Document Type
Arguendo (Online)
Abstract
This Note analyzes a 2021 decision in which a Ninth Circuit panel diverged from its sister circuits on whether an arbitrator may decide the enforceability of an arbitration agreement that excludes the application of federal law in the arbitration proceedings. In Brice v. Plain Green, LLC (Brice I), the Ninth Circuit panel considered several arbitration agreements that contained delegation provisions. A delegation provision is an additional agreement to arbitrate the validity, enforceability, or scope (collectively, “arbitrability issues”) of a broader arbitration agreement.
Analyzing the enforceability of the delegation provisions apart from that of the arbitration agreements, the panel compelled the plaintiffs to arbitrate their challenge to the enforceability of the arbitration agreements. In doing so, the panel examined the enforceability of the delegation provisions under the prospective-waiver doctrine, which prohibits an arbitration agreement from waiving a litigant’s right to pursue federal statutory remedies in arbitration. Finding that the delegation provisions did not themselves waive the plaintiffs’ right to pursue federal remedies, regardless of whether the arbitration agreements would have waived that right or not, the panel held that the delegation provisions were valid and enforceable. However, the Ninth Circuit vacated the opinion of the panel for a rehearing en banc. Shortly after, the parties reached a settlement agreement. Thus, the court dismissed the appeal as moot, leaving the panel’s decision vacated without adopting or rejecting its reasoning.
While Brice I currently stands vacated, future courts should readopt the panel’s approach if faced with a similar case. The Ninth Circuit panel correctly decided Brice I because its decision reflected a rigorously accurate application of Supreme Court precedent on the treatment of delegation provisions, properly fitting together the delegation provisions, arbitration agreements, and larger contracts in the case like matryoshka dolls (Russian nesting dolls). Likewise, the panel rightly declined to invalidate the delegation provisions in the case under the prospective-waiver doctrine. Regarding public policy, the panel’s decision placed delegation provisions on equal footing with other arbitration agreements and exercised appropriate restraint by refusing to extricate the plaintiffs from a disadvantageous agreement that they nevertheless agreed to.
This Note begins with a review of Brice I’s factual background and procedural posture, followed by a review of law relevant to the treatment of delegation provisions. Next, it offers an analogical defense of the Ninth Circuit panel’s approach in the face of contrary decisions by several of its sister circuits. Finally, this Note closes with an analysis of how the panel considered the specific delegation provisions in Brice I.
DOI
10.37419/LR.V10.Arg.2
First Page
16
Last Page
27
Recommended Citation
Michael P. Bitgood,
The Matryoshka Model: Understanding the Relationship Between Delegation Provisions and the Broader Arbitration Agreements That Contain Them,
10
Tex. A&M L. Rev.
Arguendo
16
(2023).
Available at:
https://doi.org/10.37419/LR.V10.Arg.2
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