?

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<v ->We do, Your Honor, but this is not,</v>

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and it's an important point I think your raising.

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This case is not going to have some sweeping impact

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where all consumer cases

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henceforth are going to be subject to arbitration.

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This case can and should be decided

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on the unique facts presented here.

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We've got an arbitration prevision,

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which unmistakably, very clearly includes claims

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against a representative.

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<v ->Which has the result of borrowing any class action.</v>

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<v ->It does.</v>

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<v ->Which means that, makes it pragmatically</v>

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almost impossible for somebody to invest in the attorney

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fees involved in trying to bring a claim

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because it can't be a class action.

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It can only bring individual claims.

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<v Shartle>I understand that, Your Honor, but-</v>

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<v ->It has enormous consequences.</v>

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The debt collection companies can now invoke

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their arbitration agreement entered into by the entity

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for whom they are collecting.

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And therefor avoid any risk of a class action

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and any risk of enforcement by a class action.

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<v ->In this arbitration prevision,</v>

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again, not every arbitration prevision is written this way.

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Not every arbitration prevision,

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in fact this is rather unusual.

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00:12:23.790 --> 00:12:26.187
To have an arbitration prevision

259
00:12:26.187 --> 00:12:27.220
which includes a representative.

260
00:12:27.220 --> 00:12:28.960
Most often, they do not.

261
00:12:28.960 --> 00:12:31.630
And so it's not going to have some sweeping impacted

262
00:12:31.630 --> 00:12:33.750
where every single 93A case

263
00:12:33.750 --> 00:12:35.810
now is going to be subject to arbitration

264
00:12:35.810 --> 00:12:38.149
and you're going to be prohibited from perusing the claim--

265
00:12:38.149 --> 00:12:39.107
<v Justice Lenk>You don't think that the contract</v>

266
00:12:39.107 --> 00:12:40.639
should be rewritten?

267
00:12:40.639 --> 00:12:42.418
You don't think the contract should then get rewritten?

268
00:12:42.418 --> 00:12:45.010
<v ->No, Your Honor, I don't believe that is going to happen.</v>

269
00:12:45.010 --> 00:12:46.330
<v Justice Lenk>Why not?</v>

270
00:12:46.330 --> 00:12:48.490
<v ->I don't believe it works like that.</v>

271
00:12:48.490 --> 00:12:49.323
I don't believe that--

272
00:12:49.323 --> 00:12:51.020
<v Justice Lenk>An association wouldn't do that for you?</v>

273
00:12:51.020 --> 00:12:51.853
<v ->I'm sorry.</v>

274
00:12:51.853 --> 00:12:53.057
<v ->Traders Association wouldn't make sure that happened?</v>

275
00:12:53.057 --> 00:12:55.530
<v ->No, no I don't believe that that would happen.</v>

276
00:12:55.530 --> 00:13:00.530
I mean, these agreements are not changed

277
00:13:00.780 --> 00:13:03.400
on a whim as case law changes.

278
00:13:03.400 --> 00:13:07.470
And look, you look at the U.S. Supreme Court decision

279
00:13:07.470 --> 00:13:11.410
conception cases since conception has been decided

280
00:13:11.410 --> 00:13:14.880
I mean, I understand the point, and the concern

281
00:13:14.880 --> 00:13:17.390
that consumer claims now could be subject

282
00:13:17.390 --> 00:13:19.860
to arbitration but that is the law.

283
00:13:19.860 --> 00:13:23.520
Under FAA that is the law.

284
00:13:23.520 --> 00:13:24.820
And--

285
00:13:24.820 --> 00:13:25.710
<v Judge Gants>I've read conseption.</v>

286
00:13:25.710 --> 00:13:26.810
<v ->Yeah, and so--</v>

287
00:13:26.810 --> 00:13:30.820
<v ->So lets turn to the attorneys arbitration cost prevision.</v>

288
00:13:30.820 --> 00:13:32.170
<v Shartle>Yes.</v>

289
00:13:32.170 --> 00:13:35.290
<v ->If it turns out that the arbitrator determines</v>

290
00:13:35.290 --> 00:13:39.440
that the claim is frivleless then the owner

291
00:13:39.440 --> 00:13:41.320
may seek reasonable attorneys fees.

292
00:13:41.320 --> 00:13:43.060
Meaning Enterprise.

293
00:13:43.060 --> 00:13:44.234
<v Shartle>Correct.</v>

294
00:13:44.234 --> 00:13:47.150
<v ->And then the owner will pay so basically</v>

295
00:13:47.150 --> 00:13:50.390
if this claim is brought to an arbitrator against

296
00:13:50.390 --> 00:13:54.493
Transworld and the arbitrator says it is frivolous

297
00:13:56.420 --> 00:14:01.420
then the payment to attorneys fees is paid to Enterprise.

298
00:14:03.440 --> 00:14:04.920
<v ->Again, Your Honor, it's the same point.</v>

299
00:14:04.920 --> 00:14:06.450
That the fact that the agreement

300
00:14:06.450 --> 00:14:10.020
has some specifics that relate to a claim

301
00:14:10.020 --> 00:14:13.647
against Enterprise and does not list exactly

302
00:14:13.647 --> 00:14:17.720
every step of the process when the claim

303
00:14:17.720 --> 00:14:20.650
is against and agent or representative

304
00:14:20.650 --> 00:14:24.150
doesn't mean that you then interpret the agreement

305
00:14:24.150 --> 00:14:28.070
to exclude words

306
00:14:28.070 --> 00:14:30.310
claimed against the agent

307
00:14:30.310 --> 00:14:31.780
or the representative.

308
00:14:31.780 --> 00:14:32.910
<v Justice Gants>We're supposed to read this</v>

309
00:14:32.910 --> 00:14:35.610
in its entirety.
<v ->You fill the gap.</v>

310
00:14:35.610 --> 00:14:36.443
I'm sorry.

311
00:14:36.443 --> 00:14:37.837
<v ->You want us to say,</v>

312
00:14:37.837 --> 00:14:41.240
"Oh ignore, these two previsions"

313
00:14:41.240 --> 00:14:42.073
or say,

314
00:14:42.073 --> 00:14:44.220
"Oh, AAA overcomes them."
<v ->No.</v>

315
00:14:44.220 --> 00:14:46.837
<v ->But say you wanna grab the word representative and say,</v>

316
00:14:46.837 --> 00:14:50.867
"Uh-huh, that should tell anybody who's signing

317
00:14:50.867 --> 00:14:51.913
"onto this agreement because adhesion agreement

318
00:14:51.913 --> 00:14:55.657
"says we have said

319
00:14:55.657 --> 00:14:58.207
"when interpreting adhesion agreements we seek to effectuate

320
00:14:58.207 --> 00:15:00.517
"not the actual intent of the parties

321
00:15:00.517 --> 00:15:03.317
"but instead the meaning and objectively reasonable person

322
00:15:03.317 --> 00:15:04.947
"in the non drafting parties position

323
00:15:04.947 --> 00:15:07.190
"would give to the language in the contract."

324
00:15:07.190 --> 00:15:12.190
So that's the standard we established in Nudder last year.

325
00:15:14.180 --> 00:15:17.345
How does this help an objectively

326
00:15:17.345 --> 00:15:20.620
reasonable person to understand

327
00:15:20.620 --> 00:15:24.030
that this type of claim must but arbitrated?

328
00:15:24.030 --> 00:15:28.510
<v ->Okay, again, I'm not saying that you ignore</v>

329
00:15:28.510 --> 00:15:30.460
these specific previsions

330
00:15:30.460 --> 00:15:33.050
that relate to a claim against Enterprise.

331
00:15:33.050 --> 00:15:36.940
There, in the agreement and to the extent the arbitration

332
00:15:36.940 --> 00:15:39.710
involves Enterprise they apply.

333
00:15:39.710 --> 00:15:44.710
What I'm saying is that when those previsions don't address

334
00:15:44.960 --> 00:15:49.880
a claim against another entity

335
00:15:49.880 --> 00:15:53.920
covered by the arbitration prevision that the gap is filled

336
00:15:53.920 --> 00:15:55.830
with the AAA arbitration rules.

337
00:15:55.830 --> 00:15:58.200
<v ->I'm looking, the print is small,</v>

338
00:15:58.200 --> 00:16:01.540
but I don't see anything which says where the claim

339
00:16:01.540 --> 00:16:05.520
is not against the owner than attorneys fees should be paid

340
00:16:05.520 --> 00:16:06.690
to the representative.

341
00:16:06.690 --> 00:16:07.523
Or do I see anything that says--

342
00:16:07.523 --> 00:16:09.453
<v ->The AAA rule would address that.</v>

343
00:16:10.446 --> 00:16:12.050
<v ->So you incorporate by reference</v>

344
00:16:12.050 --> 00:16:15.910
to AAA rules and this is what's supposed to be understood

345
00:16:15.910 --> 00:16:18.150
by reasonable persons signing

346
00:16:18.150 --> 00:16:19.080
on to this agreement.

347
00:16:19.080 --> 00:16:19.913
<v ->Because the agreement</v>

348
00:16:19.913 --> 00:16:22.590
specifically says that its subject to AAA rules.

349
00:16:22.590 --> 00:16:25.640
<v ->And do the AAA rules attached in any way to the--</v>

350
00:16:25.640 --> 00:16:27.277
<v Shartle>No, Your Honor, but I--</v>

351
00:16:27.277 --> 00:16:29.700
<v ->Was to incorporate by reference to the poor sucker</v>

352
00:16:29.700 --> 00:16:30.910
who's renting from Enterprise

353
00:16:30.910 --> 00:16:35.440
and supposed to be assumed they understand the AAA rules

354
00:16:35.440 --> 00:16:37.770
when they sign on to this agreement.

355
00:16:37.770 --> 00:16:42.260
<v ->No, Your Honor, perhaps that is not a fair assumption</v>

356
00:16:42.260 --> 00:16:45.410
but the fact of the matter is it does incorporate

357
00:16:45.410 --> 00:16:46.900
the AAA rules and I don't think

358
00:16:46.900 --> 00:16:50.690
that your required to actually attach the AAA rules

359
00:16:50.690 --> 00:16:53.330
to the agreement in order to incorporate them

360
00:16:53.330 --> 00:16:56.120
and put the consumer on notice that the claims

361
00:16:56.120 --> 00:16:59.060
are going to be subject to those rules.

362
00:16:59.060 --> 00:17:00.877
<v Justice Gants>Okay, thank you.</v>

363
00:17:00.877 --> 00:17:02.840
<v ->Unless there is anything else, Your Honor.</v>

364
00:17:02.840 --> 00:17:04.013
<v ->Mr. Lemberg.</v>

365
00:17:09.260 --> 00:17:11.080
<v ->May I please the court.</v>

366
00:17:11.080 --> 00:17:12.220
My name is Sergei Lemberg,

367
00:17:12.220 --> 00:17:14.253
I represent Mr. Landry.

368
00:17:15.890 --> 00:17:18.030
You are correct, Justice Gants,

369
00:17:18.030 --> 00:17:20.060
we are in the world of small print.

370
00:17:20.060 --> 00:17:23.630
So small that even with my younger eyes

371
00:17:23.630 --> 00:17:24.560
I can't read it.

372
00:17:24.560 --> 00:17:28.150
But I didn't--
(crosstalk)

373
00:17:28.150 --> 00:17:30.546
<v ->Let me help you here.</v>

374
00:17:30.546 --> 00:17:31.432
(laughing)

375
00:17:31.432 --> 00:17:32.520
Or let me at least give you the name

376
00:17:32.520 --> 00:17:36.002
of my optision, perhaps.
(laughing)

377
00:17:36.002 --> 00:17:40.770
<v ->But I did find something in the small print agreement</v>

378
00:17:40.770 --> 00:17:43.920
which hadn't been picked up in any briefing before

379
00:17:43.920 --> 00:17:45.510
and it's right at the beginning of it.

380
00:17:45.510 --> 00:17:48.690
Now, let me remind the court that my brothers burden

381
00:17:48.690 --> 00:17:51.940
here is to show that there was clear and unmistakable

382
00:17:51.940 --> 00:17:54.220
intent to benefit a third party

383
00:17:54.220 --> 00:17:55.890
that is not named in this agreement.

384
00:17:55.890 --> 00:17:58.500
That is the law, in the first circuit , that is the law,

385
00:17:58.500 --> 00:18:01.340
in Constantino and we go to the beginning

386
00:18:01.340 --> 00:18:05.060
of this agreement that additional terms in tiny print

387
00:18:05.060 --> 00:18:06.500
but its there

388
00:18:06.500 --> 00:18:11.500
it says, renter, right of the front, page two of four.

389
00:18:11.580 --> 00:18:15.820
Renter, expressly acknowledges that renter and owner

390
00:18:15.820 --> 00:18:18.780
are the only parties of this agreement.

391
00:18:18.780 --> 00:18:21.560
Not withstanding that the reservation for vehicle

392
00:18:21.560 --> 00:18:23.900
may have been arranged by a third party

393
00:18:23.900 --> 00:18:27.740
that a third party my pay for all or part of the rental bill

394
00:18:27.740 --> 00:18:30.660
and or and third party may negotiate certain terms

395
00:18:30.660 --> 00:18:31.710
or the rental

396
00:18:31.710 --> 00:18:32.893
and yada, yada, yada.

397
00:18:34.201 --> 00:18:35.145
(laughing)

398
00:18:35.145 --> 00:18:39.740
How'd you go from there to arguing

399
00:18:39.740 --> 00:18:41.110
that the agreement

400
00:18:41.110 --> 00:18:46.110
clearly and unmistakably confers upon a third party

401
00:18:46.850 --> 00:18:50.340
in your rights beats me.

402
00:18:50.340 --> 00:18:52.693
<v Justice Gants>What's a representative or an affiliate?</v>

403
00:18:55.710 --> 00:18:57.610
<v ->Its ambiguous, I don't know.</v>

404
00:18:57.610 --> 00:18:59.340
I think a fair reading of this.

405
00:18:59.340 --> 00:19:00.173
<v Justice Gants>I was thinking it could be</v>

406
00:19:00.173 --> 00:19:01.460
an employee of Enterprise.

407
00:19:01.460 --> 00:19:04.280
<v ->I think a fair reading of this is that Enterprise</v>

408
00:19:04.280 --> 00:19:07.800
wants to make it as clear as possible

409
00:19:07.800 --> 00:19:12.140
unambiguous, that unaffiliated third parties

410
00:19:12.140 --> 00:19:15.990
that are out there in the world making reservations

411
00:19:15.990 --> 00:19:19.860
somehow arranging for this are not part or this.

412
00:19:19.860 --> 00:19:21.340
<v ->Well I assumed that</v>

413
00:19:21.340 --> 00:19:24.380
the language that you just read means that

414
00:19:24.380 --> 00:19:27.100
if a company has an employee

415
00:19:27.100 --> 00:19:30.240
rent a car the person who signs for the car

416
00:19:30.240 --> 00:19:33.580
is on the hook as apposed to Acme Corporation

417
00:19:33.580 --> 00:19:34.960
that sends them on the business trip.

418
00:19:34.960 --> 00:19:35.890
Right?

419
00:19:35.890 --> 00:19:40.693
<v ->I think that the fair reading of this thing is that the,</v>

420
00:19:43.450 --> 00:19:46.840
well, like the person that's at the counter

421
00:19:46.840 --> 00:19:48.290
wearing an Enterprise badge.

422
00:19:48.290 --> 00:19:50.080
Well, that's a representative.

423
00:19:50.080 --> 00:19:50.913
Right?

424
00:19:50.913 --> 00:19:53.760
That person, if that representative runs you over

425
00:19:53.760 --> 00:19:55.120
in the parking lot

426
00:19:55.120 --> 00:19:56.960
and then you sue them

427
00:19:56.960 --> 00:19:58.770
and then Enterprise,

428
00:19:58.770 --> 00:20:00.027
then Enterprise says,

429
00:20:00.027 --> 00:20:01.780
"All right, well interpreted broadly."

430
00:20:01.780 --> 00:20:05.210
But I don't even think in that scenario

431
00:20:05.210 --> 00:20:06.730
under the Constintino case

432
00:20:06.730 --> 00:20:08.830
and the Hogan case from the first circuit

433
00:20:08.830 --> 00:20:11.990
that agent would 100%

434
00:20:11.990 --> 00:20:14.860
be able to enforce the agreement

435
00:20:14.860 --> 00:20:17.090
even there they would have a hard time

436
00:20:17.090 --> 00:20:22.090
because you'd say, well, jeez, the nurses in Constantino,

437
00:20:22.360 --> 00:20:23.870
Right, they were employees too

438
00:20:23.870 --> 00:20:25.270
it's not like they weren't the agents

439
00:20:25.270 --> 00:20:27.740
they were taking care of their grandma.

440
00:20:27.740 --> 00:20:29.900
And they couldn't force their arbitration

441
00:20:29.900 --> 00:20:32.350
agreement because it wasn't clear as day

442
00:20:32.350 --> 00:20:36.220
that the arbitration agreement entered into by the grandma

443
00:20:36.220 --> 00:20:37.690
was meant to cover them.

444
00:20:37.690 --> 00:20:38.926
<v ->Excuse me, could you tell me</v>

445
00:20:38.926 --> 00:20:40.840
the difference between agent and representative,

446
00:20:40.840 --> 00:20:41.890
as you understand it?

447
00:20:47.130 --> 00:20:48.490
<v ->I think it's ambiguous.</v>

448
00:20:48.490 --> 00:20:49.523
<v Justice Lenk>Okay.</v>

449
00:20:50.950 --> 00:20:53.270
<v ->I think it's not clear</v>

450
00:20:53.270 --> 00:20:55.280
and I think that

451
00:20:56.650 --> 00:20:58.740
because of that lack of clarity

452
00:20:58.740 --> 00:21:00.300
you interpret the ambiguity

453
00:21:00.300 --> 00:21:01.950
against the drafter.

454
00:21:01.950 --> 00:21:06.610
Here, the drafter's Enterprise and you preclude--

455
00:21:06.610 --> 00:21:07.930
<v ->So you're not saying an independent</v>

456
00:21:07.930 --> 00:21:10.160
contractor can't be a representative

457
00:21:10.160 --> 00:21:12.830
but the language in the statute,

458
00:21:12.830 --> 00:21:15.560
in the agreement, excuse me,

459
00:21:15.560 --> 00:21:18.080
is ambiguous enough that

460
00:21:18.080 --> 00:21:21.300
we can't necessarily say that

461
00:21:21.300 --> 00:21:22.903
those claims can be brought.

462
00:21:24.720 --> 00:21:26.030
<v ->My position is,</v>

463
00:21:26.030 --> 00:21:29.083
I think I'm with the first circuit and Constantino.

464
00:21:30.000 --> 00:21:32.523
We're in this adhesion contract world, right?

465
00:21:33.765 --> 00:21:36.320
The enterprise is one of the largest privately owned

466
00:21:36.320 --> 00:21:37.970
companies in the United States.

467
00:21:37.970 --> 00:21:39.077
7,200 locations.

468
00:21:39.077 --> 00:21:41.100
God knows how many cars.

469
00:21:41.100 --> 00:21:42.700
They could draft this thing

470
00:21:42.700 --> 00:21:45.010
so that its crystal clear what they want.

471
00:21:45.010 --> 00:21:46.217
<v ->Well even, I think you have an argument</v>

472
00:21:46.217 --> 00:21:49.330
to where you can get to the adhesion contract.

473
00:21:49.330 --> 00:21:52.930
Though what were calling the adhesion contract

474
00:21:52.930 --> 00:21:54.610
isn't your argument that

475
00:21:54.610 --> 00:21:58.600
this language covers the scope of the claims?

476
00:21:58.600 --> 00:22:00.727
<v Lemberg>Well that's the next thing--</v>

477
00:22:02.269 --> 00:22:04.460
<v ->Is that your first argument?</v>

478
00:22:04.460 --> 00:22:05.833
That it doesn't even apply?

479
00:22:08.515 --> 00:22:10.610
<v ->I think the first, second, and the third</v>

480
00:22:10.610 --> 00:22:11.670
are all strong enough

481
00:22:11.670 --> 00:22:15.773
but they, yes, its a scope issue.

482
00:22:17.030 --> 00:22:21.410
And the law is that you cannot expand

483
00:22:21.410 --> 00:22:23.680
who can enforce the contract

484
00:22:23.680 --> 00:22:26.400
by looking at the scope previsions.

485
00:22:26.400 --> 00:22:27.730
And that's, again,

486
00:22:27.730 --> 00:22:28.880
the Constantino case,

487
00:22:28.880 --> 00:22:30.500
but that also the Hogan case

488
00:22:30.500 --> 00:22:32.150
and there's other cases out there.

489
00:22:32.150 --> 00:22:34.437
Which speak to that.

490
00:22:34.437 --> 00:22:36.250
<v ->Are you saying the ambiguous have to be the drafter?</v>

491
00:22:36.250 --> 00:22:38.523
The drafter here would be Enterprise, right?

492
00:22:40.120 --> 00:22:41.513
Not Transworld systems.

493
00:22:43.590 --> 00:22:46.300
<v ->Against the reported drafter.</v>

494
00:22:48.380 --> 00:22:50.690
The entity that has attempted to enforce it.

495
00:22:50.690 --> 00:22:52.410
<v Justice Lenk>Enterprise is not a party in this suit.</v>

496
00:22:52.410 --> 00:22:53.243
<v ->True.</v>

497
00:22:55.310 --> 00:22:59.330
My brother is attempting to stand in Enterprises shoes

498
00:22:59.330 --> 00:23:01.940
and so I think would be fair to interpret it

499
00:23:01.940 --> 00:23:05.020
against Transworld as well.

500
00:23:05.020 --> 00:23:06.190
But let...

501
00:23:06.190 --> 00:23:07.023
Justice Gants.

502
00:23:07.023 --> 00:23:09.870
<v ->If you were suing Enterprise</v>

503
00:23:09.870 --> 00:23:13.100
saying that that they were indeed,

504
00:23:13.100 --> 00:23:15.540
Transworld is indeed somebody

505
00:23:15.540 --> 00:23:17.710
for whom there responded to yet superior

506
00:23:19.010 --> 00:23:20.570
obligations of Enterprise

507
00:23:20.570 --> 00:23:21.700
then you would be governed

508
00:23:21.700 --> 00:23:24.630
by this arbitration agreement, correct?

509
00:23:24.630 --> 00:23:26.580
<v Lemberg>I think in likelihood, yes.</v>

510
00:23:27.510 --> 00:23:29.590
<v ->So basically what you essentially saying</v>

511
00:23:29.590 --> 00:23:30.840
is however we determine,

512
00:23:30.840 --> 00:23:34.030
however we evaluate employees or representatives,

513
00:23:34.030 --> 00:23:35.110
you're saying that

514
00:23:35.110 --> 00:23:36.550
it would be in any context

515
00:23:36.550 --> 00:23:40.470
in which there would be responding and superior liability

516
00:23:40.470 --> 00:23:42.390
on the part of Enterprise.

517
00:23:42.390 --> 00:23:45.220
<v ->I think that would be a closer case.</v>

518
00:23:45.220 --> 00:23:48.230
I think if we were suing Enterprise here on

519
00:23:48.230 --> 00:23:52.380
and respond yet superiority that would be a closer case.

520
00:23:52.380 --> 00:23:54.580
That would be nurses in a nursing home.

521
00:23:54.580 --> 00:23:58.420
That would be harder.

522
00:23:58.420 --> 00:23:59.950
I think that we'd still win on that.

523
00:23:59.950 --> 00:24:01.400
But I think it's harder.

524
00:24:01.400 --> 00:24:04.210
We still win against Transworld on this.

525
00:24:04.210 --> 00:24:06.500
Because its not clear and unmistakable

526
00:24:06.500 --> 00:24:08.320
that Transworld was intended

527
00:24:08.320 --> 00:24:12.343
to be benefited by the contract.

528
00:24:14.250 --> 00:24:15.790
But we're not in that world.

529
00:24:15.790 --> 00:24:17.257
I think were in a far removed world.

530
00:24:17.257 --> 00:24:18.090
<v ->I'm saying that if you were to have sued</v>

531
00:24:18.090 --> 00:24:21.070
Enterprise, and said that Enterprise was responsible

532
00:24:21.070 --> 00:24:24.560
for the collection tactics of Transworld,

533
00:24:24.560 --> 00:24:26.350
Then you may be within arbitration.

534
00:24:26.350 --> 00:24:29.700
<v ->I think it's conceivable in that scenario.</v>

535
00:24:29.700 --> 00:24:32.100
It's a closer case as I said.

536
00:24:32.100 --> 00:24:34.500
Now, again, I'm beating a dead horse,

537
00:24:34.500 --> 00:24:37.438
but the contract between Enterprise and Transworld.

538
00:24:37.438 --> 00:24:39.396
<v Justice Lenk>You could get a better metaphor.</v>

539
00:24:39.396 --> 00:24:42.860
(Lemberg laughs)

540
00:24:42.860 --> 00:24:46.870
<v ->Their contract, twice, two different places,</v>

541
00:24:46.870 --> 00:24:51.413
on page 47 and 56,

542
00:24:52.570 --> 00:24:57.570
of the appendix establishes that Enterprise wants nothing,

543
00:24:59.030 --> 00:25:02.100
whatsoever to do with anything that Transworld

544
00:25:02.100 --> 00:25:04.120
is doing out there in the world.

545
00:25:04.120 --> 00:25:05.100
To collect this bill--

546
00:25:05.100 --> 00:25:06.320
<v ->If you were suing</v>

547
00:25:08.910 --> 00:25:10.890
the debt collector,

548
00:25:10.890 --> 00:25:13.063
based on the prevision itself,

549
00:25:14.210 --> 00:25:15.400
wouldn't you have a problem?

550
00:25:15.400 --> 00:25:20.400
I mean if the lawsuit were based on the contract directly.

551
00:25:21.920 --> 00:25:24.560
If it were, you owe me money,

552
00:25:24.560 --> 00:25:26.650
or you know, the debtor is suing you

553
00:25:26.650 --> 00:25:28.640
and they've stepped in the shoes

554
00:25:28.640 --> 00:25:30.653
of Enterprise to collect the money.

555
00:25:31.790 --> 00:25:32.623
And you're saying

556
00:25:32.623 --> 00:25:35.033
no was owed a refund under that contract.

557
00:25:37.890 --> 00:25:40.640
Wouldn't that have to go through arbitration?

558
00:25:40.640 --> 00:25:41.810
<v Lemberg>We would be inequitable</v>

559
00:25:41.810 --> 00:25:42.980
to stop a world.

560
00:25:42.980 --> 00:25:46.743
<v ->So misattach would trigger you into arbitration.</v>

561
00:25:47.640 --> 00:25:50.470
So its really Justice Lenk's first question.

562
00:25:50.470 --> 00:25:53.750
This has nothing to do with this contract, right?

563
00:25:53.750 --> 00:25:55.093
Cause this thing is all,

564
00:25:56.110 --> 00:25:58.680
whatever the contract says this is about making more

565
00:25:58.680 --> 00:26:00.740
than two phone calls.

566
00:26:00.740 --> 00:26:01.803
In a week, right?

567
00:26:02.880 --> 00:26:06.020
Just because you're making those calls in a contract.

568
00:26:06.020 --> 00:26:07.640
<v ->To be completely frank.</v>

569
00:26:07.640 --> 00:26:09.410
I think it would be an over statement

570
00:26:09.410 --> 00:26:10.990
to say it had nothing to do with it.

571
00:26:10.990 --> 00:26:12.033
It would not meet the-

572
00:26:12.033 --> 00:26:14.300
<v Justice Gaziano>Under but four causation</v>

573
00:26:14.300 --> 00:26:15.491
but doesn't arise out of the contract.

574
00:26:15.491 --> 00:26:16.324
<v ->Right.</v>

575
00:26:16.324 --> 00:26:19.080
<v ->It arises the alleged bad</v>

576
00:26:19.080 --> 00:26:21.443
93A violation of the debt collector.

577
00:26:22.590 --> 00:26:26.170
<v ->We've got a nonsignatory trying to enforce</v>

578
00:26:26.170 --> 00:26:29.570
an arbitration prevision for something that

579
00:26:29.570 --> 00:26:32.600
is about, that isn't based on the contact.

580
00:26:32.600 --> 00:26:34.890
Its a multiple cause,

581
00:26:34.890 --> 00:26:36.710
isn't this case easy?

582
00:26:36.710 --> 00:26:39.580
Don't you win that way whether than trying to find

583
00:26:39.580 --> 00:26:41.393
that they're not a representative?

584
00:26:42.460 --> 00:26:44.710
It seems really difficult.

585
00:26:44.710 --> 00:26:48.410
<v ->Well, it maybe why they balance,</v>

586
00:26:48.410 --> 00:26:50.870
having raised that theory of equitable

587
00:26:50.870 --> 00:26:52.760
to stop them below

588
00:26:52.760 --> 00:26:54.840
dropped it on appeal here.

589
00:26:54.840 --> 00:26:56.250
And didn't raise it

590
00:26:56.250 --> 00:27:00.070
because they, I'm surmising,

591
00:27:00.070 --> 00:27:02.320
but they perhaps recognized that

592
00:27:02.320 --> 00:27:06.180
they cannot establish that the claim and the contract

593
00:27:06.180 --> 00:27:08.620
were inextricably intertwined

594
00:27:08.620 --> 00:27:10.800
under the equitable Estople case

595
00:27:10.800 --> 00:27:12.010
such that would enable

596
00:27:12.010 --> 00:27:14.210
them to enforce their arbitration agreement.

597
00:27:20.860 --> 00:27:22.610
Unless the court has any questions.

598
00:27:22.610 --> 00:27:25.340
I am pretty much done.

599
00:27:25.340 --> 00:27:27.497
<v ->Okay, thank you.</v>
<v ->Thank you.</v>

600
00:27:27.497 --> 00:27:30.330
(papers ruffling)