me please the court good morning my name is ron holland and i represent appellants swift transportation interstate equipment leasing mr killebrew and mr morse this is the i think it's the third time this case has been before  this court on essentially the same but yet a related issue and that's the section one exemption under the federal arbitration at the first time it was here on mandamus petitioners plaintiffs motion for mandam and the court although denying mandamus held that the section one exemption was properly one that's decided by the district court and not delegate ball to the arbitrator the second time the matter was here on appeal on the same issue because the essentially certified that the court the court without oral argument said well we told you that this is not eligible to the arbitrator the court has to decide it the language that was chosen in that decision by the panel judge it could it was on that panel says that the contractor agreements capital c capital ag contractor agreements must be reviewed to determine whether the section one exemption applies well now we're here a third time to determine whether the district court is following the circuits instruction to review the contractor agreements or whether it's gone too far and i sitting a foot something at the outset because this is what troubles me about your case i'm having difficulty finding this order that the district court entered to scheduling order to be an appealable order and assume that it's not for a moment even with the district court was wrong is wrong and what it's doing is is clear your honor because this is not actually a case of first impression this is a case of interpretation of what the court must do to determine the section one exemption and there are at least a half a dozen if not a dozen cases before the court that demonstrate that the district courts have reteam only reviewed the contractor agreements and have not gone further than a review of the contractor but it's not an invariable rule that there might not be discovery correct for example if you have a section for case in which the the plaintiff says i never signed this agreement sure you'd have discovery and perhaps you have a marriage hearing you would have your position is but not here and i think that position has some force but i'm trying to figure out why it's such an egregious error that we need to grant mandamus first addressing the section four issue just briefly this is in the section four right but i'm saying there can be discovery and merits hearings on the issue of whether or not a claim is arbitrary well i agree but no i don't i don't necessarily agree that discovery is appropriate or there can be discovery here i do believe that this is a matter of caught at this point w the court found invent dues in one that the jurisdiction couldn't be delegated by a matter of contract this truly is a matter of contract so the the the requisite section requires the court or exams contracts of employment so we have to look what how this contract was does how does a court to determine what is a contract of employment so the court here thought today to determine that whether it's a contract of employment it's necessary to look at the relationship between the parties what what's your proposal as to how the court should consider whether it's what's the definition of contract of employment i mean i would i would look at strict contract rules our position obviously is the court clearly here has gone too far because it's deciding the case on the merits and taking away from the arbitrator so the question is was there a contract formed at the time what was the intention of the parties we've got a contract there's no question that it was signed by both parties in fact in this particular instance if we take mr sheer mr sheer was an employee of the company who affirmatively chose to become an independent contractor and then sign that agreement again one of those are really all the facts that you need to determine that there was a independent contractor agreement or at least that was the intent of the parties at the time the cause was a contract ambiguous well it's a contact this one is this one has a label on it and everything else but one of the contracts ambiguous and you're supposed to determine as you just said the intention of the parties only as how does a judge do that the arizona court's not telling you your honor about what the arizona law is but the arizona courts look at interpretation of a big contract and try to interpret the contract to interpret the contract consistent with the party's intent right not to contradict what the party i think i absolutely agree my question is what if you can't tell from the face of the contract what the party's intent was and  applying arizona where trying arizona law and there's no parole evidence rule so so in california if the language is ambiguous under certain circumstances the court could take evidence is that true in arizona and what arizona  apply well the so there are there are several questions in your question your honor so the arizona law according to the district court arizona law applies and that is she's not before the court and so we're going to concede for purposes of your question that arizona law applies the court didn't find that there was any ambiguity in the contract had it found that there was an ambiguity in the contract once again it can take it can take extrinsic or parole evidence at that time with regard to that particular provision that it's finding ambiguous but what it doesn't take is evidence of the post contractual relationship it takes evidence with regard to the formation of the contract and that provision and that's what the court is not doing here so at the end of the day you don't have an adequate roundy law if the if the district court gets a wrong if you're if you're you know if we say everything you say is true but we have a full record and us decided you have a gravity on appeal right sure your honor after at least a year comprehensive discovery and settlement and dispositive motions and likely a trial that decides the cannot consider the decision then possibly not however because the because the district court has ordered significant discovery on issues that are unrelated to the formation of the contract they'll be they'll be they'll be in other words their contention is that this although this looks like an independent contractor agreement you really treated their clients as employees presumably in arbitration there would be discovery about exactly that issue so i'm not all that sympathetic to your notion that you're going through discovery that you wouldn't have gone through otherwise well we you are of course there'd be discovery whether it be the same discovery whether the arbitrator would make the same rulings with regard to that particular plaintiff is unclear we can't speculate as to what an arbitra would do and that's the issue what you're what what the court would be doing here is regardless taking all of that all of the pretrial activities the discovery the rulings on discovery out of the arbitrators hands well that's why i ask the question think is it really is the merits incision being taken out of the arbitrator stance let's assume that the the jury finds that these folks were independent contractors is it your view that the other side still has another shot to try it in arbitration yes the other side may have a shot i mean after a full after a full but trial on the issue the court could instruct the jury that even the full issue has been litigated it must return a verdict with regard to whether the section one exemption applies yet there be a full trial on the merits that will be presented to the arbitrator as far as prior prior testimony under oath that the company will be held to with regard to so that it might just be at that point it might be a matter of damages frankly just so so we're clear on that let's assume the testimony is not as not prejudicial because you're going to have the testimony anyway one where the other this ruling and you're saying it's just a matter of question whether that has a binding effect what if what if the well what if you know i'm not saying it's a question i believe that the district court's ruling would be binding on the arbitrator if the if the district court  held on summary judgment that these folks are employees there's really not anything else for us to do but but proceed through class certification with a finding that their employees if the district court held on summary judgment that they were independent contractors  i believe that the arbitrator would be bound by that decision and therefore the parties benefit of their bargain that is the individuals who struck the bargain and executed the contract to proceed to arbitration will be deprived of that and this and if the court goes down this road and permits the district court to proceed as it does you'll you'll never have an arbitration or at least a full arbitration on the merits where the section one exemption let me go back go back that and test it so let's we let's assume that when it comes up the next time the fourth time god forbid we say the district judge got this wrong we shouldn't have this hearing at all which are just decided on the face of the complaint and  didn't give precisely clear directions as to times so i'm asking let's assume you go down this road and you lose and you appeal we can fix it if you go down this road and you win you'll be happy they'll appeal but we'll say you can't claim that the should've gone to a jury because you're up here a few months ago telling us it should have gone to a jury why isn't that the happiest of all worlds it's not the happiest of all worlds  your honor you're asking whether or prejudiced or not versus the judicial economy of proceeding down the well i think if you are if you get the verdict from the district court you pill you'll have litigated the issue that you contracted to act yes yes your honor will have litigator the issue and the litigation of the issue itself before the district court is the prejudice the prejudice is inherent in the in the requirement that we litigate the entire matter before the district court when we've contracted to do so before an arbitrator well on the other hand if you don't end up in arbitration after all and you have a full record you've considerably reduced the time for discovery in presentation the arbitration so that's a factor as well the arbitrator arguably the arbitrator at that point could retry the matter and decide contrary to what the district court found that they're independent contractors that they're actually employees and then what you would have is different results between the district thank you you can reserve but we can give you some time motion to set aside that discovery order is because when the original discovery order was entered we had no idea what the scope of discovery was going to be all the court did and this is a quote from their theory all the court did was set dates and procedures there's going to be dispositive motions that can be five deposition no hint of what the discovery was about what the defendant is completely ignore is that the day before the scheduling order was entered the judge said work entered an order it's document five forty six supplemental excerpts forty four in which he said in great detail what the discovery was going to be about it your position in this case is not withstanding the fact that this looks and walks like an independent contractor contractor agreement it really isn't because the way they treated my clients was they treated them as employees is that a fair summary of your position i would correct it i doubt i would disagree with i think there are many provisions in this that clearly suggest it's a contract of employment but the point is that even the defendant concedes that the mere recitation that this is a contract of independent contractor contract doesn't control the issue no i understand and even the make me give you another assumption here because and this is what troubles me about the case if i were an arizona state court judge interpret disagreement i would not find it in big us i would find it on its face it is an independent contractor agreement doesn't mean your folks were treated as employees that's the that's the the gist of your claim but why do i go beyond the face of the contract here it's clearly something more than a contract that says you're an employee or an independent contractor and in the darden case the supreme court says when congress and uses the term employee or employer in a federal statute as they do in the f a a common law notions of employment apply and what that means is number one the recitations of the parties as to whether you're an employee or contracts so so how do i go past the contract the deal that was made in writing by the two parties to to look at whether for f l s a purpose as it's actually an employer employee but it is the deal that was made him or not suggesting that you just throw the piece of paper out the window and look at what went on but the concept of the employment the commonwealth concept of employment the supreme court teaches in darden requires an analysis of a great number of facts and fact doors including whether the work that this work this contract is dealing with is in the ordinary course of what employees do well that right there you have to look to see what are the employees of this defendant doing how are they treated are their contract terms different from the contract terms set forth in the interpret ing the contract that is before us but not just what the words mean but the legal effect of it does it create an employment related and if i were doing that as an arizona state court judge why would i look past the contract the words in the legal effect of it are not factual issues but legal issues tell tell me why under arizona law the judge shouldn't decide this on the face of the contract yes it's complicated but if you go back to daryn or the donors donor the plaintiff says i never agreed to that stuff you put you stuck a form clause in an agreement automobile company i never read it i never agreed to it so i never agreed to that contract the issue in garner was whether the contract he entered was a contract or complain because if he was an independent contractor then there was no risk of violation if he was an employee eat the stuff that was added into the contract if you compete if you legal but he says i never i never agreed to that so this went to contract formation in garner i don't think says that if a con if nobody disputes that you entered into the contract and agreed to the provisions that we can interpret them on their face your honor i don't think that's what their honor the issue in garner was whether the contract he signed with honor says you can bring in extensive evidence to show that you never really agreed to all the provisions of the contract but here i don't think there's any dispute you can bring in extreme sick evidence to explicate the meaning of the terms and let me give  policy there's nothing in the four corners of the contract that tells you what those company policies are but those company policies go to the very heart of control and control is the heart of the employer question what are those policies that they require these drivers to comply with if they'd if they involve control of that manner and means of doing the job that makes them employees or let me give you another example there are dozens of an award be cases applying the common law test of employment to determine whether a truck drivers or are employees or independent contractors and one of the most critical aspects of is whether the driver can drive for a different company or whether they are compelled to drive only for the company that is the alleged employer well here we have to create agreements signed simultaneously the leas the contractor agreement one says you can drive for whoever you want and the other says you have to drive for swift now how are we going to resolve that without some discovery as to which one of those control or let me give you another  the point you give me another example let me ask you another question let's assume you let's assume this proceeding goes through to the and that the district judge and the district court finds that this is he finds that it's an independent contractor contract are you stuck with that finding in front of the arbitrator i believe it wipes out my so we've wiped out so under either scenario we've wiped out the critical because the critical issue for the arbitrator in this case is is this a contract of employment or a car or an independent contractor contract grech if this is sent directly to arbitration that's the issue you have tried that the issues with this court is already determined a district court judge has to decide whether this is binding effect on the arbitrator i think i have not researched this i believe so i would certainly say it's a practical matter i cannot conceive of anybody trying to well couldn't a district court say something like this couldn't a district court say this appears to be an independent contractor agreement you claim that you were really treated as employees and you have a claim but the fact that it's an independent contractor agreement doesn't mean you don't have a claim it just means that you can now go to the arbitrator and try to show that in fact you were treated as employees because i take it that's really been your claim throughout this notwithstanding the face of the agreement we were really treated as employees isn't  changed all that happened under this contract happened under this contract so the district court is determining the relationship between the parties isn't that right isn't that what the scheduling orders as yet whether in fact under like f l s relationship is employee employer then it's a contract of employment so working backwards is that's how i read the scheduling or do you agree with that if i'm sorry so if in fact there is an employee employer relationship then working backwards that makes this a contract of employment that's how i read the district court's reasoning do you agree yes and the judge has been saying that from the very beginning of this case when this before this case came up the first time the district court judge said in order to decide whether this is a contract of employment i've got to look at how the contract operates so i can understand and apply the dart in u s supreme court factors that's going to be very complicated so i'm going to send it to the arbitrator yeah and the other you know i don't for mandamus and this court recently did exactly what th district court said that this would require a fact a factual investigation into the relationship to take it is given that we haven't decided this case yet i mean you can cite us the say this position in the second case but  that it they argue that you had to look at the facts of the relationship and all the discord said was no this is an issue for you to decide judge at the other certified appeal was the judge saying i know you hinted at this first time ninth circuit but i think you were wrong but so i'm going to certify this issue and test you and they said no we had is correct the question of whether or not the contract is arbitrary is for the court i think look you can try to read more out of it than that but i think that's all that happened on the second appeal the clearly the recitation of we're into and characters in the contract doesn't control everybody agrees that doesn't control and once that doesn't control how do you figure out whether a contract is a contract of employment without resolving the ambiguities in the contract and seeing how it plays out under the darden factors for determining whether someone is an employee or not an employee and the dardenne factors clearly require looking outside the four corners of the contract you have first you have to resolve all the ambiguity in the contract then you have to look and see how employees doing the same job are treated you have to look and see whether in fact the controls that the company i saw mines to the drivers under the words of the contract can meaningfully be carried out the contract says that they can turn down loads but what's the consequence of turning down loads if you get terminated for turning down loads that's not a very meaningful control over your life and it doesn't count in making you an employee or making you an independent contractor the only way to resolve this is to analyze the contract under the dardenne factors and that does require evidence outside the four corners of the contract and i would say just one last word that has been the defendant position from day one they have only taken a different for they told the supreme court that this thing you've got to look at facts outside the contract when they they file the circuit to sion from that the second the decision by this court it's only when the court finally does with they say has to be done that now they've brought yet another appeal saying well no actually it should be the four corners of the contract whether it's  parties in counsel conceded yes that was the deal that's where the analysis stops if let's assume for example that in the paragraph the talks about the company policies that the company policies i know this isn't the case but the company policy said and append contractor should be treated as employees within the irrelevant extrinsic evidence i don't know that would be relevant expensive evidence your honor what it would be is when the when the district court reviewed the contractor agreement it would weigh that provision against the twenty other provisions that says you're an independent contractor much like your first yes my question is how do you answer that question without actually seeing the policy which is not part of the contract i don't know that you have to answer the question through extr evidence i think that you could actually you could as part of the analysis in analyzing the contract presume that it means the worst and weigh it against all of the other solutions in the contract that say so long wouldn't you incorporate by reference into the contract the other policies when when in generally an arizona law when when when a contract refers to another document it's incorporated by reference doesn't mean it's extreme sic evidence but you might look at it and if the other document ha ha doesn't really matter what we call you really employees would not be relevant it might be relevant your honor i guess i was trying to address judge thomas question of whether you actually need the extra evidence and i and defendants position is that by you could look at the four corners of the agreement almost like the scales of justice weighing the provisions against each other and that's the role of the court to determine whether it walks like a duck it talks like a duck it must be a duck if it walks like a duck and talks like a duck it's an independent contractor agreement versus an employment what do we do if it walks like a when who what do we do in a circumstance where we just can't tell from the face of it do we do we have discovery or not now position their position is under this document although it has the label you just can't this section one issue isn't it more simply put it's does this go to the arbitrator or does it not go to the arbitrator not let's have a full trial and retroactively back into whether this is a contract of employment or not let's determine the relationship between the parties because that will tell us what they meant four years prior when they signed this agreement that's what the court is insisting on doing here as opposed to looking at contract formation dealing with the discovery issue we would posit that no the court doesn't have to look beyond the four corners of the agreement and there's no mechanism arguably to look beyond the four corners of the agreement because this is not a section four matter because it's not the making of the agreement that's at that's at issue  thank you both for your arguments today the case just heard you be submitted for a decision and will be in recess for the morning