when you're ready for your honour's may please the court my name is kenton brice i'm an associate with a law firm christening telling clark an island village texas and we represent plaintiff opponents in this appeal today plaintiffs are appealing from the united states district court for the northern district of texas dallas to vision's the decision ordering this case dismissed and compelling arbitration on america plans motion to compel arbitration however as you'll find an overview and stayed in the agreements and to even if somehow this court finds that the parties did intend to incorporate this arbitration clause into their already signed written agreements it does not supersede nor does it obviate the already mandatory dispute resolution clause mandating gers to action in dallas county texas furthermore your yard before i move on to my two point the central district of california has already ruled on the law in this case two years the sales director a contract the contract requires litigation in dallas county texas however now a year later america play moved to dismiss the case in favor of arbitration totally ignoring what they talking about however physicians have become before the circuit as well as the district courts in texas the facts in those cases the arbitration clause existed at the time the parties contracted were not arguing that a party cannot incorporate arbitration clause by reference into an agreement however that arbitration clause must exist at the time is incorporated by reference and that goes to my first point the parties never intended to incorporate the arbitration clause by reference into their original incorporated by reference for the specific intended purposes of that document it's not a blank check for a party to write in any provision they wanted to this is established by the texas appellate court in dallas which said quote it is a general principle of contract law that reference to a document for a particular purpose incorporates that document only for the specified purpose and so then the question becomes what is the purpose of the policies and procedures and according to contract construction and contract interpretation under texas law you must look to the four corners of the original agreements to see what the sales to record contract or the p p m at the time stated its purpose was however a mare plan and it's their burden has not if anything at the time the parties entered into their original agreements the record is void of any p p m or policies and procedures made but you have anything to point to in the policy manual that said it was not intended to incorporate an arbitration call you are you look to the sales director agreements at the time or all the agreements together as a whole at the time the parties entered into their group when the last true if you're involved  an amendment to the original agreement in my understanding and when you have an amendment to an original agreement that amendment applies at least to the extent that it's not that it's inconsistent  with with the original agreement of weren't you if you the original agreement and the amendment are inconsistent the amendment control lets that's the general rule in your honor i would respectfully disagree with that general rule but to your question those two points if they're inconsistent to provisions of a full agreement of the total agreement out i'll get to the first point operators were asked my question first yes or that amendment under texas law if there is a conflict in provision with the original agreement with the original clause does not automatically supersede albeit the court must run through the texas rules on harmonizing a potential conflict in a contract and those three rules are that first but  we're not trying to harmonize necessary when you manda contract your object is to make something different it's not to harmonize that's correct your honor let me back up real quick the parties never intended to amend the contract through the p contract as agreement still in effect right and that the sales agreement of the broker agreement that's what had the dispute resolution is right that's make they had to be changed in writing by for agreed to by both parties whereas this policy manual could be changed without that requirement that's correct you have how do you interact with those two different documents in the two different amendment procedures that's correct your honor and that's where i was hoping to funnel his question is the parties never agreed to amend the dispute resolution procedure containing the original agreement because there is not a signed duly executed written amendment to the original agreement instead of merit plan unilaterally amended the policies and procedures made a document incorporated by reference for a specific purpose into the sales director agreement for the terms conditions of all season procedures of america that is the not the horizontal agreement between the parties that is the rules of the american land business but i mean the  however in that same agreement there's a dispute resolution procedure that's four paragraphs long all caps blocked off text totally separate from the rest of the typesetter the other of the rest of the agreement that says as the central district california there is a mandatory judicial form for any claim controversy or dispute and the arbitration clause which mare plane created six to sixteen years later says the exact same thing any claim controversy or dispute must go to arbitra your argument is the reason that the a minit doesn't step in to to displace the other language that's involved in the sales agreement because the amendment is not the sales agreement the sales agreement stay as the sales agreement so it's the other the manual that's been updated and so then you have to harmonize to under and tell you cowboy or whatever it's called it's at your that your position that's exactly  grima it wasn't amended it's only the manual that was amended that's correct ok and the manuals and until you agree that if the sales agreement itself had been amended that indeed it would displace the prior old language yes definitely that's contract want to want so it is if if if an agreement is amended then the new them in many places but that's where you have one document is that the to amending the original contract what's your best case for that bud versus max international that case came out of dallas last year and that court found it similar facts a little bit different but similar to the extent of this question and that court found that because no arbitration clause existed in the policies and procedures at the park at the time the parties intended to enter into their agreements therefore that arbitration clause was not to corporate by reference and if it ha motion for class or occasion that they realized we're in a pickle that's the very language that would have been abrogated that's correct but instead they relied upon it's a very apparently think it still applies to exactly where but let me ask you then why is according to the record and the agreement the way it's written both the arbitration clause and the mandatory form selection cause cover the exact same dispute claims or controversies under the cases which mare plans cited the form selection clauses which are is do you argue that the clickthrough people didn't agree to it or something it is not an argument back up argument you have i'm trying to it's a mare plan is reliant on the fact that they click through a website to somehow amend their already established document through the new policies of the sieges mail the actual sales director agreement goes against that argument because in that agreement it says that the sales directors are through the contract which is the law of the parties are obligated to obtain and abide by the new policies and procedures so if they did not click i accept then they're in violation their sales director agreement a mare plan create an impossible situation for these parties to know what they contracted for if the are already written signed agreements because if they don't click type except they're in violation they're already read it by clicking i mean you can read it and say no i'm not going to accept you correct and if you do that then you're in violation  your sales director agreement you can be terminated for cause and your position is your last fall back hit something about that because they don't work there anymore it doesn't apply to them you know that's a very complex issue and that comes from a case of the you told district court which is the same type the multilevel market situation with quick star where quick star had term a bunch of idea of those and they said you got to go to arbitration the court there found said said that the if it was for the commissions they're still do today as contracted for and then america plan terminated them without cause the sales agreement we contend is what this whole case is about all of you still get your lifetime residual commissions they place the court this case involves independent contractors who don't want to abide by the terms of their contract and instead want this court to rewrite the contract to make the terms more fair to them i wan correct a couple of things that some misstatements that were made the bud case out of dallas expressly says that a unilateral amendment provision like was in this contract can be used to later  an arbitration provision through policies and procedures that's exactly what the bud case was the bud case went on to say that if you do it that way because it's a later and acted provision you have to satisfy a hell of burton savings clauses because it was not in the in the original agreement it was later and that did and the court went on to say in that case that the arbitration provision satisfied halliburton savings because it was prospect of only and it provided notice to the other side before terminating exactly like this arbitration provision here judge they would have to terminate if they not get stuck with the arbitration is that your position well that the terminations provision gives notice to the other side to give them an opportunity to to go ahead and pursue arbitration so that so that it is still a bilateral promise it provides notice that if i don't want to accept your bond live liberal promise then i have to just get out of the failed agreement at that point right would you gather you need to either are you talking about from the company's perspective or there is a soon that there is a person who does the know that the broker person doesn't want to accept the promise says i'm never going to sign an arbitration agreement they just put one in my contract i have ten days in which to refuse that what happens that they never have a chance to really know the route the reasonable notice provision is before it will be terminated it's in order to ensure that it is truly a bilateral promise and th it binds both sides so that the company cannot decide for someone who is a ballot to pursue a claim the company can't decide for that individual ought to want to arbitrate that so i'm just going to terminate it right now immediately and cut off your arbitration ri on the pay and what are my options you have to go back to the original contract and ask what did you contract for what you contract it for originally was that p m was incorporated into the agreement from the start it was always a part of this contract because you didn't contract arbitration originally not because you in fact contracted for letters to something else  you can track to for venue selection in the particular state court so you did you can't say well i knew that one day they might i'm in and i really was contracting for arbitration i was actually contract for something contrary so w you have time to give consideration for the promise so that it's not a looser as the employer will that the time the time to dispute or not enter into the contract giving america plan the unilateral right to think there is a point where it would be the agreement and become a looser a or unconscionable for that matter right i think it could come to that point but you bring up an interesting point on the compensation structure the compensation structure is not in the a a there is no compensation structure in the b a a when when these brokers entered into the agreement the only method by which they could be paid compensation under a structure is through the p p m but the re broker agreement is very comprehensive dispute resolution program which is really much more than just a form selection clause and it says that and that's the document the changes have to be made by both parties in writing so if you can change something that's in that broker agreement through this policy manual where the agreements don't have to be changed in writing and doesn't have this right that requirement that those changes have to be by agreement in writing it is not what the original agreement contains in the  a contains it as well for most of them it does not contain it for grace go it contains non binding mediation which is the preliminary try to resolve that provision and then it contains a form selection clause and that form selection clause says you have to submit for legal proceedings all of those agreements use the phrase legal proceedings which is important in legal proceedings you have to submit to the non exclusive jurisdiction of dallas county and this court has held to answer your question judge this court has not helped once but twice at least that those provisions are easily harmonized when you also have an arbitration provision because of the sales agreement the earlier dispute resolution provision and it doesn't just say that any perceiving has jurisdiction in dallas or federal court in texas it says with respect to any claims controversies or disputes which are not finally resolved through mediation sales director hereby submit to the non exclusive jurisdiction of state or federal court in dallas so that's more than these provisions of this court's already looked at that says well the perceiving has to be in a certain court and saying the claims controversies disputes that the same language in the arbitration provision that waiter comes in about it have to be submitted to a court in texas that's right but if you continue to read on it says here by agrees that service a process may be made in any legal proceeding relating to arising out of this agreement it's talking about for legal proceedings that part is well it it's all the same provisions so we read it together and all of it to give effect to the claims controversies disputes language right well claims controversies disputes in any legal proceeding i don't think i thought think wing separate  is as separate things it's what it's one paragraph linked the paragraph but aside from all you interpret you do agree that provision whether it's called form selection or a broader dispute resolution you agree that's still in effect because that's why  you're in new orleans today and not arguments out in california say right yes it's in effect and it was always in effect this court held in personal security that a form selection clause and a binding arbitration provision when the binding arbitration that they are both in effect but i but i think you you at least for those who click through you get to the same place because if those provisions truly do conflict in this court of cell  the first one i agree i think they are to be looked at as one contract and an attempt to harmonize them and an attempt to interpret all of them and not write out any of them i encourage the court not to try to write out any of these provisions i don't want the court to start carving it up and box a man versus holiness the other case where this court held that judge davis was on that panel where the court said that these two provisions when you're in a contract construction of because it is one contract and you're in a contract construction of how to resolve conflicting principals in the contract i readily agree that they're both in effect at all times now for those who click through which is mowen and sharp there click through provision expressly says that they are agreeing to the amended terms and that if there is any conflict between the amended terms and the and the terms in the we would have to we would have to say that the text requirement supersedes the other requirement we couldn't harmonize those really one is contradicting the other i don't think it makes it a looser it may make it conflicting  ambiguous it very well might make it that under under general contract principles but i don't think that automatically says it's not it's not a bilateral promise or that it's so one sided you still have to analyze it in terms of either unconscionable billet or illusory in terms of in terms of no consideration but what you have here is an agreement that either side can terminate on thirty days notice and i agree with the judge  d there comes a point where this could be rewritten through the p p and him and the original contract ceases to work to exist as the contract or if the tension of the party it was not the intention of the parties but that's also not what happened here the p p m there is no evidence that the p p m was used to rewrite the b a and the u s d a it added an arbitration provision there was a test there sesa money from because the b a a contains no compensation schedule so the parties had to contemplate that substantive key provisions of this agreement were going to be amended through the p p and in the play to that there would be an arbitration proceeding because you would think that this will be dealt with a d r in the if you've looked at this you would have said this is a fully contemplated a d r it's not like incomplete to begin with it has it has non binding mediation and then it says you go to dallas county court that's in that's you would tell your client they were asked that's how you draft it is arbitration is something different it's not something that was left out that there's a gap needs to be filled proves the point because when this case got to dallas county when it was transferred there needed to be a legal proceeding to determine whether or not arbitration would be compelled a legal proceeding was needed for that to compel arbitration and there's a lot of cases that are pure form selection clauses where it says the suit any suit or proceeding needs to be brought in this forum where the courts have said right that's not inconsistent with arbitration because there's a forum for those proceedings judicial proceedings  be dealt with to decide the arbitration issues but here i just read it i mean with respect to the claims controversies or disputes which are not result through mediation the sales director submit to the jurisdiction of these courts when i read th controversies are so submitted to the jurisdiction of the poor and again judge cost of their house that there has to be an attempt to harmonize that there is a presumption towards harmonizing it under the contract of principles there is not a presumption of let's look at it and see if there's a possible interpretation where they do conflict there is a possible interpretation where the court could determine they do conflict but in an attempt to harmonize and to read all of it together as one contract which i think everybody agrees even the appellant's agree is the right way to look at it in an attempt to harmonize then they can be harmonised this court has held that the beaumont court of appeals in texarkana court of appeals have gone a step further under texas law and said when you incorporate when you have a form selection clause that does not conflict with an arbitration provision unless the form selection cla if there's conflicting provisions then the amended p p m governs so so for them if you found conflicting provisions moanin sharp in essence of entered into a new agreement in in which arbitration could amend the other provisions even with a conflict that's what the clicks of their only are the only guy who didn't click through well for greece go greece go doesn't have a foreign selection clause in her contract or be a an arrestee a do not contain the whole form selection clause we've been discussing is not in her contract so that there can't be a conflict with her she has she has non binding mediation over here that because because but it is consistent with what this court has said in personal security inbox seem it to attempt to harmonize the principles and if we follow in re phoenix well i think i think it's it's difficult to reconcile not being able to incorporate through policies and procedures but but that's that's not really a controversial concept virtually every court in texas and this court have said you can incorporate through policies and procedures but you've been able to incorporate only certain things to be arbitrated you know literally only certain claims y might be yeah you might be able to but but then you would run into a problem of then you would truly have have a gap between legal proceedings for litigated claims and arb that a bilateral promise with valid consideration the bilateral promise is consideration if both sides are bound by it and one side cannot unilaterally terminate it at will on a whim then people terminated to get your client terminated tomorrow they can terminate some are or they can terminate on ten days notice and not for existing claims that this this has the exact halliburton savings clause the texas supreme court says that there is you can have in a contract a right to unilaterally a mint and that does not invalidate the the savings clause or trump somehow generally the arbitration provision and its own savings clause i would also say in this is in our brief but that the plaintiffs cannot establish procedural or substantive unconscionable ety they have a heavy burd question about this language that i think you said might be persuasive considered in a vacuum that the the arbitration agreement just applies to i b o those in the independent business owners are defined as any person who has signed an i b o and active this court said in marlin that whenever the scope of an arbitration clause is fairly debatable or reasonably in doubt the court should decide the question of construction in favor of arbitration the best  in essence if that's truly what it means is it only applies if you are currently an i b o or an s t a then it it would be an arbitration clause that never gets used to mean could couldn't when a pro interpretation be they were active at the time of the comp the controversy arose i mean i watch it would just have no meaning it would never get used this is what arbitration would be for is a terminated agreement and commissions that might be due under the terminated agreement thank you thank you ok right back to  may please the court has had a few points in rebuttal first to clear up some controversy about the bud case with but case actually stood for the court actually quote said that because the record does not reflect that max had any policies and procedures in place at the time but became a max associated we cannot conclude the arbitration clause as part of the party's underlying contract any agreement arbitrary contain the policies and procedures would therefore be a standalone agreement and in the court went on to talk about the albertan procedures it wasn't that the policies and procedures amended the parties original agreement was a standalone agreement that's not the case here they're arguing that they have the power to amend the agreement through the hoes and for them trying to get their lifetime residual income back which gives which i'm airplane summarily kept after they terminated eight hundred people on february fourteenth two thousand and eleven eleven days before that is when the clickthrough p p m came out i mean a mare plane knew that they were going to get sued they knew there was going be a class action lawsuit they knew that they were going to withhold lifetime residual income that they had already promised and through their sales director agreement which calls for it they knew their youngest suit so how to get around get a class action get an arbitration clause everybody knows what the supreme court united states been doing the arbitration clause lately no class action if you have an arbitration clause or two class action why not avoid that plus the arbitration clause when they drafted it stated that every single person that wanted initiate arbitration had deposit twenty five thousand dollars i don't know anybody that is my client the has twenty five the earlier dispute resolution provision with the new arbitration provision is that the first step we look at on whether there's an agreement to arbitrate which is just a matter of state law or is it the second step about the scope of arbitration where there's this presumption in favor of  is on the web page that contained a square box a hell of a thirty's or twenty six page p d f that you would have to scroll through and then that said warning warning warning warning warning you must click i accept to go to your back office any conflict now of the well that's not that's and again going back to their original agreement amending their original agreement and add in a new provision to p p m when the parties actually contract it for their agreements in one thousand nine hundred four one thousand nine hundred eight two thousand and one in two thousand six there was not a it's a p p m supersedes or obviate to what there was no conflict so get the mare plan trying to find a way instead of going to each individual person saying hey you got to sign an amendment to your already agreed party agreed upon with tracks the actual language in the sales director agreement when it talks about the policies and procedures may oversells directors in one thousand and eight two thousand and one two thousand and six as i agree to a bottle of tain and abide by any and limits to the policies or they're just ok thank you very much of course then recess for about