and if i could just to inquire of the other mr dockers or mr woods do you intend to split your timers there one of you who are we intend to split our time your honor and how would you like to do that i have a mr dockery's i have eight minutes please the court david cooper on behalf of trade one enterprises i'd like hers are four minutes for a bottle in this case the district court compel trade wind to arbitrate its claims against the defendants based on the arbitration pridgen of an agreement that the defendants did not sign the district court relied on an expansive version of equitable stoppel which this court has consistently recognized as a very narrow exception to the rule that a party should not be forced to arbitrate claims against someone with whom it has never agreed to arbitrate isn't the issue in this case entirely one of state law in other words if this contract was  state law in this context according to the supreme court in the arthur andersen case is limited to traditional exceptions so too much does but but equitable stoppel is a traditional exception are you saying the supreme court was saying that the states don't have the freedom to to craft their own equitable stoppable in schools that they could if it was traditional and if it were applied equally not just to arbitration clauses but to every kind of country where do you find that in the supreme  in the federal jurisprudence so the federal jurisprudence will arthur andersen make clear that it needs when it was talking about the exceptions it was talking about them in the sense of being part of traditional state law well then and this is part of traditional i'm from arizona not all of our laws traditionally it's part of traditional arizona law are you saying it must be traditional to the fifty states no i'm not saying us to be traditional to the fifty states and i don't i don't think we have to get into this kind of complicated issue of what  arbitration can compel a signatory to an agreement with arbitration clause to arbitration under certain circumstances correct correct why doesn't this fit within those circumstances it doesn't fit under those circumstances because the strictly intertwined are intertwined with the subject matter of the contract it's that has the arbitration clause so it's not simply to impose the obligations of a contract because otherwise would only apply to rd party beneficiaries that's not true at the arizona cases say it's not a rd party finish or a doctor and it's an equitable stoppel doctrine so why isn't this claim intertwined with the subject matter of the contract so so two points  if that were the case it would not just apply in the rd party beneficiary context because there are a whole bunch of other sort of nondescript auctions where you might impose for example on a parent company not because of it's a rd party beneficiary not even because of alter ego but just because there are state law concerning when you can impose contract obligations on non parties that are taking the benefits of the contract even if they aren't technically rd party and about what that step just means that that state might have a broader concept of rd party beneficiary that's not the that's not the argument here these folks aren't saying we're entitled to the benefits of the contract they're saying that our dispute with you is intertwined with the term protection of the contract you've agreed to arbitrate disputes about the contract so let's go to a question of what is the interest trickly intertwined means but i think it's important to recognize that when that this language which comes from the sun valley ranch case is quoting in a circuit case called cd partners and a circuit in cases of post dating that in see partners have recognized this exact limitation on what inextricably intertwined means and you can look at the in re wholesale case from from a circuit which concerned an antitrust claim and the court explained that when you're dealing with an antitrust claim you're trying to impose the obligations of antitrust law not the obligations of the contract do you point to where you say specifically where you think this requirement the suggested in sun valley ranch if i understand you agree that arizona law controls here or that they agree that arizona law would control correct ok and so we have a case that looks to be pretty much on point sun valley ranch you point to other authorities on arizona authorities f position seems like we have to deal with sun valley ranch i'm trying to figure out where you think that requirement of breaching the contract is required or suggested under sun valley ranch because when i read where i read it it says that a claim relies on a contract and when the claim makes reference to or presumes the existence of the contract or the claim arises out of and relates directly to the contract that doesn't seem to require that the claim must be seeking to hold the non signatories liable for breaching the agreement it's seems like it's simply requiring that the claim be closely linked and dependent to the existence of the agreement tell me why i'm reading that wrong so that that sentence comes at the end of a paragraph quoting cd partners and cd partners ex is explaining that there are two scenarios where equitable  agreement it would have a perfectly useful and ordinary purpose as applied to supreme of the signatory without applying it to the non signatory defendants so that's the st part of that paragraph the nd is another is when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against this non significant and that this case with their saying use because of these agreements we  various actions of the parties putting these all together we have an i trust violation that is what they're saying and that is agreed that that would if that were the case then that would fall with the not part of the test but that is not the case here because although it is alleged that there was a breach that is not the basis for the claim and just to be clear about why that is it's because if there were no preach so for example we allege that there was a preach of this forty five dollars day notice period and that there was a conspiracy intentional interference with contractual relations with that the army triple wouldn't you have to interpret the contract as the basis of that claim before when even got to where there was a fear i put you most likely ye was some disparagement related to that there was also just bargeman completely unrelated to that which is this is a company that selling bad essentially bad product mix product and therefore you shouldn't deal with them so they disparaged does not arise out of the contract dispute where somebody said one reason we're putting you on the watch list is because your products have mix it's mixed sources in that if you will this is the facts are certainly relevant to the contract dispute we wouldn't we wouldn't disagree that the facts can be relevant to both the antitrust claim and facts could be relevant to a breach of contract claim or a tortious interference claim but the point is that our antitrust claim if this goes to a jury or if a judge is deciding this in summary judgment i'm looking at the elements of the anti trust law none of them has to do with whether or not there was a preach a jury would not be asked in this case whether there was a pretty let me ask the question differently let's assume that the contract that they the result of a conspiracy and that the end what you're seeking to do is it not is to enforce the contract no absolutely not we're not trying to get a forty five days back we're not trying to get compensation because for example  entitled to nothing so our claim is not based on whether or not a breach existed yes we allege a breach because it is indicative of a conspiracy let me ask the question the other way maybe this is more helpful what if it's contract and that's those are the facts and i know you don't think they are but those are the facts do you have an antitrust claim under that circumstance i present it to answer only because when you say had acted unilaterally and said look you're not complying with the contract therefore you're gone then that would not be an antitrust claim but something that can be done unilaterally cannot necessarily be done through concerted action on event that's assume subpoena gets the information from from putting out shoddy goods and people but join the list and surely terminate you and those facts will turn out to be true do we have and i trust claims there would still be an antitrust claim i think they would have because your breed you had a contract had a contract with if that was the only if that was the only reason then yes if that was the only but but let me be let me be clear about this you know i think that the reason why the cases don't go into that kind of detail and who's right and who's wrong about particular facts is because there's a clear demarcation in the case law where contract based claims like those in sun valley ranch arch are treated as oh you're in trying to impose the obligations of the contract get the benefit of the contract in an unfair way if you want to avoid the arbitration provision whereas here we are not saying that they are liable for a breach if competitors get together to be excluded someone from the market that could be an antitrust violation regardless of whether or not they were in the market in the st place or had a contract or whether there was a breach of that contract and this is i think this is the fundamental point is that true in the license  i understand it in the general context but i have a i have a trademark i want to license it to people don't i just get to decide who to license it to you do but you come to you as competitors getting together through concert action do not or at least there is a potential antitrust claim there obviously would still have to prove the elements of the antitrust claim but there are certainly a potential antitrust violation there and so for example here it's alleged in the complaint that they could terminated in six months for no reason at all or they could have not renewed the contract in the st place and we allege that the reason why they didn't do it through those mechanisms which pretty clearly would not have been a breach was essentially to provide cover so that they wouldn't look bad to other manufacturers and to the industry as a whole so we don't dispute that they actually could have terminated in a way that wouldn't have been a breach and our argument is even then it still would have been an antitrust violation p cause they were doing it in a conspiracy with the purpose of restraining trade and preventing our business model from disrupting their industry thank you all but a few seconds of your  time please the court at doctors from still reeves on behalf of just smith and sons coming the question presented and it's been alluded to in your questioning on this appeal is whether the district court erred in its application of arizona law to the facts as plaid in the complaint in this case when it ruled that the doctrine of errors of equitable stoppel under arizona law required this matter to be compelled to arbitration the two things that trade line has studiously avoided talking about in this appeal our arizona law and the facts that they pled in their complaint and as you just heard in the argument presented to you they're asking you to apply the law of other jurisdictions and to ignore what was actually pled in the complaint with respect to this and i trust claim arizona law is clear it's set forth in sun valley it was confirmed a few years later in the unpublished kerry case that some dolly the plaintiffs were not asserting an anti trust claim right that's right all right and so why doesn't that distinguish one valley ranch from the facts here it seems like the anti trust claims arise from statute and here the contract not for contract so what's your response to that now my response to that is i don't believe that the fact that this is an antitrust claim makes any difference at all it's a claim that our rises out of an agreement to the extent it's an antitrust claim the and i trust violation was to deny i trade line it's procedural and substantive rights under the contract know i haven't thought about that your honor i think it is i think it would be permissible for for people in an industry to say we don't want to do business with this particular deal they say so i take it your argument is that you know i trust claim is really intertwined with the contract claim because that's what gave rise to whatever the it i trust allegations are right this is paragraph one seventy two dollars of the complaint which which describes the end i trust claim it says that the defendant since the pima agreed that they would act in concert and did act in concert to deprive trade line of important procedural protections it should have enjoyed with respect to its license agreement with the association to disparage trade lines products which flows out of those procedural or at least one of the procedural protections that is complained of is the manner in which subpoena responded to customer complaints about adulteration and tested tradewinds products so the disparate and trade line tested and then passed those results on to existing in future consumer i take it to disparagement alleged in this case is that you that trade doing produced a bad product that's right that and the alleged disparagement is based on the allegation that  of those products was procedurally in violation of the agreement which is what made those statements disparagement so the disparagement claim is intimately intertwined with the procedural protections that trade line alleged were violated as a result of of this conspiracy and then they also go on to say that the conspiracy was to strip trade lines of its license with the association that's the claim here now you take the license away that claim disappears even if it doesn't have to disappear for you to prevail because what it is long is that the claim is in of twined in some way in the case law doesn't say is completely dependent that that's right your honor i'm just responding to the question of what happens if the if the contract went away which i think is a way of examining the extent to which the contract provisions ar intertwined and related to the claim that's being asserted in this clip case as it's played if you took the license agreement away there could be no way and i trust claim because the alleged and i trust violation is the denial of these rights under the contract you know using words like group boycott in concerted refusal to deal as if there's some sort of talisman it is simply in error those those words have no meaning without focusing on what the conduct was and i think it's worth noting that in this case all of the alleged wrongful conduct was committed by subpoena the signatory to the to the license agreement subpoenas the one that allegedly violated the procedural rights allegedly of the party the disparage trade line and supreme is the party that ultimately terminated the license so the signatory to the agreement is the one that up that allegedly according to the complaint is the principal actor in the conspiracy and the and the prime and the old me frankly wrongdoer other than the conspiracy allegations so you know the the the overall question here that is asked by all of the courts is is it fair for the plaintiff to rely on the benefits of the contract when it benefits the plaintiff but deny the obligations of the contract when it does not as with this arbitration agreement i'm getting i think close to that end of my time and i just had some up by saying this i you know i've read all these cases i know you have i looked at it all of the fact patterns are different the way that courts have articulated the standards differs from time to time but in the end every single case involves an examination of the particular facts of that case and fundamentally asks the same question which is is it fair on the facts that have been alleged is it just is it accurate is it fair to compel this matter to arbitration and i am hard pressed your honour's to imagine a case where it would be fairer to compel the matter to arbitration this claim doesn't exist at all without the license agreement they agreed to arbitrate with subpoena the primary wrongdoer who are the only reason as i think we all know that subpoena was not named in the district court complaint was as an effort to avoid the obligations of the arbitration agreement we know that because trade line demanded arbitration with trade line before filing its federal complaint we know that because trade line added subpoena as a party defendant when this case went to arbitration and contrary to what a steamed counsel said in response to your question judge her wits that the breach of contract action against in no way independent of the antitrust claim they are one and the same they are exactly the same claim and not only are they exactly the same claim based on the same evidence but at the arbitration trade line conceded that any injury and the quantum of damages was identical for the and i trust claim as for the breach of contract claim against subpoena now the that the arbitration panel found that they had failed to meet their burden of proving causation and that their damages were t speculative but there are no independent are no independent damages there is no independent harm there is no claim independent of the alleged breach of the licensing agreement by supreme subpoena and that's why applying arizona law you good morning dan woods on behalf of the j g boswell company i agree with what mr duckers has just said i just want to spend a few moments explaining why sun valley ranch in arizona law and equitable will apply with equal or even perhaps greater force with respect to the claims against my clients and that is because trade trade lines entire antitrust claim is premised on violations of the license agreement  boswell and the other kinds of coconspirators tradewinds complaint begins with the allegation that boswell grows cotton on the world's largest privately owned farm it goes on to allege that trade lines principal mr palin am presented boswell's head of marketing mr elder with a business plan and that business plan called for trade line vertically integrate and eliminate middlemen from the cotton trade lines complaint then allege that mr elder viewed this business plan as disruptive because it would have introduced competition into the subpoena cut market and would have required boswell to lower its price trade law and then went on to great lengths to allege that boswell just smith in the subpoena association conspired together to prevent trade life from executing this disruptive business plan after alleging that the supreme association had only a small staff of five employees and only eleven members of its board of directors it alleged that boswell had two seats on the board of directors alleged no less than eleven times in the complaint that mr elder was the chair of the board of directors  d i've read the complaint it strikes me that this is sort of a separate argument isn't aren't they saying as against your client it's motivation was to make sure that the had anti competitive reasons for wanting them not to go out and open an independent operation if you will and therefore that's why it acted as it yes and that's why i said intertwined with the contract because states that mr elder come in dear the subpoena board to act on boswell's behalf and then it goes on to allege repeatedly that boswell conspired with the other co defendants to deprive trade line of its license agreement in order to prevent trade line from fulfilling its disruptive business plan and to avoid price competition in the market for subpoena cotton and you've already become aware of the specific allegations that it's that under boswell's control subpoena surreptitiously tested trade lines products and vice by alicia license agreement interfered with trade lines potential contract with a merchant in israel and falsely disparage trancelike trade lines products and i know that's been the subject of a couple of questions so i want to explain that the the spares volves disparaging the quality of trade lines product and specifically that it was not in compliance with the license agreement conduct caused trade line to lose customers and business and had the intended effect of putting trade line in such dire financial straits that it couldn't pay its creditors including just smith and ledge that  all throughout the complaint and then they are tied together in paragraphs one hundred and seventy two dollars which mr duckers has referenced but which is not found in tradewinds briefs even though we raised it as in our brief and it interstate and foreign commerce and violation of section one of the sherman act that's what this case is about there's nothing separate from the license agreement as has been argued now and so for all these  thank you thank you thank you one minute thank you i just like to briefly make two points st what is the test and what does intertwined mean and i think it's important to note that in sun valley ranch and really all these cases talked about with their quote the claims were intimately founded in and intertwined with it's not whether the facts are intertwined or generally intertwined it's intimately founded in and intertwined with and that gets to the nd point where the only real question here in terms of whether or not they're intertwined is whether or not we would need a preach in order saying you must pay on to the contract isn't a contract tied up in your claims the contract is certainly part of the story i mean be hard to tell the story of what happened without referring to the cream and we recognize that but that is not the basis for the claim itself or for the injury and the point is that even if the contract did not exist so we're trying to enter this market or even if they had just not renew the contract if those are not the facts of this case the facts of this case or that your your gripe with them effect arose out of the terminations of your contract if nobody had ever terminated your contract you wouldn't have this in a trust claim would you true but the current the difference between terminations and breach so even if they terminated it in you know they argue that there was no preach even if that were true that was terminated in a completely legitimate under the contract fashion if it was done through a conspiracy with the intent to harm competition which is what we allege then that is a violation of the antitrust laws that is not  bly intertwined with the bridge thank you thank you mr cooper mr duckers mr woods thank you all for your argument presentations here today the case of trade line enterprises versus just smith and sons cotton and j g boswell company is now submitted