related but they're also separable as all explained today the first is that mirage has not met its burden of demonstrating that the union clearly and unmistakably delegated to the arbitrator in this matter the authority to determine whether the union's grievance was substantive we are betrayal under the collective bargaining agreements arbitration clause mirages claim that the union delegated this authority to the arbitrator is not based on the arbitration clause itself in the c i it's based entirely on the union's conduct during the hearing but that conduct was silent or at most ambiguous about whether the union was submitting the question of substantive arbitrarily arbiter ability to the arbitrator and under the first options versus kaplan case silence or ambiguity is not enough to delegate that issue to the council yes your honor what do you think should have happened here were raised its objection to arbitrate ability i mean i realize it was after the arbitrator and been selected it was after they had it appeared and i guess we're ready to present evidence  but at some point mirage said this were objecting well what do you think the union should have i mean what were you supposed to do let me make clear that the  mirage raised two points it raised first a challenge based on procedural arbitron billeted procedural arbiter billet is the question of whether certain procedural precursors to arbitration of the men in this case there was a timeliness challenge under the case those questions are always matters for the arbitrator decide second mirage raised an issue of substantive arbiter ability as i'll explain that issue was in fact the merits of the case they presented it as an issue of substantive arbiter brevity now you disagreed with that but given that they presented it that way why didn't you have an obligation to do something to get out of arbitration or to preserve the issue  that the arbitrator had no jurisdiction to decide that because it seems like your position is you can just sit there see if you like what the arbitrator says and they get a second bite at the apple and i'm trying to figure out how that's not the result of your argument here well in fact what happened here was not that the union just sat on its case what the union did here is essentially what george day says you're supposed to do now we can get into whether george day which is a pretty first options case remains the law that should apply in these circumstances but in fact what the union did but union counsel to it was on the record at the hearing objected to the notion that this was substantive arbiter ability at all but yes but didn't say and if you disagree with us you don't even have jurisdiction that's correct the union did not state that the union stated there is no substantive arbiter ability question here and then what the union did was agreed with counsel for the mirage that briefing  the union stated only that the shoe procedural are the durability the timeliness arbiter ability questions singular would go to the arbitrator so the union never delegated to the arbitrator the separate question but not come up the george to cases or all situations in which the party that is objecting later on objected to the whole thing there distinguishable and not read my worry is that clearly and i mistakenly standard is designed for that other type of posture so it is a little odd to apply it in a posture where you're giving the case to the arbitrator trader voluntarily you're saying i want to arbitrate this dispute and but not that is somehow that doesn't implicitly say that if a jurisdictional question comes up you're also giving that to the arbitrator i don't think it does your honor because no case says that right because we don't have a case in this we're posture there is no case that says that rises in this particular  in this case the union agreed that the matter was arbitrary but did not agree that there was either a substantive arbiter ability question at all and it was correct on that as all get to or that that issue should go to the arbitrator  technologies in the line of cases first options all of these cases do not say that the clearly it on mistake oblique standard only applies they were gone but it's like they could never imagine this weird situation we have in this case i mean it's a very odd situation to have a party who wants to be an arbitration saying but wait there's but there's one issue the arbitrator can't decide in this case i don't think it is because in this case what the union was objecting to it's not simply that the union said ok agree there's a substantive arbiter ability question here but we don't want you to answer the union's objection here which was correct was that what was being raised was not a substantive arbiter ability question at all it was the matter but what if they had done it better i mean what if they had said we don't think that the party's agreement for arbitration ever covered this type of dispute that it would have been a better objection and you would have an l say ok that's exactly the merits and maybe your honor a different case in which there is not a clear objection to what's being raised that says you're confounding the merits with substantive arbiter building which is what happened here and what i so i mean so let me back up so when you went to arbitration with this dispute you thought it should be arbitrated but you don't you didn't have any idea whether they might ever have some kind of proper jurisdictional objection i mean you didn't think they would but who knows what they would say as to substantive arpad debility maybe they would come up with a proper objection if they had what would you have done well if there had been a proper objection to substantive arbiter ability say for example if section twenty nine point zero one which is the one hundred issue said express carried water right right but let's go with the hype so say there is a clause that says we're going to arbitrate everything but maybe not something's going to something's involving some contractors or something and there's some dispute about whether this is supposed to be arbitrated and you go into arbitration and you think it should be an arbitration but they don't and they make an objection you bring it to arbitration they say we don't think we should this that we are disputing whether this can even be arbitrated what do you do that well i think under first options if the union does not agree that that matter should go to the arbitrator if there is not a clear agreement between the parties yes that yes we are submitting that matter to the arbitrator then that there is a reservation of that is a judicial issue but who has to say that well i think what there has to be is there has to be agreement that's that's what what is technology says which is that in order for that additional issue to be submitted to the arbiter either it has to be clear in the arbitration clause or the parties have to agree that yes we are submitting this issue to the our great so if it's unclear whether there was agreement and the parties are disputing that in the arbitration that say union initiated then what happens when the defendant says wait we don't even think this is arbiter ball does the can the union just sit there and wait for the arbitrator to decide it and then bring it to court later or do they have to do something what do they have to do in that situation so i don't think that under first options there can be an affirmative obligation to object i don't think it's implicit in so though how is there is this so is this a rare instance in the law where you get two bites of the apple your honor i would disagree that this is two bites of the well what if the arbitrator had decided this in your favor i mean they think they presented a substantive arbiter ability question i understand you don't think they did but the arbitrator thought they did and they thought they did and he decided something about substantive arbiter ability what if he decided in your favor continued on to the merits then i would have agreed to him deciding it right then you know the question of whether we would not object because in fact the issue was one of the merits i'm not i'm not sure i'm not sure what i mean  i think the concern that it's a very confusing area the law i think concerned that this question which i have as well as i mean that they're off the hook but i do have this concern is that had it gone the way you had planned we wouldn't be here it's only because we went down this path and all of a sudden maybe you didn't expect something and now there's an appeal to do it all over again and i think there's a concern about why is it that you have a do over i understand that concern and let me make two points because i want to get to the core issue here which is whether the arbitrator got it right regardless of the standard that's being applied i want to first point out that in fact the arbitrator did not understand substantive arbiter ability to be have been put in front of him at excerpt of record eighty seven he states the parties engaged in the mutual discussion and decided to bifurcate procedural arbiter ability from the merits that's what the arbitrator understood the arbitrator didn't understand the difference between procedural and substantive arbitr billeted the arbitrator also believed that even if it we may agree with you about that but didn't once the arbitrator says i don't even have jurisdiction over that that's a substantive arbiter ability ruling even if he wasn't supposed to make it right well i demonstrates that the union did not submit that issue to the arbitrator is saying what's in front of me is procedural arbiter ability and then moved on to address what is in effect where the merits of the let me get to that question because in some ways the issue of whether the union submitted the issue of substantive arbiter ability clearly an unmistakeable e put that issue in front of the arbitrator is a sideshow to the central question here which is what was this arbitrator doing the substantive arbiter ability question that this arbitrator should have been answering if that issue was before him was the question of whether the language in section twenty nine point zero one of the collective bargaining agreement and in the way which states that the employer shall at all times hold and exercise full control over b b king's its lessees workers terms and conditions of employment whether the parties dispute over that language and how far that language when involved an interpretation a dispute over interpretation of the c b s that is the substantive arbiter ability question and that not the question that the arbitrator answered the arbitrator did not understand what the question why for him aren't you on even weaker ground if you're saying he just got the merits wrong i mean it so your main argument as i understood it was a court should have decided substantive arbiter ability but if you're now weeping to well forget he didn't really decide subset of arbiter ability he really just wanted to side of the merits you wanted him to decide the merits so you've got you've got a pretty uphill battle on standard of review if we're talking about him deciding the merits right no your honor you're incorrect about the issue the merits were never briefed by the union here they were never presented to the arbitrator that you had a hearing about them this was post hearing briefing but there was a hearing  parties agreed that briefing on the question of the merits would come later and i certainly everyone understood that to be the case so the question what was your point that you were just getting out when you were saying he misunderstood subset of arda bitter ability really decided the merits ability which is a distinct question from the merits did not draw its essence from the contract because the arbitrator did not answer the question does the parties dispute over the scope of mirages obligations under such and twenty nine point zero one arbitrator did here was ignore the arbitration clause did not say anything about whether this was in fact a dispute over interpretation of the collective bargaining agreement and proceed to determine whether mirage was liable under section twenty nine point zero one the merits of the dispute so that decision if in fact substantive arbiter ability was in front of the arbitrator that decision is not just wrong the arbitrator got the question wrong did not interpret the correct provision of the c b s a and the decision on substantive arbiter of realty can't draw its essence from the contract but so you are saying he did decide substantive arbiter ability we are saying that the arbitrator did not have that matter before him because the union did not clearly an unmistakeable e delegate that issue to him but the arbitrator said that that's what he was doing sort of he said he was deciding procedural arbit ability but then even under a generous interpretation of the of the decision which is that he actually was deciding substantive arbiter of realty what he ended up doing was decide the merits and that's wrong first because he said he decided it anyway so it almost doesn't matter whether he got it wrong because you think a court should decide it does doesn't matter for the following reason your honor the only reason that the court needs to be concerned about whether or not that issue was in front of the arbitrator is the ability and if he was in front of the arbitrator if the court decides that you know the union through its conduct somehow did give that issue to the arbitrator then there is a level of deference that granted to the arbitrator's decision what we're saying is that regardless of whether the court reviews the substantive arbiter ability question independently we're under a deferential standard of you review the decision can't stand the arbitrator did not decide the arbitrator went to the merits of the dispute if so let's go down both paths so if we agree with you that he didn't have the ability to decide subset of arbiter ability do you need to then file a new action in court asking a court to decide it i'm not sure why we should be deciding in the first instance we don't usually do that on appeal so we have filed a petition to vacate they filed across a petition to enforce the agreement  but the issue of it in your petition to vacate did you file a petition asking a court to determine some sort of arbiter ability we stated that the matter was the for the court to decide so whether this court just that in the first instance which i believe is within the power of the court to do since whatever question previously about whether we were delegating this issue to the arbitrator the union now states we want court interpretation of this issue whether it's a matter for the for this court to decide in the first instance which i believe it is or whether the court remains the issue to the district court to make that determination in the first instance i think those are the two options but let's get on the other path and so if if we think it was given to the arbitrator but the arbitrator decided it incorrectly then you want it to be still an arbiter bowl disputes or is this going to go back to the same arbitrator to decide the merits and we already know this arbitrator thinks he was on the merits or is going to go to a different arbitrator what's going to happen if you get if you win on that path first of all your honor i don't know what the arbitrator would do we did we weren't allowed to brief this issue but you're saying that you got tangled up in the merits and effectively decided the merits so we have a hint that he disagrees with you on the merits and you're saying you'd be happy of the same arbitrator decided t the question of where this dispute is now is these are events that happened in two thousand and eleven it's on you know likely that the parties have moved on from it so i don't know that that's a perfect segue i know we're way over time here and we've been asking a lot of questions but this is really a question i ask you and i'm asking opposing counsel same question this case is about unused vacation time in a b b king's restaurant is that right that's right your honor are in the world of big union issues and because you know issues i can't imagine this is financial big number this is this is this case is actually a quite important case if that's the question financially how important is important for two reasons your honor i don't know how much how much money are you guys looking for in this case it's probably in the hundreds of thousands ok hundreds of thousands and i look at the litigation costs in this case they've got to be probably equal that or more we my guess your honor the reason here is because this question of what responsibility the big casinos in las vegas have over their increasing trend of contracting out or leasing out space within them is at the heart it's a crucial issue for a lot of part i have proprietary shade on the big picture maybe it is procedurally this may not be the case to try to resolve because procedure in this case is so incredibly mixed up and so i guess the question i have for you and i'm asking opposing counsel the same question so you're ready is why can't we just send this case to mediation you guys work this out in this case candidly this case has been worked out a long time will you mention this is two thousand and eleven unused vacation time we're still litigating six years about on these use vacation time we are litigating about the question well mirages obligation  actually this case is if this case is about unused vacation time i understand there may be a bigger movement out here but what we're deciding today is about unused vacation time that it's not about other labor negotiations so i guess the question here is that my question is is that why can't we just send this case  we're saying that this case is about a decision holding that a crucial part of the union's collective bargaining agreement dealing with who is responsible on all manner of townsel question is if we send you to mediation in this court not about what the case is you can say that for the mediator the question is for you is that do you think that would be helpful your honor i were always willing to speak to mediate but i do not in this case believe it's helpful because i believe that in this case the crucial issue and the one that we seek this court's review on is the bigger issue it is not the small issue that was your deciding something about whether you can sen of arbiter ability we're not going to decide whether they actually have a liability here and there's no way you're going to get a decision from us right now about whether they had to pay this what we have right now is a decision from an arbitrator saying that this class of cases involving mirage on for its tenants is categorically not arbitrary that decision is what we seek to have the court review but we're going to have to decide who gets to decide that question not even that question right so so i don't think you're going to get what you're i don't understand how what you're asking for in this appeal is going to get you what you say you're looking for what we have at the end of this appeal is a decision vacating the decision by the arbitrator because it did not draw its essence from the cantarell trac because the court or the district court if it's done on remand agrees that matters of the scope of mirages obligation to at all times hold and exercise full control over  its tenants terms and conditions of employment is in fact our betrayal that's what we're seeking in this in this case that that will in fact be an important precedent for us ok thank you counsel thank you  ignore section twenty one he did not so what we have here is a third party who's not a party to the c b i so he looked at the am away in to gather with the c b s a when he interpreted the c b s arbitration clause he was looking at it to make sure he was consistently interpreting both documents this is the case we have where we have nine employees of the mirage trying to file agree though that now you're talking about the merits but the arbitration clause clearly left everything said this had to be arbitrated and what he said is this can't be arbitrated our position is that he said this cannot be arbitrated because he looked at was there other forceful evidence that mirage could not be the party to this grievance he found there was other forceful evidence when looking at contract language from other contracts that didn't have a safeguard that the unit was insisting we would have joint liability he looked at the apple way in order to properly interpret all the terms of the agreement to look at everything consistently the other question i have is why didn't why shouldn't we say that mirage do i think the union was why didn't didn't wave it roger went pretty far before suddenly said oh wait a minute this is not arbitrary there's substantial case let me put it in our post hearing arbitration brief that you can raise to stand to arbitrarily issues for the first time at the arbitration hearing so i don't think the union is contesting that they said it was waived we cited the case law that says you can raise this for the first time at the arbitration hearing and the arbitrator agreed i want to get to a question that you asked your honor you said what did the union have to do george day is very clear what the union had to do and i don't think first option abrogates their responsibility under george day they could have simply not proceeded on the arbiter ability question during an arbitration hearing instead they didn't they present a different contract language or they could have expressed we reserve the right for initial court determination no where in the record is any objection in fact they overstate their objection no where in the record is there any objection to the jurisdiction of the arbitrator the arbitrators authority to bind the parties on substantial arbitron doesn't it i think sorry go ahead i think that's different there's two questions there one is yes they wanted the arbitrator to decide the merits are they are there liable for this unused vacation pay under all of the various causes another evidence that was presented but that's different from saying you can decide whether we should have an arbitration at all or whether this is our bridgeable those are two different issues we agree with that here's what happened as the district court pointed out the issues are into woven necessarily encompassed in the issue of whether the mirage violated the c b a is whether the mirages even the proper party and this grievance can be arbitrat arbiter billet to the arbitrator the court doesn't second guess that decision here we have a clear and unmistakable conduct where they argued arbiter billet during the arbitration hearing presented evidence on it never submitted a juris objection submitted in well but then they didn't know that it was objecting at the time to arbiter ability at the time they went before the arbitrator they were just following what they had to do under section twenty one and so the next step was to go to arbitration without knowing there was an objection to the matter being arbitrated it wouldn't have made any sense for them to go to court and say would you decide whether we should now go to arbitration and how could that have worked except your honor in the situation once we raise a substantial arbiter ability issue they could have done one of the two george days methods expressly reserve it for a court decision and continue with the hearing or say we're not going to even talk about the arbiter ability issue they're trying to play a semantics game with you and say hey this was really a merits issue you know we clearly stated as a substantial arbiter billet issue if you want to pretend in of aid that we didn't present it as substantial arbiter ability that's in your that's going to be your downfall because we clearly presented as that the arbitrator understood that their argument that he's saying oh it's procedural not subsea into if he misreads the contract if he  gives a faulty legal conclusion faulty logic you still cannot second guess him under the differential standard of review our position is clearly that we had a clear and unmistakable agreement now they're trying to get the second by the apple your honor mention they're saying no we never intended that after getting the unfavorable is or unfavorable result before getting the unfavorable result at any time they could have said wait we're going to not give this to the arbitrator we're going to give this to court so you want to be had apple opportunity to do that and they never dead to get to your honor's question practically speaking we would have been happy to go to mediation but as you can see the union's position is that they want to get to my understanding that this case is only worth about seventy to seventy  but at this point they're saying we don't even want to get there we don't want to get to the remedy we just want to get to this principled point of casinos have liability for their third parties so in my opinion mediation would not be effective but i just to be clear though you are open to it we would be open if your honor wanted to send us there i think it would be futile and i think a decision at this point is warranted to say they delegated the decision through their conduct to th to the arbitrator and you should affirm the court's decision on that so how do you come up with the idea i mean you could say that there was some implicit agreement i don't know that the union would may disagree with that but is that the same thing as clearly unmistakably agreeing to substantive to having the arbitrator decide substantive here's how i get to clearly and unmistakably agreeing first they continue with the arbitration hearing they presented contract language of whether or not there was joint liability of safeguard in their letter to the arbitrator after the arbitration hearing they made no distinction between procedural and subsea into they said we will submit arbitron realty to you at the very end of their post here in brief they said we will address this issue in our next brief to you they didn't say we are not addressing subsea into then even in their motion for summary judgment briefing to the district court they stated they intended to address arguments to the arbitrator in their second brief all of that conduct without any  applies that's fide we will comply with that i agree that we met our burden of providing clear and unmistakable conduct though i know you don't agree with the premise of the question i'm about to ask but if we agree with you that they let the arbitrator decide substantive arbiter billet but we think he then decided it so incorrectly that we need to reverse what do you think what happened with this go back to the same arbitrator for the merits yes i do i think that you can't quite get there though they're saying that you have to find that he didn't draw from the assistance of the contract here there's clear evidence that he drew from the essence he interpreted the contract language he said there's no joint liability clause now there might be overlapping factual support for merits arguments versus subsea into our fertility arguments but just because you use similar facts to make different legal arguments doesn't mean he reached the merits he could still look at the emma way to decide who was the correct party to bring this grievance against and why there was arbitrary the mirage so i think there's plenty of support that he drew saying i don't really understand how you can interpret section twenty one which says that a dispute over the meaning of the c b i goes to arbitra as not including this dispute over what who has liability here you may win on liability who knows but this is a dispute about who has liability end of the c b i so how is it not covered by section twenty one i think it presents the rare instance where you have a third party to say you look at the emma way and the memorandum said why do you do that this is a dispute i mean you might think you're not liable but so then you win if you're right but the union has a dispute with mirage about whether this is covered and so you have a dispute over the scope of the c b s i don't think we do  about non employees of the mirage so when you're looking to decide how broad does that arbitration clause cover it doesn't cover non employees filing a grievance against mirage an argument is the evidence that the arbitrator rely on relied on to interpret the arbitration clause like that is being excluded in this particular instance was that there was no joint liability language there was specific language that said b b king's is the employer paid benefits and wages there was nothing that said mirage would pay benefits and wages of non employed so that's fine you go to arbitration and then maybe you win on that argument but you have a dispute as far as i can tell that union and mirage have a dispute about whether mirages liability and i maybe you think you're right and you don't have liability but i don't see how you get around you have a dispute over whether there's liability under the c b i now you say we don't really have liability under the c p a ok but that's an argument about whether you have liability under the theme yeah i just am not following your logic about why this isn't covered by section twenty one i think the fact is we have interruption issues so getting to the merits which is what you're talking about the liability we don't even want to go there i agree maybe that would be the end result and given how the arbitrator telegraphed that probably would be the end result of the merits but we're saying you cannot second guess his reasoning he did not deviate from looking at the contracts and past contract language to decide did this arbitration clause cover our dispute ok so your argument which may be correct i don't know but your argument is basically it's not so wrong that it can be reversed not that it's right correct i want to turn to the last line of questioning because this is the case in which the decision is so wrong that it does not tell the thousands from the arbitrator did not look at article twenty one did not interpret the scope of article twenty one the grievance procedure definition of a grievance and there is no way in which the parties dispute not just abstractly over whether mirage has liability but dispute over the meaning of the following phrase mirage shall hold at all times hold and exercise full control over the terms and conditions of b b king's employees employment that language there is unquestionably a dispute over the meaning of that language that's the merits of the dispute the arbitrator did not ask answer the question that was put in front of them if it was put in front of them of does that dispute within an arbitration clause a grievance clause that requires the arbitration of disputes over the meaning or interpretation of the c b i this is an instance in which the arbitrator ignored the relevant provision of the contract did not answer the question that mirage says was put in front of him of council for your argument