                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


JESSICA KRAMER ,                          No. 12-55050
                             Plaintiff,
                                             D.C. No.
                 and                      8:10-ml-02172-
                                             CJC-RNB
ALEXSANDRA DEL REAL; MICHAEL
CHOI; MICHAEL SCHOLTEN ,
Individually and on Behalf of All           OPINION
Others Similarly Situated; LU LI,
                 Plaintiffs-Appellees,

                  v.

TOYOTA MOTOR CORPORATION , a
Japanese corporation / a foreign
corporation, DBA Toyota Motor
North America, Inc.; TOYOTA
MOTOR SALES, U.S.A., INC., a
California corporation / a foreign
corporation,
              Defendants-Appellants.


      Appeal from the United States District Court
         for the Central District of California
      Cormac J. Carney, District Judge, Presiding
2             KRAMER V . TOYOTA MOTOR CORP .

                   Argued and Submitted
           October 11, 2012—Pasadena, California

                      Filed January 30, 2013

 Before: Andrew J. Kleinfeld and M. Margaret McKeown,
Circuit Judges, and Gordon J. Quist, Senior District Judge.*

                      Opinion by Judge Quist


                           SUMMARY**


                             Arbitration

   The panel affirmed the district court’s order denying a
motion to compel arbitration.

    The panel held that Toyota Motor Corporation and Toyota
Motor Sales, U.S.A., Inc. may not compel plaintiffs to
arbitrate their claims. The panel also held the district court
had the authority to decide whether Toyota, a nonsignatory to
several purchase agreements with arbitration provisions
between plaintiffs and various Toyota dealerships, may
compel arbitration. Finally, the panel could discern no reason
that the plaintiffs should be equitably estopped from avoiding
arbitration in this case.


    *
   The Honorable Gordon J. Quist, United States District Court for the
W estern District of Michigan, sitting by designation.

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
             KRAMER V . TOYOTA MOTOR CORP .                     3

                          COUNSEL

Theodore J. Boutrous Jr.; William E. Thomson; Blaine H.
Evanson; Brandon J. Stoker, Gibson, Dunn & Crutcher LLP,
Los Angeles, California; Michael L. Mallow; Denise A.
Smith-Mars; Rachel A. Rappaport, Loeb & Loeb LLP, Los
Angeles, California, for Defendants-Appellants.

Vahn Alexander; Christopher B. Hayes, Faruqi & Faruqi,
LLP, Los Angeles, California; Marc L. Godino, Glancy
Binkow & Goldberg LLP, Los Angeles, California, for
Plaintiffs-Appellees.


                          OPINION

QUIST, District Judge:

    Toyota Motor Corporation and Toyota Motor Sales,
U.S.A., Inc. (collectively “Toyota” or “Defendants”) seek
review of the district court’s denial of their motion to compel
arbitration.    The district court held that Toyota, a
nonsignatory to several agreements with arbitration
provisions between Plaintiffs and various Toyota dealerships
(hereinafter “Dealerships”), could not compel Plaintiffs to
arbitrate with Toyota. The district court also found that
Toyota had waived any right to compel arbitration by
vigorously litigating this action in district court for nearly two
years.

    We have jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(C),
which provides for immediate interlocutory appeal of a
district court’s denial of a motion to compel arbitration.
Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 86
4           KRAMER V . TOYOTA MOTOR CORP .

(2000). For the reasons set forth below, we affirm the district
court’s order denying Toyota’s motion to compel arbitration.

                     BACKGROUND

    Plaintiffs are owners of Model Year 2010 Toyota Prius
vehicles who purchased their new vehicles between June
2009 and February 2010 from Toyota dealerships in
California, Texas, and Maryland. Plaintiffs bring this
putative class action on behalf of themselves and others
similarly situated who purchased or leased a Model Year
2010 Toyota Prius or Model Year 2010 Lexus HS 250h
(collectively “Class Vehicles”) in the United States.
Plaintiffs allege that they experienced defects in their anti-
lock brake systems (ABS), resulting in increased stopping
distances. Plaintiffs further allege that Toyota had notice of
the defect as early as July 2009 but failed to disclose the
defect and continued to manufacture and sell vehicles with
defective ABS. Plaintiffs assert claims for violation of
California’s Consumers Legal Remedies Act, Cal. Civ. Code
§ 1750 et seq.; unfair competition, Cal. Bus. & Prof. Code
§ 17200 et seq.; false advertising, Cal. Bus. & Prof. Code
§ 17500 et seq.; breach of the implied warranty of
merchantability, Cal. Com. Code § 2314; and common law
breach of contract.

    Plaintiffs purchased their vehicles on credit by entering
into either a “Retail Installment Sale Contract” or “Purchase
Agreement” with their respective dealerships.              The
agreements (hereinafter “Purchase Agreement(s)”) set forth
the terms of the sales, including information regarding the
purchase price, financing, insurance, warranties disclaimed
by the dealer, warranties of buyer, and rescission rights. The
Purchase Agreements also contained similarly worded
               KRAMER V . TOYOTA MOTOR CORP .                             5

arbitration provisions.1 For example, the agreement entered
by Plaintiff Michael Scholten states,

         1. EITHER YOU OR WE MAY CHOOSE
         TO HAVE ANY DISPUTE BETWEEN YOU
         AND US DECIDED BY ARBITRATION,
         RATHER THAN IN COURT OR BY JURY
         TRIAL.

         2. IF A DISPUTE IS ARBITRATED, YOU
         WILL GIVE UP YOUR RIGHT TO
         PARTICIPATE AS A CLASS
         REPRESENTATIVE OR CLASS MEMBER
         ON ANY CLAIM YOU MAY HAVE
         AGAINST US. YOU WILL GIVE UP ANY
         RIGHT TO CLASS ARBITRATION AND
         T O A N Y C O N S O LID A TION OF
         INDIVIDUAL ARBITRATIONS.

         ...

         If either you or we elect, any claims or
         disputes arising out of this transaction, or
         relating to it, will be determined by binding
         arbitration and not by court action. This
         includes all claims and disputes arising out of,
         or relating to: the vehicle, your credit
         application, this contract, the sale or financing
         of the vehicle, and any collection activities.



 1
   Toyota did not move the district court to compel arbitration of Plaintiff
Jessica Kramer’s claim because Kramer did not sign an agreement with an
arbitration provision.
6             KRAMER V . TOYOTA MOTOR CORP .

        ...

        This Arbitration Clause applies, regardless of
        whether the claims or disputes arise in
        contract, tort, statute or otherwise. It also
        applies to any claim or dispute about the
        interpretation and scope of this Arbitration
        Clause. It also applies to any claim or dispute
        about whether a claim or dispute should be
        determined by arbitration.

        Any claim or dispute is to be arbitrated by a
        single arbitrator who will arbitrate only your
        own claims and not the claims of a class of
        persons. You expressly waive any right you
        may have to arbitrate a class action.

Likewise, the arbitration clauses in the other Purchase
Agreements employ the language “you” and “we” or “buyer”
and “dealer” to identify who may elect arbitration. Toyota is
not a signatory to any of the Purchase Agreements.

                 PROCEDURAL HISTORY

    On February 4, 2010, the National Highway Traffic
Safety Administration announced a formal investigation into
allegations that Model Year 2010 Toyota Prius hybrid
vehicles experienced momentary loss of braking capability.2


    2
   See Press Release, Nat’l Highway Traffic Safety Admin., Department
of Transportation Addresses Toyota Safety Issues (Feb. 4, 2010),
http://www.nhtsa.gov/PR/DOT-22-10.        Plaintiffs’ First Amended
Complaint alleges NHTSA announced its investigation on February 3,
2010.
            KRAMER V . TOYOTA MOTOR CORP .                   7

On February 8, 2010, Toyota voluntarily recalled the Class
Vehicles to update the ABS software. Between February 8
and February 19, 2010, Plaintiffs filed separate class action
lawsuits in several federal district courts. On April 9, 2010,
the United States Judicial Panel on Multidistrict Litigation
(JPML) issued a Transfer Order in In re: Toyota Motor Corp.
Unintended Acceleration Marketing, Sales Practices and
Products Liability Litigation (MDL 2151), pursuant to which
the JPML transferred several actions to the Central District of
California. On July 28, 2010, the present actions were
consolidated by stipulation pursuant to 28 U.S.C. § 1407, and
on November 22, 2010, the district court approved a
negotiated protective order governing discovery.

    On April 26, 2011, Plaintiffs filed the operative First
Amended Complaint. The following day, the United States
Supreme Court issued its decision in AT&T Mobility LLC v.
Concepcion, __ U.S. __, 131 S. Ct. 1740 (2011), which
abrogated Discover Bank v. Superior Court, 36 Cal. 4th 148
(2005), and held enforceable class action waivers in certain
arbitration agreements. Discover Bank had previously held
class action arbitration provisions unconscionable and
unenforceable in consumer contracts of adhesion under
certain circumstances. 36 Cal. 4th at 153.

    On June 16, 2011, Toyota moved to dismiss Plaintiffs’
claims pursuant to Federal Rule of Civil Procedure 12(b)(6),
which the district court denied on September 12, 2011. The
following day, Toyota informed Plaintiffs’ counsel that
Toyota intended to move to compel arbitration. On
September 27, 2011, Toyota answered the First Amended
Complaint, asserting arbitration as one affirmative defense.
On October 10, 2011, Toyota moved to compel arbitration.
The district court denied Toyota’s motion on December 20,
8            KRAMER V . TOYOTA MOTOR CORP .

2011, finding Toyota had waived any right to arbitrate by
vigorously litigating the action, participating in discovery,
and negotiating protective orders for nearly two years. The
court also found that Toyota, as a nonsignatory to the
Purchase Agreements between Plaintiffs and Dealerships,
could not compel arbitration, and equitable estoppel did not
require arbitration.

                        DISCUSSION

                               I.

                               A.

    Toyota first argues that the district court erred by deciding
whether Toyota had a right to compel arbitration, contending
that the Purchase Agreements commit that question to an
arbitrator.

    We review de novo district court decisions about the
arbitrability of claims. Momot v. Mastro, 652 F.3d 982, 986
(9th Cir. 2011). With limited exceptions, the Federal
Arbitration Act (FAA) governs the enforceability of
arbitration agreements in contracts involving interstate
commerce. See 9 U.S.C. § 1 et seq. The FAA states that “[a]
written provision in any . . . contract evidencing a transaction
involving commerce to settle by arbitration a controversy
thereafter arising out of such contract . . . shall be valid,
irrevocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any contract.” Id.
§ 2. The FAA reflects both a “liberal federal policy favoring
arbitration,” Concepcion, __ U.S. __, 131 S. Ct. at 1745
(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 24 (1983)), and the “fundamental principle
            KRAMER V . TOYOTA MOTOR CORP .                   9

that arbitration is a matter of contract,” id. (quoting Rent-A-
Center, West, Inc. v. Jackson, __ U.S. __, 130 S. Ct. 2772,
2776 (2010)).

    The scope of an arbitration agreement is governed by
federal substantive law. Tracer Research Corp. v. Nat’l
Envtl. Servs. Co., 42 F.3d 1292, 1294 (9th Cir. 1994). “[A]s
a matter of federal law, any doubts concerning the scope of
arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the
contract language itself or an allegation of waiver, delay, or
a like defense to arbitrability.” Chiron Corp. v. Ortho
Diagnostic Sys., Inc., 207 F.3d 1126, 1131 (9th Cir. 2000)
(quoting Moses H. Cone, 460 U.S. at 24–25).

    Nevertheless, “arbitration is a matter of contract and a
party cannot be required to submit to arbitration any dispute
which he has not agreed so to submit.” United Steelworkers
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960).
“Because arbitration is fundamentally a matter of contract,
the central or primary purpose of the FAA is to ensure that
private agreements to arbitrate are enforced according to their
terms.” Momot, 652 F.3d at 986 (internal quotation marks and
citation omitted). Generally, the contractual right to compel
arbitration “may not be invoked by one who is not a party to
the agreement and does not otherwise possess the right to
compel arbitration.” Britton v. Co-op Banking Grp., 4 F.3d
742, 744 (9th Cir. 1993). Accordingly, “[t]he strong public
policy in favor of arbitration does not extend to those who are
not parties to an arbitration agreement.” Comedy Club, Inc.
v. Improv W. Assocs., 553 F.3d 1277, 1287 (9th Cir. 2009)
(citation omitted).
10           KRAMER V . TOYOTA MOTOR CORP .

                              B.

    The first issue for review is whether the district court had
authority to decide whether Toyota, a nonsignatory to the
Purchase Agreements, can compel Plaintiffs to arbitrate. The
district court addressed the issue in a footnote,

       While parties may agree to explicit provisions
       enabling the arbitrator to decide issues of the
       applicability and scope of an arbitration
       agreement, these provisions are part of the
       agreement and only apply to signatories.
       Toyota cannot invoke the right to the benefits
       of the Purchase Agreement because it was not
       a party to the agreement; thus, the threshold
       issue of whether Toyota, as a nonsignatory,
       may compel Plaintiffs to submit to arbitration
       under the Purchase Agreements must be
       decided by this Court. Britton, 4 F.3d at 744;
       Comedy Club, 553 F.3d at 1287. None of the
       cases cited by Toyota in support of its position
       . . . counsels otherwise, as they are inapposite
       to nonsignatories.

    Toyota argues that because the Purchase Agreements
expressly provide that the arbitrator shall decide issues of
interpretation, scope, and applicability of the arbitration
provision, the arbitrator should decide the issue of whether a
nonsignatory may compel Plaintiffs to arbitrate.

    “It is well settled in both commercial and labor cases that
whether parties have agreed to ‘submi[t] a particular dispute
to arbitration’ is typically an ‘“issue for judicial
determination.”’ Granite Rock Co. v. Int’l Bhd. of Teamsters,
             KRAMER V . TOYOTA MOTOR CORP .                    11

__ U.S. __, 130 S. Ct. 2847, 2855 (2010) (citations omitted).
“It is similarly well settled that where the dispute at issue
concerns contract formation, the dispute is generally for
courts to decide.” Id. at 2855–56 (citations omitted). As
explained in First Options of Chicago, Inc. v. Kaplan,
“[c]ourts should not assume that the parties agreed to arbitrate
arbitrability unless there is ‘clea[r] and unmistakabl[e]’
evidence that they did so.” 514 U.S. 938, 944 (1995)
(quoting AT&T Techs., Inc. v. Commc’n Workers of Am.,
475 U.S. 643, 649 (1986)); see also Granite Rock, 130 S. Ct.
at 2856 n.5. “In this manner the law treats silence or
ambiguity about the question ‘who (primarily) should decide
arbitrability’ differently from the way it treats silence or
ambiguity about the question ‘whether a particular merits-
related dispute is arbitrable because it is within the scope of
a valid arbitration agreement’—for in respect to this latter
question the law reverses the presumption.” First Options,
514 U.S. at 944–45 (citing Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985))
(emphasis in original).

    Here, the arbitration agreements do not contain clear and
unmistakable evidence that Plaintiffs and Toyota agreed to
arbitrate arbitrability. While Plaintiffs may have agreed to
arbitrate arbitrability in a dispute with the Dealerships, the
terms of the arbitration clauses are expressly limited to
Plaintiffs and the Dealerships. For example, Scholten’s
arbitration clause states that “[e]ither you or we may choose
to have any dispute between you and us decided by
arbitration.” The language of the contracts thus evidences
Plaintiffs’ intent to arbitrate arbitrability with the Dealerships
and no one else. The Dealerships are not a party to this
12            KRAMER V . TOYOTA MOTOR CORP .

action.3 See Momot, 652 F.3d at 987. Given the absence of
clear and unmistakable evidence that Plaintiffs agreed to
arbitrate arbitrability with nonsignatories, the district court
had the authority to decide whether the instant dispute is
arbitrable. See United Bhd. of Carpenters and Joiners of Am.
v. Desert Palace, Inc., 94 F.3d 1308, 1310 (9th Cir. 1996).

    This court addressed a similar issue in Mundi v. Union
Security Life Insurance Co., 555 F.3d 1042 (9th Cir. 2009).
In Mundi, the arbitration provision defined a dispute as a
disagreement between the two contract signatories—Wells
Fargo and the borrower. Id. at 1045. The court found that the
nonsignatory-defendant could not compel arbitration because
the arbitration agreement, by its terms, did not apply to the
nonsignatory.

         The arbitration agreement is premised on a
         disagreement between Wells Fargo and the
         borrower.      In the absence of such a
         disagreement, the arbitration provision does
         not apply. Thus, any disagreement between
         the borrower and a third party, such as [the
         defendant], is simply not within the scope of
         the arbitration agreement, even if it is related




  3
   The scope of the arbitration provisions in the Purchase Agreements
does extend to assignees. The Scholten Purchase Agreement, for example,
encompasses disputes between “you” [Plaintiffs] and “anyone to whom
we [Dealerships] transfer this contract, whether or not they sign this
contract” or “our [Dealerships’] employees and agents.” Toyota does not,
however, contend that it is a transferee, employee, or agent of the
Dealerships.
            KRAMER V . TOYOTA MOTOR CORP .                  13

       in some attenuated way to . . . the arbitration
       provision.

Id.

    As applied to this case, it makes no difference that
Plaintiffs and Toyota disagree over the arbitrability of the
arbitration agreement, as opposed to whether the entire
dispute may be arbitrated. “[T]he question ‘who has the
primary power to decide arbitrability’ turns upon what the
parties agreed about that matter.” First Options, 514 U.S. at
943 (emphasis in original). The parties to this litigation did
not agree to arbitrate arbitrability; Plaintiffs only agreed to
arbitrate arbitrability—or any other dispute—with the
Dealerships because the arbitration clause is limited to claims
between “you and us”—i.e. Plaintiffs and the Dealerships. In
the absence of a disagreement between Plaintiffs and the
Dealerships, the agreement to arbitrate arbitrability does not
apply. Therefore, a disagreement between Plaintiffs and
Toyota “is simply not within the scope of the arbitration
agreement.” Mundi, 555 F.3d at 1045.

                              II.

                              A.

    Toyota also argues that it may compel arbitration even
though it is a nonsignatory to the Purchase Agreements
because Plaintiffs are equitably estopped from avoiding
arbitration.

   “Equitable estoppel precludes a party from claiming the
benefits of a contract while simultaneously attempting to
avoid the burdens that contract imposes.” Comer v. Micor,
14              KRAMER V . TOYOTA MOTOR CORP .

Inc., 436 F.3d 1098, 1101 (9th Cir. 2006) (internal quotation
marks and citation omitted). In the arbitration context, this
principle has generated various lines of cases. See Mundi,
555 F.3d at 1046. This case involves “a nonsignatory seeking
to compel a signatory to arbitrate its claims against the
nonsignatory.” Id.

    The United States Supreme Court has held that a litigant
who is not a party to an arbitration agreement may invoke
arbitration under the FAA if the relevant state contract law
allows the litigant to enforce the agreement. See Arthur
Andersen LLP v. Carlisle, 556 U.S. 624, 632 (2009). We
therefore look to California contract law to determine whether
Toyota, as a nonsignatory, can compel arbitration.4

    Where a nonsignatory seeks to enforce an arbitration
clause, the doctrine of equitable estoppel applies in two
circumstances: (1) when a signatory must rely on the terms of
the written agreement in asserting its claims against the
nonsignatory or the claims are “intimately founded in and
intertwined with” the underlying contract, Goldman v. KPMG
LLP, 173 Cal. App. 4th 209, 221 (2009) (quoting Metalclad
Corp. v. Ventana Envtl. Org. P’ship, 109 Cal. App. 4th 1705,
1713 (2003)), and (2) when the signatory alleges substantially
interdependent and concerted misconduct by the nonsignatory
and another signatory and “the allegations of interdependent
misconduct [are] founded in or intimately connected with the
obligations of the underlying agreement.” Goldman, 173 Cal.
App. 4th at 219. Toyota argues that this case presents both
circumstances.



 4
     No party has asked us to apply any state law other than California.
            KRAMER V . TOYOTA MOTOR CORP .                  15

                              1.

    In Jones v. Jacobson, the California Court of Appeal
addressed the first possibility. 195 Cal. App. 4th 1, 20
(2011). When a signatory relies on the terms of a written
agreement,

       [u]nder [the doctrine of equitable estoppel], a
       nonsignatory defendant may invoke an
       arbitration clause to compel a signatory
       plaintiff to arbitrate its claims when the causes
       of action against the nonsignatory are
       intimately founded in and intertwined with the
       underlying contract obligations. [. . .] This
       requirement comports with, and indeed
       derives from, the very purposes of the
       doctrine: to prevent a party from using the
       terms or obligations of an agreement as the
       basis for his claims against a nonsignatory,
       while at the same time refusing to arbitrate
       with the nonsignatory under another clause of
       the same agreement.

195 Cal. App. 4th 1, 20 (2011) (internal quotations omitted)
(emphasis added) (citing Boucher v. Alliance Title Co.,
127 Cal. App. 4th 262, 271–72 (2005); JSM Tuscany, LLC v.
Superior Court, 193 Cal. App. 4th 1222, 1237 (2011);
Goldman, 173 Cal. App. 4th at 221). “[E]quitable estoppel
applies only if the plaintiffs’ claims against the nonsignatory
are dependent upon, or inextricably bound up with, the
obligations imposed by the contract plaintiff has signed with
the signatory defendant.” Goldman, 173 Cal. App. 4th at
229–30. “[M]erely ‘mak[ing] reference to’ an agreement
with an arbitration clause is not enough. Equitable estoppel
16          KRAMER V . TOYOTA MOTOR CORP .

applies ‘when the signatory to a written agreement containing
an arbitration clause “must rely on the terms of the written
agreement in asserting [its] claims” against the
nonsignatory.’” Id. at 218 (quoting MS Dealer Serv. Corp. v.
Franklin, 177 F.3d 942, 947 (11th Cir. 1999)). To determine
whether the plaintiffs’ claims relied on the written agreement,
the Goldman court looked to whether the claims that the
nonsignatory sought to arbitrate were “‘intimately founded in
and intertwined with the underlying contract obligations.’”
Id. at 221 (quoting Metalclad, 109 Cal. App. 4th at 1713).

    In Goldman, investors brought consolidated claims
against their accountants, attorneys, and investment advisors
for, among other things, breach of fiduciary duty and fraud
related to a fraudulent tax avoidance scheme. Id. at 213. As
one step in the scheme, the advisors assisted the investors in
forming limited liability companies with standard operating
agreements containing broad arbitration provisions. Id. The
accountants and attorneys, who were not parties to the
operating agreements, sought to compel arbitration, relying
on the doctrine of equitable estoppel. Id. at 216. The court
affirmed a lower court’s denial of the motion to compel
arbitration, finding that the claims were “unrelated to any of
the obligations in the operating agreements, which were
merely a procedural and collateral step in the creation of the
fraudulent tax shelters.” Id. at 218. The court observed that
the complaints did not “rely on or use any terms or
obligations of the operating agreements as a foundation for
their claims” and did not even mention the agreements. Id.
Thus, the court held the doctrine of equitable estoppel was
inapplicable. Id.

   Similarly, in Mundi, the widow of an insured borrower
brought a claim against an insurer for refusing to pay a
               KRAMER V . TOYOTA MOTOR CORP .                            17

benefit under a life insurance policy to a third-party lender
after the borrower’s death.5 555 F.3d at 1044. Although the
insurance policy did not contain an arbitration provision, the
insurer sought to compel arbitration on the basis of equitable
estoppel because a loan agreement between the borrower and
the third-party lender—designated as the creditor-beneficiary
of the policy—contained an arbitration clause. Id. The court
held that the breach of insurance policy claim was not
“intertwined” with the loan agreement and the claim did not
“arise out of” or “relate directly to” the loan agreement. Id.
at 1047 (internal quotations and alterations omitted).

    Toyota broadly asserts that Plaintiffs’ claims are
intertwined with the Purchase Agreements because they rely
upon the existence of Plaintiffs’ vehicle purchase
transactions. In addition, Toyota argues that Plaintiffs’
claims are intertwined in two specific ways: (1) Plaintiffs’


 5
   W e note some confusion as to whether Mundi, 555 F.3d 1042, remains
good law. See, e.g., In re Apple iPhone Antitrust Litig., 874 F. Supp. 2d
889, 895–98 (N.D. Cal. 2012). In Arthur Anderson, 556 U.S. 624, the
United States Supreme Court clarified that a litigant who is not party to an
arbitration agreement may invoke arbitration if the relevant state contract
law allows the litigant to enforce the agreement. Id. at 632. After careful
review, we conclude that Mundi remains good law. Although the court in
Mundi cited federal equitable estoppel cases, rather than looking directly
to applicable state law, the court applied the same substantive law on
equitable estoppel that a California court would have applied. Like the
California courts in Jones and Goldman, the Mundi court held that in order
for a nonsignatory to compel a signatory to arbitrate, the signatory’s
claims must be “intertwined with,” “arise out of,” or “relate directly to”
the contract providing for arbitration. 555 F.3d at 1047. As one court
noted, “the mere fact that the court in Mundi referred to other federal court
opinions in formulating its holding regarding equitable estoppel does not
mean that Mundi was stating ‘federal common law.’” In re Apple, 874 F.
Supp. 2d at 897.
18          KRAMER V . TOYOTA MOTOR CORP .

prayer for relief seeks “revocation of acceptance,” and (2)
Plaintiffs rely on the “price term” of the Purchase
Agreements in support of their prayer for damages for
diminution of the purchase price. We take each of these
arguments in turn.

a. Vehicle Purchases

    Toyota’s overarching argument is that Plaintiffs’ claims
are intertwined with the Purchase Agreements because
Plaintiffs’ claims rely on the existence of Plaintiffs’ vehicle
purchase transactions.

    In Count I, Plaintiffs allege that Toyota violated
California consumer protection law. Plaintiffs allege the
violation arose from Toyota’s unfair or deceptive practices,
including failure to disclose and actively concealing the risk
of the loss of brake control. Plaintiffs also allege material
representations involving the characteristics, uses, benefits,
and qualities of Toyota vehicles. For purposes of this claim,
we discern no reliance by Plaintiffs on the Purchase
Agreements. Toyota’s arguments regarding Plaintiffs’
requested relief aside, Toyota does not specifically argue this
claim is intertwined with the Purchase Agreements.

    In Count II, Plaintiffs allege Toyota violated California
unfair competition law by repeated fraudulent
misrepresentations and omissions regarding the safety of
Plaintiffs’ vehicles. This claim is not “intimately founded in”
the Purchase Agreements, Jones, 195 Cal. App. 4th at 20, nor
does it reference or rely upon the existence of the Purchase
Agreements, Goldman, 173 Cal. App. 4th at 221.
             KRAMER V . TOYOTA MOTOR CORP .                   19

    In Count III, Plaintiffs allege violation of California false
advertising law. For example, Plaintiffs allege Toyota
disseminated false or misleading statements about vehicle
safety through Toyota’s advertising, marketing, and other
publications. Similarly, Count III is not intimately founded
in, nor does it reference or rely upon, the Purchase
Agreements.

    In Count IV, Plaintiffs allege breach of the implied
warranty of merchantability because the brake defect
rendered the vehicles unfit for their ordinary purposes.
Toyota contends that the implied warranty arose by operation
of the Purchase Agreements and is therefore intertwined with
the Purchase Agreements. We disagree. The Purchase
Agreements expressly differentiate dealer warranties from
manufacturer warranties. For example, the Scholten Purchase
Agreement states, “[t]his provision does not affect any
warranties covering the vehicle that the manufacturer or
supplier may provide.” The Li Purchase Agreement further
reads, “[t]he Dealer is not a party to the manufacturer’s
warranty, in the case of a new motor vehicle or chassis, the
printed new manufacturer’s new vehicle warranty delivered
to Purchaser with such vehicle or chassis shall apply.” Thus,
Plaintiffs’ implied warranty claim against Toyota arises
independently from the Purchase Agreements, rather than
intimately relying on them.

    Finally, in Count V, Plaintiffs plead breach of contract in
the alternative, “to the extent Toyota’s repair or adjustment
commitment is deemed not to be a warranty under
California’s Commercial Code.” Plaintiffs allege the breach
arises from Toyota’s failure to adequately repair Plaintiffs’
vehicles. Toyota argues Plaintiffs’ claim relies upon the
Purchase Agreement, including privity of contract between
20           KRAMER V . TOYOTA MOTOR CORP .

Plaintiffs and Toyota. However, Plaintiffs’ breach of contract
claim does not rely on the Purchase Agreement. Although
the claim “sounds in contract,” as Toyota emphasizes, the
claim relies on Plaintiffs’ status as third-party beneficiaries to
contracts between Toyota and the Dealerships—i.e. service
duties the Dealerships owe to Plaintiffs on behalf of
Toyota—not the Purchase Agreements. We agree with the
district court’s conclusion that, in portraying Plaintiffs’
breach of contract claim as a breach of the Purchase
Agreement, Toyota misrepresents Plaintiffs’ breach of
contract claim. Plaintiffs plead breach of contract in the
alternative to the implied warranty claim, and the claim arises
from the same actions underlying the warranty
claim—Toyota’s representations about its commitment to
repairs and safety—not any promise in the Purchase
Agreements. We thus find that Count V is not intertwined
with the Purchase Agreements.

b. Revocation of Acceptance

    Toyota also contends that Plaintiffs’ claims are
intertwined because Plaintiffs seek “revocation of
acceptance” as one form of relief. Toyota reads this relief as
“revocation of acceptance of the Purchase Agreement,” as
opposed to revocation of acceptance of the sale itself.

    Looking to California contract law, the correct analysis is
whether Plaintiffs would have a claim independent of the
existence of the Purchase Agreement (equitable estoppel
applies “when the signatory must rely on the terms of the
written agreement in asserting its claims against the
nonsignatory,” Goldman, 173 Cal. App. 4th at 222 (emphasis
added), or “when the causes of action against the
nonsignatory are intimately founded in and intertwined with
            KRAMER V . TOYOTA MOTOR CORP .                 21

the underlying contract obligations,” Jones, 195 Cal. App. 4th
at 20 (emphasis added)), not whether the court must look to
the Purchase Agreement to ascertain the requested relief. The
emphasis of the case law is unmistakably on the claim itself,
not the relief. Despite Toyota’s focus on Plaintiffs’ relief,
Toyota offers no cases to support Toyota’s proposed
application.

    Here, Plaintiffs’ claims are premised on California
consumer law, unfair competition, false advertising, breach
of the implied warranty of merchantability, and breach of
contract. In order for Toyota’s equitable estoppel argument
to succeed, Plaintiffs’ claims themselves must intimately rely
on the existence of the Purchase Agreements, not merely
reference them. Toyota is correct that Plaintiffs’ claims
presume a transaction involving a purchase of a Class
Vehicle. The claims do not, however, rely upon the existence
of a Purchase Agreement. For illustration, a consumer who
purchased a vehicle with cash instead of credit would still
state a claim for which relief could be granted, absent a
Purchase Agreement. In this regard, the facts resemble the
facts of Goldman and Mundi, in which Plaintiffs’ claims
arose independently of the terms of the agreements containing
arbitration provisions. Moreover, we note that Plaintiffs’
First Amended Complaint never actually references the
Purchase Agreement, either in the prayer for relief or
otherwise.

c. Price Term

    Toyota similarly argues that Plaintiffs rely on the “price
term” of the Purchase Agreements because Plaintiffs request
damages for diminution of value of their vehicles
(“restitution” or “restitutionary disgorgement”). Again, we
22           KRAMER V . TOYOTA MOTOR CORP .

disagree. Under California law, mere reference to a term of
the Purchase Agreements is not enough. See Goldman,
173 Cal. App. 4th at 218. Moreover, we note that Plaintiffs’
Complaint does not reference the Purchase Agreements or a
specific price term. For purposes of their prayer for relief,
Plaintiffs merely rely on the fact that they exchanged value
for their vehicles, and that, due to the alleged ABS defect, the
value of their vehicles has decreased.

    We therefore find, as did the district court, that Toyota
erroneously equates Plaintiffs’ purchase of the Class Vehicles
and the existence of Purchase Agreements between Plaintiffs
and the Dealerships with interrelatedness between Plaintiffs’
claims and the obligations of the Purchase Agreements.
Plaintiffs do not seek to enforce or challenge the terms,
duties, or obligations of the Purchase Agreements. In fact,
according to Plaintiffs’ First Amended Complaint, the only
operative documents are Toyota’s marketing materials and
express written warranties, which provide the basis of the
false advertising claim.

                               2.

    Toyota next argues that Plaintiffs must arbitrate their
claims because Plaintiffs allege collusion and interdependent
misconduct between Toyota and the Dealerships. The
doctrine of equitable estoppel applies where a signatory raises
allegations of substantially interdependent and concerted
misconduct by both a nonsignatory and a signatory.
Goldman, 173 Cal. App. 4th at 222 & n.7 (citing MS Dealer,
               KRAMER V . TOYOTA MOTOR CORP .                          23

177 F.3d at 947).6 California state contract law does not
allow a nonsignatory to enforce an arbitration agreement
based upon a mere allegation of collusion or interdependent
misconduct between a signatory and nonsignatory.

         In any case applying equitable estoppel to
         compel arbitration despite the lack of an
         agreement to arbitrate, a nonsignatory may
         compel arbitration only when the claims
         against the nonsignatory are founded in and
         inextricably bound up with the obligations
         imposed by the agreement containing the
         arbitration clause. In other words, allegations
         of substantially interdependent and concerted
         misconduct by signatories and nonsignatories,
         standing alone, are not enough: the allegations
         of interdependent misconduct must be
         founded in or intimately connected with the
         obligations of the underlying agreement.

Goldman, 173 Cal. App. 4th at 219 (emphasis in original).7

    Toyota argues, “[P]laintiffs claim that Toyota and the
signatory dealers ‘engaged in a pattern of denial and
concealment’ of the alleged defect that caused [P]laintiffs’


 6
   W e note that although MS Dealer, 177 F.3d 942, is a federal case and
Arthur Andersen instructs this court to apply California state law, the
California Court of Appeal in Goldman, 173 Cal. App. 4th 209, adopted
the MS Dealer equitable estoppel analysis as California state law.

 7
   It is noteworthy that many California equitable estoppel cases omit any
mention of the concerted misconduct line of equitable estoppel cases,
suggesting the doctrine’s principal application is where plaintiffs’ claims
are intertwined with agreements containing arbitration provisions.
24          KRAMER V . TOYOTA MOTOR CORP .

injuries.” Plaintiffs deny that they allege collusion between
Toyota and the Dealerships.

    We find unconvincing Toyota’s claim that a pattern of
denial or concealment by both Toyota and the dealers
amounts to allegations of collusion or interdependent
misconduct for purposes of equitable estoppel. As the district
court noted, the sparse portions of the First Amended
Complaint that Toyota cites to support its argument do not
amount to collusion. Moreover, even if Toyota were correct
that Plaintiffs allege a pattern of concealment between Toyota
and the dealerships, these allegations are not connected to the
Purchase Agreements. Rather, like the other allegations in
the First Amended Complaint, the allegations of collusion are
not “inextricably bound up with the obligations imposed by
the agreement containing the arbitration clause.” Goldman,
173 Cal. App. 4th at 219. Therefore, Plaintiffs’ allegations
alone cannot trigger equitable estoppel under California
contract law. See id.

                              B.

    Regarding equity, we briefly note that this case is
distinguishable from other cases in which equitable estoppel
has been applied. California courts have explicitly noted that
parties should only be estopped if their “‘own conduct
renders assertion of those rights contrary to equity.’”
Goldman, 173 Cal. App. 4th at 221 (quoting Metalclad,
109 Cal. App. 4th at 1713). The “linchpin” for equitable
estoppel is fairness. Id. at 220. The facts of Metalclad, 109
Cal. App. 4th 1705, provide a useful contrast to this case.
Metalclad, a California company, entered into an oral
agreement with Ventana to sell Metalclad’s subsidiary,
Econsa. Id. at 1709. Metalclad followed up on the agreement
            KRAMER V . TOYOTA MOTOR CORP .                  25

by entering into a written agreement with Geologic, a
Ventana subsidiary, for the sale of Econsa. Id. The written
agreement included a broad arbitration clause. Id. at 1710.
Metalclad later brought claims including breach of contract
and fraud against Ventana and others. Id. When Metalclad
sought to avoid arbitration, Ventana argued that Metalclad
should be equitably estopped because Metalclad sought to
both enforce the agreement and repudiate the arbitration
provision. Id. at 1713. The court agreed, holding that the
claims were “intimately founded in and intertwined with” the
underlying contract, and it would be unfair to allow Metalclad
to avoid provisions in the same agreement it sought to
enforce. See id. at 1717. “Another maxim of jurisprudence is
relevant here . . . ‘He who takes the benefit must bear the
burden.’” Id. at 1718–19.

    By contrast, in this case, Plaintiffs do not seek to
simultaneously invoke the duties and obligations of Toyota
under the Purchase Agreement, as it has none, while seeking
to avoid arbitration. Thus, the inequities that the doctrine of
equitable estoppel is designed to address are not present.

                             III.

    Finally, Toyota argues that the district court erred in
finding that Toyota waived any right it may have had to
compel arbitration. Because we find that Toyota has no right
to compel arbitration in the present case, we need not
consider the issue of waiver.

                      CONCLUSION

    We conclude that Toyota may not compel Plaintiffs to
arbitrate their claims. The district court had the authority to
26          KRAMER V . TOYOTA MOTOR CORP .

decide whether Toyota, a nonsignatory to the Purchase
Agreements, may compel arbitration. Further, we discern no
reason that the Plaintiffs should be equitably estopped from
avoiding arbitration in this case.

     AFFIRMED.
