rationale of the district court was yesterday i think we raised two issues of course and the main issue is the error in entering a default judgment i think there's a key misapprehension and if as i looked at it again this morning i had the same difficulty your honor did but as i looked at it this morning if you look at the order entering the default which was a documentary thirty six and page two there's a paragraph there where the court discusses its rationale for entering the default judgment i believe the court just  misapprehended the case law the court relied upon two cases one is the prepaid legal services case versus cahill and the other one to sink the agent and primarily circuit the ninth circuit case that's right correct judge the tenth circuit cases the pre paid cases from two thousand and fifteen our district court read that case for the proposition that the power is reserved to the district court to determine whether there's a default in arbitration even if the arbitrator is don't make that finding and so the court said that and then later in the paragraph the court in explaining in a series the three reasons for entering default judgment it says and the precedent stating courts retain the right to enter default so that that's a leap that doesn't exist in the  court took a leap of default under section three of the f a a which i'll talk about in a moment to equating that somehow to entry of default in the federal court litigation these district court was in titled was it not if i understand you your argument is that he should have lifted the stay correct and then gone forward from there exactly what happened in the cases he relied upon right  so and i don't want to belabor this the court seems to understand the issue of course but each of the three cases we cited and two of which were relied upon by the trial court discussed only default in proceeding in arbitration in terms of section three and section three is the section of the arbitration act that allows the court to enter a stay of the federal court case the underlying case so that arbitration can go forward the only issue about default here is whether a party is allowed to return to arbitration having already been there and not paid that was the only issue that should have been discussed in this case as was discussed in the two cases that the court relied upon i will briefly address the second issue this is our alternative argument in the event that this court were to agree that default judgment was proper we hope the court doesn't agree with that but if it does the return of error raised with regard to this drug court is can a determining damages based on an affidavit of the plaintiff and not holding an evidentiary hearing we said sign arbitration agreement they do it in order to get a job if they don't sign it they don't get a job when they sue to their chagrin almost all the time the employer comes up with an arbitration agreement whether they understood it or not the employees are stuck with it if they sign it that's exactly what happened in this case along with the four other plaintiffs they got sent to arbitration ever since two thousand and twelve with the same defendant this is a classic case of where you're coming from and everything you just said ok but it does seem to me that if your adversary was in default and never arbitration which he concedes it was  thing to do is then to lift the stay of the action it may be that the court would have some sanction authority after making findings of bad faith misconduct or something like that to enter a default judgment but you'd need to have a process for that you'd have to have you know you'd have to have a hearing for it and you'd have to have  an opportunity for both sides to to you know be heard that didn't happen here well your honor in all i mean our position is a stoppel has to apply under certain circumstances i mean employers cannot be given free reign to invoke arbitration knowing how much it's going to cost because in this case the defendant knew exactly how much it was going to cost because they had other four other play cases in the pipeline they knew how much it was going to cost you know they delayed payment asking for the cases to be consolidated by the arbitrator the arbitrator said no they moved to disqualify the arbitrator he said no after they got a series of unfavorable rulings they said you know what we're not going to pay so what is the consequence for that why aren't the employers in this case stopped from coming back into district court the same court that they urged to say maybe there's an argument for that but it does seem to me that we even had an opportunity for that argument to be joined in made in the district court i mean the district court just thought that the consequence of default in arbitration was necessarily judgment in the district court and that to me doesn't follow why would that be an abuse of discretion in a case where it's clear and contested that the employer willfully decided not to pay the arbitration you  have a lot of the arbitration record so that's that's one problem but of course you understand i mean i obviously the district court judge was frustrated with what was going on here i imagine you are to but in this case you know we've got to write a rule that would apply for example to one of these employees that didn't realize they're signing an arbitration agreement they wind up in arbitration they're not able to pay and you know i'm sure you sensitive to the idea that we don't want to write a rule that allows a default to be entered against them because they were unable to pay so you know whatever rule this case produces need to have a low play in the joints in my view right and we would agree that a rule is needed however under the specific facts of this case where it is evident by their briefs by ours by judge merinos ruling the employer willfully failed to pay they never produce they were they asked for extension after extension to pay just in order to get certain rulings or not get certain rulings from the arbitrator they come back to district court saying we want to now litigate in district court because we didn't like what was going on in arbitration so under the particular facts of this case were an employer requests and demands arbitration over the employee's objection and gets sent to arbitration and then the employer willfully and i underscore willfully refuses to pay because they don't that's we don't have a finding of bad faith here we just have the district court making the lea your adversary put it the assumption that the default in arbitration necessarily means there should be a default judgment and it goes to the point the judge martin that's going to be the rule that you know that works both ways and there are problems with that well there are and if it works both ways so be it but i will say this that in our experience over the last two decades or so representing thousands of these employees that we don't know employees that want to invoke these agreements to begin with maybe it may well be that you would be entitled to a default judgment it just seems to me that you've got to have some process before hand you've got to move for that involve judgment and make your case why you're entitled and your adversary has to be given an opportunity to be heard about why there should be a default well we none of which occurred here what we did file a motion for default judgment and for sanctions and for default on liability to be entered so we filed that we have a hearing could we have a finding of bad faith if we have anything like that there wasn't a hearing given but i think that based on the record before the court it was uncontested that the employer willfully and intentionally did not pay for the same arbitration that it demanded to go to what you what's your strongest i mean what what in the record before us on appeal is your strongest indication the employer willfully refused to p arbitration or well i know in the defendant's appendix they've attached the arbitrator's finding for the sister case in garcia that led up to this because and then this one the arbitrator is finding that it was  nonpayment after she gave them opportunity to cure i know that judge marino put in his order that's on appeal that the employer willfully or intentionally failed to pay or or didn't produce any evidence that they couldn't pay and that's never been contested in the this is the defendant's admission that i refused to pay the cost because they had escalated and that's not enough under must make or under greentree we know that's not enough they had to come forth and they were given ample opportunity to do it at least maybe four or five times in arbitration and again in response to our default judgment show the court you can't pay put evidence that that that this circuit requires that the supreme court requires just these allegations or that the feeling that the costs are heavy yes they're heavy but those same costs are being paid for the plaintiffs to exchange their right to a jury trial in arbitration so that's a that's a bargain for consideration that goes on in these agreements so our position is that yes once the and seventeen and the order of terminations proceed ings by the arbitrator was until several months later right i would need to check that your honor i think that he required that he had a note actually there was a finding of nonpayment and terminations of the arbitration proceedings before he entered the fall and i think that that he denied the fault at the very beginning saying that there was not an order of finality in arbitration and then the arbitrator entered that ok it's i'm going to order and then he finally entered the default after that but there just has to become a point in time and that's what i would like to urge the panel is that there comes a point in time where employers have to be held accountable where they simply cannot go from forum to forum shopping they can stop and should apply under these particular facts of this case and that it was not an abuse of discretion for judge maria no to enter the fault under these particular acts that's our position or anything you don't you don't accept that sanctions would be the true remedy if you believe that the employer is gaming the system well default is a sanction well i understand but in the absence of any specific statutory language in section three are in rule fifty five then it's a leap is it not for the for the district judge to decide well i'm just going to plan a default judgment and you say it is a citation but it's a sanction after you've made findings of bad faith and i know judge prior's had on this before and none of that is in the record of this well the bad faith i think is tantamount to it being undisputed that the employer willfully failed to pay for the same arbor  to begin with but our case was pretty clear that he's to be binding and that so a finding that a willful non payment by that same employer is not tantamount to a finding about to have something we can meaningfully review here where the district court as has explained more than what we we have a or at least this is my view at least my view is if i just look at what the district court said the district court appeared to assume that because the party was in devote an arbitration that necessarily meant at the end that the district court had the right to decide that that necessarily meant that he could enter a default judgment that there's not a finding of bad faith there there's not been a notice an opportunity to be heard that the district court was considering a sanction for bad faith conduct is none of that it may well be your intitled to that finding you're entitled to that sanction and you'll end up in the same place but it's just not clear to me judge maria you know as jack the boxes that may be why you're sitting there and i'm standing here but i  just marino entered the default judgment the court has considered the most important portions of the record as otherwise fully advise is a just as the all judgment is granted on april of twenty seventeen and the i don't see the order of terminations of the arbitration proceedings been in or going till june is that right it is right ok there was though a suspension order early monday that in march but no the terminations happened i believe in june second maybe but if i know it's the month of june so it was a money second twenty sec ok so a couple of months after the default judgment which obviously raises some kind of a flag you choose the color i guess but i do want to respond to judge prior about whether they might be entitled to a sanction that could include a default judgment surely a federal courts have the power to enter such sanctions under various circumstances the only thing that's alleged here is that the defendants didn't pay the it's really just the advance payments in arbitration there's and there's no case authority for that being a sanctionable event to use an overused to borrow from an overused phrase what happens in arbitration kind of stays in arbitration the federal court can't enter a default arbitration award for example it can enter a default judgment under rule fifty five where a party fails to plead or defend in the case obviously that has even been alleged and couldn't be alleged here and you know i i know we're not here to litigate whether our my client was playing the system but the but what the record shows is that we're not here i don't think we're really here to litigate payment or nonpayment of arbitration if there are no other questions i'll cede the rest of my time to the court on this friday morning thank