F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

J O H N M U R P H Y ; G R

E G M A S T E R S ; R O B E R T A W E I S S , on behalf of themselves and all others similarly situated, Plaintiffs-Appellants

,

v

.

D I R E C TV, I N C .; D I R

E C TV M E R C H A N D I S I N G , I N C .; D I R

E C TV E N T E R P R I S E S , L L C; D I R

E C TV H O L D I N G S L L C; T H E D I R

E C TV G R O U P , I N C .; B E S T B U

Y S T O R E S , L

. P., Defendants-Appellees

. N o. 11-57163

D.C. No. 2:07-cv-06465- J HN-VB K

OPI NI ON

A ppeal from the United States District Court for the Central District of California J acqueline H. Ng

uy en, District J udg e, Presiding

Arg ued and Submitted May 6, 2013—Pasadena, California

F iled J uly 30, 2013M U R P H Y V

. D I R

E C TV, I N C

. 2

B efore: J ohn T. Noonan, Kim McL ane W ardlaw,

and Mary H. Murg u ia, Circuit J udg es.

Opinion by

J udg e W ardlaw

SUMMARY *

Arbitration

The panel affirmed the district c o u r t’s order compelling plaintiffs in this putative class action to arbitrate with satellite television provider DirecTV, and reversed the district court’s order compelling plaintiffs to a rbitrate with electronic retailer B est B uy

.

Plaintiffs charg ed DirecTV a nd B e st B uy with violations of state law, al l e ging that that Defendants presented c ertain D i r e c T V service equipment, such as receivers and dig ital

v i d e o recorders, as thoug h they were for sale at B est Bu y stores when in fact the Defendants considered the t r a nsactions
to be a lease rather than an o utrig ht purchase. The DirecTV’s Customer Ag r eement required arbitration of certain disputes, but B est B uy

was not a party

to that ag reement.

The panel held that the arbitration ag reement b etween plaintiffs and DirecTV was enforceable under AT& T Mobility

v. Concepcion
, 131 S. Ct

. 1 7 4 0 (2011), w hich held that Section 2 of the F ederal Arbitration Act preempts the State o f C a l i f o r n i a ’ s r u l e r e n d e r i n g u n e n f o r c e a b l e

— a s

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.M U R P H Y V

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. 3

unconscionable — arbitration p rovisions in consumer contracts that waive collective or class action proceeding s.

The panel held that B est B uy , which was not a party to the Customer Ag reement, was n ot entitled to the benefit o f the arbitration clause. The p anel h eld that neither equitable estoppel nor the th i r d

- party beneficiary doctrine p ermitted B est B uy to e nforce DirecTV’s a rbitration ag reement, a

nd that the I n d ependent Retailer Ag reement between B est B u y and D irecTV ex pressly disavowed an ag ency relationsh i p

. Th e p a nel therefore reversed the district court’s order compelling plaintiffs to arbitrate with B est B uy

.

COUNSEL

F

. Paul B land, J r. (arg

ued), Public J ustice, P.C., Washing ton, D.C.; L e slie A. B ailey

, Public J ustice, P.C., Oa k l a n d, California; Robert S. Green, G reen & Noblin, P.C

. , S a n F rancisco, California; and Michael R. Reese, Reese Richman L L P, New York, New York, for Plaintiffs-Appellants.

Melissa D. I nga l ls (arg

ued), Roby

n E. B ladow, and Shaun Paisley

, K irkland & Ellis L L P, L os A n geles, California, for D e f e n d a n t s

- A p p e l l e e s D i r e c T V
, I n c

. , D i r e c T V Merchandising

, I nc., D irecTV E n terprises, L L C, DirecTV Holding s L L C, and The DirecTV Group, I nc.

Roman M. Silberfeld ( a rg ued), Michael A. Geibelson, a nd Rebecka M. B iejo, Robins, Kaplan, Miller & Ciresi L L P, L os A n g e les, California, f

o r Defendant-Appellee B est B uy S t o r e s , L .P.M U R P H Y V

. D I R

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. 4

OP INION

W A RDL AW , Circuit J udg e:

I n AT& T M

obility v. Concepcion
, 1 31 S. Ct. 1740 (2011), the Supreme Court held t h a t S e c tion 2 of the F ederal Arbitration Act (“F AA”) preempts the State of Calif ornia’s

r u l e r e n d e r i n g u n e n f o r c e a b l e

— a s u n c o n s c i o n a b l e

— arbitration provisions in consumer contracts th a t w aive collective or class action proceeding s, see Discover Bank v

. Superior Court
, 1 1 3 P .3d 1100 (Cal. 2005) (the “ Discover Bank rule”), reasoning t h a t “[ r] equiring the availability o f classwide arbi t

ration interferes with fundamental attributes o f

a r bitration and thus creates a scheme inconsistent w ith t h e F AA.” Concepcion
, 131 S. Ct. at 1748. This p utative

consumer class action, filed before Concepcion was decided, but pending in the district court wh en Concepcion issued, charg es satellite television provider DirecTV and electronic retailer B est B uy with violations of California’s Unfair Competition L aw (“UCL ”) and Consumer L eg al Remedies Act (“CL RA”). W e must decide whether Concepcion applies
to the unique arbitration clause in the customer s er v i ce ag reement b etween Dir e c TV and individuals who believed they purchased D irecTV equipment from B est B uy s t ores and, if so, whether B est B uy , whi c h is not a party to that
ag reement, is entitled to the benefit of the arbitration clause. The district court compelled arbitration of all c laims ag ainst DirecTV and B est B uy

. W e a f firm as to DirecTV, but reverse as to B est B uy

. 1

1 In a p air o f Feb ru ary 1 1, 2 0 1 1 m in u te ord ers, th e d istrict co u rt g ran ted

m o tio n s to d i sm iss f

iled b y DirecT V an d B est B u y , elim in atin g sev eral of P lain tif f s’ claim s fr o m th e law s u i t. P lain t if f s ref eren ced th ese m in

u te

o rd ers in th eir No tice o f A p p eal, bu t d id n ot raise th em in th eir Op en in gM U R P H Y V

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I.

A summary of the alleg ed scheme to deceive consumers is necessary to understand the relationship between B e st B u y and DirecTV and the claim s ag ainst them. Plaintiffs a lleg e that D efendants present certain DirecTV service equipment, such as receivers and dig ital video recorders, as thoug h they were for sale at B est B uy stores when in fact the Defendants consider the transaction to b e a lease rather than an outrig ht purchase. Plaintiffs claim that even after the Defendants beg an offering t h e eq u ipment in question only for lease,
customers continued to receive receipts at B es t B uy stores that sug g ested the equipment had been purchased–m o s t notably b e c au se the word “SAL E” was printed in bold, capitaliz e d letters at the top of the receipts. Even a f t er lang uag e on the receipt was c h a n g e d to include r eferences to

a “ lease,” Plaintiffs alleg e that the new lang uag e was “buried” in fine print that most consumers would n ot n o t i c e o r understand. 2 Plaintiffs claim that the Defen d a nts crafted oppressive and unfair lease terms, including unex pected a nd unreasonable fees.

B rief

. T h eref o re, w e d o n o t rev iew th o se m in u te o rd ers. S

ee Bell v. City

o f Bo ise , 7 0 9 F.3 d 8 9 0 , 8 9 6 n .8 (9 th Cir. 2 0 1 3). Ho w ev er, as a resu lt o f th o se o rd e r s , Ro b erta W eiss (a Calif o rn ia resid en t) is th e on ly n am ed
p lain tif f w i th rem ain in g claim s p en d in g ag ain st B est B u y

.

2 P lain tif f s ack n o w led g e th a t i n s o m e cases th e d ef en d an ts p ro v i ded

cu sto m ers w ith a “ L ease A d d en d u m ,” b u t arg u e th at t h i s d o cu m en t also is n o t an a d e q u ate d isclo su re o f th e term s of eq u i p m en t acq u isitio n b ecau se th e ad d en d u

m w as p ro v id ed to cu st o m ers o n ly af ter eq u ip m en t

w as alread y in sta l l e d a n d activ ated in th eir h o m es. P lain tif f s alleg e th at th e d ef en d an ts co n sid ered th e L ease A d d en d u m en f o rceab le ev en ag ain st

cu sto m ers w

h o h ad n ev er receiv ed o r sig n ed o n e.M U R P H Y V

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W h en a consumer becomes a DirecTV customer, he o r she r eceives a “Customer Ag reeme n t ” t hat g overns the relationship between DirecTV and its subscribers. Section 9 of the Customer Ag reeme n t , entitled “Resolving Disputes,” provides that all disputes between DirecTV and its customers “will be resolved only b y binding arbitration.” Subsection 9(c)(ii) of the Customer A gr eement provides: “Neither y ou

nor we shall be entitled to j o i n or consolidate claims in arbitration by or ag ainst other individuals or entities, o r arbitrate any c laim as a represe n t a t i v e member of a class o r in a private attorney g eneral capacity .” How e v er, the Customer Ag reement a l s o sets forth a so-called “jettison clause”: “I f, h owever, the law of y our state would find this
ag reement to disp e n se with class arbitration procedures unenforceable, then this entire Section 9 is unenforceable.” The subsequent section, Sec t ion 1 0 (“Miscellaneous”), contains a subsection (b), which reads:

The interpr e tation and enforcement of this Ag reement shall be g overned by the rules a nd
reg u l ations of the F ederal Communications Commission, other a

p p licab le federal laws, and the laws o f the state and local area where Service is provided to y ou. This Ag reement is subject to modificat i o n if required by such laws. N otwithstanding the foreg oing

, Section 9 shall be g overned by the F ederal Arbitration Act.

DirecTV has long maintained that the Customer Ag reement means tha t P l a intiffs’ claims must be resolved throug h arbitration. I n M a r c h 2008, it moved the district
court to compel arbitration. DirecTV arg ued that the law o f named plaintiffs J ohn Murphy and G reg Masters’s residencesM U R P H Y V

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(Georg i a and Montana, respectively ) applies and permits enforcement of the class arbitration ban. 3 Plaintiffs contended that California law, which at the time included the Discover Bank rule, g overned the enforceability of the Customer A g reement’s class waiver. Concludin g that California law applied, the district court declined to c ompel arbitration. W e affirmed the d istrict court’s c h o i c e o f law ruling

. See Masters v. Dir e cTV
, Inc.
, Nos. 08-55825, 08- 55830, 2009 WL 4 885132, at *1 ( 9 t h Cir. Nov. 19, 2 009) (unpublished).

B e cause the Discover Bank rule rendered DirecTV’s class arbitration ban unenforceable, Section 9’s jettison clause was trig g ered, permitting litig ation in the district court to continue for almost a y ear and a h alf. Then, the United States Supreme C o u rt d e c i ded Concepcion
, prompting DirecTV t o successfully move the district c ourt to reconsider its p r i o r order. Pig g y

backing o n DirecTV’s Customer Agr e em ent, B est B uy also successfully moved to compel arbitration. Plaintiffs timely appealed. W e review the orders compelling arbitration de novo. Kramer v. Toyota Motor Corp
., 705 F .3d 1122, 1126 (9th Cir. 2013); Bushley v

. C r e d it Suisse F

irst Bos.
, 360 F .3d 1 1 49, 1152 (9th Cir. 2004) (“The dis trict court’s decisi o n to g rant or deny a motion to c ompel arbitration is reviewed de novo.”).

II.

“W ith limited e x ceptions, the F ederal Arbitration A ct (F AA) g overns the e nforceability of a rbitration ag reements in

3 Nam ed p lain t if

f Ro b erta W eiss d id n o t f

i le su it u n til March 2 0 1 0

. Her

co m plain t w as co n so lid ated w ith th e in stan t litig atio n

sh o rtly th ereaf ter.M U R P H Y V

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contracts involving interstate commerce.” Kramer
, 705 F .3d at 1126. Under the F AA:

A written provision in a ny maritime
t r a nsaction or a c ontract evidencing a transaction involving commer c e to settle b y arbitration a controversy thereafter arising out of such contract or transaction, or the r efusal
to perform the whole or any part thereof, o r an ag reement in writing to submit t o arbitration

an ex isting c ontroversy a r ising out o f such a contract, transaction, or refusal, shall be valid, irrevocable, and e nforceable, save up o n such
g rounds a s ex ist at l aw or in equity for the revocation of any

contract.

9 U.S.C. § 2. As the Supreme Court has noted, F AA § 2 “is

a cong ressional declaration of a libe r a l federal p olicy favoring arbitration a g reements, n otwit hstanding any state substantive o r procedural policies to the c ontrary .” Moses H

. Cone Mem’l Hosp. v. Mercury Constr. Corp.
, 4 60 U .S. 1, 24 (1983); a ccord Concepcion
, 131 S. Ct. at 1745. However, fundamentally an arbitration a g reement is contractu a l in
nature. Rent-A-Center
, W est, Inc. v. J

acks o n , 1 30 S. Ct. 2772, 2776 (2010) (observing that the “F AA reflects the fundamental p r i n ciple that arbitration is a matter o f contract”). Thus, the F AA “places arbitration ag reements on

an equal footing with o ther contracts, and requires c o u rts to enforce them according to their terms.” Id. (internal citation omitted).M U R P H Y V

. D I R

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A. DirecTV

“Apply ing Concep c i on retroactively to the arbitration provision,” the district court held that “the class a ction w aiver is not u nconscionable, and therefore, the a rbitration provision is enforceable.” W e ag ree. 4

Plaintif f s a r g ue that Section 9 o f DirecTV’s Customer A gr e e m en t , w h i c h r e q u i r e s b i n d i n g a r b i t ra t i o n , i s unenforceable due to the jettison clause set forth in subsection 9(c). They maintain that a s o f A pril 24, 2007 and April 24, 2010, t h e effective dates of the Customer Ag reements to which Plaintiffs a re p arties, “the law of [ California] would [ have found] this ag reement to d ispense with class arbitration procedures unenforceable,” rendering the “ entire Sect i o n 9 unenforceable.” B efore 2011, the Discover Bank rule had not
y et been overruled by

the Supreme Court, so Plaintiffs cling
to the notion that the r u l e s till g overns the interpretation o f thei r arbitration ag r eement today

. This arg ument misapprehends the doctrine of preempti o n and the rationale of the Supreme Court’s ruling in Concepcion

.

I mporta n t l y , the F AA meant what the Court in Concepcion say s it means—that the Customer Ag reement’s

4 T h e district co u rt f

o u n d th at Plain tif

f s receiv ed th e Cu sto m er A g reem en t co n tain in g t

h e arb itratio n p ro v i s i o n , an d w ere b o u n d b y th e

co n tract, ev en if th ey d id n o t rea d i t

. I n th eir Rep ly B rief

, P lain tif f s attem p t t o ch allen g e th is co n clu sio n

. Ho w ev er, Plain tif f s d id n ot arg u e in th eir Op en in g B rief t

h at th ey d id n o t “ assen

t to arb itratio n ,” an d th eref ore th ey h av e w a i v ed th is arg u m en t

. S mith v. Ma rsh

, 1 9 4 F.3 d 1 0 4 5
, 1 0 5 2 (9 th Cir

. 1 9 9 9 )

. In an y ev en t, th e d istrict co u rt’ s f in d in g th at P lain tif

f s receiv ed th e Co n s u m e r Ag reem en t an d co n tin u ed to accep t DirecT V’ s

serv ices is n o t c l e arly erro n eo u s an d its co n clu sio n t h at th ese actio n s b o u n d P lain tif

f s to th e term s o f

th e co n tract is co rrect.M U R P H Y V

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class w a iver is enforceable—even prior to 2011 when the Discover Bank rule was nominally in effect. That is because the Supreme Court’s “ construction o f a statute is an authoritative statement of w h at t h e statute meant b efore a s well as after the decision of the c ase g iving rise to that construction.” Rivers v. R o a d w ay Express, Inc.
, 511 U.S. 298, 3 12–13 (1994 ) ; s e e also Morales-Izquierdo v. D HS
, 600 F .3d 1076, 1090 ( 9th Cir. 2010) (“[ W ] hen a co u r t interprets a statute, even an ambig uous one, and e v e n when that interpr e t at ion conflicts with the court’s own prior interpretation, the new interpretation is treated a s the statute’s one-and-only meaning .”). Thus, § 2 of the F A A has always preempted states from invalidati n g arbitration ag reements that disallo w c l ass procedures. The parties’ ag reement that
state l a w w ould g overn the enforceability of the arbitration requirement was not an ag reement to rely on state law that “creates a scheme inconsistent with the F AA.” Concepcion
, 131 S. Ct. at 1748.

Section 2 o f the F AA, which under Concepcion requires the e nforcement of arbitration ag reements tha t b a n class procedures, is the law of California and of every other state. The Customer Ag reement’s reference to stat e l a w “does not sig nify the inappl icability of federal law, for ‘a fundamental principle in our sy stem of complex national polity ’ mandates that ‘the Constitution, laws, and treaties of the United States

a re as much a part of the law of every State as its own loc al laws and Constitution.’” Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta
, 458 U.S. 141, 157 ( 1 9 8 2) (quoting Hauenstein v

. Lynham

, 100 U.S. 483, 4 90 (1 8 80)); see also Brown v

. Investors Mortg. Co.
, 121 F .3d 4 72, 4 76 (9th Ci r. 1 997) (“The fact that the p arties ch o s e t o a pply the laws o f W a shing ton, rather than the laws of another state, does not

mean the parties decided that federal law should not a pply .”).M U R P H Y V

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I t follows that, under the do c t r ine of p reemption, the Discover Bank rule is not, and ind eed n e ver was, California l a w

. Simply put, “state law is nullified to the ex tent that i t actually conflicts with federal law.” De la Cuesta , 458 U.S.
at 153 (emphasis added). Thus, Plaintiffs’ contention that the parties intended for state law to g overn the enforceabil i t y o f DirecTV’s arbitration clause, even if the state law in question contravened federal law, is n onsensica l

. 5 A contract cannot be unenforceable under state law if fe d eral law r equires its enforcement, b ecause federal law is “the supreme L aw of the L and

. . . , any T hing in the Constitution or L aws of any State
to t h e C o ntrary notwithstanding .” U.S. Const. a rt. VI
, cl. 2. Section 9 of the Customer Ag r eement provides only that the arbitration ag reement will be unenforceable i f t h e “ law o f
y our state” d isallows c lass waiver s , w h ich California law does not—and could not—und e r t h e F AA as interpreted in Concepcion

.

Plaintiffs cite no cases to the contrar y

. Fo r instance, Plaintiffs rely heavily on American A irlines, I n c

. v

. W olens

, 513 U .S. 219 (1995), for the proposition that parties may enter a contract whose terms diverg e from the requirements of federal law. I n W

olens

, th e S u p reme Court held that the federal Airline Dereg

ulation Act, which displaces state laws
reg ulati n g a irline r ates, routes, and services, see id. at 232,
pree mpted claims b roug h t under state consumer protection laws that served in effect as a “ means to g uide and police the

5 T h at th e Cu sto m er A g reem en t m ay h av e b een d raf ted an d en tered in to

w ith th e Disco ver Ba n k ru le in m in d d o es n ot ch an g e th e f act t h at “ th e law

o f y o u r state” can n o t in clu d e a ru le th at a f ed eral statu te, as in terp reted b y th e Su p rem e Co u rt, b ars states f ro m im p o sin g

. Un d er Co n cep cio n , states sim p ly lack th e p o w er to ren der class arb itratio n w aiv ers u n en f o rceab l e as

u n co n scio n ab ly

ex cu lp ato ry

.M U R P H Y V

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marketing practices of the airlines,” id. a t 228. However, the Court h eld that the Act does not “shelter airlines f rom suits alleg ing no viola t i o n of state-imposed oblig ations, but seeking recovery

solely for the airline’s alleg ed breach of its
own, self-imposed undertaking s.” Id. Plaintiffs read this lang uag e broadly

, arg u ing t h a t when a party to a contract promises to foll o w t h e substance of state law, it is bound to do so even if federal law would o therwise preempt it. B ut W olens stands only for the p roposition that contracting parties

can enforce the substantive terms of a p rivate ag reement even if they ex ceed the requirements of federal law. W olens does
not hold that contract lang uag e referencing s t ate law transforms otherwise preempted state contract-law doctrines into enforceable private oblig ations; in fact, it implies that the opposit e is true. See id. a t 233 (“This distinction b etween what the State dictates and what the airline itself undertakes confines courts, in breach-of-contract actions, to the parties’ barg a in, with no enlarg ement or enhancement b ased on state laws or policies ex ternal to the ag reement.”).

Nor does Plaintiffs’ position find support in the Supreme Court’s d ecision in Volt Information Sciences, Inc. v. Board of Trustees of the Leland Stanford Ju n i o r University
, 489 U .S. 468 (1989). W h ile Volt does indicate that the terms

o f a n arbitration ag reement may be enforced even if they require p rocedures not c o ntemplated by the F A A, the unique posture o f Volt is a far cry fr o m t h i s case. I n Volt

, the California Court of Appeal had h e l d that, by incorporating
state law into an arbitration ag ree m e n t, the parties ag reed to be bound by a Ca l i f

o r nia r ule a uthoriz ing courts to stay arbitration pendi n g resolution of related litig ation involving thi r d p a r ties. Id. a t 471–72. The Court only r eviewed the California Court of Appeal’s c o nstruction of the contract’s choice-of-law provision to the ex tent necessary to determineM U R P H Y V

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whether it was contrary

to federal law, and concluded that it

was not. See id. at 474–76. The Court held that, “ assuming the choice-of-law c l a use meant what the Court of Appeal found it to mean,” i.e

. , that the a r bitration ag reement incorporated California p r ocedural rules, id. at 476, the California rule at issue was not preempted by the F AA. Id. at 479.

The Court in Volt e mphasiz ed “that the interpretation o f private c ontracts is ordinarily a question of state law, which this Co u r t d o e s not sit to review.” Id. at 474. As J u stice B rennan’s d issent noted, the Co u r t d eclined to review the California Court of Appeal’s holding that the contract at issue “would b e go verned solely by the law of the State o f California, to the ex clusion of fe d e r al law.” Id. a t 480 (B rennan, J
., d issenting ). Thus, the Volt m a j o r ity had no occasion to consider whether the state court’s construction o f the c ontra c t at issue was c orrect. Here, Plaintiffs’ contract interpretation arg u ments are squarely p resented, and our

reasons for rejecting them larg ely mirror the a n aly sis of the Volt dissenters. See id. at 490 (“[ T] he literal lang uag e of the contract–‘the law of the place’– g ives no indication o f any intention to apply only sta te law and e x clude o ther law that would normally be applicable to something t a k i n g place at that location. B y settled principles of federal supremacy , the law of any place in the United States includes federal law.”). B ut even the California Court of Appeal’s (nonprecedential) analy sis in Volt is disting uishable because it proceeded from the premise that, “‘[ i] n the face of such a choice of laws provision, California law applies unless preempte d b y the FAA .’” B d. of Trustees of Leland Stanford Jr. Univ. v. Volt Info. Scis., Inc.
, 240 Cal. Rptr. 558, 5 60 ( Cal. Ct. App. 1 987) (depublis h e d) (emphasis added) (quoting Garden Grove C m t y

. Church v. Pittsburgh-Des Moines Steel Co.
, 191 C a l

.M U R P H Y V

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Rptr. 1 5
, 2 0 (Cal. Ct. App. 1983)), aff’d

, 489 U.S. 468 (1989); see a lso Volt

, 489 U.S. a t 479 (noting that the C a l ifornia rule in question could be g iven effect “with o u t doing violence to the policies behind the F A A”). H ere , in

c ontrast, the Supreme Court has e x pressly held that the ru l e Plaintiffs seek to apply is “an obstacle to the accomplishment of the F AA’s objectives.” Concepcion
, 131 S. Ct. at 1748.

Under W olens and Volt

, it is cl e a r t h a t if D irecTV h ad actually contracted with Plaintiffs to allow cl a s s arbitration, it would be required to d o so irrespective of Concepcion

. B ut DirecTV did e x actly the opposite. The Customer Ag reement provides that “Neither y ou nor we shall b e entitled to join or consolida t e c laims in arbitration by or ag ainst other individuals or enti t i e s , o r arbitrate any claim as a representative member of a class or in a p rivate attorney g eneral capacity .” Under these circumsta n ces, Plaintiffs’
arg ument that by referencing state law, DirecTV incorporated the Discover Bank r

ule by reference as a substantive contract term is especially dubious. The parties ag reed not to a rbitrate only if state law required the availability of class arbitration procedures to enforce the arbitration cla u s e

. Concepcion precludes such state laws.

F or this reason, many o f the parties’ v arious contract interpretation arg uments are larg ely irrelevant to o u r analy sis. F or e x ample, Plaintiffs devote e x tensive briefing to their contention that the clause selecting state l aw in Section 9 is “far more specific” than the l a ng uag e selecting the F AA in Section 10. They likewise a r gu e that the history o f amendments to DirecTV’s Customer Ag reem ent over time shows that Section 10’s reference to the F AA is inapplicable
to the jettison clause in Section 9, and that ambig uities about whether state o r federal law i s c o n t rolling should beM U R P H Y V

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. 15

construed ag ainst DirecTV as the cont ract’s drafter. These
arg uments are unavailing because, under de la Cuesta and its
prog e ny , there is no conflict b et w e e n the reference to “the law of y our state” in S e c tion 9 of the Customer Ag reement

a n d t he reference to the F AA in Section 10. Thus, w e h a v e

no occasion to “choose” which provision of the contract controls the enforceability of the class arbitration ban.

I n a nswering the question “whether the rule of decision is supplied b y the laws of State X o r by f e deral law,” g eneral “c h oice-of-law doctrines (and, according ly

, attempts b y contracting parties to influence their application with choice-of-law clauses) have no applicability

. . . because the relevant rule is supplied by t h e C onstitution itself: a valid federal law preempts any state law p u rporting to reg ulate the

same issue.” Roadway Package Sys., Inc. v. Kayser
, 257 F .3d 287, 293–94 ( 3d. Cir. 2 001), abrogated on other g rounds by Hall St. Assocs. v. Mattel, Inc.
, 552 U.S. 576 (2008); see also Volt

, 489 U.S. at 488 (B rennan, J
., dissenting ) (observing that it is “bey o n d dispute that the normal purpose of such choice-of-law c lauses is to determine that the law of one State rather than that of another State wi l l be applicable; they simply do not speak to any interaction between stat e a nd federal law”). F or th is reason, the reference to the F AA in Section 10 of the Customer Ag reement is larg ely superfluous
to our inqui r y

. T he “ law o f y our state” lang uag e of Section 9 already incorporates § 2 of the F AA. See de la Cuesta
, 458 U .S. at 157 n.12 (“Paragr aph 15 provides that the deed is
t o be g overned by the ‘ law o f the jurisdiction’ in which t h e property is located; but the ‘law of the jurisdiction’ includes federal as well as state law.”). Thus, because the arbitration
ag reement is enforceable under Concepcion
, the district court d i d n o t err in compelling Plaintiffs to arbitrate their claim s ag ainst DirecTV.M U R P H Y V

. D I R

E C TV, I N C

. 16

B. Best Buy

The district court determined that, a lthoug h B est B uy is
not a sig natory to the Customer Ag reement or any o t h e r arbitration ag reement with Plaintiffs, 6 nevertheless Plaintiffs
must submit their c laims ag ainst B est B u y to arbitration. The district court relied o n the doctrine of equita b l e estoppel, which “‘precludes a party f rom c laiming the benefits of a contract while si m u ltaneously attempting to a void the burdens that contract imposes.’” Comer v

. Micor, Inc.
, 436 F .3d 1098, 1101 (9th Cir. 2006) ( quoting W ash. Mut. Fin. Grp., LLC v. Bailey

, 364 F

. 3d 260, 267 ( 5th Cir. 2004)). The district court r easoned that because Plaintiffs alleg ed in their complaint “concerted action on the part of DirecTV and B e st B uy , the lawsuit ag ainst B est B uy is inseparable from the la w s u i t a g ainst DirecTV.” T hus, the distirct court found it “necessary to compel arbitration of Plaintiff’s claims ag ainst B est B uy .”

Be s t B uy arg ues that arbitration o f Plaintiffs’ claims
ag ainst it is required under three al t e r native theories: (1) equitable e s t oppel; (2) a g ency ; and (3) third-party beneficiary . None of these arg uments is availing

.

1. Equitable Estoppel

“The United States Supreme Court has held that a litig ant who is not a party to an arbitration ag reement m a y invoke

a r bitration under the F A A if the relevant state contract l a w allows the litig ant to e nforce the ag r eeme nt.” Kramer
,

6 A lth o u g h W eiss is th e o n ly P l ain t if f w ith claim s rem ain i n g a g a i n s t B est Bu y w e u se th e p l u ral “ P l a i n t if f s” th ro u g h o u t th is o p in io n f or

co n sisten cy

.M U R P H Y V

. D I R

E C TV, I N C

. 17

705 F .3d at 1128 (discussing Arthur Andersen L L P v. Carlisle

, 556 U.S. 624, 632 (2009)); a ccord Rajagopalan v

. NoteW o rld, LLC
, — F. 3 d —, 2 013 W L 2151193, at *2 (9th Cir. May 20, 2013). W e therefore ex amine the contract law of Californ i a t o determine whether B est B uy , as a nonsig nato r y , may seek arbitration under the theory o f equitable estoppel.

B e cau s e g enerally o nly sig natories to a n arbitration
ag reement are oblig ated to su b m i t to binding arbitration, equitable estoppel of third parties in this contex t is narrowly confined. Mundi v. Union Sec. Life Ins. Co.
, 555 F

. 3d 1042, 1046 (9th Cir. 20 09). Under California law, a party that is
not otherwise subject to an arbit r a t i on ag reement will be equitably estopped from avoiding arbitration only under two very specific conditions. O ur recent d ecision in Kramer adopted as a controlling statemen t o f California law the equitable estoppel rule set forth in Goldman v. KPMG LLP
, 92 Cal. Rptr. 3d 534 (Cal. Ct. App. 2009):

W here a nonsig n atory seeks to enforce a n arbitration c laus e, the d o ctrine of equitable estoppel applie s in two circumstances: (1) when a sig natory must rely on the terms of the written a g reement in a sserting its claims
ag ainst the nonsig natory o r the claims a re intimately founded in and intertwined with the underly ing c ontract, and (2) when t he sig natory alleg es substantially interdependent and concerte d m i sconduct by the nonsig natory and another sig natory and the alleg atio n s o f interdep e ndent misconduct are founded in o r intim ately connected with the o b lig ations o f the underly

ing ag reement.M U R P H Y V

. D I R

E C TV, I N C

. 18

Kramer
, 705 F .3d a t 1 128–29 (internal alteration, citations, and quotatio n m a r

ks omitted). This rule reflects the p olicy that a p l a i n tiff may not, “on the o ne hand, seek to hold the non-sig natory liable p ursuant to duties imposed by the
ag reement, w hich contains an arbitration provision, b ut, on the other h and, deny arbitration’s applicability bec a u se the defendant is a non-sig natory .’” Goldman

, 92 Cal. Rptr. 3 d at 543 (quo t ing Grigson v

. Creative Artists Agency, LLC
, 210 F .3d 5 24, 528 (5th Cir. 2000)); see also Metalclad Corp.

v. Ventana E

nvtl. Organizational P ’ship

, 1 Cal. Rptr. 3 d 328, 337 (Ca l

. Ct. App. 2003) ( reasoning that equitable estoppel applies where a plaintiff “ag r eed to arbitration in the underly ing written contract but n o w , i n effect, seeks the b enefit of that contract in the form of damag es

. . . whi l e avoiding its a

rbitr a t i o n p rovision”). W e must analy z e whether B est B uy satisfies e ither of the two Kramer / Goldman

ex c e ptions to the g eneral rule precluding nonsig natories from requiring arbitration of their disputes.

a. Reliance on the underlying contract

Under the f

irst G oldman prong , equitable estoppel applies when the plaintiff’s c laims “ are ‘intimately founded in a nd intertwined’ with the underly ing contract oblig a tions.” Jones

v. Jacobson

, 125 Cal. Rptr. 3d 522, 538 (Cal. Ct. App. 2 011) (quoting Boucher v

. Alliance Title Co.
, 25 Cal. Rptr. 3 d 440, 446 (Cal. Ct. App. 2005)). “This requirement comports with, and indeed derives from, the very purposes of the doctrine: to prevent a party from using the terms or oblig ati o n s o f an ag reement as the basis f

or his claims ag a inst a nonsig natory , whi l e a t the same time refusing to arbitrate with the nonsig natory under another c l ause of that same ag reement.” Goldman

, 92 Cal. Rptr. 3d at 543–44.M U R P H Y V

. D I R

E C TV, I N C

. 19

Plaintiffs’ c laims ag ainst B est B uy do not rely on, and a re not intertwined with, the substance of the DirecTV Customer Ag reement or L ease Addendum. B est B uy arg ues that, in addition to g overning the g e n e r a l contours of the customerprovider relationship, the Customer A g reement clarifies that the leased equipment is n o t t h e property of the customer, cannot be transferred, and must be r eturned, render i n g the

ex istence of the Customer Ag reement a necessary precondition for Plaintiffs’ cl a i m s. B ut the Customer Ag reement itself merely provides that, if a customer is leasing his DirecTV equipment, it is n on-transferable and must be returned upon cancellation. T h e Customer Ag reement is factually irrelev a n t t o Plaintiffs’ claims ag ainst B est B uy , which charg e misrepresentations to customers at the point o f sale. The complaint i s r e p l e te with alleg ations of deceit b y B est B u y that have nothing to do with the Customer Ag reement. Among o ther alleg ations, Plai n tiffs claim that B est B uy “sold DirecTV Equipment a t Be s t Bu y stores in a

m a n n e r t h a t r e a s o n a b l e c o n s u m e r s w o u l d f i n d indisting uishable from any other sale w h i c h occurs at B e st B uy ”; that “Best B uy receipts g iven to customers memorializ ing the transaction contained the word ‘SAL E’ at the top of the receipt in bold, capitaliz ed letters”; and that oral “[ r] epresentations were made to some purchasers that t he DirecTV E quipment was for sale.” None of these alleg ations rely on the Customer Ag reement or attempt to seek any benefit from its terms.

Even if B est B uy is correct that Plaintiffs’ claims on some abstract level require the ex istence of the Customer Ag reement, the law is clear that this is not en o u g h f o r equitable estoppel. I n California, equitable e stoppel is inapplicable wher e a plaintiff’s “ alleg a tions reveal no claim

o f a ny v iolation of a

ny d uty , oblig ation, term or condit i o nM U R P H Y V

. D I R

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. 20

imposed by the [ c ustomer] ag reements.” Id. a t 551. Apply ing this p rinciple in Kramer
, we held that Toy ota could
not compel arbitration of a consumer class action on the basis of arbitration c lauses c onta i ned in the Purchase Ag reements customers entered into with their dealerships. See 705 F .3d
at 1124–25. W e ex pressly r e j e cted Toy ota’s arg ument that the plaintiffs’ claims were n ecessarily intertw i n e d with the Purchase Ag reements me r ely because the lawsuit was predicated o n the b a

r e fact that a vehicle purchase o ccurred. Id. at 1130–31. Rather, we held that the plaintiffs’ causes o f action, which, as h ere, larg ely arose under C a l i f o rnia

consumer protection law, were not sufficiently intertwined

w i t h the Purchase Ag reements to trig g er equitable estoppel. Id. at 1130–32. L i kewise, here, the Customer Ag reement proves at most the ex istence of a transacti o n ; Plaintiffs’ claims do not depend o n the A gr e e ment’s terms. The UCL and CL RA allow Plaintiffs to sue B est B uy for misleading

consumers reg ardless of whether o r not t h e y sig n ed larg ely unrelated contracts with DirecTV. 7 See Rajagopalan

, — F .3d

7 W e also n o te th at m an y o f t h e C a l i fo r n ia cases p erm ittin g n o n

sig n at o r i es to co m

p el arb itratio n u n d er an eq u itab le esto p p el th eo ry in v o lv e co n tract- b ased cau s es o f actio n , su ch as to rtio u s in terf eren ce or b reach o f co n tract. S

ee, e.g

. , Bo u ch er , 2 5 C al. Rp tr. 3 d at 4 47 (ap p ly in g eq u itab l e esto p p el w h e r e p lain t if f relied o n an em

p lo y m en t ag reem en t

co n tain in g an arb itratio n clau se t o alleg e f ailu re to pay accru ed w ag es, b reach of co n tract, an d o th er clai m s t ha t w ere in tim ately bo u n d u p w i th th e su b s tan ce o f th e co n tract); Met a l cla d

, 1 C al. R p tr. 3 d at 3 3 7

– 3 8 (ap p ly in g eq u itab le esto p p el w h ere p lain tif

f ’ s claim s tu rn ed o n an alleg ed b reach o f th e u

n derly i n g co n tract an d fr a ud i n o b tain in g it). Here, in

co n trast, P lain tif

f s d o n ot seek an y co n tract- related d am ag es; rath er, th eir claim s are f

o r v io l atio n s o f co n su

m er p ro t ectio n law s. W h ile w e n eed n o t f o reclo se th e p o ssib ility th at a co n s u m er cl a s s a c tio n m ig h t satisf y th e req u irem en ts f

o r eq u itab le esto p p el, th e o b v io u s co n trast b etw ee n th ese

cases an d K

ra mer su g g ests t

h at eq u itab le esto p p el is p articu larly in ap p ro p riate w

h ere p lain tif

f s seek th e p ro tectio n o f co n s u m er p ro tectio nM U R P H Y V

. D I R

E C TV, I N C

. 21

at —, 2013 WL 2151193, at *3 (rejecting equitable estoppel theory under W ashing t on law where the plaintiff’s lawsuit stated “statutory claims that are separate f rom the contract itself” (internal alteration and quotation marks omitted)).

I n short, Plaintiffs rely not o n the Customer Ag reement, but on B est B uy ’s’ alleg ed words and deeds in the course of transactions leading to the acquisition of equipment they believed they purchased, but in fact leased. “Plaintiffs d o not seek to si m u l t a neously invoke the duties and oblig ations o f [ B est B uy ] under the [ Customer] Ag reement, as it has n one, while seeking to avoid arbitration. Thus, t h e i n equities that the doctrine of equitable estoppel i s d es ig ned to address a re not present.” Kramer , 705 F .3d at 1134.

b. S u b s t a n t i a l i n t e r d e p e n d e n c e f o u n d e d i n underlying agreem e nt

Under the second Goldman prong , the doctrine o f equitable e s toppel may apply in certain cases w here a sig natory to an arbitration ag reement attempts to ev a d e arbitration by suing nonsig natory defendants for “claims that

are based on the same facts and are inherently inseparable from arbitrable claims ag ainst sig natory defen d ants.” Metalclad

, 1 Cal. Rptr. 3d at 334 (internal quotation marks omitted). However, under Goldman :

[ M ] ere a lleg ations of collusive behavior between s ig natories and nonsig natories to a contract are not enoug

h to compel arbitration

law s ag ain st m isco n d u ct th at is u n related t o an y co n tract ex cep t t o th e

ex ten t th at a cu sto m e r serv ice ag reem en t is an artif act o f th e co n su

m erp ro v id er relatio n sh ip itself

.M U R P H Y V

. D I R

E C TV, I N C

. 22

between parties who have not ag reed to arbitrate: those alleg a tions of c ollusive behavior must also establish that the plaintiff' s claims ag ainst the nonsig natory a re intimately founded in a

nd in tertwined with the

o b l i g a t i o n s i m p o s e d b y t h e c o n t r a c t

co n t a ining the arbitration clause. I t is the relationship of the claims

, not merely the collusive behavior o f the sig natory a nd nonsig natory

parties, that is key

.

92 Cal. Rptr. 3d at 545 (internal a lteration a n d q uotation marks omitted).

The district court conclude d equitable estoppel r equired arbitration ag a inst B est B uy b ecause the alleg ation s i n the complaint charg ed “substantially interdependent and concerted” misconduct. W hile that is un deniably true, Goldman makes clear “ that alleg ations of collusive behavior by sig natories and nonsig natories, w ith n o relationship to the
terms of the u nderlying contract,” does not justify a pplication of equitable estoppel to compel arbitration. Id. at 549.

Mere alleg ations of collusion are insuffici e nt to trig g er equitable estoppel. Even where a plaintiff alleg es collusion, “[ t] he sine qua non for allowing a nonsig natory to enforce an arbitration clause based on equ i table e stoppel is that the claims the plaintiff asserts ag ainst the nonsignatory a re dependent on or inex tricably b o u n d up with the contractual oblig ations of the ag reement c ontaining the arbitration clause.” Id. a t 537. As we h ave already ex plained, Plaintiffs’ claims do not bear the requisite relationship to the Customer Agreement to warrant application of equitable estoppel.M U R P H Y V

. D I R

E C TV, I N C

. 23

Thus, under California law, Plaintiffs ar e n ot e quitably estopped from litig ating their claims ag a inst B est B uy

.

2. Agency

B e st B uy also arg ues tha t we may affirm the district court’s order compe l ling arbitration on a theory of ag ency

. I n Califo r n ia, “[ a ] n onsig natory to an ag reement to a rbitrate
may be re quired to arbitrate, and may invoke arbitration
ag ainst a party , if a preex isting confidential relationship, such

as an a g ency relationship between the nonsig nat o r y and o ne of the parties to the arbitration ag reement, makes it equitable
to impose th e d

uty to arbitrate upon the nonsig natory

. ” W estra v. Marcus & M

illichap Real Estate I

nv. B rokerage Co.
, 28 Cal. Rptr. 3d 7 5 2
, 7 5 6 (Cal. Ct. App. 2005). 8 However, the district court in this c a se did not find that B e st B uy was ac t ing as DirecTV’s ag ent when it sold the equipment, and the record d oes not re f l e ct that an ag ency relationship in fact ex isted.

Even assuming that B est B uy “represents [ DirecTV]

. . . in dealing s with third persons,” Cal. Civ. Code § 2295, B e st B uy is not entitled to compel arbitration based merely on the fact that it sells DirecTV p roduct s in its stores. Ag ency requires tha t the principal maintain control o ver the ag ent’s actions. DeSuza v. Andersack

, 133 Cal. Rptr. 920, 924 (Cal. Ct. A pp. 1976) (“The rig ht of the alleg ed principal to control

8 Best B u y relies o n certain of o u r cases su g g estin g th at ag en t s o f a sig n ato ry t o an ag reem en t th at co n tain s an arb itratio n p ro v isio n m ay

co m pel arb itratio n if th e claim s arise o u t o f th e a g en cy relatio n sh i p an d relate to th e u n d erly in g ag reem en t. Ho w ev er, af ter Ca rlisle

, it i s clear th at
sta te law

, n ot su

b s t a n t iv e f

ed eral law

, g o v ern s th e in q u iry

. Kra mer , 7 0 5 F.3 d at 1 12 8

.M U R P H Y V

. D I R

E C TV, I N C

. 24

the behavior of the a l l e g ed ag ent is an essential element which must be factual l y p r es ent in order to establish the

ex istence of ag ency , and h as long b een recog niz ed as such in the decisional law.”); accord Batzel v. Smith

, 333 F .3d 1018, 103 5

– 3 6 (9th Cir. 2003). Generally

, retailers are not considered the ag e n ts o f the manufacturers whose products they sell. See Res tatement (Third) of Ag ency § 1.01 cmt. g (2006) (“A purchaser is not ‘acting on behalf of’ a supplier in

a distribution relationship in which g oods are purchased from the supplier for resale. A purchaser w h o resells g oods supplied b y another is a c ting as a principal, not an a g ent.”); Alvarez v

. Felker Mfg. Co.
, 41 Cal. Rptr. 514, 522 (Cal. Dist. Ct. App. 1964) (“One who receives g o ods from a nother for resale to a third person is not thereby the other’s ag e nt in the transaction: whether he is an ag ent f or thi s p u r

pose or is himself a buy er d epends upon whether the parties ag ree that his duty is to act p rimarily f or t h e b e n efit of the o ne delivering the g oods to him or is to a ct primarily for his o wn benefit.” (internal quotation marks omitted)). T h us, the supplier-retailer r ela

t i o n s h i p is insufficient to render B est B u y DirecTV’s ag ent. B est B uy has presented no e v i dence, on appeal or before the district court, that D irecTV controlled its behavior in way s relevant to Plaintiffs’ alleg ations.

I ndeed, to the ex tent the record contains any evidence that is probative of the nature of the arrang ement b etween the two companies, it sug g ests that an ag ency relationship was

ex p ressly disavowed by D i r ec TV and B est B u y in the “I ndependent Retailer Ag reement” they entered. The “I ndependent Retailer Ag reement” recites that B es t B uy is DirecTV’s independent sales representative. Parag raph 2 o f the ag reement recites t h a t “DI RECTV hereby appoints B e st B uy as its independent commissioned sales representative to solicit Subscriptions, o n t h e terms and conditions herein,M U R P H Y V

. D I R

E C TV, I N C

. 25

from its L ocations.” In parag raph 4.1 of the ag reement, 9 the parties ex pressly

provide:

B e st B uy shall conduct all o f its DI RECTV Sy s t e m sale, lease, warranty , maintenance, and r epair b usiness (“DI RECTV Sy stem B u siness”) for its own account and not as an
ag ent for D I RECTV. A t the r e a s o nable

r e q uest of DI RECTV, B est B uy shall display notices to its custome r s , in such form, places and m a n ner as mutually ag reed by B e st B u y and D I R E C TV, of such fact and that B e st B uy and not DI RECTV shall be responsible for all of B e st B uy ’s actions in this reg ard. DI RECTV disclaims any c ontrol

over Be st B uy ’s DI RECTV Sy stem B usiness

ex c ept to the limited ex tent ex pressly provided herein and to support and protect its

9 Al t h o u g h th e ag reem en t w as f iled u n d er seal in th e d i strict co u rt, w e

co n clu d e th at B est Bu y w aiv ed an y claim o f co n f id en tiality as to th ese p o rtio n s o f th e d o cu m en t w h en its co u n s e l af

f i rm ativ ely rep resen ted at

o r a l arg u m en t t

h at Best B u y acted as DirecT V’ s ag en t in t h e se tran sactio n s. T h e ag reem en t, th e co n t en ts o f w h ich are h ig h ly p ro b ativ e

o f th e q u estio n at h an d

, m ak es clear th at th e co m p an ies ag reed th at ex actly th e o p p o site w as tru e. Cf. In re S ea led C a se , 6 76 F.2 d 79 3
, 8 0 7 (D.C. Cir. 1 9 8 2 ) (“ W h ere s o ciety h as s u b o rd i n ated its in terest in th e search f o r tru th in f av o r o f allo w in g certain in f orm atio n to rem ain co n f

id en tial, it n eed n o t allo w th at c o n fid en tiality to b e u s ed as a to ol f o r m an ip u l atio n o f th e tru t h

- seek i n g p r o c ess.”). W e leav e it to th e d istrict co u rt to co n sid er on

rem an d w

h eth er san ctio n s are an ap p ro priate resp o n se to c o u n sel’ s ap p aren t v io latio n s of th e d u ty o f can d o r to w ard th e t rib u n al. S

ee Mo d el Ru les of P ro f

’ l Co n d u ct R. 3 .3 (a) (“A l a w y e r sh all n o t k

n o w in g ly

. . . m ak e a f alse statem en t o f f

act o r law to a trib u n al o r f ail to co rrect a f

alse
statem en t o f m ateri a l fa c t o r law prev i o u sly m ad e to th e trib u n al b y th e law y er.”).M U R P H Y V

. D I R

E C TV, I N C

. 26

activities as an independent commissioned sales representative for DI RECTV’s Service.

W e see n o r eason to conclude t o t h e c ontrary , and therefore hold that B est B uy is n ot e n t i tled to compel arbitration a s DirecTV’s ag ent.

3. Third-P arty Benef

iciary

F inally

, B est B uy arg ues that it is a third-party b eneficiary of the Customer Ag reements, a nd is therefore entitled to arbitration. I n California, 1 0 “[ e ] x ceptions i n which an arbitration ag reement may be enforced by or ag ainst nonsig natori es include where a nonsig natory is a third party beneficiary of the ag reement.” Nguyen v

. Tran
, 68 Cal. Rptr. 3d 906, 909 (Cal Ct. App. 2007). B est B uy ’ s arg ument that it meets this ex ception is unpersuasive.

B est B uy bears the burden of proving t h a t i t is a thirdparty beneficiary of the Customer Ag reement. See Garcia v

. Truck Ins. Exch.

, 682 P.2d 1100, 1105 (Cal. 1984) (in bank). A third party may only assert ri g hts under a contract if the parties to the ag reement i n t e nded the contract to benefit the third party ; “ [ t] h us, the circumstance that a literal contract interpretation w ould r esult in a benefit to the third party is not enoug h to entitle that party to demand e n forcement.” H ess v

. Ford Motor Co.
, 41 P.3d 46, 51 ( Cal. 2 002) (int e rn al alteration and q u o t a tion marks omitted); see also Cal. Civ. Code § 1559 (“A contract, made ex pressly for the benefit o f

a third person, may be enforced by him at any time b efore the parties thereto rescind it.”). I n other words, “[ t] he mere fact

10 A g ain

, B est Bu y p rim arily relies u p o n f ed eral law

. Ho w ev er, u n der Ca rlisle th e relev an t au th ority is Calif o rn ia state co n tract law

.M U R P H Y V

. D I R

E C TV, I N C

. 27

t h a t a contract results in benefits to a third party does n o t render that party a ‘third party b en ef iciary ’”; rather, the parties to the contract must have ex p ressly i n t e nded that the third party would benefit. M atthau v. Super. Ct.
, 60 C a l. Rptr. 3d 93, 99 ( Cal. Ct. App. 2007). The record here does not reflect such an intent.

The terms o f the Customer Ag reement do not demonstrate that DirecTV inte nded to benefit B est B uy throug h the contract, let alone that its customers did. F o r o ne thing

, the Customer Ag reement never mentions B est B uy

. C f

. H ess , 41 P.3d a t 51 (“‘[ T ] h e i n t ention of the parties is to be

a s c e r tained from the writing alone, if possible.’” (quoting Cal. Civ. Code § 1 6 39)). I n f act , t h e Customer Ag reement contains an entire su b s e c t ion, Section 7 (h), entitled “ThirdParty B eneficiary ,” which specifies that TiVo, I nc. is a thirdparty b eneficiary of the ag r e e ment. T h at subsection d oes not mention B es t Bu y

. The California Supreme Court has observed that “the rule o f construction ex p r e s s io unius e st

ex c lusio alterius; i.e., that mention of one matter implies the

ex c lusion of all others” is “an aid to resolv e t he ambig uities of a co ntract.” Steven v. Fid. & Cas. Co. o f New Y o rk

, 377 P.2d 284, 289 (Cal. 1962). To t h e e x tent the Customer Ag reement is ambig uous with r espect to the parties’ intent to benefit B est B uy , that rule of construction militates ag ainst concluding that B est B u y is a third-party beneficiary

, in lig ht of the fact that DirecTV clearl y knew how to provide for a third-part y b e n e f

iciary if it wished to do so. Thus, we conclude that B est B uy is not entitled t o e n f orce the arbitration ag reement as a third-party beneficiary

.

B e cause we conclude that neither equitable e stoppel n o r th e t hird-party beneficiary doctrine permit B est B uy to enforce D irecTV’s arbitration ag reement, and d etermine thatM U R P H Y V

. D I R

E C TV, I N C

. 28

the I ndependent Retailer A g reement between them ex pressly disavows an ag e ncy r elationship, we reverse t h e d istrict court’s order c ompelling Plaintiffs to arbitrate with B est B uy

.

III.

F undamentally

, our task in cases like this is to “ e n sur[ e] that private arbitration ag reements are enforced according to their terms.” V

o l t , 4 89 U.S. at 478. Plaintiffs ag reed to arbitrate their claims a g ainst DirecTV. T hey did not ag ree to arbitrate their claims ag a inst B est B uy

. Notwithstanding the parties’ many imag inat i v e l e g al arg u ments, in this case they remain bound b y t he ag reements they made and not by any they did not make. W e a f f i r m t h e district c ourt’s order compell i n g Plaintiffs to a rbitrate w ith DirecTV, a

nd reverse its order compelling them to arbitrate with B est B uy

.

AF F IRMED IN P ART; REVE R S E D IN P ART; REMANDED. Each party shall bear its own costs.