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`LATHAM & WATKINS LLP
`Timothy L. O’Mara (Bar No. 212731)
` tim.o’mara@lw.com
`Sadik Huseny (Bar No. 224659)
` sadik.huseny@lw.com
`Andrew M. Gass (Bar No. 259694)
` andrew.gass@lw.com
`Kirsten M. Ferguson (Bar No. 252781)
` kirsten.ferguson@lw.com
`Alicia R. Jovais (Bar No. 296172)
` alicia.jovais@lw.com
`Robin L. Gushman (Bar No. 305048)
`robin.gushman@lw.com
`505 Montgomery Street, Suite 2000
`San Francisco, California 94111-6538
`Telephone: +1.415.391.0600
`Facsimile: +1.415.395.8095
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`Attorneys for Defendants Ticketmaster L.L.C.
`and Live Nation Entertainment, Inc.
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`
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
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`
` Skot Heckman, Luis Ponce, Jeanene
`Popp, and Jacob Roberts, on behalf of
`themselves and all those similarly
`situated,
`
`Plaintiffs,
`
`v.
`Live Nation Entertainment, Inc., and
`Ticketmaster LLC,
`Defendants.
`
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`Case No. 2:22-cv-00047-GW-GJS
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`DEFENDANTS’ REPLY IN
`SUPPORT OF MOTION TO
`COMPEL ARBITRATION
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`The Honorable George H. Wu
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`Hearing Date: May 1, 2023
`Hearing Time: 8:30 a.m.
`Courtroom: 9D, 9th Floor
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`REDACTED VERSION OF DOCUMENT
`PROPOSED TO BE FILED UNDER SEAL
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`DEFS.’ REPLY ISO MOT. TO
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`CASE NO. 2:22-CV-00047-GW-GJS
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`TABLE OF CONTENTS
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`B.
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`C.
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`b.
`c.
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`d.
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`e.
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`f.
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`I.
`II.
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`INTRODUCTION .......................................................................................... 1
`DISCOVERY PUT THE LIE TO PLAINTIFFS’ BIAS
`ALLEGATIONS ............................................................................................ 2
`III. ARGUMENT ................................................................................................. 4
`A.
`Plaintiffs’ Challenges Have Been Delegated to the
`Arbitrator .............................................................................................. 4
`The Terms Are Not Unconscionable ................................................... 6
`1.
`The Terms Are Not Procedurally Unconscionable ................... 6
`2.
`The Terms Are Not Substantively Unconscionable .................. 8
`a.
`New Era’s Rules Promote the Efficient,
`Bilateral Resolution of Individual
`Arbitrations, as the FAA Intends .................................... 8
`(1) Mass Arbitrations Are Not “Class” or
`“Representative” Proceedings ............................... 9
`(2) The FAA Applies ................................................ 11
`New Era Is a Neutral Forum ......................................... 12
`New Era’s Rules on Page Limits Are
`Discretionary ................................................................. 14
`New Era’s Rules Allow for Discovery
`Consistent with Industry Standards ............................... 15
`New Era’s Arbitrator Selection Rules Are
`Fair and Consistent with Industry Standards ................ 18
`The Class Action Waiver and Appeal
`Provision Are Enforceable ............................................ 19
`Even If the Selection of New Era Arbitration Were
`Unenforceable, Plaintiffs Are Still Required to Arbitrate ................. 21
`IV. CONCLUSION ............................................................................................ 22
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`ATTORNEYS AT LAW
`SAN FRANCISCO
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`TABLE OF AUTHORITIES
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` Page(s)
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`CASES
`Abeyrama v. J.P. Morgan Chase Bank,
`2012 WL 2393063 (C.D. Cal. June 22, 2012) .................................................... 18
`AT&T Mobility v. Concepcion,
`563 U.S. 333 (2011) ........................................................................... 2, 15, 20, 21
`Borgarding v. JPMorgan Chase Bank,
`2016 WL 8904413 (C.D. Cal. Oct. 31, 2016) .................................................... 18
`Carillo v. Gruma Corp.,
`2017 WL 11631614 (C.D. Cal. Mar. 14, 2017) ................................................. 18
`Coast Plaza Drs. Hosp. v. Blue Cross of Cal.,
`83 Cal. App. 4th 677 (2000) ............................................................................... 17
`Colby v. J.C. Penney Co.,
`811 F.2d 1119 (7th Cir. 1987) .............................................................................. 9
`Discover Bank v. Superior Ct.,
`36 Cal. 4th 148 (2005) ........................................................................................ 20
`Donovan v. Coinbase Glob., Inc.,
`2023 WL 2124776 (N.D. Cal. Jan. 6, 2023) ........................................................ 5
`Dotson v. Amgen, Inc.,
`181 Cal. App. 4th 975 (2010) ....................................................................... 13, 17
`Epic Sys. Corp. v. Lewis,
`138 S. Ct. 1612 (2018) ......................................................................................... 2
`Fitz v. NCR Corp.,
`118 Cal. App 4th 702 (2004) .............................................................................. 18
`Gilmer v. Interstate/Johnson Lane,
`500 U.S. 20 (1991) ................................................................................... 2, 11, 13
`Hallsted v. JPMorgan Chase,
`2017 WL 8186687 (C.D. Cal. Sept. 11, 2017) ..................................................... 6
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`Home Depot USA v. Lafarge N. Am.,
`59 F.4th 55 (3d Cir. 2023) .............................................................................. 9, 10
`Lee v. Ticketmaster,
`2019 WL 9096442 (N.D. Cal. Apr. 1, 2019), aff’d, 817 F. App’x 393
`(9th Cir. 2020) ...................................................................................................... 7
`Little v. Auto Stiegler,
`29 Cal. 4th 1064 (2003) ...................................................................................... 20
`McCray v. Am. Canyon City Hall,
`2023 WL 2278408 (E.D. Cal. Feb. 28, 2023) .................................................... 15
`McKay v. JPMorgan Chase Bank,
`2016 WL 11755601 (C.D. Cal. Mar. 8, 2016) ................................................... 20
`Modiano v. BMW of N. Am.,
`2021 WL 5750460 (S.D. Cal. June 29, 2021) .................................................... 18
`Mullo v. DoorDash,
`2023 WL 1971897 (S.D.N.Y. Jan. 17, 2023) ......................................... 11, 12, 13
`Nixon v. Dream St. Inc.,
`2019 WL 13197378 (D. Ariz. May 24, 2019) ...................................................... 5
`Oberstein v. Live Nation,
`2021 WL 4772885 (C.D. Cal. Sept. 20, 2021) ............................................. 5, 6, 8
`Oberstein v. Live Nation,
`60 F.4th 505 (9th Cir. 2023) ....................................................................... 1, 7, 21
`Pokrass v. DirecTV Grp.,
`2008 WL 2897084 (C.D. Cal. July 14, 2008) ...................................................... 6
`Poublon v. C.H. Robinson,
`846 F.3d 1251 (9th Cir. 2017) ...................................................................... 17, 22
`Price v. Apple,
`2022 WL 1032472 (N.D. Cal. Apr. 6, 2022) ....................................................... 6
`Rent-A-Center, W., Inc. v. Jackson,
`561 U.S. 63 (2010) ............................................................................................... 5
`Roman v. Superior Ct.,
`172 Cal. App. 4th 1462 (2009) ........................................................................... 17
`DEFS.’ REPLY ISO MOT. TO
`COMPEL ARBITRATION
`CASE NO. 2:22-CV-00047-GW-GJS
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`Sanchez v. Valencia Holding Co.,
`61 Cal. 4th 899 (2015) .............................................................................. 6, 20, 21
`Sandquist v. Lebo Auto., Inc.,
`1 Cal. 5th 233 (2016) .......................................................................................... 13
`Serv. Partners v. Am. Home Assurance,
`2011 WL 2516411 (C.D. Cal. June 20, 2011) .................................................... 19
`Sheppard v. Staffmark Inv.,
`2021 WL 690260 (N.D. Cal. Feb. 23, 2021) ...................................................... 20
`Szetela v. Discover Bank,
`97 Cal. App. 4th 1094 (2002) ............................................................................... 7
`Taylor v. TA Operating,
`2023 WL 171359 (E.D. Cal. Jan. 12, 2023) ......................................................... 5
`Tiri v. Lucky Chances, Inc.,
`226 Cal. App. 4th 231 (2014) ........................................................................... 5, 6
`Viking River Cruises v. Moriana,
`142 S. Ct. 1906 (2022) ................................................................................. 11, 12
`Whitaker v. Tesla Motors, Inc.,
`985 F.3d 1173 (9th Cir. 2021) ............................................................................ 15
`Wu v. JPMorgan Chase Bank,
`2019 WL 4261880 (C.D. Cal. Aug. 5, 2019) ..................................................... 21
`Yeomans v. World Fin. Grp. Ins. Agency,
`485 F. Supp. 3d 1168 (N.D. Cal. 2020) ............................................................. 17
`STATUTES
`9 U.S.C. § 10(a)(2) .................................................................................................. 19
`Cal. Civ. Proc. Code §§ 1280-1294.4 ...................................................................... 18
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`I.
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`INTRODUCTION
`Defendants filed their motion to compel arbitration over a year ago. In the
`interim, the Ninth Circuit affirmed, in full, this Court’s order compelling arbitration
`in the earlier Oberstein case (brought by the same counsel as here), and rejected the
`argument that consumers did not really know who they were contracting with, and
`had not really agreed to arbitration with Defendants. Instead, the Ninth Circuit
`held—in a unanimous, published opinion—that the arbitration agreement in
`Defendants’ Terms is “a valid agreement” between Defendants and consumers, and
`that “the requirements for mutual assent [are] met.” Oberstein v. Live Nation, 60
`F.4th 505, 509 (9th Cir. 2023). Consequently, in this case, Plaintiffs’ counsel do not
`dispute that Plaintiffs repeatedly agreed to the Terms, which select New Era as the
`arbitration provider.
`Instead, Plaintiffs’ counsel take a different approach to trying to avoid
`arbitration here—arguing that Defendants’ selection of New Era as the arbitration
`provider in their Terms “shocks the conscience.” So, over the past 12+ months,
`Plaintiffs sought (and received) extensive discovery from Defendants and New Era
`on this issue. Plaintiffs brazenly claimed that discovery would uncover facts that
`shock the conscience: that Defendants were “intimately involved in New Era’s
`founding and growth,” that Defendants “collude[d] with” New Era, that “Latham …
`played a significant role in … drafting New Era’s rules and procedures,” and that
`New Era had an “anti-consumer bias” due to its “direct financial dependence” on
`Defendants. ECF No. 34-1 at 2-3, 5. Discovery proved that none of those
`accusations are true. That’s why—despite receiving thousands of pages of
`documents and taking two depositions—Plaintiffs cite so little discovery in their
`Opposition.
`Instead, Plaintiffs focus on the text of New Era’s Rules, which they had before
`them a year ago. They argue that the procedures for mass arbitrations and arbitrator
`selection are unconscionable, that the Rules create a risk of potential bias, that the
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`default limitations on discovery, brief length, and record size are unconscionable,
`etc. Ultimately, Plaintiffs claim that New Era’s Rules are so outlandish that
`arbitrations administered by New Era are not really arbitrations at all, and thus fall
`outside the FAA’s scope. Plaintiffs’ arguments are frivolous.
`Contrary to Plaintiffs’ irresponsible and distorted allegations, New Era’s
`Rules are sensible, fair, and similar to those promulgated by JAMS and AAA.
`Plaintiffs’ arguments are also contrary to controlling law. The FAA does not allow
`a plaintiff to avoid arbitration based on speculation that the arbitrator and arbitral
`process will not be “competent, conscientious and impartial.” Gilmer v. Interstate/
`Johnson Lane, 500 U.S. 20, 30 (1991). And the FAA requires courts to respect the
`parties’ “discretion in designing arbitration processes … to allow for efficient,
`streamlined procedures tailored to the type of dispute.” AT&T Mobility v.
`Concepcion, 563 U.S. 333, 344 (2011). Consequently, courts must “rigorously …
`enforce arbitration agreements according to their terms, including terms that
`specify … the rules under which that arbitration will be conducted.” Epic Sys. Corp.
`v. Lewis, 138 S. Ct. 1612, 1621 (2018).
`There’s nothing unconscionable about New Era’s Rules, and the arbitration
`agreement should be enforced, in full. But it’s worth noting that, even if the Court
`somehow deemed New Era’s Rules unconscionable, Plaintiffs are still required to
`arbitrate their claims. The Terms contain a clear severability clause, and the Terms
`state that, if New Era is unable to conduct the arbitration for any reason, arbitration
`will instead be conducted by another arbitration provider. The law is clear that the
`severability clause and the provision on alternate arbitration providers are binding
`and enforceable.
`Defendants respectfully request that the Court grant their Motion.
`II. DISCOVERY PUT THE LIE TO PLAINTIFFS’ BIAS ALLEGATIONS
`Despite insisting on—and receiving—extensive pre-arbitration discovery,
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`Plaintiffs cite hardly any discovery in their Opposition.1 That’s because discovery
`showed that Plaintiffs’ incendiary allegations about New Era and Live Nation are
`false.
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`First, discovery confirmed that Defendants and their counsel were not
`involved in New Era’s founding—let alone “intimately involved.” New Era was
`founded in 2020, and launched its ADR services in April 2021. See Opp’n Ex. C
`10:16-18, 11:3-5. The first communication between New Era and Defendants’
`counsel was in May 2021. See id. 86:2-88:2.
`Second, discovery established that Defendants’ counsel and New Era engaged
`in an arm’s-length discussion over the potential selection of New Era—and that there
`was nothing improper about those interactions. To the contrary, those interactions
`consisted of, in total, five or six Zoom meetings in May and June 2021, during which
`Defendants’ counsel vetted New Era—asking questions about their capabilities and
`offerings—and negotiated the terms of the subscription agreement (e.g., price). See
`id. 65:22-66:4, 89:15-18, 92:3-93:14, 95:4-9, 96:12-20, 169:24-170:1, 174:9-16.
`Third, discovery confirmed that Defendants and their counsel played no role
`whatsoever in the drafting of New Era’s Rules. Id. 96:17-97:2, 108:12-16.2
`Fourth, discovery established that New Era is not financially dependent on
`Defendants.
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`.3 Id. 16:17-21, 17:2-4, 18:3-6.
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`1
`For example, Plaintiffs cite Live Nation’s deposition once, see Opp’n at 3,
`and they cite to just nine documents (out of nearly 700) that were produced, see
`Opp’n Exs. F-N. Notably, only four of those nine are actually communications
`between New Era and Defendants’ counsel. The remainder are communications
`with Latham attorneys in other offices who have never represented Defendants and
`have no connection to Defendants whatsoever.
`2
`Plaintiffs’ footnote argument that the Court should nevertheless just infer that
`“Latham shaped” New Era’s Rules—without any evidence—is absurd. Opp’n at 2
`n.1.
`For example, well-known companies like SeatGeek, SpotHero, Zynga, and
`3
`PopID designate New Era in their publicly available online terms.
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`. Id. 24:20-23, 31:13-21; Opp’n Ex. E ¶¶ 5-6.
`Finally, discovery did not uncover any evidence of bias. That doesn’t stop
`Plaintiffs from misrepresenting the discovery record. But Plaintiffs’ “evidence” of
`bias consists of (1) a handful of emails reflecting the fact that some attorneys at
`Latham and other firms were interested in learning about New Era’s services (see,
`e.g., Opp’n Exs. F, G, I, J, K, L, N), and (2) a New Era PowerPoint, which states
`that
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`. Opp’n at 2 (citing Ex. F at 15). This is obviously not evidence
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`of bias—in fact,
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`Opp’n Ex. F at 15. Plaintiffs never acknowledge
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`III. ARGUMENT
`A.
`Plaintiffs’ Challenges Have Been Delegated to the Arbitrator
`This Court has repeatedly held—and Plaintiffs do not dispute—that the Terms
`contain a “delegation clause [which] clearly and unmistakably delegates arbitrability
`to the arbitrator,” and, consequently, that “the Court’s unconscionability inquiry is
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`limited to the delegation clause instead of the arbitration clause as a whole.”
`Oberstein v. Live Nation, 2021 WL 4772885, at *8 (C.D. Cal. Sept. 20, 2021).
`Nevertheless, virtually all of Plaintiffs’ arguments relate to the arbitration
`agreement as a whole. Plaintiffs hope to solve this problem by tacking on four
`conclusory sentences
`to
`the end of
`their Opposition, claiming—without
`explanation—that all of Plaintiffs’ arguments apply to the delegation clause. See
`Opp’n at 24. That’s not enough. See Rent-A-Center, W., Inc. v. Jackson, 561 U.S.
`63, 74 (2010) (court cannot consider unconscionability challenge unless plaintiff
`argues that, “as applied to the delegation provision,” it “render[s] that provision
`unconscionable”); Taylor v. TA Operating, 2023 WL 171359, at *9 (E.D. Cal. Jan.
`12, 2023). Plaintiffs’ conclusory argument does not “reflect any specific showing
`as to why the [d]elegation [c]lause itself is actually unenforceable due to
`unconscionability.” Nixon v. Dream St. Inc., 2019 WL 13197378, at *4 (D. Ariz.
`May 24, 2019); see also Donovan v. Coinbase Glob., Inc., 2023 WL 2124776, at *5
`(N.D. Cal. Jan. 6, 2023) (plaintiffs failed to meet their burden where they
`“identif[ied] a hodgepodge of other provisions within the Arbitration Clause … that
`supposedly unfairly favor [defendant] and thus render the Delegation Clause unfair
`as well”). It is not enough that “arbitration procedures—for example … limitations
`on discovery—may apply equally to the delegation clause”; instead, Plaintiffs “must
`argue that those provisions are unconscionable as applied to the delegation clause.”
`Taylor, 2023 WL 171359, at *9.
`Plaintiffs do assert (without explanation) that delegation is unconscionable
`because New Era’s arbitrators will be biased on “threshold issues.” Opp’n at 24.
`The argument seems to be that New Era’s arbitrators have a business incentive to
`rule in favor of subscribing Defendants. That fails as a matter of law. Even if “the
`arbitrator has a unique self-interest in deciding that a dispute is arbitrable,” because
`“one party tends to be a repeat player,” that does not render a delegation clause
`unconscionable. Tiri v. Lucky Chances, Inc., 226 Cal. App. 4th 231, 248-49 (2014).
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`It does not, because the concern regarding arbitrator self-interest is “virtually always
`present with delegation clauses”; therefore, deeming it a basis for unconscionability
`“would be tantamount to concluding that delegation clauses … are categorically
`unenforceable.” Id. at 249; infra Section III.B.2.b (explaining why Plaintiffs’ bias
`argument against the arbitration agreement as a whole fails).
`The Court’s inquiry can and should end here.
`B.
`The Terms Are Not Unconscionable
`In any event, Plaintiffs’ challenges to the Terms as a whole are meritless.
`Under California law, a plaintiff must show that a contract is both procedurally and
`substantively unconscionable to be unenforceable. Sanchez v. Valencia Holding
`Co., 61 Cal. 4th 899, 910 (2015). Plaintiffs show neither.
`1.
`The Terms Are Not Procedurally Unconscionable
`“Procedural unconscionability concerns the manner in which the contract was
`negotiated,” focusing on oppression and surprise. Hallsted v. JPMorgan Chase,
`2017 WL 8186687, at *3 (C.D. Cal. Sept. 11, 2017). Here, the Terms concern
`non-essential, recreational activities; that weighs against a finding of procedural
`unconscionability. See Oberstein, 2021 WL 4772885, at *9; Pokrass v. DirecTV
`Grp., 2008 WL 2897084, at *7 (C.D. Cal. July 14, 2008) (“contracts for nonessential
`recreational activities cannot be procedurally unconscionable”); Price v. Apple, 2022
`WL 1032472, at *3 (N.D. Cal. Apr. 6, 2022) (“the nature of such contracts weighs
`against” procedural unconscionability).
`Plaintiffs seek to evade this well-established principle by arguing that the
`selection of New Era was a “no-notice … unilateral change” imposed “midstream”
`during litigation, and thus was surprising and oppressive. Opp’n at 7-8. That’s
`unequivocally false. Defendants did provide Plaintiffs notice, repeatedly, of the
`current Terms, which clearly select New Era. See Mot. to Compel Arb. at 4-7, 11-
`13, ECF No. 30-1 (“Mot.”). And Plaintiffs repeatedly assented to those Terms: in
`addition to the notice at sign-in (which this Court and the Ninth Circuit previously
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`upheld), Plaintiffs here also affirmatively checked a box stating that they had read
`and agreed to the current Terms designating New Era. Id. at 5-6; see also Oberstein,
`60 F.4th at 517. Plaintiffs do not dispute that they did so. Instead, Plaintiffs imply
`that they did not receive specific notice regarding a specific change in the Terms.
`Courts (including the Ninth Circuit) have rejected that argument. Lee v.
`Ticketmaster, 2019 WL 9096442, at *1 (N.D. Cal. Apr. 1, 2019), aff’d, 817 F. App’x
`393, 395 (9th Cir. 2020) (holding that changes to Ticketmaster’s Terms are
`enforceable where plaintiff later agreed to updated Terms through notice on
`purchase page).
`Plaintiffs ignore Lee and cite Szetela v. Discover Bank, 97 Cal. App. 4th 1094,
`1100 (2002) instead. There, the plaintiff received a notice purporting to amend the
`terms of his agreement with the bank in a bill stuffer. Those facts could not be more
`inapposite. Here, by contrast, Plaintiffs checked a box expressly affirming that they
`had read and agreed to the current Terms; they cannot complain now that they had
`“no notice” of the content of those Terms.
`Plaintiffs’ “midstream” litigation argument is equally disingenuous. Plaintiffs
`are deliberately conflating this case with Oberstein—presenting them as though they
`are one continuous litigation. These are two separate cases, filed at entirely different
`times, with different named plaintiffs (just by the same counsel, seeking to
`circumvent arbitration via different arguments). Defendants have never argued that
`the current Terms apply in Oberstein, that the Oberstein named plaintiffs must
`arbitrate at New Era, or that any claims filed prior to when the Terms were updated
`should go to New Era. New and different named plaintiffs filed the present
`complaint six months after the Terms were amended to designate New Era. Those
`plaintiffs—Heckman, Ponce, Popp, and Roberts—were not named plaintiffs in
`Oberstein, and each of them indisputably agreed to the current version of the Terms
`selecting New Era before they filed this case.
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`Finally, Plaintiffs argue that Defendants and consumers were in “an ongoing
`contractual relationship,” and thus there is an “implied covenant” that the Terms
`cannot be changed “midstream.” Opp’n at 7-8. Plaintiffs are arguing that even
`where a company provides notice, and the specific consumers at issue expressly
`agree to updated terms, a company can never change its terms. That’s obviously not
`the law—and Plaintiffs cite no case to the contrary.
`Ultimately, none of Plaintiffs’ arguments compels a different conclusion than
`the one this Court reached in Oberstein: there is, at most, “a low level of procedural
`unconscionability.” Oberstein, 2021 WL 4772885, at *9. Therefore, the Terms
`“must be enforced unless
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`is a heightened finding of substantive
`unconscionability.” Id.
`2.
`The Terms Are Not Substantively Unconscionable
`In order to demonstrate substantive unconscionability, “[i]t is not enough that
`terms are slightly one-sided or confer more benefits on a particular party; a
`substantively unconscionable term must be so unreasonable and one-sided as to
`‘shock the conscience.’” Id. There is nothing about the Terms or the selection of
`New Era that comes close to “shocking the conscience.”
`a.
`New Era’s Rules Promote the Efficient, Bilateral
`Resolution of Individual Arbitrations, as the FAA
`Intends
`Plaintiffs’ unconscionability argument focuses on New Era’s use of a
`bellwether process for mass arbitrations. Specifically, Plaintiffs claim that, due to
`the application of precedent from bellwethers, claimants are unfairly subjected to
`“class or representative proceedings,” Opp’n at 11, and because New Era’s mass
`arbitrations are actually “class arbitrations,” the FAA cannot apply to the Terms, id.
`at 1, 19-23. Plaintiffs are wrong.
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`(1) Mass Arbitrations Are Not “Class” or
`“Representative” Proceedings
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`Mass arbitrations are not “class” or “representative” proceedings under New
`Era’s Rules; to the contrary, each case retains its separate identity as an individual,
`bilateral arbitration. Nothing about the use of bellwethers changes this. Bellwether
`claimants do not represent, for example, absentee claimants. And New Era’s Rules
`are clear that precedent from bellwethers is non-binding: the neutral may apply
`significant factual findings and legal determinations in one proceeding to another
`proceeding involving common issues. Rule 2(y)(i), ECF No. 30-4 (“New Era
`Rules”). Any party, however, is free to argue that a case “involve[s] individualized
`issues of law and/or fact that should not be subject to [p]recedent.” New Era Rule
`6(b)(iii)(4)(d). If the neutral agrees, then precedent from the bellwethers will not
`apply to those issues.
`Bellwethers thus do not have law-of-the-case or issue-preclusive effect.
`Instead, bellwether precedent is similar to how precedent operates among individual
`court cases of equal level: while the arbitrator “must give considerable weight to
`[prior] decisions … [the arbitrator] is not absolutely bound by them, and must give
`fair consideration to any substantial argument that a litigant makes” in support of a
`different result. See Colby v. J.C. Penney Co., 811 F.2d 1119, 1123 (7th Cir. 1987)
`(describing precedent).4 Plaintiffs’ key case here—Home Depot USA v. Lafarge N.
`Am., 59 F.4th 55 (3d Cir. 2023)—helpfully explains this issue. There, the Third
`Circuit reversed the district court’s application of law-of-the-case and issue
`preclusion to a later-filed case in a longstanding MDL. In doing so, the court drew
`a distinction between law-of-the-case and issue preclusion, on the one hand, and
`application of precedent to common issues, on the other. The court explained that,
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`Contrary to Plaintiffs’ claim (Opp’n at 11-12), this is true for later-filed claims
`too. See New Era Rule 2(y)(ii) (later-filed cases involving common issues may be
`subject to precedent).
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`“[i]n MDLs, like in other litigation, a district court may apply prior rulings to new
`cases if a party presents no new facts, evidence, or arguments to warrant a
`departure.” Id. at 66 n.6. The court further explained that, in MDLs, judges are free
`to “enter an order with respect to one party and then provide that it will be
`automatically extended to other parties if they do not come forward and show cause
`why it should be not be applicable.” Id. at 66. That is exactly how New Era’s Rules
`work: precedent from bellwethers applies to common issues in individual cases,
`unless a party demonstrates that a case “involve[s] individualized issues of law
`and/or fact that should not be subject to the [p]recedent.” New Era Rule
`6(b)(iii)(4)(d).
`Plaintiffs also argue that the use of precedent is non-mutual, because “only
`plaintiffs bear the risk of loss on common issues.” Opp’n at 5. That’s categorically
`false. The application of precedent is mutual—and neutral. Either party could win
`or lose common issues; there’s nothing about the process that favors one party over
`another. See New Era Rules 2(y) (defining precedent), 6(b)(iii)(4)-(6) (explaining
`application of precedent).
`Plaintiffs make two fallback arguments. First, they claim that if Defendants
`lost on a common issue, “Defendants get … the choice of leaving New Era.” Opp’n
`at 5. That makes no sense. If Defendants lost on a common issue, they could not
`simply select a new arbitration provider; any change to the Terms would not apply
`to an ongoing mass arbitration, to anyone who had already filed an arbitration
`demand, or to anyone who did not assent to the new Terms. Second, Plaintiffs
`speculate that if D