Del Webb Communities, Inc. v. Roger Carlson

Filing

PUBLISHED AUTHORED OPINION filed. Originating case number: 9:14-cv-01877-SB. [999782579]. [15-1385]

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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.

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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.

contained an arbitration clause.

The

agreement

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

gateway question for the court.
district

court’s

summary

judgment,

petition,
determine

and

order

vacate

remand

whether

denying

the

the

the
case

to

2

arbitration

is

a

Accordingly, we reverse the
Pulte’s
judgment
for

arbitration

arbitration.

class

the

motion

for

partial

dismissing

Pulte’s

district

clause

court

permits

to

class

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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.
complaint

raised

several

construction defects.

claims,

all

regarding

The

alleged

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.

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

alternative,

Carlsons’ claims.

to

compel

bilateral

arbitration

of

the

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

certified.”

at

$75,000

J.A. 86.

“until

such

time

as

the

Class

is

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

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authorizes class arbitration is a question of arbitrability for
the

court

to

arbitrator.

determine—not
Pulte

sought

a
a

procedural
declaratory

question

for
that

judgment

the
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

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

meantime,

the

arbitrator

ruled

that

the

sales

for
In

agreement

authorized class arbitration, but he stayed the matter for the
resolution of the federal litigation.
district

court

and

this

court

Subsequent motions in the

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.

Court’s

plurality

decision

Bazzle,

539

444

U.S.

in

Relying

on

the

Greentree
and

(2003),

Financial
court’s

this

Supreme

Corp.

v.

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
contract

clause

permits

interpretation

class

issue,

arbitration
and

because

is
the

a

simple
question

“concerns the procedural arbitration mechanisms available to the
Carlsons,”

the

threshold

inquiry

arbitrator rather than for the court.

is

a

question

for

Del Webb Cmtys., Inc. v.

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

5

the

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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,
requirement

contending
is

not

met

geographically diverse.

that
and

the
that

amount-in-controversy
the

parties

are

not

We, however, are satisfied that the

district court had diversity jurisdiction. 1

“In considering a

suit

of

to

amount

compel

may

be

arbitration,
determined

by

the

question

reference

to

resulting from the requested arbitration.”

the

jurisdictional
possible

award

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.
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$75,000,

plus

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treble

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damages

satisfies the statutory floor.

and

attorneys’

fees,

which

See 28 U.S.C. § 1332(a); Francis

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

attorneys’

calculation

when

fees

count

the

towards

contract

the

provides

amount-in-controversy
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

U.S.

Constr.

Corp.,

460

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”).

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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.”
§ 1332(d)(2)(A).

28 U.S.C.

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.”
(2009)

(determining

arbitration

of

Vaden v. Discover Bank, 556 U.S. 49, 62
jurisdiction

class-action

over

claims);

a
see

petition
also

9

to

compel

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.
“looking

through”

jurisdiction

would

Pulte’s
be

FAA

proper.

petition,
Vaden,

556

we

find

U.S.

at

And in
federal

62.

As

discussed, Pulte and the Carlsons are completely diverse, and
the Carlsons have made class-action allegations. 2

2

Although Pulte

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
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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

of

several

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

court’s decision itself.”

injury

allegedly

caused

by

the

state

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.
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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.
it

disputes

the

availability

of

class

arbitration

Rather,

under

the

sales agreement and the proper forum for deciding that issue,
questions that were never litigated in the state court. 3
Last,
federal

the

Carlsons

subject-matter

argue

that

jurisdiction

Pulte

through

cannot
the

establish

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 federalquestion

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

provides

aggrieved
a

remedy

party
only

under
where

the
a

FAA

party

because
is

the

“aggrieved

statute
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.
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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.
‘primary’

purpose

of

the

FAA

is

to

The “central or

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

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‘confers

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in

only

“arbitration

the

abstract[;

the

right

proceed

in

to

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r]ather, . . .
obtain

the

an

manner

§ 4

order

of

the

directing

provided

for

in

FAA
that
[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
summary

district

court

judgment,

denied

concluding

Pulte’s
that

the

motion

for

partial

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.

favoring

Despite

this

“liberal . . . .

federal

policy

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

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contract
(“[T]he

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formation.
FAA

imposes

E.g.,
certain

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Stolt-Nielsen,
rules

of

559

U.S.

fundamental

at

681

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.
at 83–84.

See Howsam, 537 U.S.

Procedural questions arise once the obligation to

arbitrate a matter is established, and may include such issues
as

the

application

of

statutes

requirements, laches, and estoppel.

of

limitations,

notice

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

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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
something

of

else

arbitrability,

entirely.

When

on
the

the

other

answer

to

hand,
a

are

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.
Center,

W.,

Inc.

(“‘[Q]uestion[s]
regarding

the

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

of

v.

Jackson,

561

arbitrability’

existence

of

a

U.S.
thus

legally

63,
include

binding

78

(2010)

questions
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

arbitration, but the Court has provided some guidance.

class
First,

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

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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

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

are

presumptively

for

courts

to

class
Those

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.
plurality

decided

that

question.”

In fact, however, only the
(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

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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
arbitrate

should

not

arbitrability”

evidence.”

assume

absent

that

the

“‘clea[r]

parties
and

agreed

to

unmistakabl[e]’

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

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

Court

International

in

Corp.

Stolt-Nielsen
took

its

S.A.

refusal

to

v.

AnimalFeeds

“‘force

unwilling

parties to arbitrate’ contrary to their expectations” one step
further.
945).

559 U.S. at 686 (quoting First Options, 514 U.S. at
There, it announced a rule for determining whether an

arbitration

agreement

found

“class-action

that

permits

class

arbitration.

arbitration

changes

The

the

Court

nature

of

arbitration to such a degree that it cannot be presumed the
parties

consented

to

it

by

disputes to an arbitrator.”

simply

agreeing

Id. at 685.

16

to

submit

their

Rather, the Court held

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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

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

regard,

the

Court

has

highlighted

the

the
In

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

procedural

flowing

from

formalities,

confidentiality,

greater

that
lower

efficiency,

and—for the most part—finality.

decision:
costs,
specialized

less

rigorous

privacy

and

adjudicators,

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

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findings for clear error.

Pg: 18 of 23

E.g., Teamsters Local 445 Freight

Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 201 (2d Cir.
2008).

The

FAA,

however,

provides

vacating an arbitration award.

very

limited

grounds

for

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.
been

interpreted

to

See 9 U.S.C. § 11.

prohibit

parties

expanding the scope of judicial review.

And the FAA has

from

contractually

See Hall St. Assocs.,

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

a

result,

arbitration

“[t]he

“makes

uncorrected.”
350 (2011).

it

absence
more

of

likely

multilayered
that

review”

errors

will

in
go

AT&T Mobility LLC v. Concepcion, 563 U.S. 333,
This is a cost that “[d]efendants are willing to

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

to

outweighed

the
by

size

savings

of

individual

from

avoiding

disputes,
the

and

courts.”

presumably
Id.

But

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

of

accept.

class

arbitration

that

Id. at 351.

18

defendants

would

not

lightly

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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.
before

This

is

because

the

on

the

merits,

whether

ruling

whether

the

named

parties

arbitrator

satisfy

to

must

determine,

certify

mandatory

the

class,

standards

of

representation and commonality, how discovery will function, and
how to bind absent class members.
49.
the

Concepcion, 563 U.S. at 348–

In turn, costs and time increase.
average

bilateral

arbitration

See id. (finding that

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
LexisNexis
2013)

for

Div.

(quoting

v.

the

court.

Crockett,

Howsam,

537

Reed
734

U.S.

Elsevier,

F.3d
at

594,

83)

Inc.

597–99

(reasoning

ex

rel.

(6th

Cir.

that

the

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

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

court,

and

observations

of

focusing
the

on

Stolt-Nielsen

fundamental

differences

and

Concepcion’s

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

implicates

agreement’s
both

authorization

whose

claims

and

of

the

class

type

of

arbitration

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,

861

Turner,

91

F.

No.

Supp.

3d

5:14CV97,

853,
slip.

op.

2015).

20

(N.D.W.
at

*7

Va.

2015);

(N.D.W.

Va.

Bird

v.

Sept.

1,

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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.
(whether

an

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

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

arbitrable.”).
arbitrability

scope

makes

the

issue

in

dispute

Further, we have made clear that the scope of
itself

arbitrator to decide.

is

not

an

issue

presumptively

for

the

See Va. Carolina Tools, Inc. v. Int’l

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

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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

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

that

“[t]he

question

of

‘what

kind

of

of

There, we
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.
concluding
arbitrator.

that

the

Accordingly, the district court erred in
question

was

a

procedural

one

for

the

We therefore reverse the district court’s order

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

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judgment

Filed: 03/28/2016

dismissing

proceedings.

On

the

remand,

Pg: 23 of 23

Petition,
the

and

district

remand
court

for

shall

further
determine

whether the parties agreed to class arbitration.

REVERSED, VACATED, AND REMANDED

23