may please the court good morning your honor is my name is robert rojas here on behalf of the appellant united insurance company of america were here on appeal the district court's denial of united's petition to compel arbitration and stay state court action your honour's as an initial matter but to briefly address miss miller's argument that the united lacks standing to petition to compel arbitration pursuant to section four of the f a a party is entitle to petition to compel arbitration if the parties aggrieved by the neglect refusal or failure of with the damages come from united or reliable we believe that united their order would be liable for those damages directly liable well we believe they have a sufficient financial stake so even if they're not directly liable for those damages your honor we believe that they have a sufficient interest in financial state for a number of other reasons which are disputed facts essentially a very unusual case which is comedy for a corporate owner of a subsidiary to in essence that you know with respect to putting itself in the line of fire they that wouldn't be the ordinary course but that's not exactly what we're arguing here we're arguing that what we do contend the united the employer and therefore as the employer it's has a sufficient stake in the underlying state court action and we also recognize that united is not a name party in that state court action but that's not dispositive here nor are they in any of the other disputed issues of standing regarding whether services versus ruth averred found that they looked through approach to disregard the arbitration doesn't apply when we're dealing with a situation of such as this with diversity jurisdiction and they were specific that it only applied to look at your approach  honor i don't believe we are even beside any financial issue interest i believe there's a sufficient interest here as a district court found looking at other cases pacifically doctors associates versus hollingsworth there  in the state court action the plaintiff sought suit against the owners of a franchise or and even though the franchise or wasn't named in the underlying state court action the just reported there found the franchise or as a party to the arbitration agreement  you don't need to get to the arbitration agreement determinants of course ability before determining whether the choice of law provision should be enforced pursuant to the end we understand that there's an argument there's a circular logic or circular reasoning argument but you can't put the cart befor horse so to speak but the united states just record for the western district of missouri in johnson versus c h robinson just this past july had actually rejected that argument they know to the contrary to the sort of circular logic argument they apply to minnesota choice of law provision in an arbitration agreement before determining whether an agreement wasn't for them that's not controlling on a so it's interesting will definitely read it but i mean i'm not real sure that makes good sense fact the western michigan missouri and johnson actually looked to a recent missouri supreme court decision and read versus riley which did was decided after the district court's opinion here and there the court relied on that decision which that the lot issue in specifically the missouri supreme court and how they've addressed this choice of life issue i think that would be certainly persuasive to look to that instead of the other missouri court of appeals decisions operation is not in force in this case and even if it was appropriate supply missouri law the district court erred in finding no consideration the support about arbitration agreement in missouri consideration generally consists of a promise to do or refrain from doing something or the transfer of giving up something of value to the other party importantly consideration the not be fair or equal for a contract to be enforceable it's a fundamental principle of missouri contract law the courts have no authority to evaluate the adequa enough your honor looking good at these instruction apply ordinary contract law principles and but all contracts on equal footing we think that under those ordinary contract law principles at will employment is sufficient now we understand that the missouri supreme court in baker versus bristol care a divided missouri supreme court held that at will employment was not sufficient consideration to enforce an arbitration agreement but we believe the missouri supreme court got it wrong and specifically it preempt those decisions that don't put arbitration contracts on equal footing with all other contracts in your honor specific to that missouri courts before baker and before the decision which baker relied on repeatedly held  will employment provides consideration for a contract in one nine hundred seventy six and read roberts associates of the court found the continued employment quote supplies adequate consideration for a secondary contract and quote that whole thing was restated several times of the course of the following decades and indeed this court and safety clean systems versus hankins found that quote under missouri law and at will employees continued employment after signing a covenant not to compete is sufficient consideration for the c this week the underlying state court action in this case a separate trial in january we had a conference a status conference with the court on monday and that trial court judge indicated a reluctance to move the trial court setting without any direction from which jones please the court my name's kevin jones i'm here on behalf of latasha miller i want to first address the chief judge point about this being an unusual case it is an unusual case the only reason united has filed this case as opposed to the employer reliable life insurance company because they needed to establish diversity jurisdiction to invoke section for the f a a and they they needed they chose to do that and misrepresent themselves as the employer because they wanted to get this issue away from judge powell who this state court case was initially assigned to and who had also denied a similar arbitration motion in the prior lisa white tourney case that was based on the same arbitration agreement that they're trying to invoke here so it's really just a form shopping strategy that we would suggest the court should not indulge i want to address the subject matter jurisdiction issue  and specifically why we believe that the look through framework that was prescribed in vain versus discover bank applies to this case in this subject matter jurisdiction issue and in considering the vaden decision i think it's important for the court to remember that it was a  construction case where the court's holding was driven by the text of section four and what the court held in that decision was that the phrase in section four that said same for the arbitration agreement was a statutory mandate that the district courts are to assume the absence of the arbitration agreement in determining whether subject matter jurisdiction exists over a separate underlying controversy that the section four petitioner is seeking to arbitrate and when we look at the text of section fo we can see that that mandate to assume the absence of the arbitration agreement does not distinguish between the jurisdictional has of title twenty eight it applies to any case that's brought under title twenty eight and any jurisdictional issue that brought up under title twenty eight and a fundamental jurisdictional issue in every single case that's brought under title twenty eight is article three standing in article three case or controversy requirements so we suggest that that same mandate in section four of the f a to assume the absence of the arbitration agreement applies equally when we're trying to determine whether there is an article three case or controversy that is separate apart from the arbitration agreement that the court could exercise jurisdiction over and on this point i would invite the court to consider the fifth circuit be harmonized with the circuits decision rutherford absolutely rather for does not control and i'm glad you brought that up because i know judge woman was on that panel so i want to assure the court that we're not asking this court to do anything that would undermine that holding in that case because it dealt with a completely separate jurisdictional issue that does not require a look through analysis the issue that the court decided in the rather for case was the citizenship of the parties for purposes of establishing diversity jurisdiction the court determined that vaden did not apply the look through analysis did not apply to that your inquiry and that squares up with the text of section four and its mandate to assume the absence of the under the arbitration agreement because the court can analyze that jurisdictional issue without looking to the arbitration agreement the rule has always been that the citizenship of the parties is determined by who the parties are to the civil action and the rule isn't who the parties are to the arbitration agreement the court can look to the parties of the of the civil action and determine who the whether they are to diverse or not without relying on your betray ssion agreement that's in dispute so we think that our position hormone is in harmony with the court's decision in in rather for it it doesn't undermine it in any any way shape or form if we apply vaden as we're supposed to and if we disregard the arbitration agreement as we're supposed to in any dispute about it's in force ability we are left with no other controversy here as between my client and united insurance company and on this point it's important to remember that it is united burden as the party invoking federal jurisdiction to both plead and prove the existence of an underlying subject of controversy and when we look to the section for petition in this case the only underlying substantive controversy identified in alleged to exist by united is the state court lawsuit that my client filed against reliable life insurance company and derek mcintyre and again united is not a party to that case they've never s to intervene in that case we've not made any allegations of wrongdoing by united we've never made any allegations that reliable was the alter ego of united states united could be held liable for any of the conduct of the defendants in that case  affiliated entity or united my client never recall we never got into discovery on this but she doesn't recall ever seeing any of those with that name on it here's here's a critical point on that establishes who my clients employer was they admitted in the agency proceedings that came before this lawsuit that my client was the employer and that's that's in the appendix that's in the reliables position statement that was submitted on reliable life insurance letterhead written by a reliable attorney and which reliable says that my client work for reliable we point that out in our brief your honor and so we and all the employment documents that we've offered to the district court below the application the hiring paperwork the terminations paperwork also a reliable life on not united  interestingly enough on the application for employment there is a place where you can select united and it was left blank and they chose to reliable so with we don't believe there's any controversy here no underlying controversy here between my client and united insurance and their status as the affiliate is insufficient to us to invoke article three or to meet the article three requirements of standing to hold otherwise would violate this core the shareholder standing rule that has been well established in our case law i want to move on to the choice of law issue make a couple of points about that big and the first i think the simplest way to address the choice of law question is to look at what the choice a lot of provision says it says that it only applies to enforceability this buttes we don't have in in force ability this beauty here we've raised a contract formation question and their whole argument ignores that distinction but that  the distinction between those two types of defenses and the missouri supreme court has been very clear on the distinction between the two types of differences in the baker vs bristol care case they have said that a lack of consideration argument like we've raised here goes to the contract formation and a tax essentially one of the essential elements of forming a contract where as in force ability dispute presumes that a contract has been formed and it seeks to avoid enforcement of that already formed contract there to legally distinct types of contract offenses and that's what their argument fails to appreciate and that's what the johnson the decision in the district courts johnson case that they provided in a rule twenty eight j letter also fails to appreciate that was written by judge sacks who is a well respected judge but he failed to cite the baker case at all and i think if you and i'm known way only reason i can surmise why you forgot this site is because the parties probably didn't bring it to his attention but i have to believe the judge sachs analysis would have been as impacted by the baker decision had he been brought to bear had it been brought to his attention so that the main point here is that even if we enforce this an essential element of contract formation and the baker case is clear on that and how is the district court wrong on that was not wrong on mean how well from the other side's point of view what was the consideration here  counsel for the appellant in that case and it does not apply for the same reasons the choice of law provision doesn't apply here there be it because it would be to it would require the court to give legal effect to a provision a contract to a provision  contract before the contract has been formed and the same argument applies to a purported delegation provision that they are now arguing exists and they're relying on the reid case which was aside in the briefs because that was raised in a rule twenty eight  like to address that really quickly that dealt with enforcement of a form selection clause but there's nothing in that opinion to suggest that the missouri supreme court enforced the form selection clause before the underlying employment agreement in which it was found was formed in fact there's nothing in that opinion to suggest the plaintiffs ever challenge formation of the underlying employment agreement the only consider it possible formation issue that the court considered had to do with  the employee's argument that the form select call clause required separate and additional consideration for it to be enforceable so that argument actually presume yes or implies that there was consideration for the underlying employment agreement the employee was just arguing that the form selection clause had to have separate an additional consideration which i think the missouri supreme court rightly rejected there's no missouri contract law that i'm aware of that says each and every contractual provision has to have its own separate consideration we're not making that same argument here we're not saying the choice of law provision needs its own separate consideration we're saying that there's no consideration for the whole contract the whole arbitration agreement so none of its terms can be enforced counsel how do you respond to the argument that missouri has improperly singled out arbitration agreements were different treatment that than other normal situations for what constitutes consideration well i don't think there is evidence that missouri courts have singled out arbitration agreements they've relied on their argument to disregard the whole body of case law and there are many cases which hold in a variety of contexts that at will employment is insufficient consideration for a contract and their whole argument in urging this court to overrule all those cases under the as  a line of non compete cases where missouri courts have held that at will employment is sufficient consideration to enforce a non complete agreement now there is there argument again ignores a critical distinction in missouri law that missouri courts draw between non competing agreements and ordinary contracts and this issue about f a a preemption was specifically discussed in the maro case that we've cited in our brief and and what the court said was that these non compete agreements and restrictive covenant agreements those aren't ordinary contracts those those have historically been enforced based on principles of equity rather than law and morrow specifically recognized that and this is what morris says is that those non competing agreements are not true creatures of contract law and so the ordinary rules of contract law do not apply to non competing agreements morrow says that so at most their line of not compete cases establishes that missouri courts treat competes differently than ordinary contracts it does not stand for the proposition that missouri courts treat arbitration agreements differently in ordinary contracts so we think that the reliance on those not that line of not complete cases is misplaced i would also say that they've not cited a single non competing since the baker decision so to the extent those can be read as is creating an into inconsistent  standard for arbitration agreements they've been abrogated by baker were baker says that at will employment is insufficient consideration for a contract it is also true that under missouri law  if there's an absence of mutuality in the arbitration clause that it's not enforced absolutely your honor there's no point it's our position they're making the argument that they made a promise to arbitrate here but we're saying that they've made our promise to arbitrate and that's because the exemption in the arbitration agreement for the employer's claims is written so broadly it virtually allows them to bring any claim they want in court against my client and the not compete or the the arbitration agreement specifically exams claims relating to the non compete and if we go to the non compete agreement we would submit those provisions define the scope of that exemption and if you go to the non compete agreement we will find numerous provisions in that agreement which expansively define united's rights and remedies and expressly reserve united rights and remedies at law and in equity against my client and we believe the clearest expression of how broad is and paragraph sixteen where it says that any claim arising out of a relating to this agreement shall be brought in a state or federal court of competent jurisdiction we believe that allows united to be able to bring any claim it wants in court simply by alleging that it relates to one of the one of the nine could be provisions which is an easy allegation to make given how expansively they define their rights and remedies under the nine compete agreement i see that my time is up i appreciate the court's indulgence we would ask that the records dismissal of n did try to make that distinction however again we go to the baker versus bristol care decision the divided missouri supreme court and we need not look any further than the dissent in that case and the dissent clearly called out the consideration or that at will employment a sufficient consideration they cited the not compete basis for that proposition and clearly called out the majority as applying one rule to arbitration agreements and a completely july judge sachs indyk in determining whether or not to enforce that minnesota choice of law provision instead of buying missouri law went on to say in dicta there is considerable authority in this district either concluding or predicting that missouri law arbitration agreements entered into as a common condition of original employment will be accepted as being supported by valid consideration so we think that this is clearly in dispute we think that not only jeff and judge sachs got it right we think the dissent in  baker is clearly calling out the majority there but even beyond that if i won't claim it is found not to be sufficient consideration sufficient consideration existed in the forms of both mutual promises to arbitrate as well as but the district court on the agreement lacked mutuality of obligation because it excluded united claims for injunctive relief non computer actions the court of relied on him as versus syntax corporation but in doing so really took the principle too far and went right to the heart of what we're talking about it evaluated the that it was the of consideration we acknowledge here that the agreement at issue excluded certain non competition injunctive relief claims but that being said there's nothing in missouri law that says these promises to arbitrate need to be completely equal so the court improperly looked the adequacy of the consideration there addition it agreed to pay fees and the district were aired and held that a promise to pay the cost of arbitration is not consideration  decision due course