legal error that occurred in the court below was it treated the partial motion to dismiss a motion to dismiss was not brought in all grounds on this case and the ninth circuit in richard's is held in a situation where a motion to dismiss was granted but without prejudice that's not a merits determination doesn't kill the right to seek arbitration we kind of have the flip of richard's here to where we had a partial denial however there was a second amended complaint because the only part that was granted with lee related to mr you shoot a terms of whether he was joint employer the second amended complaint extent was answer has every single theory that was in the first amended complaint subject to the motion to dismiss and what we have since found and it negates a concept that we reform shopping  we move to soon as the client said i want to go to arbitration what happens after that we bring a motion to stay this case on appeals for arbitration rights wouldn't be mooted in the judge filing comes out and tells us and this is before way after we had moved for arbitration hey folks that partial denial that was a marriage determination so in this case i think you've got an interesting theory to where there is inverse prejudice in my client's upheld aunts are going to be harmed they're going to be denied they're contractually chosen forum that all sides agreed to and we're going to be in front of a judge that apparently had  against as and has basically but i'm just saying it's something we didn't know in other words i could buy an idea for stopping correct if we had had that and he said i think i've made a dispositive marriage ruling that's going to hurt you and then we speak say oh we're going to go to a i think you can make an argument for forum shopping and there's an important thing i'm prejudiced because one of the arguments that made as well there's going to be duplication if you go to an arbitrator and stuff you're going to lose whatever it was basically heard on the motion to dismiss well that's not true because the arbitrator obviously can pay whatever weight he wants to judge gutierrez ruling it seems to me that he waited seventeen months to move for arbitration and you  arbitration after judge you terrorize indicated that he was going to view the students as employees so i know farm shopping is a harsh term that i mean obviously you seem to be happy before a until he made that ruling well the problem is is his ruling actually said i'm just as a legal matter got not going to determine it's going to depend on what the proof is later on basically i think he was setting up a summary judgment because there's multi factor test that you look under on the f l last day and so even that determination would necessarily mean that this was a merits binding determination and it may not have been but it clearly showed his time limit but you look at the quality of what happened and i think it's very clear that there was a good six months in which service was being accomplished people were coming in proactively she more counsel was added to the plaintiff side there was not active litigation then counsel get together in and this was predecessor counsel on the defense side in june twenty fourth team when you do that you're looking at most basically seven to nine months of that lay depending on when you did it and it took us about a month to tee up this motion even after giving notice of an intention to move for arbitration we gave them notice at a deposition and attempted to get a stay and basically do this motion to arbitrate see what the ruling was it's distinguished floor and that's important here is messina still wait a minute folks you did all this activity and you had opportunities to inform your opponent and the district judge that you wanted to arbitra here we did that fact right after mr hold and my firm got involved we put it in our answer we put it in the twenty six f scheduling report but then he never did anything with it for a while you have knowledge and you didn't move right away then you're dead and that's not that's not the standard really the emphasis on this case it's prejudice and it are your test which judge and i you know respectfully submit if you brought any motion to dismiss you'd be dead and you've got to move right away whereas i think the case law indicates there's nothing wrong with a motion to dismiss testing some piece of the merits it might lead to a resolution you might get a ruling  which arbitration isn't necessary for everyone or it may lead to sell and so i think it depends on the quality of the motion to dismiss and clearly this motion to dismiss was not a merits ruling and that was the legal that happened we have the flip of richard's being involved and by the way you might remember the scheduling conference there was a dialogue about arbitration was actually flat and we said well we need to get to decline make sure we have  didn't say you've gone too far you brought that motion to dismiss you pointed out didn't he didn't you say that that you think that he made some somebody made some kind of flip comment that he might very well be better off than federal court and he said go don't wait too long and warned you not to wait too long that is the point mr hole did say that there and we did not wait too long we did not within two and a half months we moved and nothing else had gone in between that period of time so we didn't move as soon as we could and after getting the client's consent and there's pros and cons you have to discuss with your client this isn't just a slam dunk decision right and i mean i know why he did a question i'm just vanish i don't know that i want to get into privilege discussions but i was not initial counsel in the case no no i don't mean you personally right and i'm just saying forget how many counselor were it if free for seventeen months the path whether he wants to invoke the arbitration clause well i will tell you right after we had the scheduling conference we did have those discussions well  little bit early if you have a cause to get out of federal court and go to arbitration but on this record which is really undisputed i just don't see the prejudice that's in i mean it all depends on the circumstances but there really is no prejudice let me add this point because i think it's important this is not a sterile area of the law ok in our reply brief to page seven you'll see multiple decisions coming out  both e f l essay and we cite the binge human case which these attorneys were involved in the northern district of california which is also held under state law that students are not employees this issue's going to get revisited by errors it's going to get revisited by the arbitrator and that's why there's really no duplication of effort and in my view based on this record and based on the judge coming to a conclusion that it was a merits determination you have just cause to reversing the motion which denied the arbitration rights let's there's any questions on reserve a couple minutes good morning your honour's may please the court chime mandelbaum on behalf of the appellate he's in this matter a number of courts have held across the country starting i believe with a circuit that playing heads i win tails you lose is the worst possible reason to delay to move for arbitration sooner than you could have and that's precisely what happened in this case as judge your two years noted i want to address a couple different manners in which the appellant's played heads i win tails you lose the first of course is the motion to dismiss and in the briefing in an argument here today appellants muddle two different merits based decisions to be made the first was the one address in the motion to dismiss and that was whether employed these students these cosmetology students were prevented from being employed as a matter of law by the california cosmetology act and judge gutierrez read that and considered in  appellate court decision called hutchison and concluded it doesn't address that and hutchinson is no longer good law because of california supreme court authority that came after it specifically marking as it comes so he said essentially these students will will go through the same test that any other inquiry would go through as to whether or not this constitutes employment under the labor code that is a separate issue then the later summary judgment issue of whether given the evidence this was an employment relationship so judge did not prejudge the merits of the case what he did was at the at the defendant's behest analyze a critical legal distinction out of the gate and rule in favor of plaintiffs the other place well that takes only him a modicum of deductive reasoning to understand why the motion to dismiss was proper prior to the motion to compel arbitration no deduction is needed when reviewing the transcript of the case management conference their judge could hear if asked is if a cli will look if you drop this in a couple footnotes why haven't you moved to compel arbitration yet and with surprising and i suppose admiral candor counsel says look there's no explicit bilateral arbitration reference and we're concerned that we're going to get a class arbitration clause construction award and if that were to be the case we'd rather be in federal court with the rule twenty three in the procedural rules of federal court so for second time over counsel is again making a street strategic decision heads i win tails you lose with respect to arbitration this is the other point that i think relevant with respect to the case management conference is that when judge gutierrez said you know look at some point waivers going to be come into play here they didn't move immediately they moved three and a half months after that conference three and a half months that's longer than the eighth circuit in the hooper decision determined was enough to constitute a waiver given the motion to dismiss that was filed in that case in total this is just three and a half months on top of the fourteen months that have already gone on to agree you have to show prejudice i would agree that we have to show prejudice the so all forms of prejudice that are cited in this context are our present here and i would refer of course just within the last month i think the closest decision from the circuit in the scene it came out but the prejudices of spalls and these are the forms of prejudice that are that are cited in cases of holding waiver first the second bite of the apple consideration here there were clearly be a need to relive a gate critical issues particularly the cosmetology act that was decided by the district court and the tradeoff there between arbitration and court was and in court of course you can get a sizeable decision and you can have that decision appealed to the ninth circuit court of appeals which is what in the twenty six f report appellants made clear they intended to do in fact they wanted to get in the an interlocutory appeal in had having made that strategic decision and lost they now switch so that the first and paramount form of prejudice is the need to re litigate a critical issue is decided the second has to do with case strategy and that's often cited well with this case have been litigated differently in a different form and in this case it's more than just kind of a conceptual hypothetical form of prejudice it's a real form the decision was made in this case and it's somewhat unconventional to reverse the merits and classification discovery and briefing in the reason that that election was made was because both sides decided that getting a sizable decision on the merits of this particular employment relationship was of paramount concern had they had the appellant's of mood for arbitration out of the gate we wouldn't have f and classification because then that decision being rendered in that form would not have the same effect so so the case really would have been litigated differently in a different form the third form of prejudice is the costs and the resources associated with seventeen months of litigation now appellants have sided on a number of cajuns that cost in and of themselves are not enough to satisfy the president's prong but there are certainly a relevant factor in in conjunction with the other forms of prejudice that i've outlined and after seventeen months of litigation a motion to dismiss a scheduling conference or told a rule twenty six f report three days of depositions there's a number of forms of cost and in fact the first time that the defendants and alex collins affirm the resources that have been sent already is on may sixteenth through the joint stipulation to extend the certification deadline the parties entered into it is certification fifty lation as a way of sort of addressing local rule twenty three and enabling them to flip merits and certification and they represent along with plaintiffs that counsel had already spent a considerable amount of time and effort in a wise in how to design this case and in a manner that would allow the court to address it effectively so those are the those are the primary forms of prejudice and i think certainly the biggest being the second bite of the apple but all three of them  support that to tell you the circumstances i think the most recent or perhaps one of the most recent one circuit decisions on this was the kelly decision and in the kelly decision they outlined precisely this mix of prejudice to support the upholding of waiver in that instance i think the other thing that i would bring to the court's attention is the standard of review and i think with first obviously to know that with respect to the law but with respect to the months of active or in at active litigation to borrow the  appellant's invented distinction i think that is clearly an analysis of the facts and you know what the nature of this time that transpired in analyzing the docket and activity happening outside was ocket so i would say  in that regard their argument should be reviewed for clearer only i think it's worth retasking with some of my remaining time all the various times during the litigation appellant's represented their intention to seek judicial determination of this on the merits and again that started with as i mentioned the so stipulation to extend certification deadlines where the di defendants represented and this is already seven months after the complaints filed that it's in the best interest of judicial resources that there that there be discovery and then an opportunity for a court resolution of the legal issue in conjunction with that they agreed to toll the statute of limitations on f l a state opt in claims from the date of situation until the day the court issues an order on the motion for summary judgment so the very definition of the tolling ended at court resolution eight months after the complaint was filed they filed a motion to dismiss and we've addressed that in detail already thirteen months after the complaint was filed the parties father june joint twenty six f report in which again defendants affirm their intice a patient of filing summary judgment motions to the court they affirm that it's in the best interest of judicial resources to structure discovery in the way that the parties jointly requested and they proposed to the court that after the court rules on the cross motions for summary judgment the case should be certified for interlocutory review by the ninth circuit fourteen months after the complaint filed is when the case management conference happens and in addition to the the line of discussion that we've already covered with respect to class the possibility of a class can cause construction interpretation the court asked about settlement and whether there had been discussions for settlement and  we had some early unsuccessful efforts and now it's just a matter of bringing this to your honor for a determination at summary judgment so again affirming that this would be brought in court one othe point i think worth addressing is the distinction two distinctions that have been made numerous times and are worth research getting to the court's attention first of course being a reservation of rights is different than  of rights and that observation is of the main by a number of courts you can't just a year into the case drop a firm affirmative defense fifteen out of forty three and think that that gives you the opportunity to play heads i win tails you are procedural in nature such as standing and motions to dismiss that drive at the merits of the case and the cooper decision from the circuit i think does a good job of describing that difference and lester's and other questions i think i've addressed everything i  it or does it not it doesn't your honor and that's what the appellate counsel noted that there isn't any explicit bilateral language so their concern was that if they if they invoked arbitration at that juncture that the plaintiffs would argue that it was permissive of class arbitration and since there was no language to the contrary that would have been a decision an arbitrator would have to make thank you  your honor is in rebuttal one the second bite at the apple standpoint if you adopt that to its legal conclusion or extend it to its logical conclusion you would come to the conclusion that filing any motion to dismiss means you've waited that's not the line that this circuit or the other they rely on the hooper decision in the eighth circuit it does reject the idea that motions to dismiss necessarily way and that was a kill shot motion where they were moving to get rid of everything and try to get rid of it once and for all that's different than what a logical choice was made here to keep up the student employee issue i mean this was no surprise this wasn't a hidden issue and they say we would have litigated it differently really you go to an arbitrator and you're not going to tee up the same issue because you're going to avoid all the certification and the cost that would be attendant on plan that's speculation and i don't think that would have occurred in this case issue two on hutchison the judge has basically sat there and said i think the martinez case may have trumped hutcheson but this is going to have to look and see what happens on summary judgment and proof and making sure you bury your birth he certainly did not indicate that this was going to be a dispositive merits ruling number three judge who tear with what he said at the scheduling hearing i want you to carefully review it because they mischaracterized what mr holt and the judge discussed it was simply the judge goes i see you've got an arbitration asked mr holt are you going to do it goes my clients have made a decision maybe we'll stay here maybe we won't judge that we need to get it done soon you've got to move on this or at some point you're going to be held the way they didn't indicate you already have waived point number four talks about the three and a half months being per se prejudicial there's no test on that at all i would ask you to look at the q votto case where there was a twenty month lag there was a motion to dismiss a motion to certify that was opposed and there was even some discovery against plaintiff in the central district using ninth circuit authority said no prejudice same thing with the murray case where there was activity at a motion to dismiss and guess what because the law was evolving like it is here there was going to have to be other other factors the cases where there has been is where there's who years of the way and so there simply is no per say three and a half month rule finally in terms of cost one the arbitration clause provides all the arbitration and arbitrators fees are paid by the school so they have no prejudice and to cost alone is not prejudice in one circuit but there was no proof put in front of judge who two years in terms of what that amount was even was on the standard of review it is to know