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COBLENTZ PATCH DUFFY & BASS LLP
One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500
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JONATHAN R. BASS (State Bar No. 75779)
LAUREN S. KOWAL (State Bar No. 224976)
SKYE LANGS (State Bar No. 287908)
JAMES F. MCKEE (State Bar No. 324781)
COBLENTZ PATCH DUFFY & BASS LLP
One Montgomery Street, Suite 3000
San Francisco, California 94104-5500
Telephone: 415.391.4800
Facsimile: 415.989.1663
Email: ef-jrb@cpdb.com
ef-Isk@cpdb.com
ef-sdl@cpdb.com
ef-jfm@cpdb.com
Attorneys for Defendants and Respondents
SAN FRANCISCO FORTY NINERS,
LIMITED and SAN FRANCISCO FORTY
NINERS, LLC
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
04/08/2019
Clerk of the Court
BY: EDNALEEN ALEGRE
Deputy Clerk
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
MR. PETER MIEULL, as Trustee for the
Franklin Mieuli Trust,
Plaintiff and Petitioner,
v.
SAN FRANCISCO FORTY NINERS
LIMITED; SAN FRANCISCO 49ERS LLC;
and DOES 1-10,
Defendants and Respondents.
AND RELATED ACTIONS
12491.004 4839-7168-0143.7
Lead Case No. CGC-12-517917
(Consolidated with case nos. CPF-12-511894
and CPF-18-516338)
ASSIGNED FOR ALL PURPOSES TO:
Hon. Mary E. Wiss, Dept. 305
SUR-REPLY IN OPPOSITION TO
AMENDED PETITION TO VACATE
ARBITRATION AWARD
Date: April 10, 2019
Time: 9:30 a.m.
Department: 305
Judge: Mary E. Wiss
Action Filed: February 2, 2012
1 CGC-12-517917
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TABLE OF CONTENTS
INTRODUCTION.
ARGUMENT
1. THE TRUST HAS OFFERED NO EXCUSE FOR ITS FAILURE TO
RAISE ITS "JURISDICTIONAL" ARGUMENTS IN 2012.0... ecesseceeeeeeeeeteeees 5
IL. THE TRUST'S "SUBJECT MATTER JURISDICTION" ARGUMENT,
NOT HAVING BEEN RAISED IN THE OPENING BRIEF, SHOULD
NOT BE CONSIDERED. .....cccsssssessessseessesesseesecssesscsresscsneeneeneesesseasecaserscesseseaneanensees 7
I. THE TRUST'S NEW "SUBJECT MATTER JURISDICTION"
ARGUMENT IS MERITLESS. ......:ssesseessesseesssseesesseessessenesnesseeneessssseressessesssenssneanes 8
12491.004 4839-7168-0143.7 2 CGC-12-517917
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TABLE OF AUTHORITIES
Page(s)
Cases
Bell v. H.F. Cox, Inc.
(2012) 209 Cal. App.4th 62.0... ccecccececsnessesssecssecsseessessseessesssessuesssessuessuesssesasessessneesneeaeeesneesetene 7
Cummings v. Future Nissan
(2005) 128 Cal. App.4th 321 .ccccccscsssccsssssecsssssessensssssscnssssssuevesessssseseceeuseseseseaseseseed 6.7, 9, 12
Douglass v. Serenivision, Inc.
(2018) 20 Cal. App.5th 376, 385
ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP
(2017) 9 Cal.App.5th 885, 907..
Eternity Investments, Inc. v. Brown
(2007) 151 Cal. App.4th 739........cccsccsesssesecseessessessessessesneesesssesessussnssnessessesssssessecesersssnsnerenee 8,9, 11
Freeman v. State Farm Mut. Auto In
(1975) 14 Cal.3d 473...
Jenks v. DLA Piper Rudnick Gray Cary US LLP
(2015) 243 CalApp.4th Deccccsecsssssssssssesssessssssessssssssseasessesssasesesssnsesseesssssssteseseseee 7,9, 10, 13
Law Offices of lan Herzog v. Law Offices of Joseph M. Fredrics
(1998) 61 Cal. App.4th 672...
MacDonald v. San Diego State Universit
(1980) 111 Cal.App.3d 67
Moncharsh y. Heily & Blase
(1992) BC al ARM oa adadadadadatalatatcbendasndadadadadatatatabslcbalcudedadafadalatatabatabandodadadatadatalabatalahchdecadads 5, 6,9
National Union Fire Insurance Co. y. Stites Professional Law Corp.
(1991) 235 Cal.App.3d 1718
Pearson Dental Supplies, Inc. v. Superior Court
(2010) 48 Cal.4th 665...0..cccccsceseeeesessecseeenesetessssessessesssessesessersnsssensensssessessseseseessessssesneeeesy 6, 12
People v. JTH Tax, Inc.
reer A tee eeeeeeccee errata dhdedndadalielebalalshsbandadedaledalatathebaeabadhdedulatetata af
Reichhardt v. Hoffman
(1997) 52 Cal App.4th 754... cccecssesssesssecssesssessssessesssesssessussssssssssssessseansessesessscsusesnsesnaesnecsneesnens® 7
Saffer v. JP Morgan Chase Bank, N.A.
(2014) 225 Cal. App.4th 1239... cccccecsecsecssesssesssecsseesneessessarssusssssssnessesssueseressesseeaneeseeaneesenese 8
12491.004 4839-7168-0143.7 3 CGC-12-517917
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Tellez v. Rich Voss Trucking, Inc.
(2015) 240 Cal. App.4th 1052....ccccsecsecsesssecssesssecsnessneessessssssssesssssussnuesssssesesseeaseeaneesnseaneenseess 7
United Firefighters of Los Angeles v. City of Los Angeles
(1991) 231 Cal.App.3d 1576...
Statutes & Rules
Code of Civil Procedure
QTIDB DDI i Ll tetahabdododedadadadatalatabshdhdedodededadadalatabatsbshdndedodedotatetatstabatsbandodsdedelolatstatalabahshdadodadadadeta 12
Code of Civil Procedure § 1286.2(a)(4)..ccccccesesseseseseesessssceresesesssessseseeaesseessessesesssersseenesesesseeresennes 5
12491.004 4839-7168-0143.7 4 CGC-12-517917
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INTRODUCTION
The Mieuli Trust's Reply Memorandum exceeds the Court-imposed 30-page limit.
Compounding its disregard of the rules, the Trust uses those excess pages to advance arguments
not presented in its Opening brief. In their Opposition brief, the 49ers pointed out that the Trust
had forfeited its arbitrability arguments (which the Trust erroneously labelled "excess of powers”
arguments)' by failing to raise them at the appropriate stage of the proceedings. The Trust now
claims that its arguments are not susceptible to waiver or forfeiture, because they go to the
arbitrator's "subject matter jurisdiction." The Court granted the 49ers leave to file this sur-reply to
address this argument.
ARGUMENT
I. THE TRUST HAS OFFERED NO EXCUSE FOR ITS FAILURE TO RAISE ITS
"JURISDICTIONAL" ARGUMENTS IN 2012.
In its opening brief in support of its amended petition to vacate the arbitration award, the
Trust argued that the dispute between the 49ers and the Trust was not subject to arbitration by the
National Football League ("NFL") because: (1) it never consented to the arbitration agreement in
the NFL Bylaws; (2) the Partnership Agreement did not properly incorporate by reference the NFL
Bylaws and dispute resolution guidelines; (3) the NFL arbitration agreement was unconscionable;
(4) the dispute was outside the scope of the arbitration agreement because the Trust was not an
“ownership interest holder;" (5) the NFL Bylaws only permit arbitration of disputes between two
owners; and (6) the NFL Commissioner improperly delegated his authority to hear the dispute to
Arbitrator Moyer. Aside from the fact that none of these issues are cognizable on a petition to
vacate an arbitration award, the Trust forfeited them by failing to present them in 2012, in
connection with the motion to compel arbitration.
' The Trust's arguments did not qualify as "excess of powers" arguments under Code of Civil
Procedure section 1286.2(a)(4). The Court decreed that the parties' disputes were "fully
arbitrable" before the NFL, and the NFL Arbitrator proceeded to preside over the dispute.
(Opposition, at 19.) The Arbitrator did not "exceed his powers" by presiding over the matters that
the Court compelled the parties to arbitrate. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 28
(arbitrator could not “exceed his powers" when he did no more than decide the dispute presented
to him).)
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Each of these "jurisdictional" arguments relates to the threshold determination of whether
the parties’ dispute was subject to arbitration before the NFL Arbitrator in the first place.
(Opposition at 24-26.) But that determination was not made by the Arbitrator. It was made by
this Court in December 2012, on the 49ers' motion to compel arbitration. And it was the Trust
that demanded that the Court, and not the Arbitrator, decide that threshold issue. As the Trust
argued at the time, it would be "nonsensical" to "suggest[] that the parties are required to first
expend significant resources, and then challenge the arbitrator's jurisdiction only after the
arbitration is complete .. . ."" (Opposition Exh. DD’ at p. 4.)
The Court, after considering the parties' arguments (which were different from the ones the
Trust is now raising in the Petition),* determined that the arbitration provisions in the NFL
Bylaws, which the Court found had been "incorporated by reference" into the parties’ partnership
agreement, were "fully and legally enforceable with respect to the entirety of the subject disputes,"
and that "no grounds exist for non-enforcement or revocation of the agreement to arbitrate."
(Opposition Exh. II at Exh. A (Reporter's Transcript) pgs. 20:14-21:8.). The dispute between the
parties was thus "fully arbitrable" before the NFL. (dd. at 25:8-16.)
Now, more than five years later, the Trust is challenging the Court's determination that the
parties' dispute was subject to NFL Arbitration — albeit on grounds different from those that it
raised in opposition to the motion to compel arbitration. The Trust forfeited its new arguments by
failing to raise them in opposition to the motion to compel arbitration (or at any other time during
the ensuing years that the parties arbitrated the dispute). (See, e.g., Moncharsh, 3 Cal.4th at 30-31;
Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 672; Cummings v. Future
All Opposition Exhibit cites are to the Declaration of Skye Langs in Support of the 49ers!
Response to the Amended Petition To Vacate the Arbitration Award.
* The Trust's new arguments are not just new, they are incompatible with the arguments it made to
the Court in 2012. The Trust previously argued that that the 49ers' alleged failure to treat the Trust
as a full partner, following the Trust's exercise of its liquidation option, meant that the Trust was
no longer bound by the arbitration provision in the NFL Bylaws. (Opposition Exh. DD, at 2
(contending the 49ers' treatment of Mr. Mieuli "takes this dispute outside the four corners of the
NFL Constitution and Bylaws.").) The Trust is now arguing that it was never bound by the NFL
Bylaws — at any time during the history of its over fifty-year ownership of its interest in the 49ers
— because it allegedly never signed a document agreeing to be bound by them. (Reply at 21-30.)
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Nissan (2005) 128 Cal.App.4th 321, 323; ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP
(2017) 9 Cal.App.5th 885, 907; Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243
Cal.App.4th 1, 9).
"Those who are aware of a basis for finding the arbitration invalid must raise it at the
outset or as soon as they learn of it so that prompt judicial resolution may take place before
wasting the time of the adjudicator(s) and the parties." (Cummings, 128 Cal.App.4th at 328-29.)
The Trust offers no excuse for having failed to raise these new grounds for objecting to the
arbitration in response to the motion to compel arbitration in 2012. It was in possession of all of
the facts underlying its new arguments long before it opposed the motion to compel arbitration.
(Opposition at 28:5-14.) There has been no change in the law. Instead, the Trust makes the
absurd claim (for the first time in its Reply brief) that it was not required to raise these arguments
in response to 49ers' motion to compel arbitration, or at any other time, because those arguments
purportedly go the Arbitrator's "subject matter jurisdiction," and cannot be waived. This is a
frankly preposterous argument.
Il. THE TRUST'S "SUBJECT MATTER JURISDICTION" ARGUMENT, NOT
HAVING BEEN RAISED IN THE OPENING BRIEF, SHOULD NOT BE
CONSIDERED.
Although there is no merit to the Trust's belated "subject matter jurisdiction" argument, the
Court need not consider the substance of that argument at all. It is fundamental that "points raised
in the reply brief for the first time will not be considered, unless good reason is shown for failure
to present them before." (Reichhardt v. Hoffman (1997) 52 Cal.App.4th 754, 764 (citing cases);
accord Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal.App.4th 1052, 1066; People v. JTH Tax,
Inc. (2013) 212 Cal.App.4th 1219, 1232; Bell v. HF. Cox, Inc. (2012) 209 Cal.App.4th 62, 79
n.6.)
The Trust's opening brief failed to address the fact that the Petition's new objections to
arbitration had not been raised in opposition to the 2012 motion to compel arbitration, or at any
time during the pendency of the arbitration.’ Nor did the Trust suggest in its opening brief that
4 Indeed, MacDonald v. San Diego State University (1980) 111 Cal.App.3d 67, which the Trust
(footnote continued)
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those arguments were immune from waiver or forfeiture. The Court should disregard the Trust's
new "subject matter jurisdiction" argument raised for the first time in its Reply brief.
Il. THE TRUST'S NEW "SUBJECT MATTER JURISDICTION" ARGUMENT IS
MERITLES:
The Trust's "subject matter jurisdiction" argument actually has nothing to do with subject
matter jurisdiction, which is a judicial, not an arbitral, doctrine. "Subject matter jurisdiction ... is
the power of the court over a cause of action or to act in a particular way." (Saffer v. JP Morgan
Chase Bank, N.A. (2014) 225 Cal.App.4th 1239, 1248 (emphasis added).) A court's subject matter
jurisdiction cannot be "conferred by consent, waiver, agreement, acquiescence, or estoppel.” (/d.)
No equivalent restriction exists in private, contractual arbitration. Indeed, the essence of
contractual arbitration is that the parties themselves confer authority on the arbitrator through their
consent. (See, e.g., Douglass v. Serenivision, Inc. (2018) 20 Cal.App.5th 376, 385.)
In Douglass, a party filed a petition to vacate an arbitration award after the limitations
period had expired. (/d. at 384.) Mr. Douglass asserted that, even though he missed the statutory
deadline, his arguments for vacating the arbitration award could not be waived because "[he was]
challenging the arbitrator's jurisdiction and such a jurisdictional challenge may be raised at any
time.” (dd. at 385.) The Court rejected that argument:
Of course, parties may not confer subject matter jurisdiction upon a court by
consent, waiver, or estoppel because our jurisdiction is defined by our Constitution
or our Legislature, not by litigants. By contrast, and as discussed more fully below,
the subject matter jurisdiction of an arbitrator is purely a product of contract,
which by definition turns on the parties’ mutual consent. To say that an arbitrator's
subject matter jurisdiction 'cannot be conferred by consent' is accordingly incorrect.
(Id. at 385 (internal citations omitted); accord Eternity Investments, Inc. v. Brown (2007) 151
Cal.App.4th 739, 747.)
The judicial system is a branch of government. It exercises the powers granted by, and is
subject to the limitations imposed by, constitutional and statutory law. Private arbitration derives
its authority from the parties themselves. The scope of an arbitrator's authority is, accordingly, not
"jurisdictional" in the way that courts employ that concept with respect to the scope of their own
now claims is "dispositive" on this issue, was not even cited in the Trust's opening brief.
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authority. Arguments going to the arbitrator's authority under a private contract are subject to
forfeiture or waiver. (/d. at 385; see also Brown, 151 Cal.App.4th at 747; Law Offices of Tan
Herzog v. Law Offices of Joseph M. Fredrics (1998) 61 Cal.App.4th 672, 678 ("While the statutes
permit the courts to compel arbitration based only on a written agreement, nothing prevented
Fredrics from waiving his rights under those provisions.").)
The Trust offers no support for the notion that its "jurisdictional" arguments are different
from, or more durable than, the arbitrability arguments that it concedes are forfeited if a party fails
to raise them in opposition to a petition to compel arbitration. The Trust attacks the arbitration
agreement for "lack of mutual assent," and under "the incorporation by reference doctrine" (Reply,
at 16), but it cannot identify any substantive distinction between those so-called "jurisdictional"
arguments and the argument that an arbitration agreement is void as unconscionable (Cummings,
128 Cal.App.4th at 323); that it is illegal (ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP
(2017) 9 Cal.App.Sth 885, 907); or that it cannot be enforced by a non-signatory (Jenks, 243
Cal.App.4th at 9). In each of those cases, the party forfeited its objection to arbitration by failing
to timely assert it. The Trust's "jurisdictional" arguments go to the same threshold question of
arbitrability — i.e., whether there is a valid and binding arbitration agreement that required the
Trust to arbitrate this dispute.
In 2012, after substantial briefing by the parties, the Court ruled that the Trust had agreed
to arbitrate these disputes pursuant to the NFL Bylaws. The Trust's failure to raise its
"jurisdictional" arguments in opposition to the motion to compel arbitration (or at any other time),
resulted in their forfeiture. (Moncharsh, 3 Cal.4th at 30-31 (objections to the enforceability of an
arbitration agreement must be raised with the Court before participating in the arbitration process);
Cummings, 128 Cal.App.4th at 328-29).°
Jenks is particularly instructive. The plaintiff in Jenks sued his former employer for
* The Trust suggests that the seminal case of Moncharsh is less than authoritative because it has
"been on the books for only twenty-seven years ...." (Reply, at 21.) It's unclear how long the
Trust believes a California Supreme Court case should be "on the books" before the lower courts
are required to follow it. Moncharsh has been repeatedly cited and discussed in cases involving
forfeiture of arguments going to arbitrability.
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violation of a termination agreement. (243 Cal.App.4th at 5-6.) He had signed an arbitration
agreement with his previous law firm, which had subsequently merged with DLA Piper, the entity
he was actually suing. DLA Piper itself was not a signatory to the arbitration agreement. (/d.)
The plaintiff in Jenks claimed he had not signed an arbitration agreement with the party seeking to
enforce that agreement. (/d.) Jenks held that the plaintiff had forfeited his argument about DLA
Piper's nonsignatory status by failing to raise it in opposition to a petition to compel arbitration.
(Id. at 9.)
All of the cases cited by the 49ers involved arguments that an arbitration agreement was
void, invalid, illegal, or otherwise unenforceable under contract law principles, just as the Trust is
now arguing. (Opposition at 26-30.) There is nothing special about the Trust's "jurisdictional"
argument, except for the misnomer the Trust attaches to it. It is subject to ordinary and well-
established rules of forfeiture.
The Trust's authorities are of no help to it. In National Union Fire Insurance Co. v. Stites
Professional Law Corp. (1991) 235 Cal.App.3d 1718, the Court vacated an arbitration award on
the ground that the arbitrator lacked "subject matter jurisdiction," even though there was no
indication that the argument had been previously raised before the arbitrator. (/d. at 1723-24.)
However, the issue was whether the arbitrator had statutory authority to hear the dispute, not
whether the dispute was within the scope of a private arbitration agreement. (/d. at 1726-27; see
Douglass, 20 Cal.App.Sth at 385). As explained in Douglass, questions involving the scope of a
dispute resolution procedure fixed by statute implicate traditional concepts of statutory subject
matter jurisdiction. (/d.) Those concepts are not implicated at all in the context of private,
contractual arbitration. (/d.)
The Court of Appeal that decided National Union has in fact twice disapproved of efforts
to extend its holding in the manner suggested by the Trust. First, in Douglass, the Second District
Court of Appeal expressly rejected the argument that challenges to an arbitrator's subject matter
jurisdiction cannot be waived. (Douglass, 20 Cal.App.Sth at 385-86.). It confirmed that National
Union is to be read narrowly, as "addressing the scope of an arbitrator's jurisdiction fixed by a
statute." (Id. (emphasis added).) "[T]o the extent [National Union] is read out of context to say
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that an arbitrator's subject matter jurisdiction cannot be enlarged by consent when that jurisdiction
is solely a matter of contract, we disagree with National Union." (Id. at 386; see also Eternity
Investments, Inc. v. Brown (2007) 151 Cal.App.4th 739, 747 ("National Union's reference to
‘subject matter jurisdiction’ was something of a misnomer. That term is used with respect to courts
of law: Parties cannot confer subject matter jurisdiction on a court by consent, waiver or
estoppel.
In MacDonald v. San Diego State University (1980) 111 Cal.App.3d 67, a professor
submitted a dispute with his university to a non-judicial grievance procedure established by state
law, (Id. at 70.) The university subsequently sought to vacate part of the ultimate grievance
resolution, arguing that the professor did not meet the statutory prerequisites for invoking the
grievance procedure. (/d. at 73-74.) In the portion relied on by the Trust, MacDonald observed
that the university's argument about the scope of the statutory grievance procedure at issue "relates
to subject matter jurisdiction which may be raised initially on appeal." (/d.) As in National
Union, however, MacDonald involved a dispute resolution mechanism established by state law,
not by contract. (Id. at 70; see Douglass, 20 Cal.App.5th at 385). MacDonald's observation about
"subject matter jurisdiction" is not applicable in the context of private, contractual arbitration.
(Douglass, 20 Cal.App.Sth at 385.) Indeed, all of the cases discussed herein that have addressed a
party's failure to raise the types of so-called "jurisdictional" arguments that the Trust is raising in
the context of contractual arbitration have determined that they are indeed subject to forfeiture.
United Firefighters of Los Angeles v. City of Los Angeles (1991) 231 Cal.App.3d 1576,
also relied on by the Trust, supports the 49ers' position. In that case, a firefighter and his union
invoked a grievance procedure against the City of Los Angeles that was provided for in the union's
contract with the City. (/d. at 1579-80.) The City had previously unsuccessfully opposed a
petition to compel arbitration, on the ground that the firefighter had no rights under the union
contract because he had been terminated. (/d. at 1580.) On appeal, the court rejected the
argument that the City was required to bring a petition to vacate the arbitration award in order to
preserve its initial objection to arbitration. To the contrary: "We think it clear . . . appellants are
not appealing the correctness of the award. Rather, they are attacking the authority of the trial
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court to compel them to submit the matter to arbitration. An order to compel arbitration is an
interlocutory order which is appealable only from the judgment confirming the arbitration award
[]." Cd. at 1581-82 (emphasis added).) As the 49ers have demonstrated, questions related to the
threshold determination of arbitrability are not reviewable by way of a petition to vacate an
arbitration award. (Opposition at 24-26.) Nor was there any issue of forfeiture in United
Firefighters; the City had preserved its argument by asserting it in opposition to a petition to
compel arbitration. (/d. at 1580.).
Finally, the Trust tacitly acknowledges that its unconscionability argument is subject to
forfeiture, but claims there was "no need to raise the unconscionability issue when the Trust
opposed the 49ers’ petition to compel ‘arbitration." (Reply, at 19-21.) Why not? The arbitration
agreement the Trust now contends is unconscionable is the same arbitration agreement that the
Court determined was enforceable. If the Trust believed the arbitration agreement was
unenforceable for any reason, the Trust had the opportunity, and the obligation, to raise its
arguments in opposition to the motion to compel arbitration, before the parties devoted several
years to arbitrating the dispute. (See Pearson Dental Supplies, 48 Cal 4th at 681
(unconscionability argument forfeited because "although plaintiff resisted defendant's petition to
compel arbitration, he did so on the grounds that defendant had waived the right to compel
arbitration, and had failed to present the arbitration agreement in an understandable form"); see
also Freeman vy. State Farm Mut. Auto Ins. (1975) 14 Cal.3d 473, 479-80 ("The clear purpose and
effect of section 1281.2 is to require the superior court to determine in advance whether there is a
duty to arbitrate the controversy which has arisen.").)
The Trust cannot point to a single case in which a court found that a party had not forfeited
a ground for objecting to arbitration ("jurisdictional" or otherwise) where the party had failed to
raise that objection in connection with a petition to compel arbitration. To the contrary, the courts
have invariably determined that "a party who knowingly participates in the arbitration process
without disclosing a ground for declaring it invalid is properly cast into the outer darkness of
forfeiture." (Cummings, 128 Cal.App.4th at 328-29 (plaintiff had forfeited her objections to
arbitration where she had previously opposed a motion to compel arbitration, but on different
12491.004 4839-7168-0143.7 12 CGC-12-517917
SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP
One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500
Fax 415.989.1663
415.391.4800
mn
grounds); Pearson Dental Supplies, 48 Cal.4th at 681 (unconscionability argument forfeited for
failure to raise it in opposition to petition to compel arbitration); Jenks, 243 Cal.App.4th at 9
(nonsignatory argument forfeited for failure to raise in opposition to petition to compel
arbitration).)
The Trust's characterization of its new arguments as unwaivable "subject matter
jurisdiction" arguments is specious.
DATED: April 8, 2019 COBLENTZ PATCH DUFFY & BASS LLP
By: /s/ Jonathan R. Bass
Jonathan R. Bass
Attorneys for Defendants and Respondents
SAN FRANCISCO FORTY NINERS,
LIMITED and SAN FRANCISCO FORTY
NINERS, LLC
12491.004 4839-7168-0143.7 13 CGC-12-517917
SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP
One Montoomery Street, Suite 3000, San FRANCISCO, CALIFORNIA 94104-5500
+ Fax 415.989.1663
415.391.4800
Ce IN DH RW YD me
Ny oN RW NY NY N NN YD Be Be ee ee ee ee
oa Am FB Oo Nh Be SF BO ke AA aA Rk OH STS
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO
At the time of service, I was over 18 years of age and not a party to this action. I am
employed in the County of San Francisco, State of California. My business address is One
Montgomery Street, Suite 3000, San Francisco, CA 94104-5500.
On April 8, 2019, I served true copies of the following document(s) described as
SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE
ARBITRATION AWARD
on the interested parties in this action as follows:
Robert R. Moore, Esq. °
Michael J. Betz, Esq.
Alexander J. Doherty, Esq.
Grayson (Trey) W. Marshall III, Esq.
Allen, Matkins, Leck, Gamble, Mallory &
Natsis, LLP
Three Embarcadero Center, 12th Floor
San Francisco,.CA 94111-4074
Tel: (415) 837-1515
Fax: (415) 837-1516
Email: rmoore@allenmatkins.com
mbetz@allenmatkins.com
adoherty@allenmatkins.com
tmarshall@allenmatkins.com
BY ELECTRONIC SERVICE: I electronically filed the document(s) with the Clerk of the
Court by using the File & ServeXpress system. Participants in the case who are registered users
will be served by the File & ServeXpress system. Participants in the case who are not registered
users will be served by mail or by other means permitted by the court rules.
BY MESSENGER SERVICE: I enclosed said document(s) in an envelope or package,
addressed as shown below, and dispatched a messenger from my place of business with
instructions to hand-carry the above and make delivery to the following during normal business
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I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Executed on April 8, 2019, at San Francisco, California.
WAM.
Mark W. Allen
12491.004 4839-7168-0143.7 14 CGC-12-517917
SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARD
Preview
COBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND JONATHAN R. BASS (State Bar No. 75779) LAUREN S. KOWAL (State Bar No. 224976) SKYE LANGS (State Bar No. 287908) JAMES F. MCKEE (State Bar No. 324781) COBLENTZ PATCH DUFFY & BASS LLP One Montgomery Street, Suite 3000 San Francisco, California 94104-5500 Telephone: 415.391.4800 Facsimile: 415.989.1663 Email: ef-jrb@cpdb.com ef-Isk@cpdb.com ef-sdl@cpdb.com ef-jfm@cpdb.com Attorneys for Defendants and Respondents SAN FRANCISCO FORTY NINERS, LIMITED and SAN FRANCISCO FORTY NINERS, LLC ELECTRONICALLY FILED Superior Court of California, County of San Francisco 04/08/2019 Clerk of the Court BY: EDNALEEN ALEGRE Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO MR. PETER MIEULL, as Trustee for the Franklin Mieuli Trust, Plaintiff and Petitioner, v. SAN FRANCISCO FORTY NINERS LIMITED; SAN FRANCISCO 49ERS LLC; and DOES 1-10, Defendants and Respondents. AND RELATED ACTIONS 12491.004 4839-7168-0143.7 Lead Case No. CGC-12-517917 (Consolidated with case nos. CPF-12-511894 and CPF-18-516338) ASSIGNED FOR ALL PURPOSES TO: Hon. Mary E. Wiss, Dept. 305 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARD Date: April 10, 2019 Time: 9:30 a.m. Department: 305 Judge: Mary E. Wiss Action Filed: February 2, 2012 1 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 TABLE OF CONTENTS INTRODUCTION. ARGUMENT 1. THE TRUST HAS OFFERED NO EXCUSE FOR ITS FAILURE TO RAISE ITS "JURISDICTIONAL" ARGUMENTS IN 2012.0... ecesseceeeeeeeeeteeees 5 IL. THE TRUST'S "SUBJECT MATTER JURISDICTION" ARGUMENT, NOT HAVING BEEN RAISED IN THE OPENING BRIEF, SHOULD NOT BE CONSIDERED. .....cccsssssessessseessesesseesecssesscsresscsneeneeneesesseasecaserscesseseaneanensees 7 I. THE TRUST'S NEW "SUBJECT MATTER JURISDICTION" ARGUMENT IS MERITLESS. ......:ssesseessesseesssseesesseessessenesnesseeneessssseressessesssenssneanes 8 12491.004 4839-7168-0143.7 2 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn TABLE OF AUTHORITIES Page(s) Cases Bell v. H.F. Cox, Inc. (2012) 209 Cal. App.4th 62.0... ccecccececsnessesssecssecsseessessseessesssessuesssessuessuesssesasessessneesneeaeeesneesetene 7 Cummings v. Future Nissan (2005) 128 Cal. App.4th 321 .ccccccscsssccsssssecsssssessensssssscnssssssuevesessssseseceeuseseseseaseseseed 6.7, 9, 12 Douglass v. Serenivision, Inc. (2018) 20 Cal. App.5th 376, 385 ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.5th 885, 907.. Eternity Investments, Inc. v. Brown (2007) 151 Cal. App.4th 739........cccsccsesssesecseessessessessessesneesesssesessussnssnessessesssssessecesersssnsnerenee 8,9, 11 Freeman v. State Farm Mut. Auto In (1975) 14 Cal.3d 473... Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243 CalApp.4th Deccccsecsssssssssssesssessssssessssssssseasessesssasesesssnsesseesssssssteseseseee 7,9, 10, 13 Law Offices of lan Herzog v. Law Offices of Joseph M. Fredrics (1998) 61 Cal. App.4th 672... MacDonald v. San Diego State Universit (1980) 111 Cal.App.3d 67 Moncharsh y. Heily & Blase (1992) BC al ARM oa adadadadadatalatatcbendasndadadadadatatatabslcbalcudedadafadalatatabatabandodadadatadatalabatalahchdecadads 5, 6,9 National Union Fire Insurance Co. y. Stites Professional Law Corp. (1991) 235 Cal.App.3d 1718 Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665...0..cccccsceseeeesessecseeenesetessssessessesssessesessersnsssensensssessessseseseessessssesneeeesy 6, 12 People v. JTH Tax, Inc. reer A tee eeeeeeccee errata dhdedndadalielebalalshsbandadedaledalatathebaeabadhdedulatetata af Reichhardt v. Hoffman (1997) 52 Cal App.4th 754... cccecssesssesssecssesssessssessesssesssessussssssssssssessseansessesessscsusesnsesnaesnecsneesnens® 7 Saffer v. JP Morgan Chase Bank, N.A. (2014) 225 Cal. App.4th 1239... cccccecsecsecssesssesssecsseesneessessarssusssssssnessesssueseressesseeaneeseeaneesenese 8 12491.004 4839-7168-0143.7 3 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal. App.4th 1052....ccccsecsecsesssecssesssecsnessneessessssssssesssssussnuesssssesesseeaseeaneesnseaneenseess 7 United Firefighters of Los Angeles v. City of Los Angeles (1991) 231 Cal.App.3d 1576... Statutes & Rules Code of Civil Procedure QTIDB DDI i Ll tetahabdododedadadadatalatabshdhdedodededadadalatabatsbshdndedodedotatetatstabatsbandodsdedelolatstatalabahshdadodadadadeta 12 Code of Civil Procedure § 1286.2(a)(4)..ccccccesesseseseseesessssceresesesssessseseeaesseessessesesssersseenesesesseeresennes 5 12491.004 4839-7168-0143.7 4 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND INTRODUCTION The Mieuli Trust's Reply Memorandum exceeds the Court-imposed 30-page limit. Compounding its disregard of the rules, the Trust uses those excess pages to advance arguments not presented in its Opening brief. In their Opposition brief, the 49ers pointed out that the Trust had forfeited its arbitrability arguments (which the Trust erroneously labelled "excess of powers” arguments)' by failing to raise them at the appropriate stage of the proceedings. The Trust now claims that its arguments are not susceptible to waiver or forfeiture, because they go to the arbitrator's "subject matter jurisdiction." The Court granted the 49ers leave to file this sur-reply to address this argument. ARGUMENT I. THE TRUST HAS OFFERED NO EXCUSE FOR ITS FAILURE TO RAISE ITS "JURISDICTIONAL" ARGUMENTS IN 2012. In its opening brief in support of its amended petition to vacate the arbitration award, the Trust argued that the dispute between the 49ers and the Trust was not subject to arbitration by the National Football League ("NFL") because: (1) it never consented to the arbitration agreement in the NFL Bylaws; (2) the Partnership Agreement did not properly incorporate by reference the NFL Bylaws and dispute resolution guidelines; (3) the NFL arbitration agreement was unconscionable; (4) the dispute was outside the scope of the arbitration agreement because the Trust was not an “ownership interest holder;" (5) the NFL Bylaws only permit arbitration of disputes between two owners; and (6) the NFL Commissioner improperly delegated his authority to hear the dispute to Arbitrator Moyer. Aside from the fact that none of these issues are cognizable on a petition to vacate an arbitration award, the Trust forfeited them by failing to present them in 2012, in connection with the motion to compel arbitration. ' The Trust's arguments did not qualify as "excess of powers" arguments under Code of Civil Procedure section 1286.2(a)(4). The Court decreed that the parties' disputes were "fully arbitrable" before the NFL, and the NFL Arbitrator proceeded to preside over the dispute. (Opposition, at 19.) The Arbitrator did not "exceed his powers" by presiding over the matters that the Court compelled the parties to arbitrate. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 28 (arbitrator could not “exceed his powers" when he did no more than decide the dispute presented to him).) 12491.004 4839-7168-0143.7 5 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND Each of these "jurisdictional" arguments relates to the threshold determination of whether the parties’ dispute was subject to arbitration before the NFL Arbitrator in the first place. (Opposition at 24-26.) But that determination was not made by the Arbitrator. It was made by this Court in December 2012, on the 49ers' motion to compel arbitration. And it was the Trust that demanded that the Court, and not the Arbitrator, decide that threshold issue. As the Trust argued at the time, it would be "nonsensical" to "suggest[] that the parties are required to first expend significant resources, and then challenge the arbitrator's jurisdiction only after the arbitration is complete .. . ."" (Opposition Exh. DD’ at p. 4.) The Court, after considering the parties' arguments (which were different from the ones the Trust is now raising in the Petition),* determined that the arbitration provisions in the NFL Bylaws, which the Court found had been "incorporated by reference" into the parties’ partnership agreement, were "fully and legally enforceable with respect to the entirety of the subject disputes," and that "no grounds exist for non-enforcement or revocation of the agreement to arbitrate." (Opposition Exh. II at Exh. A (Reporter's Transcript) pgs. 20:14-21:8.). The dispute between the parties was thus "fully arbitrable" before the NFL. (dd. at 25:8-16.) Now, more than five years later, the Trust is challenging the Court's determination that the parties' dispute was subject to NFL Arbitration — albeit on grounds different from those that it raised in opposition to the motion to compel arbitration. The Trust forfeited its new arguments by failing to raise them in opposition to the motion to compel arbitration (or at any other time during the ensuing years that the parties arbitrated the dispute). (See, e.g., Moncharsh, 3 Cal.4th at 30-31; Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 672; Cummings v. Future All Opposition Exhibit cites are to the Declaration of Skye Langs in Support of the 49ers! Response to the Amended Petition To Vacate the Arbitration Award. * The Trust's new arguments are not just new, they are incompatible with the arguments it made to the Court in 2012. The Trust previously argued that that the 49ers' alleged failure to treat the Trust as a full partner, following the Trust's exercise of its liquidation option, meant that the Trust was no longer bound by the arbitration provision in the NFL Bylaws. (Opposition Exh. DD, at 2 (contending the 49ers' treatment of Mr. Mieuli "takes this dispute outside the four corners of the NFL Constitution and Bylaws.").) The Trust is now arguing that it was never bound by the NFL Bylaws — at any time during the history of its over fifty-year ownership of its interest in the 49ers — because it allegedly never signed a document agreeing to be bound by them. (Reply at 21-30.) 12491.004 4839-7168-0143.7 6 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND Nissan (2005) 128 Cal.App.4th 321, 323; ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.5th 885, 907; Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 9). "Those who are aware of a basis for finding the arbitration invalid must raise it at the outset or as soon as they learn of it so that prompt judicial resolution may take place before wasting the time of the adjudicator(s) and the parties." (Cummings, 128 Cal.App.4th at 328-29.) The Trust offers no excuse for having failed to raise these new grounds for objecting to the arbitration in response to the motion to compel arbitration in 2012. It was in possession of all of the facts underlying its new arguments long before it opposed the motion to compel arbitration. (Opposition at 28:5-14.) There has been no change in the law. Instead, the Trust makes the absurd claim (for the first time in its Reply brief) that it was not required to raise these arguments in response to 49ers' motion to compel arbitration, or at any other time, because those arguments purportedly go the Arbitrator's "subject matter jurisdiction," and cannot be waived. This is a frankly preposterous argument. Il. THE TRUST'S "SUBJECT MATTER JURISDICTION" ARGUMENT, NOT HAVING BEEN RAISED IN THE OPENING BRIEF, SHOULD NOT BE CONSIDERED. Although there is no merit to the Trust's belated "subject matter jurisdiction" argument, the Court need not consider the substance of that argument at all. It is fundamental that "points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before." (Reichhardt v. Hoffman (1997) 52 Cal.App.4th 754, 764 (citing cases); accord Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal.App.4th 1052, 1066; People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1232; Bell v. HF. Cox, Inc. (2012) 209 Cal.App.4th 62, 79 n.6.) The Trust's opening brief failed to address the fact that the Petition's new objections to arbitration had not been raised in opposition to the 2012 motion to compel arbitration, or at any time during the pendency of the arbitration.’ Nor did the Trust suggest in its opening brief that 4 Indeed, MacDonald v. San Diego State University (1980) 111 Cal.App.3d 67, which the Trust (footnote continued) 12491.004 4839-7168-0143.7 7 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND those arguments were immune from waiver or forfeiture. The Court should disregard the Trust's new "subject matter jurisdiction" argument raised for the first time in its Reply brief. Il. THE TRUST'S NEW "SUBJECT MATTER JURISDICTION" ARGUMENT IS MERITLES: The Trust's "subject matter jurisdiction" argument actually has nothing to do with subject matter jurisdiction, which is a judicial, not an arbitral, doctrine. "Subject matter jurisdiction ... is the power of the court over a cause of action or to act in a particular way." (Saffer v. JP Morgan Chase Bank, N.A. (2014) 225 Cal.App.4th 1239, 1248 (emphasis added).) A court's subject matter jurisdiction cannot be "conferred by consent, waiver, agreement, acquiescence, or estoppel.” (/d.) No equivalent restriction exists in private, contractual arbitration. Indeed, the essence of contractual arbitration is that the parties themselves confer authority on the arbitrator through their consent. (See, e.g., Douglass v. Serenivision, Inc. (2018) 20 Cal.App.5th 376, 385.) In Douglass, a party filed a petition to vacate an arbitration award after the limitations period had expired. (/d. at 384.) Mr. Douglass asserted that, even though he missed the statutory deadline, his arguments for vacating the arbitration award could not be waived because "[he was] challenging the arbitrator's jurisdiction and such a jurisdictional challenge may be raised at any time.” (dd. at 385.) The Court rejected that argument: Of course, parties may not confer subject matter jurisdiction upon a court by consent, waiver, or estoppel because our jurisdiction is defined by our Constitution or our Legislature, not by litigants. By contrast, and as discussed more fully below, the subject matter jurisdiction of an arbitrator is purely a product of contract, which by definition turns on the parties’ mutual consent. To say that an arbitrator's subject matter jurisdiction 'cannot be conferred by consent' is accordingly incorrect. (Id. at 385 (internal citations omitted); accord Eternity Investments, Inc. v. Brown (2007) 151 Cal.App.4th 739, 747.) The judicial system is a branch of government. It exercises the powers granted by, and is subject to the limitations imposed by, constitutional and statutory law. Private arbitration derives its authority from the parties themselves. The scope of an arbitrator's authority is, accordingly, not "jurisdictional" in the way that courts employ that concept with respect to the scope of their own now claims is "dispositive" on this issue, was not even cited in the Trust's opening brief. 12491.004 4839-7168-0143.7 8 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn Ce IND authority. Arguments going to the arbitrator's authority under a private contract are subject to forfeiture or waiver. (/d. at 385; see also Brown, 151 Cal.App.4th at 747; Law Offices of Tan Herzog v. Law Offices of Joseph M. Fredrics (1998) 61 Cal.App.4th 672, 678 ("While the statutes permit the courts to compel arbitration based only on a written agreement, nothing prevented Fredrics from waiving his rights under those provisions.").) The Trust offers no support for the notion that its "jurisdictional" arguments are different from, or more durable than, the arbitrability arguments that it concedes are forfeited if a party fails to raise them in opposition to a petition to compel arbitration. The Trust attacks the arbitration agreement for "lack of mutual assent," and under "the incorporation by reference doctrine" (Reply, at 16), but it cannot identify any substantive distinction between those so-called "jurisdictional" arguments and the argument that an arbitration agreement is void as unconscionable (Cummings, 128 Cal.App.4th at 323); that it is illegal (ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.Sth 885, 907); or that it cannot be enforced by a non-signatory (Jenks, 243 Cal.App.4th at 9). In each of those cases, the party forfeited its objection to arbitration by failing to timely assert it. The Trust's "jurisdictional" arguments go to the same threshold question of arbitrability — i.e., whether there is a valid and binding arbitration agreement that required the Trust to arbitrate this dispute. In 2012, after substantial briefing by the parties, the Court ruled that the Trust had agreed to arbitrate these disputes pursuant to the NFL Bylaws. The Trust's failure to raise its "jurisdictional" arguments in opposition to the motion to compel arbitration (or at any other time), resulted in their forfeiture. (Moncharsh, 3 Cal.4th at 30-31 (objections to the enforceability of an arbitration agreement must be raised with the Court before participating in the arbitration process); Cummings, 128 Cal.App.4th at 328-29).° Jenks is particularly instructive. The plaintiff in Jenks sued his former employer for * The Trust suggests that the seminal case of Moncharsh is less than authoritative because it has "been on the books for only twenty-seven years ...." (Reply, at 21.) It's unclear how long the Trust believes a California Supreme Court case should be "on the books" before the lower courts are required to follow it. Moncharsh has been repeatedly cited and discussed in cases involving forfeiture of arguments going to arbitrability. 12491.004 4839-7168-0143.7 9 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn violation of a termination agreement. (243 Cal.App.4th at 5-6.) He had signed an arbitration agreement with his previous law firm, which had subsequently merged with DLA Piper, the entity he was actually suing. DLA Piper itself was not a signatory to the arbitration agreement. (/d.) The plaintiff in Jenks claimed he had not signed an arbitration agreement with the party seeking to enforce that agreement. (/d.) Jenks held that the plaintiff had forfeited his argument about DLA Piper's nonsignatory status by failing to raise it in opposition to a petition to compel arbitration. (Id. at 9.) All of the cases cited by the 49ers involved arguments that an arbitration agreement was void, invalid, illegal, or otherwise unenforceable under contract law principles, just as the Trust is now arguing. (Opposition at 26-30.) There is nothing special about the Trust's "jurisdictional" argument, except for the misnomer the Trust attaches to it. It is subject to ordinary and well- established rules of forfeiture. The Trust's authorities are of no help to it. In National Union Fire Insurance Co. v. Stites Professional Law Corp. (1991) 235 Cal.App.3d 1718, the Court vacated an arbitration award on the ground that the arbitrator lacked "subject matter jurisdiction," even though there was no indication that the argument had been previously raised before the arbitrator. (/d. at 1723-24.) However, the issue was whether the arbitrator had statutory authority to hear the dispute, not whether the dispute was within the scope of a private arbitration agreement. (/d. at 1726-27; see Douglass, 20 Cal.App.Sth at 385). As explained in Douglass, questions involving the scope of a dispute resolution procedure fixed by statute implicate traditional concepts of statutory subject matter jurisdiction. (/d.) Those concepts are not implicated at all in the context of private, contractual arbitration. (/d.) The Court of Appeal that decided National Union has in fact twice disapproved of efforts to extend its holding in the manner suggested by the Trust. First, in Douglass, the Second District Court of Appeal expressly rejected the argument that challenges to an arbitrator's subject matter jurisdiction cannot be waived. (Douglass, 20 Cal.App.Sth at 385-86.). It confirmed that National Union is to be read narrowly, as "addressing the scope of an arbitrator's jurisdiction fixed by a statute." (Id. (emphasis added).) "[T]o the extent [National Union] is read out of context to say 12491.004 4839-7168-0143.7 10 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 that an arbitrator's subject matter jurisdiction cannot be enlarged by consent when that jurisdiction is solely a matter of contract, we disagree with National Union." (Id. at 386; see also Eternity Investments, Inc. v. Brown (2007) 151 Cal.App.4th 739, 747 ("National Union's reference to ‘subject matter jurisdiction’ was something of a misnomer. That term is used with respect to courts of law: Parties cannot confer subject matter jurisdiction on a court by consent, waiver or estoppel. In MacDonald v. San Diego State University (1980) 111 Cal.App.3d 67, a professor submitted a dispute with his university to a non-judicial grievance procedure established by state law, (Id. at 70.) The university subsequently sought to vacate part of the ultimate grievance resolution, arguing that the professor did not meet the statutory prerequisites for invoking the grievance procedure. (/d. at 73-74.) In the portion relied on by the Trust, MacDonald observed that the university's argument about the scope of the statutory grievance procedure at issue "relates to subject matter jurisdiction which may be raised initially on appeal." (/d.) As in National Union, however, MacDonald involved a dispute resolution mechanism established by state law, not by contract. (Id. at 70; see Douglass, 20 Cal.App.5th at 385). MacDonald's observation about "subject matter jurisdiction" is not applicable in the context of private, contractual arbitration. (Douglass, 20 Cal.App.Sth at 385.) Indeed, all of the cases discussed herein that have addressed a party's failure to raise the types of so-called "jurisdictional" arguments that the Trust is raising in the context of contractual arbitration have determined that they are indeed subject to forfeiture. United Firefighters of Los Angeles v. City of Los Angeles (1991) 231 Cal.App.3d 1576, also relied on by the Trust, supports the 49ers' position. In that case, a firefighter and his union invoked a grievance procedure against the City of Los Angeles that was provided for in the union's contract with the City. (/d. at 1579-80.) The City had previously unsuccessfully opposed a petition to compel arbitration, on the ground that the firefighter had no rights under the union contract because he had been terminated. (/d. at 1580.) On appeal, the court rejected the argument that the City was required to bring a petition to vacate the arbitration award in order to preserve its initial objection to arbitration. To the contrary: "We think it clear . . . appellants are not appealing the correctness of the award. Rather, they are attacking the authority of the trial 12491.004 4839-7168-0143.7 11 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn court to compel them to submit the matter to arbitration. An order to compel arbitration is an interlocutory order which is appealable only from the judgment confirming the arbitration award []." Cd. at 1581-82 (emphasis added).) As the 49ers have demonstrated, questions related to the threshold determination of arbitrability are not reviewable by way of a petition to vacate an arbitration award. (Opposition at 24-26.) Nor was there any issue of forfeiture in United Firefighters; the City had preserved its argument by asserting it in opposition to a petition to compel arbitration. (/d. at 1580.). Finally, the Trust tacitly acknowledges that its unconscionability argument is subject to forfeiture, but claims there was "no need to raise the unconscionability issue when the Trust opposed the 49ers’ petition to compel ‘arbitration." (Reply, at 19-21.) Why not? The arbitration agreement the Trust now contends is unconscionable is the same arbitration agreement that the Court determined was enforceable. If the Trust believed the arbitration agreement was unenforceable for any reason, the Trust had the opportunity, and the obligation, to raise its arguments in opposition to the motion to compel arbitration, before the parties devoted several years to arbitrating the dispute. (See Pearson Dental Supplies, 48 Cal 4th at 681 (unconscionability argument forfeited because "although plaintiff resisted defendant's petition to compel arbitration, he did so on the grounds that defendant had waived the right to compel arbitration, and had failed to present the arbitration agreement in an understandable form"); see also Freeman vy. State Farm Mut. Auto Ins. (1975) 14 Cal.3d 473, 479-80 ("The clear purpose and effect of section 1281.2 is to require the superior court to determine in advance whether there is a duty to arbitrate the controversy which has arisen.").) The Trust cannot point to a single case in which a court found that a party had not forfeited a ground for objecting to arbitration ("jurisdictional" or otherwise) where the party had failed to raise that objection in connection with a petition to compel arbitration. To the contrary, the courts have invariably determined that "a party who knowingly participates in the arbitration process without disclosing a ground for declaring it invalid is properly cast into the outer darkness of forfeiture." (Cummings, 128 Cal.App.4th at 328-29 (plaintiff had forfeited her objections to arbitration where she had previously opposed a motion to compel arbitration, but on different 12491.004 4839-7168-0143.7 12 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montcomery STREET, SuITE 3000, San FRANCISCO, CALIFORNIA 94104-5500 Fax 415.989.1663 415.391.4800 mn grounds); Pearson Dental Supplies, 48 Cal.4th at 681 (unconscionability argument forfeited for failure to raise it in opposition to petition to compel arbitration); Jenks, 243 Cal.App.4th at 9 (nonsignatory argument forfeited for failure to raise in opposition to petition to compel arbitration).) The Trust's characterization of its new arguments as unwaivable "subject matter jurisdiction" arguments is specious. DATED: April 8, 2019 COBLENTZ PATCH DUFFY & BASS LLP By: /s/ Jonathan R. Bass Jonathan R. Bass Attorneys for Defendants and Respondents SAN FRANCISCO FORTY NINERS, LIMITED and SAN FRANCISCO FORTY NINERS, LLC 12491.004 4839-7168-0143.7 13 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARDCOBLENTZ PATCH DUFFY & BASS LLP One Montoomery Street, Suite 3000, San FRANCISCO, CALIFORNIA 94104-5500 + Fax 415.989.1663 415.391.4800 Ce IN DH RW YD me Ny oN RW NY NY N NN YD Be Be ee ee ee ee oa Am FB Oo Nh Be SF BO ke AA aA Rk OH STS PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of San Francisco, State of California. My business address is One Montgomery Street, Suite 3000, San Francisco, CA 94104-5500. On April 8, 2019, I served true copies of the following document(s) described as SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARD on the interested parties in this action as follows: Robert R. Moore, Esq. ° Michael J. Betz, Esq. Alexander J. Doherty, Esq. Grayson (Trey) W. Marshall III, Esq. Allen, Matkins, Leck, Gamble, Mallory & Natsis, LLP Three Embarcadero Center, 12th Floor San Francisco,.CA 94111-4074 Tel: (415) 837-1515 Fax: (415) 837-1516 Email: rmoore@allenmatkins.com mbetz@allenmatkins.com adoherty@allenmatkins.com tmarshall@allenmatkins.com BY ELECTRONIC SERVICE: I electronically filed the document(s) with the Clerk of the Court by using the File & ServeXpress system. Participants in the case who are registered users will be served by the File & ServeXpress system. Participants in the case who are not registered users will be served by mail or by other means permitted by the court rules. BY MESSENGER SERVICE: I enclosed said document(s) in an envelope or package, addressed as shown below, and dispatched a messenger from my place of business with instructions to hand-carry the above and make delivery to the following during normal business hours, by leaving a true copy thereof with the person whose name is shown or the person who apparently was in charge of that person's office or residence. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on April 8, 2019, at San Francisco, California. WAM. Mark W. Allen 12491.004 4839-7168-0143.7 14 CGC-12-517917 SUR-REPLY IN OPPOSITION TO AMENDED PETITION TO VACATE ARBITRATION AWARD