thank you very much good morning your honour's jonathan newman attorney for the defendant appellant proper elizondo may please the court the supreme court on a quickly declared in the house in case of the fifteen years ago that procedural subsequent to house them as well my most recently i believe in lag sixteen but in certain other ninth circuit cases as well and what this case boils down to is a procedural question of how many or be traders  should have been involved in this case the question of the number of arbitrators in the case has to my knowledge not been dealt with directly by the ninth circuit it has been dealt directly by the fourth circuit and boxer and a number of the district courts and some state courts subsequent to docs or including the district for the district of columbia and those courts have will on equivocally come to the determination that the number of arbitrators in the case is a procedural rather than a subst argument from both sides both myself and mr buss who's here as well as to the place ability of those rules and how they were how they had to determine the answer to the question of whether or not the case could proceed arguments were made on both sides that the way the rules are framed in that there's actually no rule dealing with an amendment that increases the amount over a hundred thousand dollars he came to the determination that the rules allow him to constrain himself to the original complaint there had been no motion that was made by either side there had been no motion made to amend the complaint by the claima i don't know that he specifically made reference to rule twelve four zero nine i believe that the or betrayed or made reference to the rules in general he didn't or twelve for one and the trader spoke about  the ability for a soul arbitrator to proceed on a case where the where damages have increased again not by virtue of any proposed one of my appellant brief and the arbitrator said that if i can read for the court is the basic question i was asking was whether or not we should proceed on the basis of the original complaint which is  hundred thousand dollars which is within the funeral authorization for a single arbitrator to proceed i think mr newman is correct then case is the case on occasion i've been submitted to the single arbitrator based on the original complaint and the consequence has been there in the course of the development so he was not just willy nilly pulling something out of thin air he was interpreted the rules and what the rules allow him to do and under the supreme court's jurisprudence and under the ninth circuit's jurisprudence where the court has  required him to get more arbitrators involved number and how does that impact me and he asked for comments from both sides and we both made already mentioned how that the mention brought up the issue raised was aware of those rules us and asked for comments and then he construed the rules and his ability to  so he mentions equitable considerations as opposed to the language of the rules except that what we're now doing your honor is we're looking at the merits of the case which this which the supreme court in this circuit have specifically stated we  party is required to determine to show the court that the arbitrators interpretation of the rules was something that the court would agree with the arbitrator comes up with an interpretation of the rules that enter as long as he is arguably doing his job and making a determination as to the scope of his ability he can make a determination that's against what would otherwise seemingly be plain language of an agreement whether that be a deadline on his ability to make a ruling whether that be a specific price that was included in the or patrician agreement so i would say that yes an arbitrator could do that we don't have to get to that question here because in ability to interpret and determine every single co provision including twelve for a one and that interpretation and determination is binding upon the parties and both sides agreed to that so we don't have a case like you would have in some other cases where the arbitration contract for example said you need to have three or be traders that if that was the contract that the parties had signed then an arbitrator might not have the ability to go against that that's not what we have here what we have here is an arbitration agreement signed by both parties where the parties have agreed to proceed under finger's rules finger's rules specifically specifying that the op or trader is the sole decision there is no fin rule that deals with an amendment that takes a one hundred thousand dollars claim over and above one hundred thousand dollars so based on rule twelve for knowing the sole decision making ability in that case would be the arbitrator before whom the case could have decided either way and he could decided we should not rule either way you would have been binding on the parties pursuant to their own signed arbitration agreement this court as has been stated by the supreme court has been stated by circuit over and over is we don't look at procedural determinations when the arbitrators make a procedural termination the only thing that the court does is says was he attempting to interpret the contract which  different venue have our we're hearing the them and complaint always said we don't care about efficiency that's contrary to the contractual agreement so overturn the arbitrator interpretation before the rules of the forum upon which they are in and therefore if they submitted an order once the arbitron he made a determination it's binding on them and that's every single court that was cited by the district court here had that exact scenario where there was a specific provision in the  the parties that restricted the arbitrators procedural making determinations we don't have that here and therefore respectfully submitted that this court should reverse the district court and because there basis of jurisdiction in the course as court knows that statute pertains to a final decision this is not a final decision before this court this is where the arbitrator exceeded its powers by hearing a case which should have been heard by three arbitrators and has been reminded back to further proceedings based upon the court's decision so there's no final decision merits have not been addressed in the response in the reply brief that was filed by the appellant they no nine u s c sixteen as another basis for jurisdiction and procedurally that was defective because it was raising a new argument in reply green but i responded to the motion to strike that as well as a motion to mend my previous motion to dismiss for lack of subject matter jurisdiction the district zero one the rules very plain in its language that if a claim is over one hundred thousand you have to have three arbitrators and not a single arbitrator this is not a case your honour's word there's discretion with the arbitrator how they handle overhearing in the procedures  counsel you heard your opponent say this ask you that he indicated that the case law is clear that number of arbitrators is a procedural question do you agree with that no i don't your honor why is that because in this particular case it's not like the procedure within the hearing that the arbitrary is making decision with their discretion this is a mandatory explicit plain rule that says of damages over one hundred you have to have three arbitrators there's no discretion involved in that and the arbitrator insta cision is written decision i know but counsel with respect issue before the arbitrator was how do you treat the prayer in the complaint you treated as as originally pleaded which was one hundred thousand he's aware of the fact that the claim is now above the hundred thousand he's aware of that fact if when he had the chance to look at things when he made his decision he noted in his arbitration award that the claim was one hundred twenty can that happen that can happen right up until the time example that's basically what happened here was that the eleventh hour maybe not the eleventh hour and fifty ninth minute but the eleventh hour well what isn't or why isn't it up to the arbitrator to determine no a claim is really what's been presented initially and in this instance virtually all the way up until the time the arbitration hearing began well here's the problem with doesn't talk about damages by the way in twelve for one it's about the amount of the claim right and i think that's a key point because twelve for a one to the same what kind of for me and this is substance over form twelve one two for one doesn't say how you ask for the damages and what form you do who do rally is they asked for over one hundred thousand before the hearing start and actually under the you know with the record before the court actually contacted mr newman a few days before the hearing to find out what was going on here i would be willing to vacate the hearing before it happened in the point the proper was just on the record no only the fact that i contacted mr newman to find out what his position was on authority to interpret and determine the applicability of all provisions under the code and such interpretations are filing binding upon the parties so so you're bound to that part of the contract as well and here why under the record i don't think even references i recall is interpretation when two for one understood being present the hearing is more about the convenience of the parties in the fact that the appellant was an older gentleman that's what i understood as well he never referenced and but if you rea one two for one it says if you're going to go beyond three arbitrators beyond a single intruder you have to have my consent in writing i never provided that consent the fact is when this is when i got the pre hearing brief about eleven days before the hearing that's the first became aware before the arbitration began that there was a possibility that more than one hundred thousand dollars might be asking he i believe ask each of you for your opinion whether more than one arbitrator was necessary right correct ok and then he made a determination that based upon his understanding or rather how he construed the federal rule that because the original amount asked for was one hundred that certain things follow it may change it's not an irrational thing that he did he was just simply construing how best to handle this yes he did consider the age of parties and so on but he also seemed based on what i saw he seemed to be construing the rules and making a fairly common sense the termination and connection with those yes your honor why well because the the rules mandatory this you know if we take it's not changing the rule the rule is the same rule the question is what do you look to to determine how the rule is applied you're not changing the rule and the question is do you look to the prayer on the complaint or what allegedly occurs afterward the complaint was not amended before the arbitration began right that's correct so he said i'm going to like it i'm going to like watch in the complaint which is one hundred thousand dollars i'm applying the rule as i understand it to be ok and indeed it may not be a big point but if there's anything in twelve for a one point one one direction or another it seems to me if you look at twelve for one day which states that if the amount of the claim is fifty thousand or less the claim proceeds before one arbitrator and is subject to simplified arbitration procedures doesn't that mean that the relevant time for determining the amount of the claim must be early on because otherwise you could proceed on simplified procedures and then all of a sudden the amount of the claim could be raised and you'd have to start over again not through simplified well that's a risk you take when you don't follow the proper procedures your honor what in the perfect world should have been happen here is a complaint should have been amended beforehand which also please cruelly from gauging in any discovery when i see the damages amounts of change right before this what we're hearing penalized i mean that it isn't as if you got had damages of one hundred twenty five thousand dollars and post well i wouldn't instead what are your honor and be thought the basis to understand why why it was raised right before the hearing i wouldn't have that opportunity to find that information now but the point i'm trying to you know i mean you need to emphasize here is the fact that the rules are pretty plain there's not a lot of discretion involved here set forth your position on the case as well as the damages you are claiming is the arbitrator knew the damages they were claiming now exceeded that one hundred thousand this is why the arbitrary even brought it up you know so a sponsor yet the hearing on his own before i could even raise the issue but if that is your position but it's current do you understand why at least from my perspective when i looked at this finra rule the rules not change the question is what figure do you look at the determine  or the hundred thousand dollars comes from in this case that's what the complaint set hundred thousand dollars that allowed a single arbitrator to proceed he took the position in construing the rule that it's what's in the complaint that counts the complaint was not amended i know you said there was some talk about it was going to be might might go higher something like that but it was it was amended it didn't change and we might have a different case if the complain had actually been amended prior to the commencement of the arbitration then i think your point might be pretty solid that he has no authority to change the federal rule but at least based on the case law certainly the supreme court case law this procedural isn't what's procedure what's not discretionary your honor it's the rule is very clear that the daddy didn't say what form one two four or one doesn't say it has to be in the complaint this is what your what happened in this case he changed the amount of the damages prior to the hearing and in a one to four a one didn't say what what format has to be and it just says and i agree the district court it's substance over form if you're damned is over one hundred regardless what form know any other arguments you want to make that you're almost well just on just on the there's issues brought up a waiver but it wasn't addressed today and this is a case where there is no waiver under the federal rules it's twenty days before the hearing you have to follow written motion i got the brief eleven days before the hearing i contacted mr newman got no response and therefore at that time at the hearing by only my only option of procedurally was make the objection which i did at the time before the hearing started thank you your honor thank you you have a little bit of  rebuttal time there picture wasn't he didn't have to accept it he could have rejected the amendment and then it's still one hundred thousand dollars claim as required as pledged under the pleadings and actually if we look at page thirty one of my brief where i quote his decision decision actually wasn't on equitable grounds his decision was i notice that neither party has made a motion a to amend the complaint or be a motion to dismiss or otherwise address the question of the hundred thousand dollars and for that reason on that particular score i