FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOHN MURPHY; GREG MASTERS;

ROBERTA WEISS, on behalf of

themselves and all others similarly

situated,

Plaintiffs-Appellants,

v.

DIRECTV, INC.; DIRECTV

MERCHANDISING, INC.; DIRECTV

ENTERPRISES, LLC; DIRECTV

HOLDINGS LLC; THE DIRECTV

GROUP, INC.; BEST BUY STORES,

L.P.,

Defendants-Appellees.

No. 11-57163

D.C. No.

2:07-cv-06465-

JHN-VBK

OPINION

Appeal from the United States District Court

for the Central District of California

Jacqueline H. Nguyen, District Judge, Presiding

Argued and Submitted

May 6, 2013—Pasadena, California

Filed July 30, 2013
2 MURPHY V. DIRECTV, INC.

Before: John T. Noonan, Kim McLane Wardlaw,

and Mary H. Murguia, Circuit Judges.

Opinion by Judge Wardlaw

SUMMARY*

Arbitration

The panel affirmed the district court’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 arbitrate with electronic retailer

Best Buy.

Plaintiffs charged DirecTV and Best Buy with violations

of state law, alleging that that Defendants presented certain

DirecTV service equipment, such as receivers and digital

video recorders, as though they were for sale at Best Buy

stores when in fact the Defendants considered the transactions

to be a lease rather than an outright purchase. The DirecTV’s

Customer Agreement required arbitration of certain disputes,

but Best Buy was not a party to that agreement. 

The panel held that the arbitration agreement between

plaintiffs and DirecTV was enforceable under AT&T Mobility

v. Concepcion, 131 S. Ct. 1740 (2011), which held that

Section 2 of the Federal Arbitration Act preempts the State of

California’s rule rendering unenforceable — as

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
MURPHY V. DIRECTV, INC. 3

unconscionable — arbitration provisions in consumer

contracts that waive collective or class action proceedings. 

The panel held that Best Buy, which was not a party to

the Customer Agreement, was not entitled to the benefit of

the arbitration clause. The panel held that neither equitable

estoppel nor the third-party beneficiary doctrine permitted

Best Buy to enforce DirecTV’s arbitration agreement, and

that the Independent Retailer Agreement between Best Buy

and DirecTV expressly disavowed an agency relationship. 

The panel therefore reversed the district court’s order

compelling plaintiffs to arbitrate with Best Buy.

COUNSEL

F. Paul Bland, Jr. (argued), Public Justice, P.C., Washington,

D.C.; Leslie A. Bailey, Public Justice, P.C., Oakland,

California; Robert S. Green, Green & Noblin, P.C., San

Francisco, California; and Michael R. Reese, Reese Richman

LLP, New York, New York, for Plaintiffs-Appellants.

Melissa D. Ingalls (argued), Robyn E. Bladow, and Shaun

Paisley, Kirkland & Ellis LLP, Los Angeles, California, for

Defendants-Appellees DirecTV, Inc., DirecTV

Merchandising, Inc., DirecTV Enterprises, LLC, DirecTV

Holdings LLC, and The DirecTV Group, Inc.

Roman M. Silberfeld (argued), Michael A. Geibelson, and

Rebecka M. Biejo, Robins, Kaplan, Miller & Ciresi LLP, Los

Angeles, California, for Defendant-Appellee Best BuyStores,

L.P.
4 MURPHY V. DIRECTV, INC.

OPINION

WARDLAW, Circuit Judge:

In AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011),

the Supreme Court held that Section 2 of the Federal

Arbitration Act (“FAA”) preempts the State of California’s

rule rendering unenforceable—as unconscionable—

arbitration provisions in consumer contracts that waive

collective or class action proceedings, see Discover Bank v.

Superior Court, 113 P.3d 1100 (Cal. 2005) (the “Discover

Bank rule”), reasoning that “[r]equiring the availability of

classwide arbitration interferes with fundamental attributes of

arbitration and thus creates a scheme inconsistent with the

FAA.” Concepcion, 131 S. Ct. at 1748. This putative

consumer class action, filed before Concepcion was decided,

but pending in the district court when Concepcion issued,

charges satellite television provider DirecTV and electronic

retailer Best Buy with violations of California’s Unfair

Competition Law (“UCL”) and Consumer Legal Remedies

Act (“CLRA”). We must decide whether Concepcion applies

to the unique arbitration clause in the customer service

agreement between DirecTV and individuals who believed

they purchased DirecTV equipment from Best Buy stores

and, if so, whether Best Buy, which is not a party to that

agreement, is entitled to the benefit of the arbitration clause. 

The district court compelled arbitration of all claims against

DirecTV and Best Buy. We affirm as to DirecTV, but

reverse as to Best Buy.

1

1

In a pair of February 11, 2011 minute orders, the district court granted

motions to dismiss filed by DirecTV and Best Buy, eliminating several of

Plaintiffs’ claims from the lawsuit. Plaintiffs referenced these minute

orders in their Notice of Appeal, but did not raise them in their Opening
MURPHY V. DIRECTV, INC. 5

I.

A summary of the alleged scheme to deceive consumers

is necessary to understand the relationship between Best Buy

and DirecTV and the claims against them. Plaintiffs allege

that Defendants present certain DirecTV service equipment,

such as receivers and digital video recorders, as though they

were for sale at Best Buy stores when in fact the Defendants

consider the transaction to be a lease rather than an outright

purchase. Plaintiffs claim that even after the Defendants

began offering the equipment in question only for lease,

customers continued to receive receipts at Best Buy stores

that suggested the equipment had been purchased–most

notably because the word “SALE” was printed in bold,

capitalized letters at the top of the receipts. Even after

language on the receipt was changed to include references to

a “lease,” Plaintiffs allege that the new language was “buried”

in fine print that most consumers would not notice or

understand.2 Plaintiffs claim that the Defendants crafted

oppressive and unfair lease terms, including unexpected and

unreasonable fees.

Brief. Therefore, we do not review those minute orders. See Bell v. City

of Boise, 709 F.3d 890, 896 n.8 (9th Cir. 2013). However, as a result of

those orders, Roberta Weiss (a California resident) is the only named

plaintiff with remaining claims pending against Best Buy.

2 Plaintiffs acknowledge that in some cases the defendants provided

customers with a “Lease Addendum,” but argue that this document also

is not an adequate disclosure of the terms of equipment acquisition

because the addendum was provided to customers only after equipment

was already installed and activated in their homes. Plaintiffs allege that

the defendants considered the Lease Addendum enforceable even against

customers who had never received or signed one.
6 MURPHY V. DIRECTV, INC.

When a consumer becomes a DirecTV customer, he or

she receives a “Customer Agreement” that governs the

relationship between DirecTV and its subscribers. Section 9

of the Customer Agreement, entitled “Resolving Disputes,”

provides that all disputes between DirecTV and its customers

“will be resolved only by binding arbitration.” Subsection

9(c)(ii) of the Customer Agreement provides: “Neither you

nor we shall be entitled to join or consolidate claims in

arbitration by or against other individuals or entities, or

arbitrate any claim as a representative member of a class or

in a private attorney general capacity.” However, the

Customer Agreement also sets forth a so-called “jettison

clause”: “If, however, the law of your state would find this

agreement to dispense with class arbitration procedures

unenforceable, then this entire Section 9 is unenforceable.” 

The subsequent section, Section 10 (“Miscellaneous”),

contains a subsection (b), which reads:

The interpretation and enforcement of this

Agreement shall be governed by the rules and

regulations of the Federal Communications

Commission, other applicable federal laws,

and the laws of the state and local area where

Service is provided to you. This Agreement is

subject to modification if required by such

laws. Notwithstanding the foregoing, Section

9 shall be governed by the Federal Arbitration

Act.

DirecTV has long maintained that the Customer

Agreement means that Plaintiffs’ claims must be resolved

through arbitration. In March 2008, it moved the district

court to compel arbitration. DirecTV argued that the law of

named plaintiffs John Murphy and Greg Masters’s residences
MURPHY V. DIRECTV, INC. 7

(Georgia 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, governed the enforceability of the

Customer Agreement’s class waiver. Concluding that

California law applied, the district court declined to compel

arbitration. We affirmed the district court’s choice of law

ruling. See Masters v. DirecTV, Inc., Nos. 08-55825, 08-

55830, 2009 WL 4885132, at *1 (9th Cir. Nov. 19, 2009)

(unpublished).

Because the Discover Bank rule rendered DirecTV’s class

arbitration ban unenforceable, Section 9’s jettison clause was

triggered, permitting litigation in the district court to continue

for almost a year and a half. Then, the United States Supreme

Court decided Concepcion, prompting DirecTV to

successfully move the district court to reconsider its prior

order. Piggybacking on DirecTV’s Customer Agreement,

Best Buy also successfully moved to compel arbitration. 

Plaintiffs timely appealed. We review the orders compelling

arbitration de novo. Kramer v. Toyota Motor Corp., 705 F.3d

1122, 1126 (9th Cir. 2013); Bushley v. Credit Suisse First

Bos., 360 F.3d 1149, 1152 (9th Cir. 2004) (“The district

court’s decision to grant or deny a motion to compel

arbitration is reviewed de novo.”).

II.

“With limited exceptions, the Federal Arbitration Act

(FAA) governs the enforceability of arbitration agreements in

3 Named plaintiff Roberta Weiss did not file suit until March 2010. Her

complaint was consolidated with the instant litigation shortly thereafter.
8 MURPHY V. DIRECTV, INC.

contracts involving interstate commerce.” Kramer, 705 F.3d

at 1126. Under the FAA:

A written provision in any maritime

transaction or a contract evidencing a

transaction involving commerce to settle by

arbitration a controversy thereafter arising out

of such contract or transaction, or the refusal

to perform the whole or any part thereof, or an

agreement in writing to submit to arbitration

an existing controversy arising out of such a

contract, transaction, or refusal, shall be valid,

irrevocable, and enforceable, save upon such

grounds as exist at law or in equity for the

revocation of any contract.

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

a congressional declaration of a liberal federal policy

favoring arbitration agreements, notwithstanding any state

substantive or procedural policies to the contrary.” Moses H.

Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24

(1983); accord Concepcion, 131 S. Ct. at 1745. However,

fundamentally an arbitration agreement is contractual in

nature. Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct.

2772, 2776 (2010) (observing that the “FAA reflects the

fundamental principle that arbitration is a matter of

contract”). Thus, the FAA “places arbitration agreements on

an equal footing with other contracts, and requires courts to

enforce them according to their terms.” Id. (internal citation

omitted).
MURPHY V. DIRECTV, INC. 9

A. DirecTV

“Applying Concepcion retroactively to the arbitration

provision,” the district court held that “the class action waiver

is not unconscionable, and therefore, the arbitration provision

is enforceable.” We agree.4

Plaintiffs argue that Section 9 of DirecTV’s Customer

Agreement, which requires binding arbitration, is

unenforceable due to the jettison clause set forth in subsection

9(c). They maintain that as of April 24, 2007 and April 24,

2010, the effective dates of the Customer Agreements to

which Plaintiffs are parties, “the law of [California] would

[have found] this agreement to dispense with class arbitration

procedures unenforceable,” rendering the “entire Section 9

unenforceable.” Before 2011, the Discover Bank rule had not

yet been overruled by the Supreme Court, so Plaintiffs cling

to the notion that the rule still governs the interpretation of

their arbitration agreement today. This argument

misapprehends the doctrine of preemption and the rationale

of the Supreme Court’s ruling in Concepcion.

Importantly, the FAA meant what the Court in

Concepcion says it means—that the Customer Agreement’s

4 The district court found that Plaintiffs received the Customer

Agreement containing the arbitration provision, and were bound by the

contract, even if they did not read it. In their Reply Brief, Plaintiffs

attempt to challenge this conclusion. However, Plaintiffs did not argue in

their Opening Brief that they did not “assent to arbitration,” and therefore

they have waived this argument. Smith v. Marsh, 194 F.3d 1045, 1052

(9th Cir. 1999). In any event, the district court’s finding that Plaintiffs

received the Consumer Agreement and continued to accept DirecTV’s

services is not clearly erroneous and its conclusion that these actions

bound Plaintiffs to the terms of the contract is correct.
10 MURPHY V. DIRECTV, INC.

class waiver is enforceable—even prior to 2011 when the

Discover Bank rule was nominally in effect. That is because

the Supreme Court’s “construction of a statute is an

authoritative statement of what the statute meant before as

well as after the decision of the case giving rise to that

construction.” Rivers v. Roadway Express, Inc., 511 U.S.

298, 312–13 (1994); see also Morales-Izquierdo v. DHS,

600 F.3d 1076, 1090 (9th Cir. 2010) (“[W]hen a court

interprets a statute, even an ambiguous one, and even when

that interpretation conflicts with the court’s own prior

interpretation, the new interpretation is treated as the statute’s

one-and-only meaning.”). Thus, § 2 of the FAA has always

preempted states from invalidating arbitration agreements

that disallow class procedures. The parties’ agreement that

state law would govern the enforceability of the arbitration

requirement was not an agreement to rely on state law that

“creates a scheme inconsistent with the FAA.” Concepcion,

131 S. Ct. at 1748.

Section 2 of the FAA, which under Concepcion requires

the enforcement of arbitration agreements that ban class

procedures, is the law of California and of every other state. 

The Customer Agreement’s reference to state law “does not

signify the inapplicability of federal law, for ‘a fundamental

principle in our system of complex national polity’ mandates

that ‘the Constitution, laws, and treaties of the United States

are as much a part of the law of every State as its own local

laws and Constitution.’” Fid. Fed. Sav. & Loan Ass’n v. de

la Cuesta, 458 U.S. 141, 157 (1982) (quoting Hauenstein v.

Lynham, 100 U.S. 483, 490 (1880)); see also Brown v.

Investors Mortg. Co., 121 F.3d 472, 476 (9th Cir. 1997)

(“The fact that the parties chose to apply the laws of

Washington, rather than the laws of another state, does not

mean the parties decided that federal law should not apply.”).
MURPHY V. DIRECTV, INC. 11

It follows that, under the doctrine of preemption, the

Discover Bank rule is not, and indeed never was, California

law. Simply put, “state law is nullified to the extent that it

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 govern the enforceability of

DirecTV’s arbitration clause, even if the state law in question

contravened federal law, is nonsensical.

5 A contract cannot

be unenforceable under state law if federal law requires its

enforcement, because federal law is “the supreme Law of the

Land . . . , any Thing in the Constitution or Laws of any State

to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. 

Section 9 of the Customer Agreement provides only that the

arbitration agreement will be unenforceable if the “law of

your state” disallows class waivers, which California law

does not—and could not—under the FAA as interpreted in

Concepcion.

Plaintiffs cite no cases to the contrary. For instance,

Plaintiffs rely heavily on American Airlines, Inc. v. Wolens,

513 U.S. 219 (1995), for the proposition that parties may

enter a contract whose terms diverge from the requirements

of federal law. In Wolens, the Supreme Court held that the

federal Airline Deregulation Act, which displaces state laws

regulating airline rates, routes, and services, see id. at 232,

preempted claims brought under state consumer protection

laws that served in effect as a “means to guide and police the

5 That the Customer Agreement may have been drafted and entered into

with the Discover Bank rule in mind does not change the fact that “the law

of your state” cannot include a rule that a federal statute, as interpreted by

the Supreme Court, bars states from imposing. Under Concepcion, states

simply lack the power to render class arbitration waivers unenforceable as

unconscionably exculpatory.
12 MURPHY V. DIRECTV, INC.

marketing practices of the airlines,” id. at 228. However, the

Court held that the Act does not “shelter airlines from suits

alleging no violation of state-imposed obligations, but

seeking recovery solely for the airline’s alleged breach of its

own, self-imposed undertakings.” Id. Plaintiffs read this

language broadly, arguing that when a party to a contract

promises to follow the substance of state law, it is bound to

do so even if federal law would otherwise preempt it. But

Wolens stands onlyfor the proposition that contracting parties

can enforce the substantive terms of a private agreement even

if they exceed the requirements of federal law. Wolens does

not hold that contract language referencing state law

transforms otherwise preempted state contract-law doctrines

into enforceable private obligations; in fact, it implies that the

opposite is true. See id. at 233 (“This distinction between

what the State dictates and what the airline itself undertakes

confines courts, in breach-of-contract actions, to the parties’

bargain, with no enlargement or enhancement based on state

laws or policies external to the agreement.”).

Nor does Plaintiffs’ position find support in the Supreme

Court’s decision in Volt Information Sciences, Inc. v. Board

of Trustees of the Leland Stanford Junior University,

489 U.S. 468 (1989). While Volt does indicate that the terms

of an arbitration agreement may be enforced even if they

require procedures not contemplated by the FAA, the unique

posture of Volt is a far cry from this case. In Volt, the

California Court of Appeal had held that, by incorporating

state law into an arbitration agreement, the parties agreed to

be bound by a California rule authorizing courts to stay

arbitration pending resolution of related litigation involving

third parties. Id. at 471–72. The Court only reviewed the

California Court of Appeal’s construction of the contract’s

choice-of-law provision to the extent necessary to determine
MURPHY V. DIRECTV, INC. 13

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 clause meant what the Court of Appeal

found it to mean,” i.e., that the arbitration agreement

incorporated California procedural rules, id. at 476, the

California rule at issue was not preempted by the FAA. Id. at

479.

The Court in Volt emphasized “that the interpretation of

private contracts is ordinarily a question of state law, which

this Court does not sit to review.” Id. at 474. As Justice

Brennan’s dissent noted, the Court declined to review the

California Court of Appeal’s holding that the contract at issue

“would be governed solely by the law of the State of

California, to the exclusion of federal law.” Id. at 480

(Brennan, J., dissenting). Thus, the Volt majority had no

occasion to consider whether the state court’s construction of

the contract at issue was correct. Here, Plaintiffs’ contract

interpretation arguments are squarely presented, and our

reasons for rejecting them largely mirror the analysis of the

Volt dissenters. See id. at 490 (“[T]he literal language of the

contract–‘the law of the place’– gives no indication of any

intention to apply only state law and exclude other law that

would normally be applicable to something taking place at

that location. By settled principles of federal supremacy, the

law of any place in the United States includes federal law.”). 

But even the California Court of Appeal’s (nonprecedential)

analysis in Volt is distinguishable because it proceeded from

the premise that, “‘[i]n the face of such a choice of laws

provision, California law applies unless preempted by the

FAA.’” Bd. of Trustees of Leland Stanford Jr. Univ. v. Volt

Info. Scis., Inc., 240 Cal. Rptr. 558, 560 (Cal. Ct. App. 1987)

(depublished) (emphasis added) (quoting Garden Grove

Cmty. Church v. Pittsburgh-Des Moines Steel Co., 191 Cal.
14 MURPHY V. DIRECTV, INC.

Rptr. 15, 20 (Cal. Ct. App. 1983)), aff’d, 489 U.S. 468

(1989); see also Volt, 489 U.S. at 479 (noting that the

California rule in question could be given effect “without

doing violence to the policies behind the FAA”). Here, in

contrast, the Supreme Court has expressly held that the rule

Plaintiffs seek to apply is “an obstacle to the accomplishment

of the FAA’s objectives.” Concepcion, 131 S. Ct. at 1748.

Under Wolens and Volt, it is clear that if DirecTV had

actually contracted with Plaintiffs to allow class arbitration,

it would be required to do so irrespective of Concepcion. But

DirecTV did exactly the opposite. The Customer Agreement

provides that “Neither you nor we shall be entitled to join or

consolidate claims in arbitration by or against other

individuals or entities, or arbitrate any claim as a

representative member of a class or in a private attorney

general capacity.” Under these circumstances, Plaintiffs’

argument that by referencing state law, DirecTV incorporated

the Discover Bank rule by reference as a substantive contract

term is especially dubious. The parties agreed not to arbitrate

only if state law required the availability of class arbitration

procedures to enforce the arbitration clause. Concepcion

precludes such state laws.

For this reason, many of the parties’ various contract

interpretation arguments are largely irrelevant to our analysis. 

For example, Plaintiffs devote extensive briefing to their

contention that the clause selecting state law in Section 9 is

“far more specific” than the language selecting the FAA in

Section 10. They likewise argue that the history of

amendments to DirecTV’s Customer Agreement over time

shows that Section 10’s reference to the FAA is inapplicable

to the jettison clause in Section 9, and that ambiguities about

whether state or federal law is controlling should be
MURPHY V. DIRECTV, INC. 15

construed against DirecTV as the contract’s drafter. These

arguments are unavailing because, under de la Cuesta and its

progeny, there is no conflict between the reference to “the

law of your state” in Section 9 of the Customer Agreement

and the reference to the FAA in Section 10. Thus, we have

no occasion to “choose” which provision of the contract

controls the enforceability of the class arbitration ban.

In answering the question “whether the rule of decision is

supplied by the laws of State X or by federal law,” general

“choice-of-law doctrines (and, accordingly, attempts by

contracting parties to influence their application with

choice-of-law clauses) have no applicability . . . because the

relevant rule is supplied by the Constitution itself: a valid

federal law preempts any state law purporting to regulate the

same issue.” Roadway Package Sys., Inc. v. Kayser, 257 F.3d

287, 293–94 (3d. Cir. 2001), abrogated on other grounds by

Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576 (2008); see also

Volt, 489 U.S. at 488 (Brennan, J., dissenting) (observing that

it is “beyond dispute that the normal purpose of such

choice-of-law clauses is to determine that the law of one State

rather than that of another State will be applicable; they

simply do not speak to any interaction between state and

federal law”). For this reason, the reference to the FAA in

Section 10 of the Customer Agreement is largely superfluous

to our inquiry. The “law of your state” language of Section

9 already incorporates § 2 of the FAA. See de la Cuesta,

458 U.S. at 157 n.12 (“Paragraph 15 provides that the deed is

to be governed by the ‘law of the jurisdiction’ in which the

property is located; but the ‘law of the jurisdiction’ includes

federal as well as state law.”). Thus, because the arbitration

agreement is enforceable under Concepcion, the district court

did not err in compelling Plaintiffs to arbitrate their claims

against DirecTV.
16 MURPHY V. DIRECTV, INC.

B. Best Buy

The district court determined that, although Best Buy is

not a signatory to the Customer Agreement or any other

arbitration agreement with Plaintiffs,6nevertheless Plaintiffs

must submit their claims against Best Buy to arbitration. The

district court relied on the doctrine of equitable estoppel,

which “‘precludes a party from claiming the benefits of a

contract while simultaneously attempting to avoid the

burdens that contract imposes.’” Comer v. Micor, Inc.,

436 F.3d 1098, 1101 (9th Cir. 2006) (quoting Wash. Mut. Fin.

Grp., LLC v. Bailey, 364 F.3d 260, 267 (5th Cir. 2004)). The

district court reasoned that because Plaintiffs alleged in their

complaint “concerted action on the part of DirecTV and Best

Buy, the lawsuit against Best Buy is inseparable from the

lawsuit against DirecTV.” Thus, the distirct court found it

“necessary to compel arbitration of Plaintiff’s claims against

Best Buy.”

Best Buy argues that arbitration of Plaintiffs’ claims

against it is required under three alternative theories: (1)

equitable estoppel; (2) agency; and (3) third-party

beneficiary. None of these arguments is availing.

1. Equitable Estoppel

“The United States Supreme Court has held that a litigant

who is not a party to an arbitration agreement may invoke

arbitration under the FAA if the relevant state contract law

allows the litigant to enforce the agreement.” Kramer,

6 Although Weiss is the only Plaintiff with claims remaining against

Best Buy we use the plural “Plaintiffs” throughout this opinion for

consistency.
MURPHY V. DIRECTV, INC. 17

705 F.3d at 1128 (discussing Arthur Andersen LLP v.

Carlisle, 556 U.S. 624, 632 (2009)); accord Rajagopalan v. 

NoteWorld, LLC, — F.3d —, 2013 WL 2151193, at *2 (9th

Cir. May 20, 2013). We therefore examine the contract law

of California to determine whether Best Buy, as a

nonsignatory, may seek arbitration under the theory of

equitable estoppel.

Because generally only signatories to an arbitration

agreement are obligated to submit to binding arbitration,

equitable estoppel of third parties in this context is narrowly

confined. Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042,

1046 (9th Cir. 2009). Under California law, a party that is

not otherwise subject to an arbitration agreement will be

equitably estopped from avoiding arbitration only under two

very specific conditions. Our recent decision in Kramer

adopted as a controlling statement of California law the

equitable estoppel rule set forth in Goldman v. KPMG LLP,

92 Cal. Rptr. 3d 534 (Cal. Ct. App. 2009):

Where a nonsignatory seeks to enforce an

arbitration clause, the doctrine of equitable

estoppel applies in two circumstances: (1)

when a signatory must rely on the terms of the

written agreement in asserting its claims

against the nonsignatory or the claims are

intimatelyfounded in and intertwined with the

underlying contract, and (2) when the

signatory alleges substantially interdependent

and concertedmisconduct bythe nonsignatory

and another signatory and the allegations of

interdependent misconduct are founded in or

intimately connected with the obligations of

the underlying agreement.
18 MURPHY V. DIRECTV, INC.

Kramer, 705 F.3d at 1128–29 (internal alteration, citations,

and quotation marks omitted). This rule reflects the policy

that a plaintiff may not, “on the one hand, seek to hold the

non-signatory liable pursuant to duties imposed by the

agreement, which contains an arbitration provision, but, on

the other hand, deny arbitration’s applicability because the

defendant is a non-signatory.’” Goldman, 92 Cal. Rptr. 3d at

543 (quoting Grigson v. Creative Artists Agency, LLC,

210 F.3d 524, 528 (5th Cir. 2000)); see also Metalclad Corp.

v. Ventana Envtl. Organizational P’ship, 1 Cal. Rptr. 3d 328,

337 (Cal. Ct. App. 2003) (reasoning that equitable estoppel

applies where a plaintiff “agreed to arbitration in the

underlying written contract but now, in effect, seeks the

benefit of that contract in the form of damages . . . while

avoiding its arbitration provision”). We must analyze

whether Best Buy satisfies either of the two Kramer/Goldman

exceptions to the general rule precluding nonsignatories from

requiring arbitration of their disputes.

a. Reliance on the underlying contract

Under the first Goldman prong, equitable estoppel applies

when the plaintiff’s claims “are ‘intimately founded in and

intertwined’ with the underlying contract obligations.” Jones

v. Jacobson, 125 Cal. Rptr. 3d 522, 538 (Cal. Ct. App. 2011)

(quoting Boucher v. Alliance Title Co., 25 Cal. Rptr. 3d 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 obligations of an

agreement as the basis for his claims against a nonsignatory,

while at the same time refusing to arbitrate with the

nonsignatory under another clause of that same agreement.”

Goldman, 92 Cal. Rptr. 3d at 543–44.
MURPHY V. DIRECTV, INC. 19

Plaintiffs’ claims against Best Buy do not rely on, and are

not intertwined with, the substance of the DirecTV Customer

Agreement or Lease Addendum. Best Buy argues that, in

addition to governing the general contours of the customerprovider relationship, the Customer Agreement clarifies that

the leased equipment is not the property of the customer,

cannot be transferred, and must be returned, rendering the

existence of the Customer Agreement a necessary

precondition for Plaintiffs’ claims. But the Customer

Agreement itself merelyprovides that, if a customer is leasing

his DirecTV equipment, it is non-transferable and must be

returned upon cancellation. The Customer Agreement is

factually irrelevant to Plaintiffs’ claims against Best Buy,

which charge misrepresentations to customers at the point of

sale. The complaint is replete with allegations of deceit by

Best Buy that have nothing to do with the Customer

Agreement. Among other allegations, Plaintiffs claim that

Best Buy “sold DirecTV Equipment at Best Buy stores in a

manner that reasonable consumers would find

indistinguishable from any other sale which occurs at Best

Buy”; that “Best Buy receipts given to customers

memorializing the transaction contained the word ‘SALE’ at

the top of the receipt in bold, capitalized letters”; and that oral

“[r]epresentations were made to some purchasers that the

DirecTV Equipment was for sale.” None of these allegations

rely on the Customer Agreement or attempt to seek any

benefit from its terms.

Even if Best Buy is correct that Plaintiffs’ claims on some

abstract level require the existence of the Customer

Agreement, the law is clear that this is not enough for

equitable estoppel. In California, equitable estoppel is

inapplicable where a plaintiff’s “allegations reveal no claim

of any violation of any duty, obligation, term or condition
20 MURPHY V. DIRECTV, INC.

imposed by the [customer] agreements.” Id. at 551. 

Applying this principle in Kramer, we held that Toyota could

not compel arbitration of a consumer class action on the basis

of arbitration clauses contained in the Purchase Agreements

customers entered into with their dealerships. See 705 F.3d

at 1124–25. We expressly rejected Toyota’s argument that

the plaintiffs’ claims were necessarily intertwined with the

Purchase Agreements merely because the lawsuit was

predicated on the bare fact that a vehicle purchase occurred. 

Id. at 1130–31. Rather, we held that the plaintiffs’ causes of

action, which, as here, largely arose under California

consumer protection law, were not sufficiently intertwined

with the Purchase Agreements to trigger equitable estoppel. 

Id. at 1130–32. Likewise, here, the Customer Agreement

proves at most the existence of a transaction; Plaintiffs’

claims do not depend on the Agreement’s terms. The UCL

and CLRA allow Plaintiffs to sue Best Buy for misleading

consumers regardless of whether or not they signed largely

unrelated contracts with DirecTV.7See Rajagopalan, —F.3d

7 We also note that many of the California cases permitting nonsignatories to compel arbitration under an equitable estoppel theory

involve contract-based causes of action, such as tortious interference or

breach of contract. See, e.g., Boucher, 25 Cal. Rptr. 3d at 447 (applying

equitable estoppel where plaintiff relied on an employment agreement

containing an arbitration clause to allege failure to pay accrued wages,

breach of contract, and other claims that were intimately bound up with

the substance of the contract); Metalclad, 1 Cal. Rptr. 3d at 337–38

(applying equitable estoppel where plaintiff’s claims turned on an alleged

breach of the underlying contract and fraud in obtaining it). Here, in

contrast, Plaintiffs do not seek any contract-related damages; rather, their

claims are for violations of consumer protection laws. While we need not

foreclose the possibility that a consumer class action might satisfy the

requirements for equitable estoppel, the obvious contrast between these

cases and Kramer suggests that equitable estoppel is particularly

inappropriate where plaintiffs seek the protection of consumer protection
MURPHY V. DIRECTV, INC. 21

at —, 2013 WL 2151193, at *3 (rejecting equitable estoppel

theory under Washington law where the plaintiff’s lawsuit

stated “statutory claims that are separate from the contract

itself” (internal alteration and quotation marks omitted)).

In short, Plaintiffs rely not on the Customer Agreement,

but on Best Buy’s’ alleged words and deeds in the course of

transactions leading to the acquisition of equipment they

believed they purchased, but in fact leased. “Plaintiffs do not

seek to simultaneously invoke the duties and obligations of

[Best Buy] under the [Customer] Agreement, as it has none,

while seeking to avoid arbitration. Thus, the inequities that

the doctrine of equitable estoppel is designed to address are

not present.” Kramer, 705 F.3d at 1134.

b. Substantial interdependence founded in

underlying agreement

Under the second Goldman prong, the doctrine of

equitable estoppel may apply in certain cases where a

signatory to an arbitration agreement attempts to evade

arbitration by suing nonsignatory defendants for “claims that

are based on the same facts and are inherently inseparable

from arbitrable claims against signatory defendants.” 

Metalclad, 1 Cal. Rptr. 3d at 334 (internal quotation marks

omitted). However, under Goldman:

[M]ere allegations of collusive behavior

between signatories and nonsignatories to a

contract are not enough to compel arbitration

laws against misconduct that is unrelated to any contract except to the

extent that a customer service agreement is an artifact of the consumerprovider relationship itself.
22 MURPHY V. DIRECTV, INC.

between parties who have not agreed to

arbitrate: those allegations of collusive

behavior must also establish that the plaintiff's

claims against the nonsignatory are intimately

founded in and intertwined with the

obligations imposed by the contract

containing the arbitration clause. It is the

relationship of the claims, not merely the

collusive behavior of the signatory and

nonsignatory parties, that is key.

92 Cal. Rptr. 3d at 545 (internal alteration and quotation

marks omitted).

The district court concluded equitable estoppel required

arbitration against Best Buy because the allegations in the

complaint charged “substantially interdependent and

concerted” misconduct. While that is undeniably true,

Goldman makes clear “that allegations of collusive behavior

by signatories and nonsignatories, with no relationship to the

terms of the underlying contract,” does not justify application

of equitable estoppel to compel arbitration. Id. at 549.

Mere allegations of collusion are insufficient to trigger

equitable estoppel. Even where a plaintiff alleges collusion,

“[t]he sine qua non for allowing a nonsignatory to enforce an

arbitration clause based on equitable estoppel is that the

claims the plaintiff asserts against the nonsignatory are

dependent on or inextricably bound up with the contractual

obligations of the agreement containing the arbitration

clause.” Id. at 537. As we have already explained, Plaintiffs’

claims do not bear the requisite relationship to the Customer

Agreement to warrant application of equitable estoppel. 
MURPHY V. DIRECTV, INC. 23

Thus, under California law, Plaintiffs are not equitably

estopped from litigating their claims against Best Buy.

2. Agency

Best Buy also argues that we may affirm the district

court’s order compelling arbitration on a theory of agency. 

In California, “[a] nonsignatory to an agreement to arbitrate

may be required to arbitrate, and may invoke arbitration

against a party, if a preexisting confidential relationship, such

as an agency relationship between the nonsignatory and one

of the parties to the arbitration agreement, makes it equitable

to impose the duty to arbitrate upon the nonsignatory.” 

Westra v. Marcus & Millichap Real Estate Inv. Brokerage

Co., 28 Cal. Rptr. 3d 752, 756 (Cal. Ct. App. 2005).8

However, the district court in this case did not find that Best

Buy was acting as DirecTV’s agent when it sold the

equipment, and the record does not reflect that an agency

relationship in fact existed.

Even assuming that Best Buy “represents [DirecTV] . . .

in dealings with third persons,” Cal. Civ. Code § 2295, Best

Buy is not entitled to compel arbitration based merely on the

fact that it sells DirecTV products in its stores. Agency

requires that the principal maintain control over the agent’s

actions. DeSuza v. Andersack, 133 Cal. Rptr. 920, 924 (Cal.

Ct. App. 1976) (“The right of the alleged principal to control

8 Best Buy relies on certain of our cases suggesting that agents of a

signatory to an agreement that contains an arbitration provision may

compel arbitration if the claims arise out of the agency relationship and

relate to the underlying agreement. However, after Carlisle, it is clear that

state law, not substantive federal law, governs the inquiry. Kramer,

705 F.3d at 1128.
24 MURPHY V. DIRECTV, INC.

the behavior of the alleged agent is an essential element

which must be factually present in order to establish the

existence of agency, and has long been recognized as such in

the decisional law.”); accord Batzel v. Smith, 333 F.3d 1018,

1035–36 (9th Cir. 2003). Generally, retailers are not

considered the agents of the manufacturers whose products

they sell. See Restatement (Third) of Agency § 1.01 cmt. g

(2006) (“A purchaser is not ‘acting on behalf of’ a supplier in

a distribution relationship in which goods are purchased from

the supplier for resale. A purchaser who resells goods

supplied by another is acting as a principal, not an agent.”);

Alvarez v. Felker Mfg. Co., 41 Cal. Rptr. 514, 522 (Cal. Dist.

Ct. App. 1964) (“One who receives goods from another for

resale to a third person is not thereby the other’s agent in the

transaction: whether he is an agent for this purpose or is

himself a buyer depends upon whether the parties agree that

his duty is to act primarily for the benefit of the one

delivering the goods to him or is to act primarily for his own

benefit.” (internal quotation marks omitted)). Thus, the

supplier-retailer relationship is insufficient to render Best Buy

DirecTV’s agent. Best Buy has presented no evidence, on

appeal or before the district court, that DirecTV controlled its

behavior in ways relevant to Plaintiffs’ allegations.

Indeed, to the extent the record contains any evidence that

is probative of the nature of the arrangement between the two

companies, it suggests that an agency relationship was

expressly disavowed by DirecTV and Best Buy in the

“Independent Retailer Agreement” they entered. The

“Independent Retailer Agreement” recites that Best Buy is

DirecTV’s independent sales representative. Paragraph 2 of

the agreement recites that “DIRECTV hereby appoints Best

Buy as its independent commissioned sales representative to

solicit Subscriptions, on the terms and conditions herein,
MURPHY V. DIRECTV, INC. 25

from its Locations.” In paragraph 4.1 of the agreement,9 the

parties expressly provide:

Best Buy shall conduct all of its DIRECTV

System sale, lease, warranty, maintenance,

and repair business (“DIRECTV System

Business”) for its own account and not as an

agent for DIRECTV. At the reasonable

request of DIRECTV, Best Buy shall display

notices to its customers, in such form, places

and manner as mutually agreed by Best

Buy and DIRECTV, of such fact and that

Best Buy and not DIRECTV shall be

responsible for all of Best Buy’s actions in

this regard. DIRECTV disclaims any control

over Best Buy’s DIRECTV System Business

except to the limited extent expressly

provided herein and to support and protect its

9 Although the agreement was filed under seal in the district court, we

conclude that Best Buy waived any claim of confidentiality as to these

portions of the document when its counsel affirmatively represented at

oral argument that Best Buy acted as DirecTV’s agent in these

transactions. The agreement, the contents of which are highly probative

ofthe question at hand, makes clear that the companies agreed that exactly

the opposite was true. Cf. In re Sealed Case, 676 F.2d 793, 807 (D.C. Cir.

1982) (“Where society has subordinated its interest in the search for truth

in favor of allowing certain information to remain confidential, it need not

allow that confidentiality to be used as a tool for manipulation of the

truth-seeking process.”). We leave it to the district court to consider on

remand whether sanctions are an appropriate response to counsel’s

apparent violations of the duty of candor toward the tribunal. See Model

Rules of Prof’l Conduct R. 3.3(a) (“A lawyer shall not knowingly . . .

make a false statement of fact or law to a tribunal or fail to correct a false

statement of material fact or law previously made to the tribunal by the

lawyer.”).
26 MURPHY V. DIRECTV, INC.

activities as an independent commissioned

sales representative for DIRECTV’s Service.

We see no reason to conclude to the contrary, and therefore

hold that Best Buy is not entitled to compel arbitration as

DirecTV’s agent.

3. Third-Party Beneficiary

Finally, Best Buy argues that it is a third-party beneficiary

of the Customer Agreements, and is therefore entitled to

arbitration. In California,10“[e]xceptions in which an

arbitration agreement may be enforced by or against

nonsignatories include where a nonsignatory is a third party

beneficiary of the agreement.” Nguyen v. Tran, 68 Cal. Rptr.

3d 906, 909 (Cal Ct. App. 2007). Best Buy’s argument that

it meets this exception is unpersuasive.

Best Buy bears the burden of proving that it is a thirdparty beneficiary of the Customer Agreement. See Garcia v.

Truck Ins. Exch., 682 P.2d 1100, 1105 (Cal. 1984) (in bank). 

A third party may only assert rights under a contract if the

parties to the agreement intended the contract to benefit the

third party; “[t]hus, the circumstance that a literal contract

interpretation would result in a benefit to the third party is not

enough to entitle that party to demand enforcement.” Hess v.

Ford Motor Co., 41 P.3d 46, 51 (Cal. 2002) (internal

alteration and quotation marks omitted); see also Cal. Civ.

Code § 1559 (“A contract, made expressly for the benefit of

a third person, may be enforced by him at any time before the

parties thereto rescind it.”). In other words, “[t]he mere fact

 

10 Again, Best Buy primarily relies upon federal law. However, under

Carlisle the relevant authority is California state contract law.
MURPHY V. DIRECTV, INC. 27

that a contract results in benefits to a third party does not

render that party a ‘third party beneficiary’”; rather, the

parties to the contract must have expressly intended that the

third party would benefit. Matthau v. Super. Ct., 60 Cal.

Rptr. 3d 93, 99 (Cal. Ct. App. 2007). The record here does

not reflect such an intent.

The terms of the Customer Agreement do not demonstrate

that DirecTV intended to benefit Best Buy through the

contract, let alone that its customers did. For one thing, the

Customer Agreement never mentions Best Buy. Cf. Hess,

41 P.3d at 51 (“‘[T]he intention of the parties is to be

ascertained from the writing alone, if possible.’” (quoting

Cal. Civ. Code § 1639)). In fact, the Customer Agreement

contains an entire subsection, Section 7(h), entitled “ThirdParty Beneficiary,” which specifies that TiVo, Inc. is a thirdparty beneficiary of the agreement. That subsection does not

mention Best Buy. The California Supreme Court has

observed that “the rule of construction expressio unius est

exclusio alterius; i.e., that mention of one matter implies the

exclusion of all others” is “an aid to resolve the ambiguities

of a contract.” Steven v. Fid. & Cas. Co. of New York,

377 P.2d 284, 289 (Cal. 1962). To the extent the Customer

Agreement is ambiguous with respect to the parties’ intent to

benefit Best Buy, that rule of construction militates against

concluding that Best Buy is a third-party beneficiary, in light

of the fact that DirecTV clearly knew how to provide for a

third-party beneficiary if it wished to do so. Thus, we

conclude that Best Buy is not entitled to enforce the

arbitration agreement as a third-party beneficiary.

Because we conclude that neither equitable estoppel nor

the third-party beneficiary doctrine permit Best Buy to

enforce DirecTV’s arbitration agreement, and determine that
28 MURPHY V. DIRECTV, INC.

the Independent Retailer Agreement between them expressly

disavows an agency relationship, we reverse the district

court’s order compelling Plaintiffs to arbitrate with Best Buy.

III.

Fundamentally, our task in cases like this is to “ensur[e]

that private arbitration agreements are enforced according to

their terms.” Volt, 489 U.S. at 478. Plaintiffs agreed to

arbitrate their claims against DirecTV. They did not agree to

arbitrate their claims against Best Buy. Notwithstanding the

parties’ many imaginative legal arguments, in this case they

remain bound by the agreements they made and not by any

they did not make. We affirm the district court’s order

compelling Plaintiffs to arbitrate with DirecTV, and reverse

its order compelling them to arbitrate with Best Buy.

AFFIRMED IN PART; REVERSED IN PART;

REMANDED. Each party shall bear its own costs.