Del Webb Communities, Inc. v. Roger Carlson

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 15-1385

DELL WEBB COMMUNITIES, INC.; PULTEGROUP, INC.,

Petitioners - Appellants,

v.

ROGER F. CARLSON; MARY JO CARLSON,

Respondents - Appellees.

Appeal from the United States District Court for the District of
South Carolina, at Beaufort. Solomon Blatt, Jr., Senior
District Judge. (9:14−cv−01877−SB)

Argued: December 9, 2015 Decided: March 28, 2016

Before TRAXLER, Chief Judge, GREGORY and DIAZ, Circuit Judges.

Reversed, vacated, and remanded by published opinion. Judge Diaz
wrote the opinion, in which Chief Judge Traxler and Judge
Gregory joined.

ARGUED: Robert Leon Widener, MCNAIR LAW FIRM, P.A., Columbia,
South Carolina, for Appellants. Michael S. Seekings, LEATH
BOUCH & SEEKINGS, LLP, Charleston, South Carolina, for
Appellees. ON BRIEF: A. Victor Rawl, Jr., Henry W. Frampton,
IV, MCNAIR LAW FIRM, P.A., Charleston, South Carolina, for
Appellants. William Jefferson Leath, Jr., LEATH BOUCH &
SEEKINGS, LLP, Charleston, South Carolina; Phillip W. Segui,
Jr., Amanda Morgan Blundy, SEGUI LAW FIRM, PC, Mount Pleasant,
South Carolina, for Appellees.
DIAZ, Circuit Judge:

Roger and Mary Jo Carlson signed a sales agreement with

PulteGroup, Inc. and its subsidiary Del Webb Communities, Inc.

(together, “Pulte”) for the purchase of a lot and construction

of a home in Hilton Head, South Carolina. The agreement

contained an arbitration clause. This appeal stems from the

Carlsons’ attempt to arbitrate class-action claims against Pulte

under the agreement, and Pulte’s efforts to limit arbitration to

the claims between the three parties. The district court held

that the availability of class arbitration under an arbitration

agreement is a procedural question for the arbitrator to decide,

rather than a question for the court.

Because the primary goal in enforcing an arbitration

agreement is to discern and honor party intent, and because of

the fundamental differences between bilateral and class

arbitration—which change the nature of arbitration altogether—we

hold that whether parties agree to class arbitration is a

gateway question for the court. Accordingly, we reverse the

district court’s order denying Pulte’s motion for partial

summary judgment, vacate the judgment dismissing Pulte’s

petition, and remand the case for the district court to

determine whether the arbitration clause permits class

arbitration.

2
 I.

The relevant facts are not in dispute. The Carlsons signed

the sales agreement at issue in March of 2002. Section 4.3 of

the agreement contains an arbitration clause that, in relevant

part, states:

Any controversy or claim arising out of or
relating to this Agreement or Your purchase
of the Property shall be finally settled by
arbitration . . . .

After Closing, every controversy or claim
arising out of or relating to this
Agreement, or the breach thereof shall be
settled by binding arbitration as provided
by the South Carolina Uniform Arbitration
Act. . . . The rules of the American
Arbitration Association (AAA), published for
construction industry arbitrations, shall
govern the arbitration proceeding and the
method of appointment of the arbitrator.

. . . .

Any party to this Agreement may bring
action . . . to compel arbitration . . . .

J.A. 34–35.

In September 2008, the Carlsons filed suit in South

Carolina state court against Pulte and two other parties. The

complaint raised several claims, all regarding alleged

construction defects. The Carlsons later moved to amend their

complaint to add class-action allegations because their lawsuit

was one of approximately 140 like cases pending against Pulte.

The state court granted the motion over Pulte’s objection.

3
 Pulte then moved to dismiss the amended complaint, or in

the alternative, to compel bilateral arbitration of the

Carlsons’ claims. The state court denied both motions, but the

South Carolina Court of Appeals reversed, finding the Carlsons’

claims subject to arbitration under the sales agreement with

Pulte. Carlson v. S.C. State Plastering, LLC, 743 S.E.2d 868,

875 (S.C. Ct. App. 2013).

The Carlsons subsequently filed a demand for arbitration

with the American Arbitration Association (AAA). Their demand

sought class arbitration and class certification, and set the

claim amount at $75,000 “until such time as the Class is

certified.” J.A. 86. The class size, as identified in the

demand for arbitration and attached amended complaint, accounts

for approximately 2,000 homes—significantly more than the 140 or

so similar claims pending against Pulte when the Carlsons moved

to proceed as a class.

On May 6, 2014, the AAA manager held a conference call with

the Carlsons and Pulte. During the call, the manager notified

the parties that the arbitrator would decide whether the sales

agreement permits class arbitration.

Three days later, Pulte filed in federal court a Petition

and Complaint to Compel Bilateral Arbitration (“Petition”) under

§ 4 of the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.

As relevant here, Pulte argued that whether the sales agreement

4
authorizes class arbitration is a question of arbitrability for

the court to determine—not a procedural question for the

arbitrator. Pulte sought a declaratory judgment that the

parties did not agree to class arbitration.

Between May 2014 and March 2015, the parties filed several

motions in the district court, including Pulte’s motion for

partial summary judgment that is the subject of this appeal. In

the meantime, the arbitrator ruled that the sales agreement

authorized class arbitration, but he stayed the matter for the

resolution of the federal litigation. Subsequent motions in the

district court and this court resulted in a stay of the

arbitration proceedings pending this appeal.

The district court denied Pulte’s partial summary judgment

motion and dismissed the Petition. Relying on the Supreme

Court’s plurality decision in Greentree Financial Corp. v.

Bazzle, 539 U.S. 444 (2003), and this court’s unpublished

decision in Davis v. ECPI College of Technology, L.C., 227 F.

App’x 250 (4th Cir. 2007), the court reasoned that whether the

arbitration clause permits class arbitration is a simple

contract interpretation issue, and because the question

“concerns the procedural arbitration mechanisms available to the

Carlsons,” the threshold inquiry is a question for the

arbitrator rather than for the court. Del Webb Cmtys., Inc. v.

Carlson, No. 9:14-cv-01877-SB, at 7 (D.S.C. Mar. 25, 2015).

5
 This appeal followed.

II.

We review a district court’s grant of summary judgment de

novo. Thompson v. Aluminum Co. of Am., 276 F.3d 651, 656 (4th

Cir. 2002).

A.

We turn first to the Carlsons’ contention that we should

dismiss the appeal—and that the district court should have

dismissed the Petition—for lack of subject-matter jurisdiction.

The Carlsons first challenge Pulte’s assertion of diversity

jurisdiction, contending that the amount-in-controversy

requirement is not met and that the parties are not

geographically diverse. We, however, are satisfied that the

district court had diversity jurisdiction. 1 “In considering a

suit to compel arbitration, the question of jurisdictional

amount may be determined by reference to the possible award

resulting from the requested arbitration.” Delta Fin. Corp. v.

Paul D. Comanduras & Assocs., 973 F.2d 301, 304 (4th Cir. 1992).

The Carlsons’ amended complaint and demand for arbitration,

together, provide that the value of their individual claim is

1
The Carlsons complain (incorrectly) that the district
court never explained why it had jurisdiction over the Petition.
During a hearing on July 8, 2014, the district court denied the
Carlsons’ motion to dismiss for lack of jurisdiction and
explained the grounds for its ruling.

6
$75,000, plus treble damages and attorneys’ fees, which

satisfies the statutory floor. See 28 U.S.C. § 1332(a); Francis

v. Allstate Ins. Co., 709 F.3d 362, 368 (4th Cir. 2013) (stating

that attorneys’ fees count towards the amount-in-controversy

calculation when the contract provides for them); J.A. 40

(providing in sales agreement that award of attorneys’ fees goes

to the prevailing party). Moreover, the parties are completely

diverse, as the Carlsons are South Carolina citizens, and the

Pulte parties are Michigan and Arizona citizens. See 28 U.S.C.

§ 1332(a)(1); Home Buyers Warranty Corp. v. Hanna, 750 F.3d 427,

433 (4th Cir. 2014).

The Carlsons, however, resist this conclusion on the ground

that South Carolina State Plastering, LLC (“SCSP”), a defendant

named in the original state court complaint, is a South Carolina

citizen. But SCSP is not a party to the federal proceedings,

and its citizenship is therefore irrelevant. Further, SCSP did

not agree to arbitrate with the Carlsons and is not a party to

the underlying arbitration. See Moses H. Cone Mem’l Hosp. v.

Mercury Constr. Corp., 460 U.S. 1, 20 (1983) (calling for

piecemeal resolution in different forums of a dispute when the

plaintiff has an arbitration agreement with some defendants and

not others because “an arbitration agreement must be enforced

notwithstanding the presence of other persons who are parties to

the underlying dispute but not to the arbitration agreement”).

7
 We also conclude that the district court had jurisdiction

under the Class Action Fairness Act of 2005 (CAFA), which

provides that a district court has original jurisdiction over

class actions with an amount in controversy greater than

$5,000,000 and in which “any member of a class of plaintiffs is

a citizen of a State different from any defendant.” 28 U.S.C.

§ 1332(d)(2)(A). To determine federal jurisdiction over an FAA

§ 4 petition, the court “may ‘look through’ [the] petition to

determine whether it is predicated on an action that ‘arises

under’ federal law.” Vaden v. Discover Bank, 556 U.S. 49, 62

(2009) (determining jurisdiction over a petition to compel

arbitration of class-action claims); see also 9 U.S.C. § 4

(providing that a petition to compel arbitration is proper in

federal court when the court “would have jurisdiction under

title 28 . . . of a suit arising out of the controversy between

the parties”).

Jurisdiction under CAFA, then, depends on the underlying

substantive controversy—here, the putative class action. And in

“looking through” Pulte’s FAA petition, we find federal

jurisdiction would be proper. Vaden, 556 U.S. at 62. As

discussed, Pulte and the Carlsons are completely diverse, and

the Carlsons have made class-action allegations. 2 Although Pulte

2 Again relying on SCSP’s South Carolina citizenship, the
Carlsons urge that the district court should have dismissed the
Petition under an exception to CAFA, which requires district

8
seeks only bilateral arbitration, the substantive matter

currently in arbitration has an amount in controversy exceeding

$5,000,000: the amended complaint attached to the Carlsons’

demand for arbitration alleged claims “encompass[ing] thousands

of houses,” and the demand for arbitration valued the Carlsons’

claim alone at $75,000, J.A. 4.

Next, the Carlsons assert that the Rooker–Feldman doctrine

precludes federal jurisdiction over the matter because the

issues presented in the Petition and on appeal were decided by

the state courts. Under Rooker–Feldman, only the U.S. Supreme

Court may review state court final judgments; a federal district

court has no such authority. D.C. Ct. of App. v. Feldman, 460

U.S. 462, 482 (1983); Rooker v. Fid. Trust Co., 263 U.S. 413,

416 (1923). But the Supreme Court has since clarified—after we

and several of our sister circuits interpreted the Rooker–

Feldman doctrine broadly—that the doctrine “applies only when

the loser in state court files suit in federal district court

seeking redress for an injury allegedly caused by the state

court’s decision itself.” Davani v. Va. Dep’t of Transp., 434

F.3d 712, 713 (4th Cir. 2006) (citing Exxon Mobil Corp. v. Saudi

Basic Indus. Corp., 544 U.S. 280 (2005)). Here, Pulte is not

courts to decline to exercise jurisdiction over a class action
“in which . . . at least [one] defendant is a defendant . . .
who is a citizen of the State in which the action was originally
filed [i.e., South Carolina].” 28 U.S.C.
§ 1332(d)(4)(A)(i)(II)(cc). As discussed, SCSP’s citizenship is
immaterial to the underlying arbitration.

9
the state-court loser; when Pulte moved to compel arbitration in

state court, the motion was ultimately granted. Moreover, the

Petition does not challenge the state court decision. Rather,

it disputes the availability of class arbitration under the

sales agreement and the proper forum for deciding that issue,

questions that were never litigated in the state court. 3

Last, the Carlsons argue that Pulte cannot establish

federal subject-matter jurisdiction through the FAA. Pulte,

however, has never contended that the district court had federal

question jurisdiction based on the FAA, acknowledging, as it

must, that the FAA “does not create any independent federal-

question jurisdiction” but rather only permits the federal

district court to compel arbitration when the court “would have

jurisdiction over a suit on the underlying dispute,” through

“diversity of citizenship or some other independent basis.”

Moses H. Cone, 460 U.S. at 25 n.32.

At oral argument, the Carlsons pressed the purported

jurisdictional defect, arguing for the first time that Pulte is

not an aggrieved party under the FAA because the statute

provides a remedy only where a party is “aggrieved by the

alleged failure, neglect, or refusal of another to arbitrate

3
We reject the Carlsons’ assertion that these questions
were decided by the South Carolina Court of Appeals. That court
found that the claims alleged by the Carlsons in their complaint
should be arbitrated, but it said nothing about the issue of
class-wide arbitration.

10
under a written agreement for arbitration.” 9 U.S.C. § 4. The

Carlsons’ contention, however, does not implicate the district

court’s subject-matter jurisdiction. Rather, it is a question

of statutory standing, Discover Bank v. Vaden, 489 F.3d 594, 607

n.20 (4th Cir. 2007), overruled on other grounds by 556 U.S. 49

(2009), which the Carlsons waived by failing to raise the point

in the district court, see, e.g., Merrimon v. Unum Life Ins. Co.

of Am., 758 F.3d 46, 53 n.3 (1st Cir. 2014) (“[A]rguments based

on statutory standing, unlike arguments based on constitutional

standing, are waivable.”).

In any case, Pulte has statutory standing. The “central or

‘primary’ purpose of the FAA is to ensure that ‘private

agreements to arbitrate are enforced according to their terms,’”

and a party may not be forced to submit to class arbitration

absent express agreement. Stolt-Nielsen S.A. v. AnimalFeeds

Int’l Corp., 559 U.S. 662, 682, 684 (2010) (quoting Volt Info.

Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ.,

489 U.S. 468, 479 (1989)). Here, Pulte is sufficiently

aggrieved under § 4 by the alleged refusal of the Carlsons to

arbitrate bilaterally, as required under the written agreement.

Cf. Puleo v. Chase Bank USA, N.A., 605 F.3d 172, 181 (3d Cir.

2010) (en banc) (rejecting appellants’ non-arbitrability

argument that they “are amenable to arbitration in the abstract”

because “a district court does not issue an order compelling

11
arbitration in the abstract[; r]ather, . . . § 4 of the FAA

‘confers only the right to obtain an order directing that

“arbitration proceed in the manner provided for in [the

parties’] agreement”’” (alteration in original) (quoting Volt,

489 U.S. at 475)).

Accordingly, we deny the Carlsons’ request that we dismiss

the appeal for lack of subject matter jurisdiction.

B.

The district court denied Pulte’s motion for partial

summary judgment, concluding that the inquiry—whether an

arbitration clause permits class arbitration—is procedural and

therefore for the arbitrator. We disagree and hold that whether

an arbitration clause permits class arbitration is a gateway

question of arbitrability for the court.

Under the FAA, arbitration agreements are “valid,

irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.” 9 U.S.C.

§ 2. Despite this “liberal . . . . federal policy favoring

arbitration,” Moses H. Cone, 460 U.S. at 24, the FAA seeks to

enforce arbitration agreements “in the manner provided for in

such agreement,” § 4; see Stolt-Nielsen, 559 U.S. at 682.

The Supreme Court has reiterated the contractual nature of

arbitration agreements, careful to avoid forcing parties to

resolve their disputes through means not intended at the time of

12
contract formation. E.g., Stolt-Nielsen, 559 U.S. at 681

(“[T]he FAA imposes certain rules of fundamental importance,

including the basic precept that arbitration ‘is a matter of

consent, not coercion.’” (quoting Volt, 489 U.S. at 479));

Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)

(“[A]rbitration 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.” (quoting United Steelworkers of Am. v.

Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960))); First

Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 945 (1995) (“[A]

party can be forced to arbitrate only those issues it

specifically has agreed to submit to arbitration . . . .”).

Advancing the prioritization of party intent in arbitration

agreements, the Supreme Court has identified two categories of

threshold questions—procedural questions for the arbitrator, and

questions of arbitrability for the court. See Howsam, 537 U.S.

at 83–84. Procedural questions arise once the obligation to

arbitrate a matter is established, and may include such issues

as the application of statutes of limitations, notice

requirements, laches, and estoppel. See id. at 85; see also

John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964)

(“Once it is determined . . . that the parties are obligated to

submit the subject matter of a dispute to arbitration,

‘procedural’ questions which grow out of the dispute and bear on

13
its final disposition should be left to the arbitrator.”). The

Court has explained that these are questions for the arbitrator

not only because the “parties would likely expect that an

arbitrator would decide [them],” Howsam, 537 U.S. at 84, but

also because the questions do not present any legal challenge to

the arbitrator’s underlying power, see AT&T Techs., Inc. v.

Commc’ns Workers of Am., 475 U.S. 643, 648–49 (1986); United

Steelworkers, 363 U.S. at 582–83.

Questions of arbitrability, on the other hand, are

something else entirely. When the answer to a question

“determine[s] whether the underlying controversy will proceed to

arbitration on the merits,” that question necessarily falls

within the “narrow circumstance[s]” of arbitrable issues for the

court to decide. Howsam, 537 U.S. at 83; see also Rent-A-

Center, W., Inc. v. Jackson, 561 U.S. 63, 78 (2010)

(“‘[Q]uestion[s] of arbitrability’ thus include questions

regarding the existence of a legally binding and valid

arbitration agreement, as well as questions regarding the scope

of a concededly binding arbitration agreement.” (alterations in

original)).

The Supreme Court has not conclusively told us who gets to

decide whether an arbitration agreement provides for class

arbitration, but the Court has provided some guidance. First,

although a plurality of the Court in Green Tree Financial Corp.

14
v. Bazzle found that the issue was a procedural one for the

arbitrator, 539 U.S. at 452–53, the Court’s treatment of Bazzle

in subsequent decisions has effectively disavowed that

rationale, see Oxford Health Plans LLC v. Sutter, 133 S. Ct.

2064, 2068 & n.2 (2013) (explaining the high bar for overturning

an arbitrator’s decision on the grounds that he exceeded his

powers, but stating, “We would face a different issue if [the

petitioner] had argued below that the availability of class

arbitration is a so-called ‘question of arbitrability.’ Those

questions . . . are presumptively for courts to decide.”);

Stolt-Nielsen, 559 U.S. at 680 (“Unfortunately, the opinions in

Bazzle appear to have baffled the parties in this case . . . .

[T]he parties appear to have believed that the judgment in

Bazzle requires an arbitrator, not a court, to decide whether a

contract permits class arbitration. In fact, however, only the

plurality decided that question.” (emphasis added) (citation

omitted)).

Second, the Court over several decades has crafted legal

rules regarding the interpretation of arbitration agreements,

which, together, demonstrate that the issue presented here is

one of arbitrability. To begin with, it is well established

that whether the parties have submitted a particular dispute to

arbitration is “undeniably an issue for judicial determination[]

[u]nless the parties clearly and unmistakably provide

15
otherwise.” AT&T Techs., 475 U.S. at 649; see also John Wiley,

376 U.S. at 547 (“[W]hether or not [a party] [i]s bound to

arbitrate, as well as what issues it must arbitrate, is a matter

to be determined by the Court on the basis of the contract

entered into by the parties.” (quoting Atkinson v. Sinclair Ref.

Co., 370 U.S. 238, 241 (1962))).

In First Options of Chicago, Inc. v. Kaplan, the Court

extended this rule to the determination of who has the primary

power—the arbitrator or the court—to decide whether the parties

delegated a question of arbitrability to arbitration, stating

that “[c]ourts should not assume that the parties agreed to

arbitrate arbitrability” absent “‘clea[r] and unmistakabl[e]’

evidence.” 514 U.S. at 944 (alterations in original) (quoting

AT&T Techs., 475 U.S. at 649).

The Court in Stolt-Nielsen S.A. v. AnimalFeeds

International Corp. took its refusal to “‘force unwilling

parties to arbitrate’ contrary to their expectations” one step

further. 559 U.S. at 686 (quoting First Options, 514 U.S. at

945). There, it announced a rule for determining whether an

arbitration agreement permits class arbitration. The Court

found that “class-action arbitration changes the nature of

arbitration to such a degree that it cannot be presumed the

parties consented to it by simply agreeing to submit their

disputes to an arbitrator.” Id. at 685. Rather, the Court held

16
that parties cannot be forced to arbitrate on a class-wide basis

absent “a contractual basis for concluding that the party agreed

to do so.” Id. at 684.

The evolution of the Court’s cases are but a short step

away from the conclusion that whether an arbitration agreement

authorizes class arbitration presents a question as to the

arbitrator’s inherent power, which requires judicial review. In

that regard, the Court has highlighted the significant

distinctions between class and bilateral arbitration, and these

fundamental differences confirm that whether an agreement

authorizes the former is a question of arbitrability.

When parties agree to forgo their right to litigate in the

courts and in favor of private dispute resolution, they expect

the benefits flowing from that decision: less rigorous

procedural formalities, lower costs, privacy and

confidentiality, greater efficiency, specialized adjudicators,

and—for the most part—finality. These benefits, however, are

dramatically upended in class arbitration, which brings with it

higher risks for defendants. See Stolt-Nielsen, 559 U.S. at

686–87 (contrasting the high stakes of class-action arbitration

with its limited scope of judicial review).

In litigation, certification decisions may be appealed on

both an interlocutory basis and after a final judgment, and the

appellate court reviews questions of law de novo and factual

17
findings for clear error. E.g., Teamsters Local 445 Freight

Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 201 (2d Cir.

2008). The FAA, however, provides very limited grounds for

vacating an arbitration award. See 9 U.S.C. § 10 (providing

grounds, such as: an award “procured by corruption, fraud, or

undue means;” and when the arbitrator evidences “partiality or

corruption,” is “guilty of misconduct” or “other misbehavior”

that prejudices the party’s rights, or “exceed[s] [his or her]

powers”). A reviewing court’s ability to modify or correct an

award is similarly cabined. See 9 U.S.C. § 11. And the FAA has

been interpreted to prohibit parties from contractually

expanding the scope of judicial review. See Hall St. Assocs.,

L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008).

As a result, “[t]he absence of multilayered review” in

arbitration “makes it more likely that errors will go

uncorrected.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333,

350 (2011). This is a cost that “[d]efendants are willing to

accept” in bilateral arbitration “since [the errors’] impact is

limited to the size of individual disputes, and presumably

outweighed by savings from avoiding the courts.” Id. But

“bet[ting] the company” without effective judicial review is a

cost of class arbitration that defendants would not lightly

accept. Id. at 351.

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 Moreover, in bilateral arbitration, the lack of rigorous

procedural rules greatly increases the speed and lowers the cost

of the dispute resolution, but in class arbitration, procedural

formality is required, reducing—or eliminating altogether—these

advantages. This is because the arbitrator must determine,

before ruling on the merits, whether to certify the class,

whether the named parties satisfy mandatory standards of

representation and commonality, how discovery will function, and

how to bind absent class members. Concepcion, 563 U.S. at 348–

49. In turn, costs and time increase. See id. (finding that

the average bilateral arbitration begun between January and

August 2007 reached a final disposition in four-to-six months,

whereas none of the class arbitrations initiated as of September

2009 had resulted in a final merits award, and the average time

from filing to resolution—through settlement, withdrawal, or

dismissal, not judgment on the merits—was 630 days).

It is not surprising then that those circuit courts to have

considered the question have concluded that, “unless the parties

clearly and unmistakably provide otherwise,” whether an

arbitration agreement permits class arbitration is a question of

arbitrability for the court. Reed Elsevier, Inc. ex rel.

LexisNexis Div. v. Crockett, 734 F.3d 594, 597–99 (6th Cir.

2013) (quoting Howsam, 537 U.S. at 83) (reasoning that the

Supreme Court “has given every indication, short of an outright

19
holding, that classwide arbitrability is a gateway question” for

the court, and focusing on Stolt-Nielsen and Concepcion’s

observations of the fundamental differences between bilateral

and class arbitration); see also Opalinski v. Robert Half Int’l

Inc., 761 F.3d 326, 331–34, 335-36 (3d Cir. 2014) (finding that

the Supreme Court had “cast doubt” on the Bazzle plurality, and

that an agreement’s authorization of class arbitration

implicates both whose claims and the type of controversy an

arbitrator may resolve).

Leaving the question of class arbitration for the court

also flows logically from our own cases. In Central West

Virginia Energy, Inc. v. Bayer Cropscience LP, for example, we

stated (albeit in dicta) that “consent to class arbitration did

not fall within [the] category of ‘procedural’ questions . . . .

because the class-action construct wreaks ‘fundamental changes’

on the ‘nature of arbitration.’” 645 F.3d 267, 274–75 (4th Cir.

2011) (quoting Stolt-Nielsen, 559 U.S. at 685–86). Since then,

at least two district judges in this circuit have held that

whether an agreement permits class arbitration is a question of

arbitrability for the court. See Chesapeake Appalachia, LLC v.

Suppa, 91 F. Supp. 3d 853, 861 (N.D.W. Va. 2015); Bird v.

Turner, No. 5:14CV97, slip. op. at *7 (N.D.W. Va. Sept. 1,

2015).

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 A review of the kinds of disputes we have found to be

procedural in nature shows that our decision today aligns with

circuit precedent. E.g., Bayer Cropscience, 645 F.3d at 274

(whether an arbitration panel in Richmond, Virginia, or in

Charleston, West Virginia, should resolve the dispute); Dockser

v. Schwartzberg, 433 F.3d 421 (4th Cir. 2006) (the question of

the number of arbitrators); Durham Cty. v. Richards & Assocs.,

742 F.2d 811 (4th Cir. 1984) (limitations period expressed in

arbitration agreement raised as defense to arbitration); In re

Mercury Constr. Corp., 656 F.2d 933 (4th Cir. 1981) (en banc)

(whether untimeliness, waiver, or laches were for the arbitrator

or court’s determination), aff’d sub nom. Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1.

Most notably, these decisions do not challenge the

underlying agreement to submit the dispute to arbitration. See

Marrowbone Dev. Co. v. Dist. 17, United Mine Workers of Am., 147

F.3d 296, 300 (4th Cir. 1998) (“[T]he court decides, as issues

of contract law, the threshold questions of whether a party is

contractually bound to arbitrate and whether, if so bound, the

arbitration provision’s scope makes the issue in dispute

arbitrable.”). Further, we have made clear that the scope of

arbitrability itself is not an issue presumptively for the

arbitrator to decide. See Va. Carolina Tools, Inc. v. Int’l

Tool Supply, Inc., 984 F.2d 113, 117 (4th Cir. 1993) (finding

21
both that “except as clearly and unmistakably indicated in their

contract, the parties d[o] not intend to commit the very issue

of the scope of arbitrability itself to arbitration,” and that

“the typical, broad arbitration clause” does not meet that

standard).

In reaching its contrary result, the district court relied

on our unpublished decision in Davis v. ECPI College of

Technology, L.C., 227 F. App’x 250 (4th Cir. 2007). There, we

found that “[t]he question of ‘what kind of arbitration

proceedings’ are required under the arbitration clause is not a

gateway issue for a court to decide.” Id. at 253. But Davis

was decided before Stolt-Nielsen, Concepcion, and Oxford Health

Plans, and relied exclusively on the plurality in Bazzle. Given

the thin reed that is now Bazzle, we decline to follow our

unpublished precedent.

III.

In this case, the parties did not unmistakably provide that

the arbitrator would decide whether their agreement authorizes

class arbitration. In fact, the sales agreement says nothing at

all about the subject. Accordingly, the district court erred in

concluding that the question was a procedural one for the

arbitrator. We therefore reverse the district court’s order

denying Pulte’s motion for partial summary judgment, vacate the

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judgment dismissing the Petition, and remand for further

proceedings. On remand, the district court shall determine

whether the parties agreed to class arbitration.

REVERSED, VACATED, AND REMANDED

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