F OR P UB LIC AT ION


### U N I TED STA TES C O U R T O F A PPEA LS F O R T H E N IN T H C IR C U IT

J ES S I C A KRAMER , Plain tif f , and
A L EX S ANDR A D EL R EA L ; M I CHAEL C HOI ; M I CH A EL S CHOL TEN , I nd ivi du a lly

and on B e ha lf of Al l Othe rs Simi larl y

Situ a te d; L

U L I , Plaintif fs-Appellee

s ,

v.
T OYOTA M O T O R C OR PO R ATI ON , a J ap an es e c o rp o ra t i o n/a f o re i gn corpor ation, DB A Toy ota Motor No rt h A me ri c a , Inc .; T OY OT A M O T O R S AL ES , U.S.A., I NC ., a C al i fo rn i a c o rp o ra t i o n/a f o re i gn corpor ation, De

fe nd an ts- Ap pe lla nts

. No. 12-55050

D.C. No. 8:10-ml-02172- CJ C-RNB

OPI NI ON

Appea l from the United States District Court fo r t he Ce ntr a l D istri c t of

Ca lif or nia Cormac J. Carney , District J udg e, PresidingKRAM ER V
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2

T he H o no rab le G o rdo n J. Q ui st , U ni t ed Stat es D i st ri ct C o urt f o r t he * W est ern D i st ri ct of M i chi gan, s i t t i ng by desi gnat i o n.
T hi s s ummary cons t i t ut es no part o f the o pi ni on of

t he cour t

. I t ha s ** b een p repa red b y co urt s t af f f o r t he co nveni ence o f

t he read er. Argued and Submitted Oc tob e r 1 1, 20 12 —Pa sa de na , Ca lif or nia Filed January

30, 2013
Be fore : AndrewJ . Kleinfe ld and M. Marg are t McKeown, Circuit J udg es, and G ordon J. Quis t, Senior District J udg e. *

Op ini on by Judg e Qu ist

SUMMAR

Y **

Arbitrat ion The pa nel af firmed the district c ourt’s orde r de n y i n g a motion to compel arbitration.
Th e pa ne l he ld t hat T oyota

Mo tor Cor po ratio n a nd To y ota Mo tor Sa le s, U. S.A ., I nc. may no t c omp e l pl a int if

fs to arbi tr a te th e ir

c la im s
. T h e p an e l a ls o h e ld th e d is tr ic t c o urt ha d th e a uth or ity to d e c ide wh e the r T oyota , a no ns ig nator y to sever al purc hase a g ree ments with arbitration provisions b e tw e e n p la inti f

f s an d v ar io u s T o y o ta d e a le r s h ip s , may compel ar bitration. Finally , the pane l could discern no r eason that the plaintiffs shoul d be equitably estopped fr om avoiding arbitration in thi s case
.KRAM ER V
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CO UN SEL
Theodore J . Boutro u s J r.; Wil liam E. Thomson; Blaine H. Ev ans on ; B ra

nd on J. Sto ke r, Gi bs on , D unn & Cr utc he r L L P, L os Ang eles, California ; Michael L . Mallow; Denise A. Smit h-Mar s; Rachel A. Rappa port, L oeb & L oeb L L P, L os An g e le s, Ca lif

or nia , f or De fe nd ants -A

pp e lla nts

. Va hn Al e xan de r; Chr ist op he r B . Ha y e s, F aru qi & F aru qi, L L P, L os Ang eles, California; Marc L . Godino, Glancy Binkow & GoldbergL L P , L os Ang eles, California , for Pla int if fs -A pp e lle e s.

OP IN ION QUI ST, District J udg e:
To y ota Mo tor Cor po ratio n a

nd To y ota Mo tor Sa le s, U.S.A., I nc. (c ollectively “Toyota” or

“De fenda n t s ”) se ek revie w of the di strict court’s de nial of their motion to compel arbitration. The district c ourt held that Toy ota, a nonsignatory

to severa l ag ree ments with arbitration provisions betwee n Plaintiffs and various Toy ota dea lerships (h e re ina ft e r “ De a le rs hip s” ), c ou ld n ot c omp e l Pla int if fs to arbitrate with Toy ota. The district c o u rt al so found that To y ota had wa ived any rig ht to compel arbitration by vigor ously

litigatingthis action in district court for nearly two y e ars
. We have jurisdiction pursuant to 9 U.S.C. § 16(a)(1) (C), which provide s for immediate inter locu t ory appea l of a district court’s de nial of a moti on to compel ar bitration. Gree n Tree Fin. Corp.-Alabama v. Randolph , 531 U.S. 79, 86KRAM ER V
. T OYOTA M O T O R C O RP
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4 (2000). F or the re asons s et forth below, we a ffirm the district court’s or der denying T oy ota’s motion to compel arbitration.

BACK GR OUND
Plaintiffs are owners of

Model Yea

r 2010 Toy o ta Prius vehicles who purch as ed their ne w vehicle s betwee n J une 20 09 and

F e bruar y 20 10 fr om T oyota

de a le rs hip s in Ca lif or nia , T e xas, and

Mary land . Pl a int if

fs brin g thi s putative class a ction on behalf of themselves a

nd others si m ilarly situated who purc hased or lease d a Model Ye ar 2010 Toy ota Prius or Model Yea r 2010 L exus HS 250h (c oll e c tiv e ly

“ Cla ss V e hic le s” ) i n th e Un ite d St a te s. Pla int if fs a lle g e that th e y

e xpe ri e nc e d d e fe c ts in the ir anti

lock brake sy stems (AB S), resultin g in increa sed stopping distances. Plaintiffs fur

ther a lleg e that Toyota had notice of the def ect a s ear ly

as Jul y 2009 but failed to di sclose the de fe c t and

c on tin ue d to manu fa c tur e and sel l veh ic le s w ith defe ctive AB S. Pl aintiffs asse rt claim s fo r violation of California’s Consumers L eg al Remedies Ac t, Cal. Civ. Code § 1750 et seq. ; unfair c ompetition, C al. Bus. & Prof. Code § 17200 et seq. ; false a dvertising , C al

. Bus. & Prof. Code § 17500 et seq. ; br eac h of the implied wa rra nty of merc hantability , Cal. Com. C ode § 2314; and c ommon law br e a c h o f c on tr a c t. Plaintiffs purchase d their vehic les on cre dit b y enter ing int o e ith e r a “ Re ta il I ns ta llm e nt Sa le Con tr a c t” or “ Pur c ha se Ag ree ment” with their re spective de ale rs hips. The a g re e me nts (h e re ina ft e r “ Pur c ha se Ag re e me nt( s) ” ) s e t f or th the terms of the sales, including information re g ardingthe purchase pric e, fina

ncing , insurance , war

ranties discla imed by the dea ler, wa

rra nties of buy er, and resc ission rights. The Purchase Ag reem ents also containe d simil arly worde dKRAM ER V
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T o yo ta d id n o t m o v e the d istric t c o u rt to c o m p e l ar b itra tio n o f P la intiff 1 Jes s i ca K r amer ’ s cl ai m b eca us e K r amer di d not s i gn an ag r eement wi t h a n arbit rat i o n pro vi si o n. arb itr a tio n p ro vis ion s. For example, the ag ree ment enter ed 1 by Pla int if f M ic ha e l Sc ho lte n s tate s, 1. EI TH ER Y OUOR

WE M AYCH OO SE TO HAV E ANY D I SPUTE BETW E EN YOU AND US DECI DED B Y ARBI TRATI ON, RA TH ER T HA

N I N CO UR T OR

B Y JUR Y T R IA L.
2. I F A D I SPUTE I S ARBI TRATED, YOU WI L LGI VE UP YOU RRI GHT TO PAR T I C I P A T E AS A CL ASS REPR ESENTATIVE OR CL ASS MEMBER ON ANYCL AI M YOU MAYHAVE AGAI NST US. YOU W I L LGI VE UP ANY RI GHT TO CL ASS ARBI TRATI ON AND TO ANY CONSOL I DAT I O N OF I ND I VI DU AL

ARB I TRA TI ON S.

. . . I f either y ou or we elec t, any

claims or disput e s ar is in g o u t o f

th is tr an s a c ti o n , or relating to it, will b e d etermined by binding arb itr a tio n and no t by c ourt a c tio n. Th is includes all claims and disputes arising out of , or re latin g to: the ve hic le, y our c re dit application, this contra ct, the sale or financ ing of the ve hic le , a

nd any c oll e c tio n a c tiv iti e s.KRAM ER V
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6

See P res s R el ease, N at ’ l H i ghway T raf f i c Sa f et y A d m i n. , D ep art m ent 2
o f T r an s por t at i on Addr es s es T oy ot a Sa f et y I s s u es ( Fe b. 4, 201 0 ), ht t p: / / www. nh t s a. gov/ P R / D O T

- 22

- 10

. Pl ai nt i f f s ’ Fi r s t Am ended Compl ai n t a l l eg es N H T SA a n n ou n ce d i t s i n v es t i g at i on on Fe br u ar y 3, 2010. . . . This Arbitration Clause applies, reg ardle ss of wh e the r t

he c la ims or

dis putes arise in c on tr a c t , t o rt , s t a tu t e o r

o t h e r w i s e
. I ta l so ap p lies to any

claim or dispute about the interpre t ati on and scope of this Arbitration Cla us e . I t als o ap pli e s to any c la im or dis pute ab o u t whether

a cla im or dispute should be deter mined by arbitration.
A n y c l a i m o r

d i s p u t e i s t o b e ar

b i tr a t e d b y a sin g le ar b it r a to r w h o w il l a

r b it r a te o n ly y o ur own claims and not the c laims of a cla ss of persons. You e x pressly

waive any ri g ht y ou may have to a rbitrate a class ac tion.
L ike wi se , th e arb itr a tio n c la us e s in the oth e r P ur c ha se Ag ree ments employ

the l anguag e “y ou” and “we ” or “ buy er” and “ de a le r” to ide nti fy wh o may e le c t arb itr a tio n. To y ota is no t a sig nator y to a ny of the Pur c ha se Ag re e me nts

. P ROCEDURAL HISTORY
On F e br uary 4, 20 10 , th e Natio na l H ig hw ay Tr a ff ic Sa fe ty Ad min istratio n a

nn ounc e d a fo rm a l inve sti g a tio n into a lle g a tio ns that Mo de l Y e ar 2 01 0 T oyota Pr ius hy

br id v e h i c l e s e x p e r i e n c e d

m o m e n t ar

y l o s s o f b r ak i n g c a

p a b i l i ty. 2KRAM ER V
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. 7

On F e b r u ar y 8 , 2 0 1 0 , T o y o t a

v o l u n t ar i l y

r e c a l l e d th e C l a ss V e h i c l e s t o u

p d a t e t h e A B S s o f

t w ar e
. B e tw e e n F e b ru ar

y 8 and F ebrua

ry 19, 2010, Plaintiffs filed separ at e cla ss action lawsuits in sever al federa l district courts. On April 9, 2010, the United States Judi cial Panel on Multidistrict L itigati on (JP ML ) i ssued a Tr ansfe r Orde r in In re: Toyota Motor Corp. Unintended Ac cele ration Marketing, Sales Practice s and Products Liabil ity Liti

gation (MDL

2151), pursua

nt to which the J PMLtransfe rre d sever al actions to the Centra l District of Calif o r n ia

. O nJu ly

2 8 , 2 0 1 0 , th e p r e s e n t a c ti o n s wer e consolidated by

stipulation pursuant to 28 U.S.C

. § 1407, and on November

22, 2010, the district co u rt approve d a n e g o t i a t e d

p r o t e c t i v e o r d e r

g o v e r n i n g d i s c o v e r

y. On Ap ri l 26 , 2 01 1, Plain ti ff s f ile d th e op e ra

tiv e F ir st Amended Complaint. The f ollow i n g d ay , the United States Supreme Court issued its decision in AT& T Mobility LL C v. Concepc ion , __ U.S. __, 131 S. Ct. 1740 (2011) , which abrog ated Di

sc ov e r Ba nk v . S

up e rio r Co ur t , 36 Cal. 4th 148 (2 00 5) , a nd he ld e nf or c e a ble c la ss a c tio n w a ive rs in c e rt a in arbitration ag ree ments. D is c o v e r B a nk ha d p re vio us ly

he ld class ac tion a rb i tration provisions unconscionable and unenfor cea

ble in consumer c ontrac ts o f adhesion unde r cer tain circ umstances. 36 Cal. 4th at 153.
On June 16 , 20 11 , Toyota

mov e d to dis mis s Pla int if fs ’ claims pursuant to F eder al Rule of C ivil P roce dure 12( b)(6) , which the dist rict court denied on Septembe r 12, 2011. The following day , Toy ota informed Plainti ffs’ counsel that To y o t a int ended to move to c ompel arbitration. On Sep tember 27, 2011, Toyota answe red the First Amende d Complaint, asserting a

rbitration as one aff

i rmative de fense

. On Octobe r 10, 2011, Toyo t a moved to compe l arbitration. The district c ourt denied Toy ota’s motion on Dec ember 20,KRAM ER V
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8 2011, finding Toy ota h ad waived a ny rig ht to arbitrate by v i g o r o u s l y l i t i g a t i n g t h e a c t i o n , p art i c i p a t i n g i nd i s c o v e r y, and neg otiating pr otective or ders f or nea rly two y ear s. The court a ls o f

o u n d th a t T o y o ta , a s a n o n s ign a to r y to the Pur c ha se Ag re e me nts be tw e e n Pl a int if fs and De a le rs hip s, could not compel ar

bitration, and equitable estoppel did not require arbitration.
DI SCU SSIO N
I.
A. Toy ota first argues that the district cour t erre d by deciding whether Toy ota had a

rig ht to c ompel arbitration, contending that the Purcha se Ag ree ments commit that question to an arbitrator. We review de novo dist rict cour t decisions about the arbitra bility of cla ims. M

o m o t v
. M as tro , 652 F.3d 982, 986 (9th Cir. 2011 ). W ith lim ited exceptions, the Fe dera l Arbitration Ac t (FA A) g o v erns the e nforc eability of a rb i t r a t i o na g r e e m e n t s i nc o n t r a c t s i n v o l v i n g i n t e r s t a te commerc e. See 9 U.S.C. § 1 et seq. The F AA states that “ [a] written provision in a

ny
. . . contra ct evidenc ing a transac tion inv olv ing c omm e rc e to se ttl e by arb itr a tio n a c on tr ov e rs y the r e a f te r ar is in g o u t o f s u c h c o n tr a c t

. . . s h a ll be valid, ir re vo c a ble , an d en fo rc e a

ble , sav e up on

su c h g ro un ds a s e xist at law or in equity for the r evocation o f an y co ntrac t.” Id. § 2. The FAA ref

lects both a “libera l fede ral policy favor ing arbitration,” Concepc ion ,

_ _ U

. S.

_ _ , 1 3 1 S. Ct

. at 1745 (q u o t i n g Mo se

s H . Co ne Mem’ l H

os p. v . M e rc ur yCon str

. Corp. , 4 60 U. S. 1 , 2 4 ( 19 83 )) , a nd the “ fu nd ame nta l pr inc ipl eKRAM ER V
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that arbitration is a matter of c ontrac t,” id. (q u o t i n g Rent-ACenter, W

est, Inc. v . Jack

son , __ U. S

.

_

_ , 130 S. Ct . 2772, 2776 (2010))

. The scope of a n arb itration ag ree ment is gove rned by fe d era l substantive law. Tracer Rese arch Corp. v. Nat’l Envtl. Servs. Co. , 4 2 F

. 3 d 1 2 9 2 , 1 2 9 4 ( 9 th

Ci r
. 1 9 9 4 )

. “ [A ]s a matter of fe deral law, any

doubts conce rning the scope of arb i t rable issues should be resolved in f avor of arbitration, whether the problem at hand is the cons truction of the contra ct lan gu age itself or an a lleg ation of wa iver, de lay , or a like def

ense to a rb itrability .” Chiron Corp. v. Ortho Diagnostic Sys., Inc

. , 207 F.3d 1126, 1131 ( 9 t h Cir. 2000) (q u o t i n g Moses H. Cone , 460 U.S. at 24–25).
Neve rtheless, “ arbitration is a m atter of contra ct and a pa rt y c ann ot b e re qu ir e d to su

bmi t to arb itr a tio n a

ny dis pute which he ha s not ag ree d so to submit .” Un ite d S te e lwo rk e rs v. W arrior & Gulf Navigation Co. , 363 U.S. 574, 582 (1960).

“ B e c a us e arb itr a tio n is fu

nd ame nta lly

a matte r o f c on tr a c t, the ce ntral or pr imary

purpose of

th e FA A i s to ensure that pr ivate a g re e me nts to a

rb itr a te are e nf

or c e d ac c or din g to t

he ir terms.” Momot , 652 F.3d at 986 (internal quotation mar ks and citation omitted). Gene rally , the contractual rig ht to compel arb itr a tio n “ may

no t be inv ok e d by on e wh o is no t a pa rt y to the a g re e me nt a

nd do e s n ot o the rw ise po sse ss t he ri g ht t o compel ar bitration .” Britton v. Co-op Banking Grp. , 4 F.3d 742, 74 4 (9t

h Ci r. 19 93 ). Ac c or din g ly , “ [t]he str on g pu bli c policy in favor of arbitration doe s not ext end to those who a re not parties to an a

rbitration ag ree ment.” Comedy Clu b, Inc. v . I mp ro v W . A sso cs. , 553 F.3d 1277, 1287 (9th Cir

. 2009) (citation omitted).KRAM ER V
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B.
The fir st issue for re view is whethe r the district cour t had authority to decide whet h er Toy ota, a nonsig natory to the Purchase Ag ree ments, can c ompel Plaintiffs to arbitrate. The district court addr essed the issue in a footnote,
Whil e par ties may ag ree to expli cit provisions enablingthe ar

bitrator to dec ide issues of the applicabili t y

and scope of an a

rbitration ag ree ment, these provisions ar e par t of the a g re e me nt a

nd on ly a pply to s ig nator ie s. To y ota c ann ot i nv ok e the ri g ht to the be ne fi ts of the Purchase Ag ree ment beca use it was not a pa rt y to t he a g re e ment; thus , th e thr e sh old i s s u e o f w h e t h e r T o y o t a , a s a

n o n s i g n a t o r

y, may compel Plaintiffs to submit to arbitration under the Purchase Ag ree ments m ust be decide d by

this Court. Britton , 4 F.3d at 744; Comedy Club , 553 F.3d at 1287. None of the case s cited by Toy ota in support of its posit ion

. . . c ouns e ls o the rw ise , a s th e y are ina pp os ite to n on sig nator ie s.
To y ota argue s th a t be c a

us e the Pur c ha se Agre e me nts expressly pro vide that the ar

bitrator shall dec ide issues of interpre tation, sc o p e, and applica bility of the a

rbitration provision, the arbitrator should decide the issue of whe ther a nonsignatory

may compel Plaintiffs to arbitrate.
“I t is well settled in both commerc ial and labor case s that wh e the r p a

rt ie s h ave a g re e d to ‘su

bmi [t] a p art ic ula

r d isp ute to arbitra t ion’ is ty

pically an ‘“ issue for judicial deter mination.”’ Gran ite Ro c k Co. v . Int ’l Bh d. of T e am ste rs ,KRAM ER V
. T OYOTA M O T O R C O RP
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__ U.S. __, 130 S. C t. 2847, 2855 ( 2010) (c itations omi tted). “I t is simil arly well settled that wher e the disput e a t i s sue conce rns contra ct forma tion, the dispute is gene rally for courts to dec ide.” Id. at 28 55–56 (citations omitted). As e xp lai ned inFirst Options of Chicago, Inc. v . Kaplan , “ [c]o ur ts sh ou ld n ot a ssume that th e pa rt ie s a g re e d to arb itr a te ar b it r a b il it y u n le s s th e r e is ‘ c le a [r ] an d un mi s ta ka b l[ e ]’ evidenc e that they

did so.” 514 U.S. 938, 944 (1995) (q u o t i n g AT& T Tec h s
. , Inc. v . Commc’n W orkers of Am. , 47 5 U .S. 64 3, 64 9 ( 19 86 )) ; see also Granite Rock, 13 0 S. Ct. at 2 8 5 6 n.5. “In this manner the law treats silence or ambig uity about t he question ‘ who (primar ily) should decide arbitra bility ’ di ffe rently

from the wa

y it treats silence or ambig uity about the question ‘ whether a pa rticu lar me ri tsrelated dispute is arbitrable beca use it is within t he s co p e of a valid arbitration ag ree ment’—for in respec t to this latter question the law re verse s the presumption.” Fir st Options , 5 1 4 U. S

. at 9 4 4

– 4 5 (c i t i n g Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, I

nc. , 473 U.S. 614, 626 (1985)) (empha sis in original).
Her e, the arbitration agr eeme nts do not contain clear a nd un mis ta ka ble e vid e nc e tha

t Pla int iffs and To y ota

a g re e d to arb itr a te arb itr a

bil it y
. Whil e Pla int if

fs may have a g re e d to arbitrate arb i trability

in a dispute with the Dea lerships, the te rm s o f t

he arb itr a tio n c la

us e s are e xpre ssly lim ite d to Plainti ff s and the De aler ships. For e x ample, Scholten’s arb itr a tio n c la

us e state s that “[e ]ith e r y ou or we may c ho os e to have a

ny dispute betwee n y ou and us dec ided by arbitrati o n
. ” The lang uag e of the contra cts thus evidence s Plaintiffs’ intent to arbitrate arbitrability with the Dea lerships a nd n o o n e e l s e
. T h e D e a l e r s h i p s ar e n o t a p arty to t hisKRAM ER V
. T OYOTA M O T O R C O RP
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12

T h e sc o p e o f t h e a rb itra tio n p ro v is io n s in th e P u rc h a se A g re e m e n ts 3 do es ex t end t o as s i gn ees
. T he Schol t en P ur cha s e Agr eement , f or e xampl e, en compa s s es d i s pu t es be t we en “ y ou ” [ Pl ai n t i f f s ] a n d “ an y on e t o w h om w e [D e a le rs h ip s] tra n sfe r th is c o n tr a c t, w h e the r o r n o t t h e y sign this
c o n tra c t” o r “o u r [D e a le rs h ip s’] e m p lo ye e s a n d a g e n ts.” T o yo ta d o e s n o t, ho wever, co nt end t hat i t i s a tr a n sfe ree , em p l o y ee, or agent of t he D ea l ersh i p s. action. See M

omot , 652 F.3d at 987. Given the absenc e of 3 c le ar a nd un mis taka

ble ev ide nc e tha

t Pla int if fs a g re e d to arbi tr a te ar

b it r a b il it y w it hn o n s ign a to r ie s , th e d is tr ic t c o urt ha d the a uth or ity to de c ide wh e the r the ins tant dis pute is arbitra ble. See U

nited Bhd. of Carpenters and Joiners of Am. v. De sert Palace, I

nc. , 94 F.3d 1308, 1310 ( 9th Cir. 1996).
Th is c ourt

a dd re sse d a si mi lar iss ue inMundi v. Union Security Life In s u rance Co. , 555 F.3d 1042 ( 9th Cir. 2009). I n Mundi , th e arb itr a tio n p ro vis ion de fi ne d a

disp ut e a s a disa g re e me nt b e tw e e n th e tw o c on tr a c t si g nator ie s—Wel ls Fa rg o and the borrow er. Id. at 1045. The court found that the no ns ig nator

y -d e fe nd ant co uld

no t c omp e l arb itr a tio n b e c a us e the ar bitration ag ree ment, b y i t s t erms, did not apply to the n o n s i g n a t o r

y. The a rbitration ag ree ment is premi s ed on a disag ree ment betwee n Wells Farg o and the borrowe r. In the absence of such a disag reement, the ar

bitration provision does not apply . Thus, any

disag ree ment between the borrow er a

nd a t h i rd par

ty , such as [the defe n d an t] , is s im

p ly n o t w it

h in th e s c o p e of the ar bitration ag ree ment, even if it is relatedKRAM ER V
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. 13

in some attenu at ed wa

y to . . . the arbitration provision.
Id. As applied to this case , i t makes no diffe renc e that Plaintiffs and Toy ota disag ree over the arbitrability of the arbitration ag ree ment, as opposed to whe th er the entire dispute m ay b e arbitrated. “ [T] he question ‘who ha s the primary power to decide a

rbitrability ’ turns upon what the pa rt ie s a g re e d a

bo ut tha t matter.” First Options , 514 U.S. at 94 3 ( e mph a sis in o ri g ina l)

. The pa rt ie s to thi s li tig a tio n d id no t a g re e to arbitr a te arb itr a bil ity ; Pla int if

fs on ly a g re e d to arbitrate arbitrability

—or any

other dispute—with the De a le rs hip s b e c a

us e the arb itr a tio n c la

us e is l imi te d to c la ims b e t w e e n“ y o u an d u s ”

— i

. e
. P l a i n t i f f s an d t h e D e a l e r s h i p s
. In the abse nce of

a disag ree ment betw ee n Plaintiffs and the Dea lerships, the agr eeme nt to arbitrate arbitra bility does not apply . There fore , a disag ree ment between P l aintiffs and Toy ota “is simply

not within the scope o f t h e arbitration ag ree ment.” Mundi , 555 F.3d at 1045.
II.
A.
T o y o ta a ls o ar g u e s th a t it ma y c o mp e l ar

b it r a ti o n even thou gh it i s a

no ns ig nator

y to t he Pur c ha se Agre e me nts beca use Plaintiffs are equitably estopped fr om avoiding arbitration. “Equitable estoppel prec ludes a party from claiming the b e n e f i t s o f a c o n t r a c t w h i l e s i m u l t an e o u s l y a t t e mp t ing to avoid the burde ns that cont rac t imposes.” Com e r v . M ic or ,KRAM ER V
. T OYOTA M O T O R C O RP
.

14

N o part y ha s as ked u s t o app l y an y s t at e l aw ot her t han Cal i f orn i a. 4 Inc. , 436 F.3d 1098, 1101 (9th Cir. 2006) (interna l quotation mark s and

c itatio n o mitte d) . I n the arb itr a tio n c on te xt, th is principle ha s g ener ated va rious l i nes of c ases. See M undi , 555 F.3d at 1046. This c ase involves “ a nonsig natory seeking to compel a sig natory

to arb itrate its claims ag ainst the nonsignatory .” Id. The United States Supreme Court has held that a litigant who is not a party

to an ar b i t ration agr eeme nt may

invoke arbitration under the F AA if the re l evant state contra ct law allows the litiga

nt to enforc e t h e agr eeme nt. See A rthur An de rse n LLP

v . Ca rli sle , 5 5 6 U

. S. 6 2 4 , 6 3 2 ( 2 0 0 9 )

. We there fore look to California contra ct law to dete rmine wh e ther Toy ota, as a

nonsignatory , can c ompel arbitration. 4
Where a nonsignatory

seeks to e n fo rce an ar

bitration clause , the doctrine of equitable estoppel applies in two circ umstances: (1) when a signatory must rely on the terms of the written a g ree ment in assertingits cl aim s ag ainst the nonsignatory

or the c laims are “ intimat el y founded in a

nd intertwined with” the underlying c ontr a ct, Goldman v. KPMG LLP , 1 7 3 C al

. Ap p
. 4 t h2 0 9 , 2 2 1 (2 0 0 9 ) ( qu o t i n g Metalclad Cor p. v . V e nta na En v tl. Or

g. P’ sh ip , 109 Cal. App. 4th 1705, 17 13 (2 00 3) ), and (2 ) wh e n the sig nator y a lle g e s su bs tanti a lly interdepe ndent and c once r te d mi s c o n d uct by the nonsig natory and another si g natory and “the alleg ations of interde pendent misconduct [are] founded in or intimately connec ted with the obligations of the underlying a g ree ment.” Goldman , 1 73 Ca l. Ap p. 4th a t2 1 9

. T o y o t a

ar g u e s t h a tt h i s c a s e p r e s e n t s bo th c ir c ums tanc e s.KRAM ER V
. T OYOTA M O T O R C O RP
. 15
1.
I n Jones v . Jacobson , the California Court of Appeal addre ssed the first possibility . 195 Cal. App. 4th 1, 20 (2011). When a sig natory relies on the te rms of a wri t ten a g re e me nt, [u] nder [ the doctrine of equitable estoppel], a nonsignatory

defe ndant may

invoke an arbitration clause to compe l a s ignatory plaintiff to arbitrate its claims when the cause s of ac tion ag ainst the nonsigna tory are intimately founded i n and intertwined wi th the unde rly ing

c on tra c t o b l i g a t i o n s
. [.

. . ] T his require ment comports wit h, and indee d derive s from, t h e ver

y purposes of the doct ri ne: to preve nt a par ty from using the terms or oblig ations of an a g reem ent as the b a s i s f o r h i s c l a i m s a g a i n s ta

n o n s i g n a t o r

y, wh ile at th e same tim e re fu sin g to a rb itr a te with the nonsignatory

under a nother c lause of the same a g re e me nt.
195 Cal. App. 4th 1, 20 (2011) (inter nal quotations omitt ed) (empha sis a dded) (citing Bouche r v. Alliance Title Co. , 127 Cal. App. 4th 262, 271–72 (2005); JSM Tuscany , LLC v. Su pe rio r Co ur t , 193 Cal. App. 4th 1222, 1237 (2011); Goldman , 173 Cal. App. 4th at 2 2 1 ). “[E]quit able e stoppel applies only

if the plaintiffs’ claims ag ainst the nonsignatory are depende nt up o n , or inextricably bound up with, the ob lig a tio ns imp os e d b y

the c on tr a c t pl a int if

f h a s si g ne d w ith th e s ign a to r

y d e f e n d ant.” Gol dman , 173 Cal. App. 4th at 22 9

– 30. “[M] ere ly

‘mak[ing] ref

ere nce to’ an agree ment with an ar

bitration clause is not enoug h. Equitable estoppelKRAM ER V
. T OYOTA M O T O R C O RP
.

16 applies ‘whe n the signatory to a written ag ree ment containing an ar bitrati o n cl au se “must re ly on the terms of the written ag ree men t i n as s er t i n g [ i t s ] cl ai m s ” aga i nst the nonsignatory .’” Id. at 2 1 8 (q u o t i n g MS De aler Serv. Corp. v. Fran k lin , 177 F.3d 942, 947 (11th Cir. 1999)). To de termine wh e the r t he pla int if

fs ’ c la ims re lie d on the wr itt e n a g re e me nt, the Goldman court looked to whe ther th e cl aims that the no ns ig nator

y so ug ht t o a

rb itr a te we re “ ‘i nti mate ly

fo un de d in and intertwined with the underlying c ontrac t obligations.’” Id. at 2 2 1 (q u o t i n g Metalclad , 109 Cal. App. 4th at 1713).
I n Goldman , inve sto rs br ou g ht c on so lid a te d c la ims ag ainst their accountants, attorney s, and investment advisors for, among othe r thing s, brea ch of f iduciary duty and fr aud related to a fraudulent tax avoidanc e scheme. Id. at 213. As on e ste p in the sc he me , the a dv iso rs a ssi ste d th e inv e sto rs in forming limit ed liability companies with sta ndard o p erating ag ree ments containing broad arbitration provisions. Id. The acc ountants and attorney s, who wer e not pa rties t o t he operating a g ree ments, sought to compe l arbitration, relying on the doctrine of equitable estoppel. Id. at 2 1 6. The c ourt aff i rm ed a lower

court’s de nial of the motion to compel arbitration, finding that the claims wer e “unr elated to a ny of the obligations in t he oper ating ag ree ments, which we re mere ly a proce dural and collater al step in the cre ation of the fra udulent tax s helters.” Id. at 218. The court observe d that the complaints did not “re l y on or use a ny terms or obligations of t h e o perating a g ree ments as a f oundation for their cla ims ” an d d id not even mention the agree ments. Id. Thus, the court he ld the doctrine of equitable e stoppel was inapplicable. Id.
Simi larly , in Mundi , t h e widow of a n insured borr ower b r o u g h ta

c l a i ma g a i n s tani n s u r e r f o r r e f u s i n g t o p ay aKRAM ER V
. T OYOTA M O T O R C O RP
. 17

W e no t e som e co nf

usi o n a s t o whet her M undi , 5 5 5 F.3d 10 4 2 , remains 5 g o o d law

. See , e
. g. , I

n r e Appl e i Phone Ant i t r us t Li t i g. , 874 F. Su pp. 2d 8 8 9 , 89 5

– 9 8 (N

. D

. C al

. 20 1 2 ). I n Ar t h u r An d e r s on , 55 6 U

. S. 62 4 , t he U ni t ed St at es Supre me C our t cl ar i f i ed t hat a l i t i gan t wh o i s not par t y t o an ar bi t r at i on agr eement m ay i nv oke arbi t r at i on i f t he r el eva nt s t at e c ont r act la w a llo w s the lit iga n t to e n fo rc e the a g re e m e n t. I d. at 63 2

. A f

t er caref ul
re v ie w , w e c o n c lud e tha t M undi re m a ins go o d law . A ltho u g h the c o u rt in M u n d i c ited fed e ra l eq u itab le e sto p p e l ca se s, ra the r t h a n lo o k ing d ire c tly t o a ppl i ca bl e s t at e l aw, the co ur t a ppl i ed t h e s ame s u bs t an t i v e l aw on eq ui t abl e es t oppel t h at a Cal i f or n i a cou r t w ou l d h av e appl i ed. Li k e t he C al i f o rni a co urt s i n Jones a n d G ol dm an , t he M u n d i cour t hel d t hat i n or der fo r a no n sig n a to ry to c o m p e l a sign a to ry to a rb itra te , t h e sign a to ry’s cl ai ms mu s t be “ i nt ert wi n ed wi t h , ” “ ar i s e ou t of , ” or “ r el at e di r ec t l y t o” t he co nt ract pro vi d i n g fo r a rb i t rat i o n. 55 5 F.3d at 10 4 7

. A s o ne co urt no t ed , “t he m ere f

act t hat t he co urt i n M undi ref erred t o o t her f

ed eral co urt opi n i on s i n f

or mu l at i n g i t s h ol di n g r eg ar di n g e qu i t abl e es t oppel doe s n ot m e a n tha t M undi was s t at i ng ‘ f eder al co mm on l aw. ’ ” In re A p p le , 874 F. Su pp. 2d a t 897. benef it u n d e r a li f e in s u r an c e p o li c y

to a th ir d

- p arty

le nder afte r the borrowe r’s de ath. 555 F.3d at 1044. Although the 5 insurance policy

did not contain an arbitration provision, the ins ur e r s ou g ht t o c omp e l arb itr a tio n o n th e ba sis of e qu ita ble estoppel bec ause a

loan ag ree ment betwee n the borrow er a nd the t hird-par

ty lender —desig nated a s the cre ditor-bene ficiar y of the policy

—contained a

n arbitration clause. Id. The c ourt held that the bre ach of i n s u rance policy claim was not “intertwine d” with the loan ag ree ment and the c laim did not “ar ise out of” or

“re late dire ctly

to” the loan agre ement. Id. at 1047 (interna l quotations and alterations omi tted). Toy ota broadly asser

ts that Plaintiffs’ claims are int e rt wi ne d w iththe Pur c ha se Ag re e me nts be c a us e the y re ly up on the e xiste nc e of

Pla int if fs’ ve hic le purc ha se tr ans a c tio ns . In a dd iti on , T oyota argue s t hat Pla int if

fs ’ c la im s ar e i n t e rt w i n e d

i nt w o s p e c i f

i c w ay s : ( 1 ) P l a i n t i ff

s’KRAM ER V
. T OYOTA M O T O R C O RP
.

18
prayer f or re lief see ks “re vocation of ac ceptance,” and (2) Pla int if fs re ly on the “ pr ic e te rm ” of

the Pur c ha se Ag ree ments in su p p o rt of their pr ay er f or dama g es for dim inutio n of the purc ha se pr ic e
. We take e a c h of th e se arguments in turn.

a. VehiclePurchases
To y ota ’s ov e ra

rc hin g argume nt i s th a t Pla int if fs ’ c la ims are int e rt wi ne d with th e Pur c ha se Ag re e me nts be c a us e Pla int if fs ’ c la ims re ly

on the e xisten ce of

Pla int if fs ’ v e hic le purc ha se tr ans a c tio ns
. I n Count I , Plaintiffs alleg e that Toyota violated California c onsumer prote ction law. Plaint i ff s alleg e the viol a tio n a

ro se fr om T oyota ’s un fa ir or de c e pti ve pr a c tic e s, inc lud ing fa ilure to dis c los e and a c tiv e ly c on c e a lin g the ri sk of the loss o f brake contr ol. Plainti ffs a lso alleg e mater ial repre se ntatio ns inv olv ingthe c ha ra c te ri sti c s, us e s, be ne fi ts, and qu a lit ie s of To y ota ve hic le s. F or purp os e s o f t his c la im, we dis c e rn

no re lia

nc e by Pla int if fs on the Pur c ha se Ag re e me nts . T oyota ’s arguments re g ard ingPla int if fs ’ re qu e ste d r e lie f a sid e , To y ota do e s no t sp e c if ic a lly a rgue thi s c la im i s in te rt

wi ne d w iththe Pur c ha se Ag re e me nts

. I n Co un t I I , Pl a int if

fs a lle g e To y ota

vio lated Cal if

or nia unfair competition la w b y re p ea t ed fr au d u lent misrepre sen t ati ons and omissions reg ardingthe safe ty of Plaintiffs’ vehicles. This c laim is not “intimately founded in” the P urcha se Ag ree ments, Jones , 195 Cal. App. 4th at 20, nor do e s it re fe re nc e or re ly up on the e xiste nc e of th e P urc ha se Ag ree ments, Goldman , 173 Cal. App. 4th at 221.KRAM ER V
. T OYOTA M O T O R C O RP
. 19

I n Count I I I , Pla int if

fs a lle g e vio latio n of

Ca lif or nia fa lse a dv e rt isi ng law. F or

e xamp le , Pl a int if

fs a lle g e To y ota dis se min a te d f

a lse or mi sle a din g state me nts a bo ut v e hic le safe ty throug h Toy ota’s ad v ertising , marke ting, a nd other publications. Sim ilarly , Coun t I I Iis not int imately founded in, no r d oe s it

re fe re nce or

re ly up on , th e Pur c ha se Ag re e me nts

. I n Count I V, Plaintiffs alleg e bre ach of the implied war ranty of mercha ntability

beca use the bra

ke def ect re nd e re d th e veh ic le s unf it f or the ir or din ary purp os e s. Toy ota contends that the implied warra nty arose by operation of the Pur c ha se Ag re e me nts and is the re fo re int e rt wi ne d w ith the Pur chase Ag re e me nts . We dis a g re e . T he Pur c ha se Ag ree ments expressly

differ entiate de aler

war ranties f rom ma n u f a c t u r e r w arr anti e s. F or

e xamp le , th e Sc ho lte n Purc ha se Ag ree ment states, “[t] his provis i o n d oes not aff ect a ny war ranties c overingthe vehicle that t h e manufacture r or supplier may

provide.” The L i Purchase Agre ement fur ther rea ds, “[t] he Dea ler is not a party to t h e m an ufac turer’ s war ranty , in the case of a ne w motor vehicle or chassis, the printed newmanufa cture r’s ne w vehicle war ra nty delivere d to P ur c ha se r w ithsu c h v e hic le or c ha ssi s sh a ll a pp ly .” Thus , Pl a inti f f s ’ im p li e d w ar r an ty c la im a g a in s t T o y o ta

ar ise s independe ntly

from t h e Purcha se Ag ree ments, rather than int imate ly

re lyingon

the m.
F ina lly , in Count V, Pla int if fs ple a d b re a c h o f c on tr a c t in the alter native, “to the e x tent Toy ota’s re pai r o r adjustment commitment is deeme d not to be a war ranty under California’s Comm erc ial Code.” Plaintiffs alleg e the br eac h ari se s f ro m T oyota ’s fa il ure to a de qu a te ly re pa ir Pla int if fs ’ vehicles. Toyota ar g ues P l ai ntiffs’ cla im relies upon the Pur c h a s e A g r e e me n t, in c lu d in g p r iv it y o f c o n tr a c t b e tweenKRAM ER V
. T OYOTA M O T O R C O RP
.

20
Plaintiffs a

nd Toy ota. Howeve r, Plaintiffs’ bre ach of contra ct cl ai md o es n o tre l y

o nt h e P u rc h as e A gre em en t

. Al th o u gh the claim “sounds in co n t ra ct,” as Toy ota emphasizes, the c la im r e lie s on Pla int if

fs ’ status a s th ir d- pa

rt y be ne fi c iari e s to contra cts betwe en Toyota and the Deale rships—i.e. servic e duties the Dea lerships owe to Plaintiffs on b eh alf of Toy ota—not the Pu rc hase A g ree ments. We ag ree with the dis tr ic t c ourt ’s c on c lus ion tha t, i n p or tr ayingPla int if

fs ’ br e a ch of

c on tr a c t c la im a s a

br e a c h o f t

he Pur c ha se Ag ree ment, Toy ota misrepresents Plaintiffs’ brea ch of contra ct claim. Plaintiffs plead bre ach of contra ct in the alternative to the implied warra nty claim, and the claim ar ises fr om the sa me a c tio ns un de rl y ing th e wa rr a nty c la im— To y ota’ s r e pr e se ntatio ns a bo ut i ts c omm itm e nt t o re pa ir s a nd sa fe ty —n ot a ny prom ise in t

he Pur c ha se Ag ree ments. We thus find that Count V is not intertwined wi th t he Pur c ha se Ag re e me nts

. b. Rev ocation of Acce

ptance Toy ota also conte nds that Plainti ffs’ c laims are intertwined be cause Pl a inti f f s seek “ revoc ation of acc eptanc e” a s one for

m of relief

. Toy ota re ads this relief a s “re v o c a ti o n o f a c c e p ta

n c e o f th e Pur c h a s e A g r e e me n t, ” as opposed to revoc ation of ac cepta nce of the sale itself.
L oo kin g to Ca lif

or nia c on tr a c t law , the c or

re c t ana ly sis is whether Pl ai ntiffs would have a c lai m independe nt of the exis tence of the Purcha se Ag ree ment (equitable estoppel applies “when the sig natory must rely

on the terms of the wr itten a g re e me nt in asserting it s claims ag ainst the nonsignatory ,” Goldman , 1 73 Ca l. A pp . 4 th a t 22 2 ( e mph a sis added) , or “when the causes of action ag ainst the no ns ig nator

y are int imate ly fo un de d in and int e rt wi ne d w ithKRAM ER V
. T OYOTA M O T O R C O RP
. 21

the under ly ing c ontrac t obligations,” Jones , 1 95 Ca l. A pp . 4 th a t 20 (e mph a sis a dd e d) ), no t w he ther th e co ur t mu st l oo k to the P urcha se Agre ement to asce rtain t he requested r elief. The emphasis of the case law is unmist akably on the claim itself, not the re lief. De spite Toy ota’s foc us on Plainti ffs’ r elief, Toy ota o ff

er s no case s to support Toy ota’s propose d application.
He re , Pl a int if

fs ’ c la ims are pr e mis e d o n Ca lifo rn ia consumer law, unfa ir competition, false a dvertising , brea ch of the implied war

ranty of merchantabilit y , and bre ach of contra ct. In order

for T oy ota’s equitable estoppel ar g ument to s uc c e e d, Pla int if

fs ’ c la ims the mse lve s mu st inti mate ly re ly on the e xiste nc e of the Pu rc ha se Ag re e me nts , n ot m e re ly re fe re nc e the m. T oyota is c or re c t th a t Plaint if

fs ’ c la ims pr e sume a

tr ans a c tio n invo lv in g a pur c ha se of a Cla ss Vehicle . The c laims do not, howeve r, re ly upon the exist ence of a Purc hase A g ree ment. For illust ratio n, a consume r who purc ha se d a

ve hic le wi th c a shins te a d o f c re dit wo uld sti ll state a c la im f or wh ic h r e lie f c ou ld b e gr ante d, a bs e nt a Purchase Ag ree ment. I n this reg ard, t h e facts resemble the fac ts of Goldman and Mundi , in wh ic h Pl a int if

fs ’ c la ims arose independe ntly of the ter ms of the ag ree ments containing arb itr a tio n p ro vis ion s. Moreo ver, w e no te that Pla int if fs ’ First Amende d Complaint never ac tually ref ere nces the Purchase Ag ree ment, either in the pr ay er fo r re lief or otherwise.

c
. Pr ic e Te rm Toy ota similarly

argues that Plaintiffs rely on the “pr ice te rm ” of the Pur c ha se Ag re e me nts be c a us e Pla int if

fs re qu e st damag es for

diminuti on of value of their ve hicl es (“r estitution” or “re stitut ionary disgor g ement”) . Ag ain, weKRAM ER V
. T OYOTA M O T O R C O RP
.

22 disag ree . Under C al i fornia la w, mere ref

ere nce to a

term of the Purcha se Ag ree ments is not e n o u gh. See G oldman , 17 3 Cal . App . 4th at 21 8. Mo re ov e r, we no te that Pla int if fs ’ Complaint does not re fer ence the Purcha se Ag ree ments or a spec ific price term. F or purpose s of their pra y er f or re lief, Plaintiffs me rely rely on the fac t that the y exchanged v alue for their vehicles, a

nd that, due to the alleg ed AB S defec t, the value of their vehic les has dec rea sed.
We t he re fo re fi nd , a s d id t

he d is tr ic t c ourt , th a t T oyota err oneously equate s Plaintiffs’ purcha se of the Class Vehic les and the e x istence of Purchase Ag ree ments betwee n Plaintiffs and the De a le rs hip s w ith int e rr e late dn e ss b e tw e e n Pl a int if fs ’ c la ims and

the o bli g a tio ns of

the Pur c ha se Ag re e me nts

. Pla int if fs do no t se e k to e nf

or c e or cha lle ng e the te rm s, duti es, o r o bli g a tio ns of

the Pur c ha se Ag re e me nts . In f a c t, a c c or din g to P la int if

fs ’ F ir st A me nd e d Comp lain t, t he on ly operative documents ar e Toyota’s mark et i ng materia ls and express written war

ranties, whic h provi d e t he basis of the fa lse a dv e rt isi ngc la im.
2.
To y ota ne xt arg ue s th a t Pla int if fs mus t arb itr a te the ir claims bec ause Plaintiffs allege collusion and interdepe ndent misconduct b et ween Toy ota and the D eale rships. The doctrine of equitable estoppel applies where a signatory raises alleg ations of substantially interdepe ndent and c oncer ted m i s c o n d u c tb y b o t ha

n o n s i g n a t o r

y an d a s i g n a t o r

y. Goldman , 1 7 3 C al

. Ap p
. 4 t hat 2 2 2 & n
. 7 (c i t i n g MS De aler ,KRAM ER V
. T OYOTA M O T O R C O RP
. 23

W e no t e t hat al t ho ugh MS D eal er , 1 7 7 F

. 3 d 9 4 2 , i s a f ed eral case and 6 A r t hu r A n d ersen i nst ruct s t hi s co urt t o ap p l y C al i f o rni a st at e l aw, t he C al i f o rni a C o urt of A p p eal i n G ol dm an , 17 3 Cal

. A pp
. 4t h 20 9, adop t ed t he MS D eal er equi t abl e e s t op pel an al y s i s as Cal i f orn i a s t at e l aw.
It i s no t ewo rt hy that m any C al i f o rni a eq ui t ab l e est o p p el cases om i t any 7
m en t i o n of t he co nc erted m i sco nd uc t l i ne o f eq uit ab l e est o p p el c a ses, s u g g e s t i n g t h e doc t r i n e ’ s pr i n c i pa l a pp l i c a t i on i s w h e r e pl a i n t i f f s ’ c l a i ms are i ntertwined wit h a gre em en t s co ntaini ng arb i t rati o n p ro visi o ns. 177 F.3d at 947). California state c ontrac t law does not 6 allow a nonsig natory

to enforc e an a

rbitration agr eeme nt based upon a

mere alleg ation of coll usion or interdepe ndent m i s c o n d u c tb e t w e e na

s i g n a t o r y an d n o n s i g n a t o r

y.
I n anyc a se a

pp lyinge qu ita

bl e esto pp e l to compel ar

bitration despite the lac k of an ag ree ment to arbitrate , a nonsig natory may c omp e l arb itr a tio n only wh e n th e c la ims ag ainst the non s i gnatory

are founded in a

nd inext rica bly bound up wi th the obligations imposed by theagreem ent containing the arbit ra tio n c lau se
. I n other wor ds, alleg ations of substantially interdepe ndent and concer ted mis c on du c t by

sig natorie s and

no ns ig nator ie s, standing alone, a

re not e noug h: the alleg ations of interde pendent misconduc t must be founded in or intimately

connec t ed with the ob lig a tio ns of

the un de rl yinga g re e me nt. Goldman , 173 Cal. App. 4th at 219 (empha sis in original). 7 Toy ota ar g ues, “[P] lai ntiffs claim that Toyota and the signatory deale rs ‘eng ag ed in a pattern of deni al and c on c e a lme nt’ of

the a lle g e d d e fe c t th a t c a us e d [P]la int if

fs ’KRAM ER V
. T OYOTA M O T O R C O RP
.

24 injuries.” Plaintiffs deny that they al leg e collusion betwe en To y ota and the De a le rs hip s. We find unconvincingToy o t a’ s claim t hat a pattern of denial or c on cealment by both Toy ota and the de aler s amounts to alleg ations of collusion or inter d ep endent misconduct for purposes of equitable estoppel. As the district court noted, the sparse por tions of the First Amende d Complaint that Toy ota cites to suppor t its argumen t d o n ot amount to c ollusion. More over, e ven if Toyota wer e cor rec t that Plai nti ff

s all e g e a patte rn of c on c e a lme nt b e tw e e n T oyota and the de aler ships, these alleg ations are not c onnecte d to the Pur c ha se Ag re e me nts . Rathe r, lik e the oth e r a lle g a tio ns in the Fir st Amended Compl aint, the allegations of collusi on are not “inextricably

bound up with the obligat i o n s i mposed by the ag ree ment containingthe ar bitration clause.” Goldman , 173 Cal

. App. 4t h at 219. Ther efor e, Plaintiffs’ alleg ations a lon e c ann ot t

ri g g e r e qu ita

ble e sto pp el un de r C a lif or nia contra ct law. See id.
B.
Re g ard inge qu ity , w e br ie fl y no te that th is c a se is distinguishable from other cases in which equitable estoppel has bee n applied. C alifornia courts have expli citly noted that parties should only

be estoppe d if their “‘ own conduc t rende rs asser

tion of those ri gh t s contrar y to equity .’” Goldman , 1 7 3 C al

. Ap p
. 4 t h at 2 2 1 (q u o t i n g Metalclad , 10 9 Ca l. Ap p. 4th a t 17 13 ). Th e “ lin c hp in” fo r equi tab le estoppel is fairne ss. Id. at 220. The fa cts of Metalclad , 109 Cal. A p p
. 4 t h 1705, provide a useful contr ast to this case. Metalcla d, a California

company , enter ed into an ora l a g r e e m e n tw i t hV e n t an a t o s e l l M e t a l c l a d ’ s s u b s i d i ar y, Econsa. Id. at 1709. Metalcla d followed up on the a g ree mentKRAM ER V
. T OYOTA M O T O R C O RP
. 25

by e n te r in g into a w r itte n a g r e e me n t w it h G e o lo g ic , a Ventana subsidiary , for the sa le of Ec onsa. Id. T h e written ag ree men t i n cluded a

broad a rbitration clause

. Id. at 1710. Metalcla d later br oug ht claim s including br eac h of contra ct and fr aud ag ainst Ventana and other s. Id. When Metal clad soug ht to avoid arbitration, Ve ntana a rgued that Meta l clad sh ou ld be e qu ita

bly e sto pp e d b e c a

us e Me ta lc la d s ou g ht t o both en fo rc e the a g ree ment and re pudiate the a rbitration provision. Id. at 1713. The c ourt agr eed, holdingthat the claims wer e “intimately

founded in and intertwined w ith” the underlying c ontrac t, and it would be unfa ir to allow Metalcla d to a v o i d p r o v i s i o n s i n t h e s am e a g r e e m e n t i t s o u g h tto enfor ce. See id. a t 1717 . “A no the r m a xim of jur isp ru de nc e is rele vant her e . . . ‘H e who take s the bene fit must bear the burden.’ ” Id. at 1718–19.
B y c on tr a st, in t

his c a se , Pl a int if

fs do no t se e k to simult ane ou sly

inv ok e the dutie s and

ob li gatio ns of

To y ota under the Purchase Ag ree ment, as it has none, while se eking to avoid ar

bitration. Thus, the inequities that the doctrine of e qu ita ble e sto pp e l is de sig ne d to a dd re ss a re no t pr e se nt.
III
. F ina lly , T oyota

argue s th a t th e dis tr ic t c ourt e rr e d in fi nd ingthat T oyota

wa ive d a

ny ri g ht i t ma

y have ha d to compel arbitration. Be cause we find that Toy ota has no rig ht to compel ar

bitration in the prese nt case , we ne ed not consider the issue of wa iver.

CO NC LU SION
We c on c lude that

To y ota may no t c omp e l Pla int if

fs to arb itr a te the ir

c la ims . T he dis tr ic t c ourt ha d th e a uth or ity toKRAM ER V
. T OYOTA M O T O R C O RP
.

26
de c ide wh e the r T oyota , a no ns ig nator

y to t he Pur c ha se Ag ree ments, may

compel ar

bitration. Furthe r, we discern no rea son t h at the Plaintiffs should be equitably estopped fr om avoiding arbitration in thi s case
. AF F IRMED.