rich phillips here on behalf of the appellant columbia hospital medical city at dallas also doing business as medical city at a medical so dollars hospital in this dispute between a medical provider and a pay or i am a the pay or would really like to have its contract and defeat it to medical city dallas hospital treated a patient who's a member of a health plan administered by i m a i m a pre authorized treatment then for two years i am a refused to pay anything on the hospital's claims for that treatment and when it finally did pay something on those claims it expressly took advantage of discounted rates in the hospital agreement on the terms and the items for which it decided to fund the reimburse but now i am a argues that it can take full advantage of that contract but at the same time not have to arbitrate under the terms of that contract this court should reverse the district court's refusal to compel arbitration on two independent grounds st direct benefits of stop l requires arbitration here because i am a knowingly sought and received benefits of the hospital agreement and nd and independent of that the network of agreements here that create this p p o arrangement constitutes a unified contract contract while also at the same time avoiding its burdens it applies in two different circumstances the one relevant here is when a party knowingly seeks and receives the benefits of a contract with an arbitration provision contrary to a's argument in this court it is not limited to parties that are closely related or that are affiliates and the court should reject dime a's attempt to add a new requirement for a direct benefit system for this prong of direct benefits to stoppel the only two requirements are knowledge and receiving a direct benefit the district court here rejected direct benefits of stoppel on the st prong only it did not reach the question of direct benefit but instead found that i am a was not aware of the contract and that rejection is based on two legal at hers about knowledge st the district court relied on the fact that i am a denied having subjective knowledge of the arbitration provision twice in the opinion the district court said that the i am a did not have knowledge of the of the terms of the contract and specifically knowledge of the arbitration provision that's not the right test this court rejected that test in the  register which is a case involving a form selection clause but didn't get its stead again involved direct benefits of stoppel in the same test in that case the party argued that it didn't have specific knowledge of the form selection cause this court rejected that argument and said specific knowledge is not required and tellingly i am a makes no effort in this court to defend that part of the district court's reasoning the nd legal error the court made was by saying that merely having knowledge of the rates the reimbursement r was not sufficient knowledge of the contract the hospital agreement and that's because the court found that the rates are found in an attachment to the hospital agreement and the district court said that's a knowledge of an attachment not knowledge of the contract but the law is clear on this one  black letter law that attachments to a contract are part of the contract so knowledge of the rates is knowledge of the contract basic terms so the district courts two primary reasons for saying that there was not knowledge should be rejected when the correct standards are applied i am a was aware of the basic terms of this contract when it took advantage of the agreement it was indisputably aware of the terms st i am a pre approved the surgeries it confirmed in doing so that the hospital was an in work provider for this plan and for this patient which requires knowledge of the hospital agreement i have there's an contradicted evidence in the record it's at record page five hundred and ninety one in the form of an affidavit that says what that pre authorization was i made  s this but cites no evidence to the contrary instead simply asserts that this pre authorization was nothing more than saying that the person was a member of the plant but again the evidence in the record the only evidence is that it was more than that would also have cited are the court to texas insurance code one thousand three hundred and one point one three five which discusses pre authorization and what pre authorization is and it's a good example of what law and preauthorization and it is not simply acknowledging th e person is a member of the plan nd when i am a paid these claims two years later almost two years later it indisputably had knowledge of the bay of the the discount rates when they sent the payment in the explanation of benefits which is found in the record of page six hundred and fifty seven they specifically said for the things that they were paying they were paying based on the discount schedule and they took three hundred thousand dollars in discounts based on that schedule now i may says that they were paying based on what it could confirm to be the reasonable rate but the e o be the thing they sent us this disclaims that entirely by specifically referencing those terms mr phillips  if i don't see that the district court apply the heightened knowledge standard is the question before us then whether the district court clearly aired when it held that i m a's contract ten years earlier didn't put it on in knowledge of the hospital contract with the arbitration provision is that the question of course again i don't think it's a matter of in finding that the contract was ten years before their contract with p p l plus that's irrelevant to the question of whether they had knowledge of the hospital agreement right then but is the question of course whether they just court made it clear error of fact if i don't think that the is that basically that the issue that we're looking at i still think it's an error of law at the the facts here are not really in dispute what they were aware of is not in dispute they were made specifically aware of the payment terms a record page and fifty two it's a letter that was sent while they were deciding what to pay so i don't think there's a dispute about what knowledge they had i think the dispute is about what the effect of that knowledge is and is it enough aren't they aren't they saying i that the payment dispute here in itself is complicated but here we're just asking who will resolve it and if the letter is the best evidence isn't that letter primarily health smart  paying based on the discounted rates in the hospital agreement a why is he was of i'd like to ask you a question about these rates in the hospital that the rates are an attachment to the hospital agreement correct and surely in that course of ten years the rates would change from time to time well given the ten years was the i am a p p o plus agreement i'm not exactly sure how far before this but the hospital agreement still would have had some ability to modify the rates would it not i believe that's correct the much of that is discussed in the brief but i imagine that there was some  agreement authorize changes and the changes were made and the rates what it not it might have to be but here on the facts i am a way to claim that the discounted rate that they paid is the discounted rate that everybody agrees was the correct amount well what i'm saying is they know that this agreement is evolving over time and they are going to go with the flow as it evolves over time which seems to me  ability to sail under the french flag due to a contract signed by other parties for bound by the arbitration clause mean that seems to me very close to what we've got here i absolutely agree with that your honor and the fact that when they were when they paid they paid on that claim it indicates that they had knowledge of that amount the district court did not reach the nd part of the test on direct benefits of stoppel which is whether they received direct benefits  therefore though that i am a release now would be on notice of any of its downstream providers agreements that they might have an arbitration clause to the extent they're taking advantage of those agreements to discounted rates then yes they're also responsible if they have arbitration cause that's flawed direct benefits of stoppel which is you can't pick and choose the provisions that you like while avoiding the ones you don't and a lowly the hospital might accept lower rates under the knowledge that it could arbitrate rather core exactly and that's the reason we have direct benefits of stoppel i am a argues that it didn't directly benefit from the agreement as we discussed already they did say they took advantage of the agreement by getting the lower rate when they decided to pay i am a's agreement with p p o plus specifically says please go out and create a network again the network of contracts here as they function they don't work without each other that's part of the unified contract thing but also applies here in that i am a wanted sign it's a group p p o plus so please go out and make as many contracts as you can with a broad geographic network with providers so that we can offer these that i would say no and the reason i would says there are the courts of recognize that it is separate documents call to pay or acknowledgement is not required that's in the scott and white case and the g p a holding case both hold a separate acknowledgements not required all it's required is that the pay or agree to pay and be responsible for the charges and i may did so in its agreement with p p o plus by agreeing to pay claims of participating providers in accordance with the political plan so it is a federal case and we're not bound technically by federal district court cases so what what state law do you have on if any the i would point to but i think it the there were applying state law there you're not bound by scott why do i think it recognizes that the idea that a separate agreement which is what i am a argues is required is not the law it's simply  i m a tries to argue that the benefits it benefits received were indirect somehow one of the cases they point to i think actually supports us it's the phoenix company's case in that case the cup the benefit was found to be in direct because it came from signatories exercising their contracts all rights not someone else but here were different from that because the contract to a right that's being affected or being exit exercise that the is i m a exercising its right under this network of agreements to take advantage of the discounted rates and i think that again it emphasizes why we have a direct benefit here we pointed the court to the ten car a shipyard case from the  circuit which this court cited favorably favorably in the hellenic case and in other nd circuit cases about what is a direct benefit versus an indirect benefit i am a says that's not the circuit authority but they have a point of discord really to any real test for direct benefits other than trying to argue that it has to be some sort of close affiliate relationship which none of the cases require fact this is a very important case regarding direct benefits as net yes  impacts how these sorts of medical provider networks are going to function and if i amazed correct then the hospitals are going to lose the benefit of their use arbitration agreements and your lap it will allow these pay owners to pick and choose the provisions that they like in these contracts as networks are put together we think it's important that the court hold i m a to the contract that it sought and received the benefit of and that it needs to arbitrate this dispute represent i am a the f b i lee this appeal involves an attempt to bind a non signatory to an arbitration agreement even though it didn't bring the lawsuit it didn't have knowledge of the agreement during the transaction and it never promised to comply with the a great i want to go over each of those in turn st i'd like to discuss the importance of i'm a physician as a non important that i am a never promise to comply with columbia's hospital agreement in connection with the unified contract so turning to i am then his role as a non signatory who didn't sue columbia has said that arbitration agreement supplied a non signatory is only in rare circumstances and that's from the breed escapes by the th circuit i insist i may as a non signatory but not just a non signatory it's a non signatory defendant columbia filed the arbitration against i may which then filed this suit to prevent the arbitration but i am a is the defendant the th circuit has never state law really that's right low that is five minutes  neither has exodus but in terms of direct been it didn't terms of these doctrines requiring someone to arbitrate i believe that that's federal law as far as we can find neither has any other circuit ever forced a non signatory to arbitrate when they didn't bring the lawsuit there are a small number of district court cases but i would suggest to you that each of them have facts that that overcome that issue in some respect like maybe the defendant had previously sued on the contract or the defendant had actually signed the contract so really wasn't announced until the th circuit has sharply distinguished cases arbitration or even though the government knew about the agreement knew about the clause was repeatedly involved in choosing the entities who would be a party to the agreement and appears to have benefited from the agreement the court said it is not enough therefore that the government benefited from the existence of the joint venture agreement and the british case had quote the other courts including the fist circuit have quoted that really talked about the importance of this non signatory defendant status and here's one quote from it from brutus they said this there is an important distinction however between cases where the courts seriously consider applying direct benefits  stoppel and the case of bar in the former the non signatory have brought suit against a signatory promised in part of upon the agreement here is undisputed that the government has not sued br under the agreement the government has thus not exploited the joint venture being to the degree that the cases that consider applying dispersion of the stuff of acquired for this case really  redus is dispositive in that respect because of the roles of the parties now since brutus two th circuit cases have described the direct benefits to stumble doctrine in ways that columbia is trying to use to force i am a to arbitrat even though it's a non signatory defended though two cases are noble drilling and lloyd's register but both those cases involved claims by a non signatory the non done in which the breeder's case for clauses the next thing i'd like to do is talk about noble drillings requirement that i am a new about the hospital agree no drilling in the visit no withdrawing case involved a purchaser of rope who did bring the lawsuit but they weren't suing on the contract that had the arbitration clause in it so the court exploits the contract containing the clause and it obtains a direct benefit that they would bind them now noble drilling required knowledge of the contract during the transaction by court having a copy of the contract and having it by the time of litigation was not sufficient and during the contract meant in that case at the time noble drilling ordered purchased and plus back in two thousand and two in the purpose of that contract is to permit i in the end its plans access to the the surgeries in question here room february of two thousand and sixteen and i am a did not have a copy of the hospital agreement at the time of the surgery i am they could have asked i am a probably could have gotten the hospital hundreds of potential providers many members this plan is not the only plan that it manages it has a huge number of pursuit of procedures coming through in transactions in the middle and i am a makes money off of paying the least amount of money for the greatest number for seniors well i am a protects its plans to which it has a fiduciary duty and it did not have a copy of this contract in two thousand and till two thousand and nineteen i am a didn't know the amount of the discounts at the time of the surgeries it relies on p p o plus with p p o pos keeps those contracts in its fatah and it read prices the the procedures the costs given the rates let me say a little quick thing about these rates in the schedule it will work out just as good as you say it the broad way i'm thinking about it is on the one hand they had knowledge that there must be a provider agreement out there as to each hospital so they didn't know these agreements existed and then the opposing counsel has said there are sort of three ways they must have known about this eleven dollars is their payment corresponded directly to this columbia hospital agreements payment schedule two is they pre authorized it as to this patient and the rd is this october letter so at the broad scale i guess the proposition is everyone in this situation the your clients in would have known of these provider agreements and then at the narrow specific the judge atlas must  eating knowledge because of those three points is that a fair way of thinking if what we have to decide here i think it does list the issues and i'd like to address each one st of all on the issue of whether  must have known that's not the test and in the noble drilling case that the purchaser of wrote bought it through the distributor it approached the manufacturer and went to the distributor at their direction so they must have known that there was a distribution agreement but it didn't matter what they must of know i am a doesn't that there are hundreds of these agreements in it in assumes they exist but that's not enough for this test with regard to the payment and  authorization for the payment let me address that in just a moment but for the authorisation i am a is simply confirming that this person is a member of the plan and i will graded they are confirming that the hospital is part of is a preferred provider but they're not making any statements about what the contract requires or the contents of the contract and let me make a point about that schedule that they did not have a copy of the court assume below that they had a copy of the schedule and that's not true in the record it page one hundred and forty eight it explains that the court to send it said it didn't matter that the schedule is not good enough let me point out what the schedule attaches it does not show how much these surgeries cost it shows a a percentage discount you still have to to come up with the usual and customary charge and the argument in this case that's not before the court is whether columbia can charge amounts that are beyond twitter usual  customary so all that in that schedule is a twenty five percent discount you still have to know what the top line number is what usual in customer so returning to the the time line i m lloyd's register case which talked about this just as well and just service says if the non signatory receives a copy of a heretofore unknown contract for the st time in it susan signatory that mid litigation revelation likely is not enough for knowing exploitation of the contract under this version of direct benefits to stop and that's what we have here ballymena turn to your question judgments in about the letter into october two thousand and sixteen this letter was to hell smart wasn't i m a which is revealing itself but that's that letter in october two thousand and sixteen is eight months after the surgeries at that point it's too late the surgeries are performed there's i am a can't make any other choices it can't send this person to a different provider it either owes the money or it doesn't at this point if you look at noble drilling it talked about the importance of knowing about the contract at the time they ordered the rope receive the rope during the transaction this is really after the transaction the columbia argues well you paid these amounts you took the discount well that's right because i pay the amounts it's required to pay under its contract paying what you believe you know is not a ground for stop it's entitle to those discounts under the network the only real dispute was how much should the surgeries cost and if you look at this letter you see the real dispute here it says that i am or columbia doesn't believe it's limited to charges that are reasonable and customary that's really the dispute and i may says no you overbuilt for this now i like to talk about you have an easy record cite for your statement that that i am a has hundreds of provides each with their own is the response there that you may not have had a copy of the full contract but you knew the basic terms and that i guess is a legal question in order to trigger a d v e direct benefit to stop all what would you say are provider that's all they knew they didn't have the even the rates it eventually they got bill from p p o plus and p p o plus had applied the discount but at that point they started looking at the usual and customary charges the top line number to say is this usually customary and they asked the hospital for some bacca and the hospital didn't want to give it in terms of costs so then the hospital wrote to health smart after that let that posts you know  evidence is relevant to whether un knowledge or not in my view i agree with that because at the time of the surgery the only knowledge was this is a member of the plan and this is a prefer well i doubt that i am a is so naive that they would have known that one preferred provider at a better track record of keeping within the bounds of usual and customary then another one because t we can't speculate on that because some of these plants have self insurance provisions for whoever the ultimate provider is so we can't really speculate on the ultimate deal what we do know is that patient can choose from any preferred provider and that i am a does not reroute them as long as they're in system and all i and that is do is say they're in the system and then after the fact and they has the right to make sure they're not paying more than  customary and there's an appeal process that they could have a hospital could if in vote under arista and they did not do so i'm curious because it is an area of law the two of you know well and i am just curious your view as to which would be more disruptive in other words if the time to assess knowledge of basic terms is at the time that columbia rendered the service the surgery and you do acknowledge at that point you knew they were a pervert provider how disruptive would it be or would it be not disruptive at all for us to send say your client had a duty to inquire as to all of its providers contracts and if that is the rule of law then how would your client then speak evil to say i don't want to have to arbitrate could take extracts from these agreements is there a moment of choice at this point well i think if you make that rule they're going to have to go back and ask everybody for their contracts and they're going to have to remove people from the system if they don't like their contract but for right now that's not how it works for right the as we're going to talk about these pay our knowledge means there are ways the hospital can require the i m a of people like that to agree to pay their fees and be responsible for that and they didn't arista that whereby and it's in the plan as well which is also in the record where the hospital if it doesn't like the determination about what is usual and customary can appeal it and i a has to send that out to a rd party and if they don't agree with that d i believe they can bring a suit in court to challenge the result but i am a is limited to what's usual and customary and that's why it's in a result and it's in it's the key in those cases is that those pay order knowledges and the subscriber agreements where they balland the t p a they had a promise to comply with the agreement not simply a promise to pay the claim outside of a risk the plan defines usable reach will target usual and reasonable charges to be same as the contract rates here so a receipt really does not apply this is not something that's being done in the sort of outside the plan this is not in a recent case and arista doesn't really have anything to do with what we're doing here today next i want to talk a little bit about this idea of whether or not it's important that i am a is the defendant or the plaintiffs they want to focus on one part of the test from noble drilling there are two ways to have direct benefits to stoppel one as the court recognize a noble drilling is if a part of sues  to obtain benefits of a contract but the nd one and it is stated in the disjunctive in double drilling knowingly seeking and receiving benefits of a contract with an arbitration provision i am a ask this court to write that one out to say that doesn't apply and that's simply not the right test on lack of knowledge i think there's a few things when you talk about here mr pipes talks about the difference in time between their contract with p p o plus and the hospital agreement here but i am a p o plus go out and create a network go sign these contracts in the i am a p p o plus agreement there's a provision that says here are the terms we would like to see in these kinds of contracts that you go sign so now i am a says go do that and then it wants to bury its head in the sand and say we don't have to do anything to educate ourselves about the terms of those contracts we're just going to take advantage of them and then if there's something we don't like will refuse to comply with it and that is not what the law allows them to do i think it's significant that the preauthorization we've discussed here is evidence that i am a new not just that she was a member of the plan what knew that it was in a network procedure and to know its in a network procedure they had to know that there was an in network agreement with our hospital which we were providing discounted services at and in network right and when they provide that pre authorization that is knowledge that's evidence of knowledge of the basic terms of the agreement and i think those basic terms to answer question from judge dickinson are the identity of the parties the idea that it is and in network in this and situation it is going to be back specific to a particular kind of case as to what basic can or cannot doesn't apply here this isn't a recent dispute it's a dispute arises outside of that planet dissidence puta rises because i'm a cream and between the provider in the pay or that's a completely different set of agreements nice operate it may be it may be part of the matrix on in the merits but certainly in deciding whether this thing needs to be decided in court or in or in arbitration the relevant contract relevant agreements are