good morning me please the court eugene scalia representing the appellants i'd like to reserve two minutes for a bottle as participants in the u s c plans plaintiffs had the authority to sue under regarding their retirement benefits and that authority included selecting the forum in which to conduct that litigation plaintiffs here agreed that the form for all claims including those arising under federal law would be arbitration and accordingly and under a long line of supreme court decisions they are obligated to proceed in arbitration that arbitration or over is to be individual in a non class basis because for among other reasons the parties here before this court agreed that they do not have an agreement to class arbitration and therefore still feel some dictates that it be individual arbitration how does that vindicate the class rights it it did a of the rights that the plaintiffs have to the benefits near retirement accounts and the supreme court will rule explained that they have an ability to proceed to seek recovery as to their accounts what this plan is is a series of accounts involving monies that they contributed investment options that they selected and they have the full ability in arbitration to sue to ensure that those accounts are properly funded and to seek equitable relief regarding the plan so for example the ability to sue and have a fiduciary replaced with a like what they would never have is the ability to sue and seek money for other people without proceeding as a class action and will really doesn't tell us that lyric tells us that an individual can seek relief if only their own account is affected but it doesn't say and they can't see clearly if the same thing they're challenging affects other people to well certainly loot doesn't preclude class actions it simply doesn't require that they be available and that i'm confused why it has to be a class action so say there is some kind of exorbitant fee that's being charged to all account holders it's the same policy that's affecting everyone why i can't an individual seek relief on behalf of the plan for that problem that cuts across accounts without it being a class action you can sue to seek relief of an injunction of nature that affects who runs the plant for example who they retain is a record keeper which is an issue here but once you have sued being brought up with respect other people were guarding their monetary interests you're squarely in territory where due process dictates that the protections available in the rule twenty be able if a suit of that nature is going to be available again they have the ability in arbitration to pursue everything that would be of interest to them with respect to the plan what they can't do is step over and it will get due process why is it different in court so i mean in court could an individual seek relief for everyone in the plan that's being affected by the same policy even if it requires monetary monetary remedy yes but only with the rule twenty three protections or something a cent substantially identical to are other cases including the current case from the second circuit which gets right to the fact that if you're seeking to vindicate other people's interest in the plan you've got to have due process protections ron what i would point the court to is decisions such as  a which is a paga case and there this court recognized that it was ok to go forward in arbitration on an individual basis even though there could be relief sought as to violations toward other people because it was the government's claim being brought and the court was at great pains to emphasize and sakae that it was not other people's monetary claims would be litigated in a pocket case it was only the government's penalty interest as to all those other people here very different situation and the reasoning of soccer dictates the opposite conclusion that you can't go into court or arbitration seeking relief as to thousands of people monetary in those accounts that they put money into they selected the op plan accounts up so you just get more funds put into your individual account technically it's as to the plan but for all practical purposes it's highly individualized again it concerns the money you people in the investment options that you say we agree with you about that but why do we think this this language did given that well it's that you have to include and claims on behalf of others and this our agreement doesn't say that several reasons first the statutes you actually get part of the claim for yourself so you honor qichen claim brought in the name of the government the government has an absolute right to intervene and take over the case if you have set it you can elect to continue receiving pleadings but if they do the plaintiff gets the stay tuned they can't kick them out i mean the plaintiff has a claim at that point but the government is always unnamed party the government can take control of the litigation the government can enter the litigation later and the government has approval farty ultimately over any settlement remember by contra that in fact the plan arbitrate plans arbitration agreement couldn't bind the individual plaintiff it seems to me though that there are if there are derivative claims doesn't the opposite true but your honor respectfully i don't believe they're derivative claims because comber said that they are not derivative claims they are claims not only brought on behalf of the plan but entirely with respect to an individual interest it's wholly absent in the context of a key template remember the factual circumstance that's the second important point of distinction with united states route welch which is there you had a fraud dispute between a company and the united states government and the question was whether an arbitration agreement entered  ent relation relationship which had the word employment in about every single sentence could be construed to cover that fraud claim for the government and this court said no by contrast what you have here is in a point really say this contract was only about employment and this fraud claim is about employment it says that the language doesn't say anything about claims on behalf of someone else and this i mean we have there's just a lot of cases saying that it is the claims are on behalf of the plan again your honor that this court has also said very very directly to the model that was followed incomer was to say the plaintiffs here the claims belong to them they're bringing this case let's look and see if they have an arbitration agreement and here you have that exact circumstance met it's the it's the factual scenario that was absent but what's that got to right i mean well it says if they had included that language the plan couldn't stop them they'd be bound is the it seems very analogous your hon r welch does have a footnote saying well you could had language like this that certainly is not binding precedent that the only circumstance under which you can have you know particularly in a  different that it keeps him claim subject to arbitration agreement if you have the language that happened of mention in the footnote in united states well welch what you do have here is arbitration agreements that talk about all claims talk about federal claims that in several different places say that any or all claims will be litigated and that includes that includes sentences that have no reference at all to claims that you know may have belonged to the pla itself but that was the language used to write the contract and well it's also had the thing about disputes between employee and employer and then went on to have this very broad language and they said the broad language is interpreted and in context of the former which it's the same structure as this language where the any award is going to go is it not to the plan it goes technically what this court has said is the cause of action belongs to the players that was this court's work language in the didn't capture the claims they might bring in the plan they they made a statutory argument and they said that claims for employee benefits were employment claims but they never even cited welch they never suggested that they had a welch type circumstance this court has repeatedly referred to for a one k or five zero to a two sorry for all the section claims as plaintiff's claims there are claims his claims if you look at tipple if you look at it if you look at polls if you look at qumran all of those cases it's referred to as the plaintiff's claims you can't fault the parties for using a similar concept that a claim brought only half of the plan but which affects your own personal account claims being brought on behalf of the plan doesn't use the word plan several times to suggest that the claim is one belonged to the plan as opposed to individual and we don't dispute there's a technical matter honor it's brought on behalf of plan my point is that when these parties agreed to arbitrate disputes arising from their relationship benefit claims would have been front and center at that and given the scone court's reference to benefits claims as the plaintiff claims it's certainly appropriate to construe their contract to cover them as well but let's assume for the sake of argument gives them time for a battle that the so claim here was to remove the fiduciary do you think that could be arbitrated and even though it affects the other participants in the plan that's a serious honor that you have under any number of statutes you could have a wage our suit and a trust suit seeking among other things injunctive relief that's going to affect other people what it doesn't do their due process rights to money to their accounts in a way that having suit brought us to all the other individuals that counts and operate thank you agreement is limited to the claims that the employee ego has against the employer and that's when the to an individual claim and not a derivative claim a claim on behalf of other affected people under or by analogy other participants in this plan and there are over twenty eight thousand participants in this plan the arbitration in this agreement states that specifically under that second arbitration provision that was address welsh similarly that it only applies to claims that employee may have against the university by its terms under this court's decision and welch that does not apply to the plans claims that it and for the exclusive purposes of providing benefits to charging reasonable expenses of the ministration and acting prudently so under that understanding of what's happening i don't really understand why this has to be a class action it seems like you actually are kind of in multiple you can have multiple adjudications by thousands of different participants over the exact same flu cheri conduct and the exact same damages to the plan and yet each of those different adjudications  whether participant can bring an action under either rest you to cause or the practical effect of that because of that effect the court in the second circuit said and this has been followed by just about every other court that's considered class certification issues  has said that due process due process protections have to be established who protect the interest of the other participants so that when the court decides who are the  breached their duties in these various respects client has the plan suffered losses what is the measure by which we are going to determine plan losses which then determines how much goes into each individual's account the court is doing that for all of the participants and then actually rule twenty three procedural safeguards and it's a non opt out class under rule twenty three b one to protect the inches of the participant so that it key town actions be class actions two because the other related is might be affected i'm just having trouble because you want the analogy in one way but not the other right well and recall that the interest of the other potential key time playing to this is that they're not going to get a cut of the government's recovery of its damages so they are they they are getting paid attorney fees in a way for prosecuting the action that's different from a risk a plan where if the plan has been paying excessive record keeping  the court says all right the proper record keeping fee would have been twenty dollars and so the excess is what you have to pay in and you have to allocate among all of the participants accounts pro rata over the time that those damages accrued that's much different circumstance you see because now each of those plaintiffs are getting into their retirement accounts a pro rata amount of those damages so some planes as are going to be happy with twenty another plaintive might have proved that the least on behalf of the plan we have due process safeguards erected to protect those participants interims and that's rule twenty three which and nearly universally there's maybe one or two exceptions every court a certified these cases under r way no how any one of these twenty eight thousand participants in this plan are going to be able to bring an action that recovers all of the plans losses in a way that brings all the participants and protects  potentially and here's how because again in these actions here's what you have to prove these are the individuals who are the fiduciaries as for these acts these acts it say having five record keepers in a plan now putting the plans recordkeeping out for  competitive bidding is a breach and they committed the bridge the plant suffered losses because had they put it out to be a good a reasonable amount of record keeping fees would have been ten dollars per participant last over the period of time and now get relief that's plan wide open potentially you could but one question is are you going to get the discovery necessary to get all of that information because all all of this stuff is conducted behind closed doors how the fiduciary exacted is an open are we going to get all of the play information is a participant who may have a pro rata share in who are trying to count that result and a thousand dollars going to spend five hundred thousand dollars and turnings an expert for us to go through the process of proving all of that for twenty thousand and four billion dollar twenty eight thousand participant four billion dollars plan to get her pursue specific one thousand dollars allocation here's another question let's assume that that participant does do that expands the huge amount of money it takes to prove these cases and i've done a bunch of them and gets the decision is there a different rule for fees if it's a class action or not in this context if you get that head of awards on behalf of the that all right is u s c and the other fiduciaries of this plan down by that arbitrator's decision or do they now get to take a shot on participant number two and say well let's see if we can win this arbitration arbitration isn't subject to arcane concepts such as rest judicata which courts are bound by so who knows what the next arbitrator's going to do and so does now u s c get to go through one through twenty thousand participants and just hope that it keeps that it a strategy on the next arbitration maybe gets a better arbitrator with some of these agreements we're going to be in aaa arbitration with some will be in jams arbitration maybe we can play those off and get good results in some cases good result in others and then maybe they can lower the amount of their damages by only going at this by one participant at a time in the hope one of twenty eight thousand participants are going to go through all of that process or two we can win with some of the arbitrator will now get inconsistent decisions where arbitration they're saying that now the arbitrator cannot award that you only get one thousand dollars and that's that it seems like you as a plaintiff lawyers for the plaintiff who wants to get relief for the plan should argue they're wrong yes i should argue they're  but what is the certainty that that's going to happen let me ask a different question how do you view these clients are they purely derivative purely non derivative or a mixture i would say to make sure your honor and it really depends upon the nature of the losses that have to be restored to the plan under section eleven zero nine and it's a calculation of losses that it's not just picking up the totals in each individual participant account it's the exact opposite of that th terminate all right if the plan had one record keeper instead of twenty dollars per participant it would have paid thirty million dollars less the recordkeeping fees or it had it gone to this slate of twenty put it investment options it would have had one hundred million dollars more in assets for the participants accounts and then what stats the term and bet large amount the plan what amount then determined all right what's the pro rata allocation among all of the participants who were in the plan at the time so in that sort of action it is a derivative action so when you make a  surely breach actions and like the supreme court precedent is incorrect as we pointed out in the brief but that point of the individual being able to pursue the claim on behalf of the plan issue agreed to that are they acting solely the interest of the participants or are they acting to protect themselves and they're acting to protect themselves by putting that arbitration provision in the plan document that violating section eleven of six by engaging self dealing so i think it's problematic on that point the core point of colmar though is that if a pittsburgh is going to release we're going to limit to bar participant will add class actions for it to recover the plans lost so they say it's only the claims that the employee may have and under welch that means it doesn't include representative claims u did not put this provision in its plan document to bind the plan as income or that he came to the intent on us c's part that these arbitration agreement don't apply to allow the no nine actions on behalf of the plan to recover the plans losses so both of those elements from both the employees perspective and the employer's perspective shows then nobody intended these arbitration agreements to cover plan claims only individual claims  one of the most important things that an employee has is the interest of he or she holds in his or her retirement account that's where the most important things to them and it's something they believe they have there are two things that i'd like to emphasize in closing this morning first it's one thing in the context of a fraud action brought in the name of the federal government against a company to have as plans would have you carefully scrutinized in employment arbitration agreement to see if the government's claim is covered it's quite different when we're talking about retirement accounts that people have with potentially life's savings that they depend upon do you suppose his plan is what have you that you don't have that you don't have an interest in it and so we think these agreements are clear but if there's any ambiguity surely that ambiguity counsels in favor of recognizing that you have the account and you have the claim as this court itself as head has said it's perfectly rational and appropriate to read these agreements the same way for example these agreements say any claim that otherwise would have been decidable in a court of law whether under local state or federal law will instead be decided by arbitration except as specifically excluded that is a very broad agreement and to do as plaintiffs would have you seize on a technicality as to whether you have it or you don't know the plan has it when we're talking about your own retirement saving would really be an extraordinarily hostile approach toward arbitration which they're advocating second the procedural point judge freedom which which you've raised but they disagree with you they have made a very compelling case as to why there are due process rights that simply don't permit trying to litigate other people's retirement benefits other people's accounts without the protections to class device which aren't available here because of their own agreements and still nielsen i would point out finally that if you listen to the tail end of plaintiff's argument you saw it collapse into the problems they've had in this case all along which ultimately is they're trying to argue that aristocles can't be arbitrated but that's just wrong that's where their logic leads you that's where you can't go because it would create a massive circuit split this court long ago recognized that it was a claims can be arbitrated and these agreements are properly construed to cover those claims what this court it can't be on a class basis because nobody agreed to that thank you can't thank you they started will be submitted for a decision we'll be in recess and the students may stay here our law clerks will address you for a few minutes and then