N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT

PETER FONG; SUT FONG, Pla i ntiffs-Appe lla

nts,
v. U.S. B ANC OR P; U.S. B ANK NATIONAL ASSOC IATION,

De fe nda n ts-Appe lle e s. No. 23-16186 D.C . No. 2:22-c v-01291-M C E-KJN
M EM O R ANDUM *

Appe a l from

the Unite d

Sta t e s Distric t C ourt for the Ea ste rn Distric t of C a lifornia M o rrison C . Engla

nd, Jr., Distric t Judge , Pre siding Argue d a nd Subm itte d

June 12, 2024 Pa sa de n a , C a l ifornia B e fore : W . FLETC HER , C HR ISTEN, a nd VANDYKE, C irc uit Judge s . Pa rtia l Disse nt by

Judge VANDYKE. Pla intiff-Appe lla

nts Pe t e r Fong a

nd Sut Fong ope ne d a

sa fe de posit box a

t a U.S. B a nk bra

n c h (“ the branc h” ) in Sa c ra m e nto in 2000. The y store d a substa

ntia l

a m ount of c a s h, gold, a

nd je we lry

in the box. In 2013, the bra nc h ha d trouble 

# F IL ED
JUL 17 2024 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.ope ning the door to the slot whe re the Fongs’ box wa s store d be c a u se the bra nc h’ s ke y did not work properly . The branc h a ske d the Fongs to m ove the box to a ne w slot tha t ha d diffe re n t ke y s. The Fongs c a m e to the branc h, signe d a one -pa ge

“ C onsum e r Sa fe De posit B ox C ontra c t,” and m ove d the ir box to the ne w slot

a ssigne d to the m

by the b ra nc h. In 2021, the Fongs we re notifie d by la w e nforc e m e nt tha

t the ir sa fe de posit box ha d be e n

“ drille d .” The y

we nt to the branc h a

nd disc ove re d tha

t m a ny of the
va lua ble s the y ha d store d in the box we re m issing. The Fongs sue d De fe n d a ntAppe l le e s U.S. B a nk Na

tiona l Assoc ia t ion a

nd U.S. B a nc orp (toge the r, “ U .S. B a nk” ) in fe de ra l c ourt. The distric t c ourt gra nte d U.S. B a nk’ s m otion to c om pe l

a rbitration a

nd dism isse d the c a se . W e ha ve jurisdic t ion unde r 28 U.S.C . § 1291. W e va c a te and re m a nd.

“ W e re vie w the distric t c ourt’ s orde r c o m pe lling a rbitration de novo.” Ahlstrom v . DHI Mortg. C o., Ltd. , L.P. , 21 F.4th 631, 634 (9th C ir. 2021). “ W e
a lso re vie w ‘ le ga l c o n c lusions re ga rding the e xiste nc e of a

va lid, binding c o ntra c t de novo.’ ” Id. (quoting C asa de l C affe Ve rgnano S.P.A. v

. ItalFlav ors, LLC , 816 F.3d 1208, 1211 (9th C ir. 2016)). The pa rty se e king to c o m

pe l a rbitration be a rs “ the burde n of proving the
e xiste nc e of a

n a gre e m e nt to a

rbitrate by

a pre ponde ra nc e of the e vide nc e . ”

2K

nutson v . Sirius XM Radio, Inc

. , 771 F.3d 559, 565 (9th C ir. 2014). The pa rtie s
a gre e tha t C a lifornia

c ontra c t la

w c ontrols whe the r the y

a gre e d to a

rbitra te
. Se e id

. C a lifornia la w provide s: For the te rm s of a

nothe r doc um e nt to be inc o rporate d into the doc um e n t

e xe c ute d by the pa

rtie s [1] the re fe re nc e m

ust be c le a r a n d une quivoc a l, [2] the re fe re nc e m

ust be c a lle d

to the a tte ntion of the othe r party a nd he m ust c onse nt the re to, a

nd [3] the te rm s of the inc orpora t e d doc um e nt m ust be known or e a sily a va ila ble to the c o ntra c ting pa

rtie s. Shaw v . Re

ge nts of the Univ . of C

al. , 58 C a l. App. 4th 44, 54 (1997) (bra c ke te d
num be rs a dde d); se e also In re Holl , 925 F.3d 1076, 1084 (9th C i r. 2019) (quoting Shaw ). U.S. B a n k a

rgue s tha t the Fongs a gre e d to a

rbitrate be c a

use the one -pa ge Sa fe De posit B ox C ontra c t the y signe d in 2013 inc orpora t e d by re fe re nc e an
a rbitration provision c onta ine d in a se pa ra te doc um e nt, the “ Sa fe De posit B ox Le a se Agre e m e nt.” The Sa fe De posit B ox C ontra c t provide d, in re le v a n t pa rt: The unde rsigne d R e nte r(s) he re by re nt the sa fe de posit box de sc ribe d in this a gre e m e n t. R e nte r(s) a g re e s to the te rm s of the “ Sa fe De posit B ox Le a se Agre e m e nt” , a s a m e nde d from

tim e to tim e (the “ R

ule s” ), inc luding the pa y m e nt of re nta l fe e s in a dva nc e . . . . The R

ule s are inc orpora t e d he re in by

re fe re nc e a nd m a de a

pa rt of this a gre e m e n t. B y

signing, R e nte r(s) a c knowle dge re c e ipt of two ke y s , a

c o py of the pre se nt R

ule s, a nd unde rsta

nd

3that FDIC -insura nc e of the B a nk’ s insura

nc e polic y

doe s not c o ve r sa fe de posit boxe s a nd the ir c onte n ts. U.S. B a n k ha s not shown tha t the Sa fe De posit B ox Le a se Agre e m e nt wa s

“ c a lle d to the a tte n tion” of the Fongs or “ e a sily a va ila ble ” to the Fongs whe n the y signe d the Sa fe De posit B ox C ontra c t. Se e Shaw , 58 C a l . App. 4th a t 54. First, it would not ha

ve be e n c le a r to a re a sona ble c onsum e r unde r the c irc um sta nc e s tha t the Sa fe De posit B ox C ontra c t re pre s e nte d a ne w a gre e m e nt. Se e id. (“ [E] a c h c a se
m ust turn on its fa

c ts.” ). The Fongs did not c om e to the bran c h to ope n a ne w
a c c ount or to ge t a

ne w sa fe de posit box; the y ha d ke pt a

box a t the bra nc h

for thirte e n y e a

rs. R a t he r, the branc h a s ke d the Fongs to c om e be c a use its ke y

did not work for the slot in whic h the Fongs’ box ha d be e n pla c e d. So fa r a s the Fongs
we re c onc e rne d , the y

we re signing pa

pe rwork, a t the branc h’ s re que st, to ge t a ne w slot for the i r e xisting box. Unde r the s e c irc um s ta

nc e s, it would ha ve be e n re a sona ble for the Fongs to unde rsta nd tha t the te rm “ Sa fe De p osit B ox Le a se Agre e m e nt” re fe rre d to the prior a gre e m e nt the pa rtie s e nte re d whe n the Fongs ope ne d the ir sa fe de posit box in 2000. 1 U.S. B a nk doe s not e xpla in why the Fongs should ha

ve unde rstood tha

t the one -pa g e Sa fe ty

De posit B ox C ontra c t

1 The pa rtie s ’ prior a gre e m e nt is not in the re c ord, a nd the re is no indic a tion it c onta ine d

an a rbitration provision. 4re pre se nte d a n e n t ire ly ne w a gre e m e n t tha

t inc orpora te d a

se p a ra te doc um e n t the Fongs ha d ne ve r se e n. 2 Se c ond, the re is a

ge nuine dispute of m a te ria l fa c t a s to whe the r the branc h provide d the Sa fe De posit B ox Le a se Agre e m e nt to the Fongs. Se e Hanse n v . LMB Mortg. Se rv

s., Inc

. , 1 F.4th 667, 670 (9th C ir. 2021) (e xpla ining tha t the sum m a ry judgm e nt sta

nda rd in Fe d e ra l R

ule of C ivil Proc e dure 56 a pplie s whe n the form a tion of a

n a gre e m e nt to a

rbitra t e is a t issue ). The U.S. B a nk e m ploy e e who

a ssiste d the Fongs in 2013 subm itte d a sworn de c la

ra tion sta ting tha t it is he r
norm a l proc e dure to provide the longe r doc um e nt c onta i ning the Sa fe De posit B ox Le a se Agre e m e nt to c ustom e rs who ope n ne w sa fe de posit boxe s . B ut she ha s no
a c tua l re c olle c t ion of a ssisting the Fongs. B oth of the Fongs signe d sworn de c la ra tions sta

t ing tha t whe n the y c a m e to the bran c h the y we re give n

no

2 The disse nt obse rve s tha t the Fongs did not ra

ise this pre c ise argum e nt in the i r brie fing. Howe ve r, the Fongs a rgue d tha t the y ha d a

n a c c ount with U.S. B a nk sinc e 2000 a

n d signe d the one -pa ge c ontra c t in 2013 only

“ be c a use the y we re m oving the ir box to a

diffe re n t slot with diffe

re nt ke y s.” M ore ove r, “ [t] he pa rty pre s e ntation princ iple is supple , not ironc la d,” and the re are “ c irc um sta nc e s in whic h a m ode st initia

ting role for a

c ourt is a p propria te .” U nite d State

s v . Sine ne ng-Smith , 590 U.S. 371, 376 (2020); s e e also Doe s v . W asde n , 982 F.3d 784, 793 (9th C i r. 2020) (“ [I] t is a longsta nding princ i ple tha

t ‘ whe n a n issue or c la im

is prope rly be fore the c ourt, the c o urt is not lim ite d to the pa

rtic ula r le ga l the o rie s a dva nc e d by the pa rtie s, but ra

the r re ta ins the inde p e nde n t powe r to ide ntify and a pply the prope r c onstruc tion of gove rning la w.’ ” ) (quoting K

ame n v . K

e mpe r Fin. Se rv s., Inc

. , 500 U.S. 90, 99 (1991)) . 5doc um e nts othe r tha n the o n e -pa ge Sa fe De p osit B ox C ontra c t. B e c a use it would ha ve be e n re a sona ble for the Fongs to unde rsta nd tha t the one -pa ge form

re fe rre d to the pa rtie s’ prior a gre e m e nt, the re wa s no re a son for the Fongs to re que st the
se pa ra te doc um e nt re fe re nc e d in the form . If the Fongs’ de c la ra tions a re be lie ve d, the U .S. B a nk e m

p l oy e e who a ssiste d the m in 2013 kne w, de spite the la n gua ge in the o ne -pa ge form

signe d by the Fongs, tha

t the y ha d not, in fa c t , be e n provide d a
c opy of the Sa fe De posit B ox Le a s e Agre e m e n t. Those c irc um sta

nc e s distinguish this c a s e from Larrus v . First N at’l Bank of San Mate o C

nty
. , 122 C a l. App. 2d 884 (1954). In Larrus , the pla intiffs “ ha d ha d no prior de a lings” with the ba nk; the y c om

ple te d signa ture c a rds to ope n a ne w
a c c ount. Id. a t

886. The y

a lso “ ha d the c a rds ove rnight a t the ir hom e ,” a nd thus

“ ha d the opportunity

to re a d the short te xt just a bove the spa c e for the i r signa ture s
a nd to a s k for the rule s a

nd re gula tions re fe rre d to if the y

did not wish to subje c t the m se l ve s to the m

in ignora n c e of the ir c onte nts.” Id. a t 889–90. If the Fongs’ de c la

ra tions a re be lie ve d, the y

are not bound by the arbitration

a gre e m e nt c onta ine d in the Sa fe De posit B ox Le a se Agre e m e nt. W e va c a te the orde r c om

pe lling a rbitration a

nd re m a nd to the distric t c ourt for furthe r proc e e dings c onsiste nt with this disposition. V ACAT E D and RE M ANDE D .
6Pet er Fong, et al. v. U.S. Bancorp, et al. , No. 23

- 16186

VANDYKE, Circuit Judge, dissenting in part : I respectfully disagree with the majority ’s conclusion that the Safe Deposit Box Lease agreement was not properly incorporated into the contract that Peter and Sut Fong signed when they moved their safe deposit box. Instead, I think the Fongs agreed to arbitrate when they signed the Consumer Safe Deposit Box Contract. Because I also believe their other arguments on appeal are unavailing , I would affirm the district court’s reasoning

. 1 1. As the majority explains, under California law , “[a] contract may incorporate documents and terms by reference ... so long as the incorporation is clear and unequivocal, the reference is called to the attention of the other party and he consents thereto, and the terms of the incorporated document are know n or easily available to the contracting parties.” In re Holl , 925 F.3d 1076, 1084 (9th Cir. 2019) (cleaned up). Here, the Fongs each signed the Consumer Safe Deposit Box Contract, which stated that the “Rules are incorporated herein by reference , ” and d efined “the ‘Rules’” as “the ‘Safe Deposit Box Lease Agreement ’ , as amended from time to

1 After the parties finished briefing this case the Supreme Court decided Smith v. Spizzirri , 144 S. Ct. 1173 ( 2024), which holds that “[w]hen a district court finds that a lawsuit involves an arbitrable dispute, and a party requests a stay pending arbitration, § 3 of the FAA compels the court to stay the proceeding.” Id . at 1178
. Because Smith may affect whether this case should have been stayed instead of dismissed, I would remand for the district court to address that question in the first instance. 

# FILED
JUL 17 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2

time.” So by signing the Consumer Safe Deposit Box Contract, the Fongs agreed to be bound by the Safe Deposit Box Lease agreement, which contained an arbitration provision. The majority reasons that the Safe Deposit Box Lease Agreement was not incorporated because (1) the Fongs may have understood the Safe Deposit Box Contract to incorporate a prior agreement between the parties from when the Fongs originally opened their box in 2000 ; and (2) there is a genuine dispute as to whether the bank provided the Safe Deposit Box Lease Agreement to the Fongs. To start , the Fongs did not argue that they understood the contract to be referring to some earlier agreement. See United States v. Sineneng Smith , 590 U.S. 371, 375 (2020) (“In our adversarial system of adjudication, we follow the principle of party presentation.”)

. The Fongs argue only that because both documents have “Safe Deposit Box ” in the title and “Agreement” is synonymous with “Contract,” the incorporation provision could be read to refer only to the one

- page Consumer Safe Deposit Box Contract. But it would make little sense for a document to “incorporate[] herein by reference” itsel f. Indeed, the majority implicitly recognizes this by refusing to rely on the incorporation argument actually made by the Fongs

. Even if th e Fongs had argued that the Consumer Safe Deposit Box could have been read to refer to some other agreement they made when they first opened the box , a s the majority acknowledges , there is no other such agreement in the record

.3

We do not even know that a prior agreement exists , let alone what it was titled or what it said

. As far as we know, there may not have been any earlier written contract at all. If so, w ould it still have been reasonable for the Fongs to read “ The Rules are incorporated herein by reference” to refer to an earlier written contract that did not exist? What if th e earlier agreement was titled something like “Terms and Conditions,” not “Lease Agreement”? Would it still be reasonable then to assume the Contract’s reference to the “Safe Deposit Box Lease Agreement” referred to an earlier document with a co mpletely different title? We simply do not know anything about a potential earl ier contract because none is in the record. I t is pure speculation by the majority to assume that such an agreement existed and could have been confused for the “ Safe Deposit Box Lease Agreement ” or even “the ‘Rules’” referenced in the Consumer Safe Deposit Box Contract

— particularly speculative since, as mentioned, the Fongs never made that argument

. It’s one thing to assume the truth of the plaintiffs’ allegations at this stage. It’s something else entirely, as the majority does here, to make and rely on facts the plaintiffs never alleged and argum ents they never made. T he majority’s second argument is no better

. The majority determines that because the Fongs’ declarations insisted that they never received a copy of the Safe Deposit Box Lease Agreement, we must assume they never received one. I agree that we must take the Fongs at their word at this stage , but I note that even from the4

Fongs’ perspective, there is a dispute of fact. The Fongs in their declarations claim they never received the Safe Deposit Box Lease Agreement, but they also provided the Consumer Safe Deposit Box Contract, which they signed “acknowledge[ ing ] receipt of ... the present Rules , ” which are defined as the “Safe Deposit Box Lease Agreement.” So the Fongs both claim now to never have received the Lease Agreement but signed that they did in fact receive the Lease Agreement. But more importantly, California law does not require that a document be given to the contracting party in order to be incorporated into the contract

— only that it be “easily available.” See In re Holl , 925 F.3d 1076, 1084 (9th Cir. 2019) ; see also Larrus v. First Nat’l Bank of San Mateo Cnty. , 122 Cal. App. 2d 884, 889

– 90 ( Cal. Ct. App. 1954) ( holding incorporation valid where plaintiffs “ had the opportunity to read the short text just above the spaces for their signatures and to ask for the rules and regulations it referred to ”). Here, even if the Fongs did not receive the Consumer Safe Deposit Box Lease Agreement, they have not shown a dispute of fact as to whether the branch would have given them one had they asked. To the contrary, the Bank provided a declaration from the employee who signed the Fongs’ Consumer Safe Deposit Box Contract that it is her normal practice to provide customers with a copy of the Lease Agreement . While we cannot use this declaration to draw the conclusion that the employee provided them the agreement, we can draw the undisputed inference that, had the Fongs asked, she would have provided it. To5

reach the opposite conclusion, the majority again relies on the completely speculative idea that the Fongs had “no reason” to request the Lease Agreement if they thought the Contract only incorporated some prior agreement that is not in the record and never argued by either party. Finally, the majority seems to briefly suggest that the Fongs may not have known they were signing a contract at all, and that they instead thought they were only “signing paperwork, at the branch’s request, to get a new slot for their existing box.” What a reasonable person would think that paperwork could be other than some sort of agreement to terms regarding the box is unclear. But more importantly , this is, again, not an argument that the Fongs made in their briefs to us
. See Sineneng

- Smith , 590 U.S. at 375. The Fongs do not argue that they did not know they were signing a contract and they do not argue that they did not consent to the
one - page Consumer Safe Deposit Box Contract. They argue only that the one

- page contract somehow could be read as incorporating only itself , which, as discussed above, is an implausible argument that even the majority does not rely on. 2. Because the majority determines that the arbitration provision was not properly incorporated, it does not address the other two issues on appeal . B ut in my view, those arguments also do not merit relief. First, Appellees did not waive their right to arbitrate. To prove waiver, the Fongs “must demonstrate: (1) knowledge of an existing right to compel arbitration6

and (2) intentional acts inconsistent with that existing right.” Armstrong v. Michaels Stores, Inc. , 59 F.4th 1011, 1015 (9th Cir. 2023). The Bank’s response to the Fong’s Consumer Financial Protection Bureau inquiry stating that if the Fongs “wish to request a copy of any available video surveillance, [they] may do so with a court issued subpoena in w riting,” does not amount to Appellees “actively litigat[ing] the merits of a case,” let alone “for a prolonged period of time in order to take advantage of being in court.” Newirth by & through Newirth v. Aegis Senior Cmtys., LLC , 931 F.3d 935, 941 (9th Cir. 2019). Second, U.S. Bancorp may enforce the arbitration agreement. “[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.” Murphy v. DirecTV, Inc ., 724 F.3d 1218, 1229 (9th Cir. 2013) (quotation omitted)

. “Under California law, a party that is not otherwise subject to an arbitration agreement will be equitably estopped from avoiding arbitration” in some circumstances. Id . Here, each of the Fongs ’ claims are against both USBNA and U.S. Bancorp, and each arise out of the Bank’s actions surrounding the Fongs’ safe deposit box. The claims against U.S. Bancorp are thus “based on the same facts and inherently inseparable from arbitrable claims against ” USBNA, and the Fongs may not avoid arbitration with U.S. Bancorp. Id . at 1231 (quotation omitted)

.7

Because I believe the district court properly granted Appellee’s motion to compel arbitration , I respectfully dissent.