honor i actually have three points generating the first point is that houma clearly controls here the only issue in this case is whether or not mohammed in new jersey supreme court decision was preempted under the a homa clearly decided that it's a neutral decision well there is something there is some tension here in the is there not i don't consider there to be any tension under homa i know that parties have raised a potential tension between houma and the and gay but that tension was under pennsylvania law if you're referring to the crown and decision which of course is an unpublished decision and not binding precedent yet i think informative  the parties were arguing under pennsylvania law that in light of houma under new jersey law we were entitled the plaintiffs there are the appellants were entitled to a second bite at the apple or a second review of the issues there are i happen to consider gay to be correct in its result i've gone through it of course there's the argument that the ultimate determination and the ultimate troubling words if you were  ultimately we concluded in dicta that pennsylvania case law holds that an agreement to arbitrate may be unconscionable simply because it is it isn't in cream and to arbitrate now whether or not we can't we can't rely on that unpublished opinion right i'm not sure what i'm saying here well our rules tell us that we can't say we where we can't cite that might so why don't you tell us why  gay is on this on this point and not and quote alternative holding unquote which trumps the later decided home decision and by the way they do hold that or at least the home a ticked so it's not just a crime well yes it's a little equivocal it was an equivocal concededly equivocal and i thought that was clarified in cronan but why don't we drill down to find out where that language occurred in the decision the issue in gay as described by judge greenberg and we point out in our brief i think seven times is whether or not you have a right to a judicial action under the c r away which is the credit reform organization act and the  pennsylvania state law quibble which is the c s a and the paddle judge greenberg in the panel conclude that there is no right to a judicial action there was a second issue whether or not under the c r away you have a right to a judicial class action and that was also rejected the the decision then goes on to say while the parties have argued that the lack of a class action is unconscionable and if we assume what we've already held is not a right then we addressed that under the controlling law and here we've decided that the controlling law is for genya so already you're into the first level then you or at least the first level of alternative holding the panel concludes that under virginia law there is no right to a class action and therefore that the r or judicial action and therefore that the argument is rejected party's argued alternatively pennsylvania law should apply they then adjust pennsylvania law and evaluated the two cases that were brought to the attention of the court like i don't and then there's a whole discussion of that right i mean gay goes on at some length talking about little and and to bill and talking all about why is that not an alternative holding eyes it i don't have a problem with those holding sure i don't believe that those are ticked actually although i do believe that there a right out there but i was says the issue of class certification is so important that we're going to relegate it back to the judiciary rather than the arbitrator and we know that that's not the law so they are clearly hostile to arbitration the thing that the sentence that causes the problem here actually there's two points one is a reference and i don't have it exactly quoted but it has to do parsing something about parsing the arbitration agreement and the second sentence is that the pennsylvania case law holds that an agreement to arbitrate may be unconscionable simply because it is an agreement to arbitrate now that sentence follows all the other sentences where they're talking about and all of this it's pretty removed it's a that's a very rare i don't think that the decision hinges upon that particular piece of language i don't think it hinges on the parsing language because parse inability to parse is inconsistent with the  agreement here and it's inconsistent with all of this court's decisions in the past i would refer the court to judge cowan your decision in alexander v anthony you go through and you parse that arbitration agreement like crazy and come up with six different reasons why different provisions are unconscionable both both procedurally unconscionable and subsequently unconscionable and if i might i'd like to use that as a segue into my second argument and that is the not substantive concha unconscionable of he that when you delve into public policy that you have violated the f a a a now the basis for that argument is the fact that f a a section four says that an a common law so it's got to be uneven ground it's got to be something that doesn't treat arbitration agreements differently your honor is what i brought with me today and i should point out that there are many many many decisions that address the submit them to the court and then your opponent a reasonable time to make a response i will do that your honor but what i would like to do is read several portions from it if i might defendants by the way or the defendant cites to the  report and in their brief page thirty eight of their brief cites to page thirty eight of the joint reports are i'd like to direct the court to what appears at page thirty seven thirty nine and forty in before you do that can i ask this question no matter what's in that report if the holding the pennsylvania law discussion  resulting in a statement by the court ngae is not the it's a holding do you concede that that would mean we would be bound to follow again as opposed to home  not at all your honor and that's because gay is under pennsylvania law it's analyzing different decisions homa is readily distinguishable in order to be bound by gay you'd have to find which the  mohammad decision is hostile to arbitration even though it is entirely neutral to arbitration i've got your position ok all right and by the way to the extent that there is an argument about hostility in mohammad they severed the class action waiver and directed the case to arbitration in the accompanying case that day delta they held that the class action waiver was uninformed i'm sorry that they held that it may be enforceable in certain circumstances where the who has that say i believe that under the controlling case law supreme court case law that the issue of whether the arbitration agreement itself is in forcible is a question for the court in the f in particular here it's triggered because what the opposing side has done is they've written their arbitration agreement so that if the class action waiver isn't enforceable it's going to be litigated in federal court and you both agree that the question is whether under the contract law whatever they were dealing with under that state's law there is an agreement to arbitrate or not is to be determined by the court that's correct you know in fact muhammad specifically deals with hear what the joint report says are three things that is interesting one with respect to whether you can use subset of law they're talking about the federal state balance and they say on page thirty seven to be sure whether or not a contract exists is a question of the subset of law the jurisdiction wherein the contract was made so the joint report specially incorporates subset of law at page thirty nine they quoted justice card and then judge cardozo of the new york court of appeals at that point in a decision called matter of berkowitz and what this it's dealing with when it's in forcible when it's not enforceable and what judge cardoza says is that with respect to arbitration agreements of course we exclude cases where the contract is inherently immoral or in contravention of the statute so they're clearly incorporating public policy concerns also in fact i believe he refers to public policy right after that you're you're you're running out of time so why don't you move move ahead with my third party when i hear my third very quick argument your honor is just to refer to the vote decision here the parties clearly intended that if there was some reason that they are that the class action waiver wasn't  forcible that we'd be in federal court i think that the way this is proceeding if you don't rule that way you give the other side the opportunity to pick and choose when they're going to be in federal court when they're not going to be in federal court when they're going to enforce the arbitration clause when they're not going to enforce arbitration clause but the clear thing is the parties intended to be in federal court here to fend did not intend to be in arbitration if that class action waiver wasn't in forcible for some reason under state plaintiff's case one is that the ruling in gays and alternative holding it clearly it is four and a half pages long complete discussion of pennsylvania law and a discussion of the principles of federal preemption secondly we heard that the two cases that gay dealt with consumer rights and that is hostility to arbitration there with us that's the feeling of of the free work that that for whatever reason and not merely because it's arbitration that it's against public the state can be preempted by the f a a and it is here because imposing judicial procedures onto arbitration is discrimination i mean it's facially neutral i'm going to say what in houma dictates that procedure and force it into arbitration arbitration is after all alternative dispute resolution if you're going to turn it into court isn't that the same thing is forcing people into court and does that show doesn't it show hostility to arbitration when the new jersey supreme court is it is it an amorphous hostility to arbitration that's a problem under supreme court law or is it a specific denial of the opportunity if you deny people class dispute resolution mechanism whether it's in court or in arbitration if you deny him in a contract of adhesion a class this resolution that's against our public policy we don't care is the subtext according to your opponent we don't care whether that class dispute resolution happens in a courtroom or it happens in arbitration and that we're agnostic but to say there is no class dispute resolution at all that's avoided as against the public policy of the state of new jersey now that's the issue that i would like to hear you speak to what is it about that if they've accurately portrayed that as the holding  mohamad why would that be a violation of that f a a you know iran or that same protestation of neutrality was contained in tippett oh and the gay court said ostensibly neutral which i think is correct because treating dissimilar things in a similar manner is discrimination how is it treating this similar thing because i'm sorry don rickles arbitration is meant to be different from court and impressing rule twenty three on arbitration is saying we're going to make arbitration look like court isn't that the same hostility just a new twist on it as saying you're allowed to go to arbitration you have to go to court so you're your position depends upon a statement that arbitration  ken that arbitration by definition could be class arbitration because that is the importation of wrongful importation of court style proceedings doesn't go that far your honor simply that the parties are allowed to choose between class arbitration if you look at the arbitrator if you look at the f a a and you look at section three and section four they both use the words in accordance with the terms of the contract in terms of arbitration and that's all we're saying here is that the parties can make a choice muhamad forces parties to involuntary arbitration that neither party actually agreed to neither party in this case agreed to class arbitration but that's that's the end of your position though doesn't the end of your position have to be there can never be class arbitration if because the the construct we're working with in here is contracts of it right within that construct if the party with all the power can say you will never arbitrate by class and you will never arbitrate and you will never have a class action court how is it hostile to arbitration for the state courts to say we won't tolerate that that that at least class dispute resolution has in some form has to be left open and we don't care which one explain to me how that's hostile to the notion of arbitration it's hostile to the parties agreement that arbitration will be individual under mohammad there will be no individual arbitration archon only marched with the rabbit back in the hat when you say that's the party's agreement because we're in the construct of a contract right in other words one party i mean maybe i'm just misunderstanding but i was on the impression of mohammed was based on the notion that the individual who's bargaining with the the real power can't change that it's given to and they've got excepted but the center of mahomedan mohamad says this under the rubric factors is the public policy holding which is the holding that individual arbitration is contrary to the public policy of the state of new jersey the public policy of the a is clearly in favor of arbitration and in favor of enforcing arbitration clauses according to the terms of the party select it under mohammed if the parties if it is not a contract that he should if if there's equal or  agreements get in force and which don't on a matter of new jersey public policy because of the federal arbitration act in fact what the court has done is carve out a class of contracts that as a matter of law cannot have individual arbitration clauses and now we're going to have  new jersey supreme court balancing cases between muhammad and delta funding deciding when and where arbitration clauses can be valid and think they can mohamed be read to say not we're opposed to individual arbitration but simply to say we're opposed to the denial of the opportunity for class arbitration what is it would you point to mamma that that says we can't accept the new jersey individual arbitration mohamed says that all the incidents of class action are absolutely necessary to vindicate consumer rights that is in fact not true it's an assumption made by muhammad that individual arbitration doesn't work that has the same hostility to arbitration that the f a a was meant to stop and there's no way around it there is simply no way around the fact that the basis of that decision is that the incidence of a class action are necessary and that without them without then it says that arbitration is effectively you're either a lunatic or a fanatic to litigate over thirty dollars or more in this case a matter of cents as opposed to dollars how as a practical matter is the mohammed court wrong when it says we think that there needs to be some opportunity for class arbitration because there are there's a classification of the spirits that otherwise will never be proper because it would be fundamentally irrational for an individual to bring it without a class mechanism well i think if you look at our clause your honor it exempts small claims so you can go to small claims courts only larger claims that are subject to the arbitration i also think that there are two sides to the coin to you would be for a political case which is most cases will settle most consumers will receive who do go to arbitration will receive settlement our clause has a mediation before binding arbitration and that mediation is paid for by us and we will pay attorneys fees are available in our arbitration clause so i don't think you have a case where if you have a thirty dollar claim if you take it to arbitration it's likely you're going to get thirty dollars and that's what we're talking about here is satisfying consumers individually not lining the pockets of class action attorneys and that's it's an efficient mechanism to get money directly to the consumer and avoid all of the hassle of class action and we're talking about something that's not in the record there's nothing in this record that indicates that with minimum claims as poster articulated that the thing would never be adjudicated fairly and correctly there's nothing in the record that indicates that says individual arbitration because new jersey is not allowed to set up its view its public policy as against the f a a and a number of circuits looked at this and agreed with the rationale of them i mean that country public policy because these claims would never be adjudicated on this circuit held in johnson that you look claims and other claims there can be a valid individual class act individual arbitration only clause and i would point out o arbitration there was a mention of alexander and i just to say that we have no dispute with alexander and the factors in alexander were totally different from here our view is that what gay holds is that where you impress judicial procedures and arbitration like rule twenty three you have fundamentally changed the arbitration and you indicated hostility arbitration i would point out just as prior statement in allied groups where he says that arbitration is simpler and the procedures are easier and less expensive and he citing one thousand nine hundred four house report when he says that now think about class action in rule twenty three think about different kinds of class think about the litigation of class station and under muhammad i ask you how much of a rule twenty three does the new jersey supreme court say has to be an arbitration you have an immediate appeal of certification under twenty three act all of these things in new jersey supreme court will have to superintend and say this arbitration clauses is doesn't meet doesn't meet our standard because the class action is not close enough to rule twenty three that is something the new jersey supreme court is not allowed to do with all due and in fact it was not necessary to the whole was not necessary it was it was it was not even if the court said that the other clause which prohibited class action in court was part of the contract as a whole which goes to judge allen's question it was for the arbitrator not for the court ok court literally had no authority over that in that case so if that's if that's the case shifters with me for second if it's if it is a statement or discussion or a ruling that that is not necessarily the holy of the case and it's clear from day that the court was saying virginia law applies because that's what they said and under virginia law this is the result why is it if all that if that's the holding that everything that happens after it isn't also is it well reasoned is that if the test were only is it absolutely necessary to the decision there would be no such thing as an alternative holding this court's decision in pardine and other cases indicate that there are alternative holdings how do you get over judge gree that that that that that whole thing he he joined that holding where it was absolutely dicta to discuss any any of that because it was found not unconscionable under state law there was no one caution ability fighting under state alligator want to certain are the class action rules and i'm in a class action in jams right now of course the defendant sprint tried to get out twice but they're still in there and thanks to the second circuit earlier this year there is a specific rule that allows the arbitrator to issue a partial award after the class decision and that partial award is immediately appealable so it's not only the same as twenty three off it's better than twenty three f because they get to go to court right away in order to challenge that particular ruling on certification the standards at least in jams and aaa are the same the supreme court has written that there's no reason that arbitration is in the muck ball to class actions or vice versa very quickly i had the pleasure last week of citing judge circuit to your decision in weiss the one about whether you could pay a buyout class wraps and it's the same concept that the new jersey supreme court here applied in connection with a large enough claim that somebody you know thousands of dollars is worthy of litigating whereas thirty dollars is not but it's a fact intensive analysis and always has been under new jersey law they didn't come up with this in new the word birth decision's been around for almost twenty years and that's how they evaluate it i do want to point out to the court again with respect to the joint report and judge counts and she said you're from new jersey i was really surprised to see that the f a a is based on two statutes that preexisted it one is the new york arbitration act and the other was in new jersey arbitration act so to suggest that new jersey is hostile to arbitration when they created it is i believe inconsistent with the facts we would be an arbitration here if they wouldn't have included the severability clause this un severability clause they basically said we are not going to arbitrate if the class action waiver is held to be unenforceable why they don't want to be in arbitration they really don't want to be in arbitration they don't want to be in arbitration with a class action they don't want to deal with class actions at all louden by the way in the ninth circuit did not say that gay was wrong it said that what it was evaluating which i believe was the washington supreme court decision was neutral and that the decision in k was not by the way and judge sure and i think you were asking this before the if the definition of victory is that it's not necessary to it's holding then by definition the holding in mohammad that it applies  both contracts in arbitration and outside of arbitration was absolutely critical to its holding because that's how it determined that it wasn't violating the f a a thank you or others the case was very well a court would like to have a transcript of the argument and would ask the parties to share the costs of them making a transcript if you have these checked with the clerk's office before you leave they will tell you how to do that again we thank you and we will take this matter under