Rent-A-Center, West, Inc. v. Jackson , 130 S. Ct. 2772 ( 2010 )

(Slip Opinion) OCTOBER TERM, 2009 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
RENT-A-CENTER, WEST, INC. v. JACKSON
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 09–497. Argued April 26, 2010—Decided June 21, 2010
Respondent Jackson filed an employment-discrimination suit against
petitioner Rent-A-Center, his former employer, in a Nevada Federal
District Court. Rent-A-Center filed a motion, under the Federal Ar
bitration Act (FAA), to dismiss or stay the proceedings, 9 U. S. C. §3,
and to compel arbitration, §4, based on the arbitration agreement
(Agreement) Jackson signed as a condition of his employment. Jack
son opposed the motion on the ground that the Agreement was unen
forceable in that it was unconscionable under Nevada law. The Dis
trict Court granted Rent-A-Center’s motion. The Ninth Circuit
reversed in relevant part.
Held: Under the FAA, where an agreement to arbitrate includes an
agreement that the arbitrator will determine the enforceability of the
agreement, if a party challenges specifically the enforceability of that
particular agreement, the district court considers the challenge, but if
a party challenges the enforceability of the agreement as a whole, the
challenge is for the arbitrator. Pp. 3–12.
(a) Section 2 of the FAA places arbitration agreements on an equal
footing with other contracts, Buckeye Check Cashing, Inc. v.
Cardegna, 546 U. S. 440, 443, and requires courts to enforce them ac
cording to their terms, Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior Univ., 489 U. S. 468, 478, “save
upon such grounds as exist under law or in equity for the revocation
of any contract,” §2. Here, the Agreement included two relevant arbi
tration provisions: it provided for arbitration of all disputes arising
out of Jackson’s employment, including discrimination claims, and it
gave the “Arbitrator . . . exclusive authority to resolve any dispute re
lating to the [Agreement’s] enforceability . . . including . . . any claim
2 RENT-A-CENTER, WEST, INC. v. JACKSON
Syllabus
that all or any part of this Agreement is void or voidable.” Rent-A-
Center seeks enforcement of the second provision, which delegates to
the arbitrator the “gateway” question of enforceability. See, e.g.,
Howsam v. Dean Witter Reynolds, Inc., 537 U. S. 79, 83–85. The
court must enforce the delegation provision under §§3 and 4 unless it
is unenforceable under §2. Pp. 3–6.
(b) There are two types of validity challenges under §2: one “chal
lenges specifically the validity of the agreement to arbitrate,” and
“[t]he other challenges the contract as a whole,” Buckeye, supra, at
444. Only the first is relevant to a court’s determination of an arbi
tration agreement’s enforceability, see, e.g., Prima Paint Corp. v.
Flood & Conklin Mfg. Co., 388 U. S. 395, 403–404, because under §2
“an arbitration provision is severable from the remainder of the con
tract,” Buckeye, supra, at 445. That does not mean that agreements
to arbitrate are unassailable. If a party challenges the validity under
§2 of the precise agreement to arbitrate at issue, the federal court
must consider the challenge before ordering compliance with the
agreement under §4. That is no less true when the precise agree
ment to arbitrate is itself part of a larger arbitration agreement. Be
cause here the agreement to arbitrate enforceability (the delegation
provision) is severable from the remainder of the Agreement, unless
Jackson challenged the delegation provision specifically, it must be
treated as valid under §2 and enforced under §§3 and 4. Pp. 6–9.
(c) The District Court correctly concluded that Jackson challenged
only the validity of the contract as a whole. In his brief to this Court
he raised a challenge to the delegation provision for the first time,
but that is too late and will not be considered. See 14 Penn Plaza
LLC v. Pyett, 556 U. S. ___, ___. Pp. 9–12.
581 F. 3d 912, reversed.
SCALIA, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. STEVENS, J., filed a
dissenting opinion, in which GINSBURG, BREYER, and SOTOMAYOR, JJ.,
joined.
Cite as: 561 U. S. ____ (2010) 1
Opinion of the Court
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SUPREME COURT OF THE UNITED STATES
_________________
No. 09–497
_________________
RENT-A-CENTER, WEST, INC., PETITIONER v.
ANTONIO JACKSON
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 21, 2010]
JUSTICE SCALIA delivered the opinion of the Court.
We consider whether, under the Federal Arbitration Act
(FAA or Act), 9 U. S. C. §§1–16, a district court may decide
a claim that an arbitration agreement is unconscionable,
where the agreement explicitly assigns that decision to the
arbitrator.
I
On February 1, 2007, the respondent here, Antonio
Jackson, filed an employment-discrimination suit under
Rev. Stat. §1977, 42 U. S. C. §1981, against his former
employer in the United States District Court for the Dis
trict of Nevada. The defendant and petitioner here, Rent-
A-Center, West, Inc., filed a motion under the FAA to
dismiss or stay the proceedings, 9 U. S. C. §3, and to com
pel arbitration, §4. Rent-A-Center argued that the Mutual
Agreement to Arbitrate Claims (Agreement), which Jack
son signed on February 24, 2003 as a condition of his
employment there, precluded Jackson from pursuing his
claims in court. The Agreement provided for arbitration of
all “past, present or future” disputes arising out of Jack
son’s employment with Rent-A-Center, including “claims
2 RENT-A-CENTER, WEST, INC. v. JACKSON
Opinion of the Court
for discrimination” and “claims for violation of any federal
. . . law.” App. 29–30. It also provided that “[t]he Arbitra
tor, and not any federal, state, or local court or agency,
shall have exclusive authority to resolve any dispute
relating to the interpretation, applicability, enforceability
or formation of this Agreement including, but not limited
to any claim that all or any part of this Agreement is void
or voidable.” Id., at 34.
Jackson opposed the motion on the ground that “the
arbitration agreement in question is clearly unenforceable
in that it is unconscionable” under Nevada law. Id., at 40.
Rent-A-Center responded that Jackson’s unconscionability
claim was not properly before the court because Jackson
had expressly agreed that the arbitrator would have ex
clusive authority to resolve any dispute about the enforce
ability of the Agreement. It also disputed the merits of
Jackson’s unconscionability claims.
The District Court granted Rent-A-Center’s motion to
dismiss the proceedings and to compel arbitration. The
court found that the Agreement “ ‘ “clearly and unmistak
enly [sic]” ’ ” gives the arbitrator exclusive authority to
decide whether the Agreement is enforceable, App. to Pet.
for Cert. 4a. (quoting Howsam v. Dean Witter Reynolds,
Inc., 537 U. S. 79, 83 (2002)), and, because Jackson chal
lenged the validity of the Agreement as a whole, the issue
was for the arbitrator, App. to Pet. for Cert. 4a (citing
Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440,
444–445 (2006)). The court noted that even if it were to
examine the merits of Jackson’s unconscionability claims,
it would have rejected the claim that the agreement to
split arbitration fees was substantively unconscionable
under Nevada law. It did not address Jackson’s proce
dural or other substantive unconscionability arguments.
Without oral argument, a divided panel of the Court of
Appeals for the Ninth Circuit reversed in part, affirmed in
part, and remanded. 581 F. 3d 912 (2009). The court
Cite as: 561 U. S. ____ (2010) 3
Opinion of the Court
reversed on the question of who (the court or arbitrator)
had the authority to decide whether the Agreement is
enforceable. It noted that “Jackson does not dispute that
the language of the Agreement clearly assigns the arbitra
bility determination to the arbitrator,” but held that where
“a party challenges an arbitration agreement as uncon
scionable, and thus asserts that he could not meaningfully
assent to the agreement, the threshold question of uncon
scionability is for the court.” Id., at 917. The Ninth Cir
cuit affirmed the District Court’s alternative conclusion
that the fee-sharing provision was not substantively un
conscionable and remanded for consideration of Jackson’s
other unconscionability arguments. Id., at 919–920, and
n. 3. Judge Hall dissented on the ground that “the ques
tion of the arbitration agreement’s validity should have
gone to the arbitrator, as the parties ‘clearly and unmis
takably provide[d]’ in their agreement.” Id., at 921.
We granted certiorari, 558 U. S. ___ (2010).
II
A
The FAA reflects the fundamental principle that arbi
tration is a matter of contract. Section 2, the “primary
substantive provision of the Act,” Moses H. Cone Memorial
Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24 (1983),
provides:
“A written provision in . . . a contract evidencing a
transaction involving commerce to settle by arbitra
tion a controversy thereafter arising out of such con
tract . . . shall be 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.
The FAA thereby places arbitration agreements on an
equal footing with other contracts, Buckeye, supra, at 443,
and requires courts to enforce them according to their
4 RENT-A-CENTER, WEST, INC. v. JACKSON
Opinion of the Court
terms, Volt Information Sciences, Inc. v. Board of Trustees
of Leland Stanford Junior Univ., 489 U. S. 468, 478
(1989). Like other contracts, however, they may be invali
dated by “generally applicable contract defenses, such as
fraud, duress, or unconscionability.” Doctor’s Associates,
Inc. v. Casarotto, 517 U. S. 681, 687 (1996).
The Act also establishes procedures by which federal
courts implement §2’s substantive rule. Under §3, a party
may apply to a federal court for a stay of the trial of an
action “upon any issue referable to arbitration under an
agreement in writing for such arbitration.” Under §4, a
party “aggrieved” by the failure of another party “to arbi
trate under a written agreement for arbitration” may
petition a federal court “for an order directing that such
arbitration proceed in the manner provided for in such
agreement.” The court “shall” order arbitration “upon
being satisfied that the making of the agreement for arbi
tration or the failure to comply therewith is not in issue.”
Ibid.
The Agreement here contains multiple “written provi
sion[s]” to “settle by arbitration a controversy,” §2. Two
are relevant to our discussion. First, the section titled
“Claims Covered By The Agreement” provides for arbitra
tion of all “past, present or future” disputes arising out of
Jackson’s employment with Rent-A-Center. App. 29.
Second, the section titled “Arbitration Procedures” pro
vides that “[t]he Arbitrator . . . shall have exclusive au
thority to resolve any dispute relating to the . . . enforce
ability . . . of this Agreement including, but not limited to
any claim that all or any part of this Agreement is void or
voidable.” Id., at 32, 34. The current “controversy” be
tween the parties is whether the Agreement is uncon
scionable. It is the second provision, which delegates
resolution of that controversy to the arbitrator, that Rent-
A-Center seeks to enforce. Adopting the terminology used
by the parties, we will refer to it as the delegation provi
Cite as: 561 U. S. ____ (2010) 5
Opinion of the Court
sion.
The delegation provision is an agreement to arbitrate
threshold issues concerning the arbitration agreement.
We have recognized that parties can agree to arbitrate
“gateway” questions of “arbitrability,” such as whether the
parties have agreed to arbitrate or whether their agree
ment covers a particular controversy. See, e.g., Howsam,
537 U. S., at 83–85; Green Tree Financial Corp. v. Bazzle,
539 U. S. 444, 452 (2003) (plurality opinion). This line of
cases merely reflects the principle that arbitration is a
matter of contract.1 See First Options of Chicago, Inc. v.
——————
1 There is one caveat. First Options of Chicago, Inc. v. Kaplan, 514
U. S. 938, 944 (1995), held that “[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.” The parties agree the
heightened standard applies here. See Brief for Petitioner 21; Brief for
Respondent 54. The District Court concluded the “Agreement to
Arbitrate clearly and unmistakenly [sic] provides the arbitrator with
the exclusive authority to decide whether the Agreement to Arbitrate is
enforceable.” App. to Pet. for Cert. 4a. The Ninth Circuit noted that
Jackson did not dispute that the text of the Agreement was clear and
unmistakable on this point. 581 F. 3d 912, 917 (2009). He also does
not dispute it here. What he argues now, however, is that it is not
“clear and unmistakable” that his agreement to that text was valid,
because of the unconscionability claims he raises. See Brief for Re
spondent 54–55. The dissent makes the same argument. See post, at
5–8 (opinion of STEVENS, J.).
This mistakes the subject of the First Options “clear and unmistak
able” requirement. It pertains to the parties’ manifestation of intent,
not the agreement’s validity. As explained in Howsam v. Dean Witter
Reynolds, Inc., 537 U. S. 79, 83 (2002), it is an “interpretive rule,” based
on an assumption about the parties’ expectations. In “circumstance[s]
where contracting parties would likely have expected a court to have
decided the gateway matter,” ibid., we assume that is what they agreed
to. Thus, “[u]nless the parties clearly and unmistakably provide
otherwise, the question of whether the parties agreed to arbitrate is to
be decided by the court, not the arbitrator.” AT&T Technologies, Inc. v.
Communications Workers, 475 U. S. 643, 649 (1986).
The validity of a written agreement to arbitrate (whether it is legally
binding, as opposed to whether it was in fact agreed to—including, of
6 RENT-A-CENTER, WEST, INC. v. JACKSON
Opinion of the Court
Kaplan, 514 U. S. 938, 943 (1995). An agreement to arbi
trate a gateway issue is simply an additional, antecedent
agreement the party seeking arbitration asks the federal
court to enforce, and the FAA operates on this additional
arbitration agreement just as it does on any other. The
additional agreement is valid under §2 “save upon such
grounds as exist at law or in equity for the revocation of
any contract,” and federal courts can enforce the agree
ment by staying federal litigation under §3 and compelling
arbitration under §4. The question before us, then, is
whether the delegation provision is valid under §2.
B
There are two types of validity challenges under §2:
“One type challenges specifically the validity of the
agreement to arbitrate,” and “[t]he other challenges the
contract as a whole, either on a ground that directly af
fects the entire agreement (e.g., the agreement was
fraudulently induced), or on the ground that the illegality
of one of the contract’s provisions renders the whole con
tract invalid.” Buckeye, 546 U. S., at 444. In a line of
cases neither party has asked us to overrule, we held that
only the first type of challenge is relevant to a court’s
determination whether the arbitration agreement at issue
is enforceable.2 See Prima Paint Corp. v. Flood & Conklin
Mfg. Co., 388 U. S. 395, 403–404 (1967); Buckeye, supra, at
——————
course, whether it was void for unconscionability) is governed by §2’s
provision that it shall be valid “save upon such grounds as exist at law
or equity for the revocation of any contract.” Those grounds do not
include, of course, any requirement that its lack of unconscionability
must be “clear and unmistakable.” And they are not grounds that First
Options added for agreements to arbitrate gateway issues; §2 applies to
all written agreements to arbitrate.
2 The issue of the agreement’s “validity” is different from the issue
whether any agreement between the parties “was ever concluded,” and,
as in Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440 (2006),
we address only the former. Id., at 444, n. 1.
Cite as: 561 U. S. ____ (2010) 7
Opinion of the Court
444–446; Preston v. Ferrer, 552 U. S. 346, 353–354 (2008).
That is because §2 states that a “written provision” “to
settle by arbitration a controversy” is “valid, irrevocable,
and enforceable” without mention of the validity of the
contract in which it is contained. Thus, a party’s chal
lenge to another provision of the contract, or to the con
tract as a whole, does not prevent a court from enforcing a
specific agreement to arbitrate. “[A]s a matter of substan
tive federal arbitration law, an arbitration provision is
severable from the remainder of the contract.” Buckeye,
546 U. S., at 445; see also id., at 447 (the severability rule
is based on §2).
But that agreements to arbitrate are severable does not
mean that they are unassailable. If a party challenges the
validity under §2 of the precise agreement to arbitrate at
issue, the federal court must consider the challenge before
ordering compliance with that agreement under §4. In
Prima Paint, for example, if the claim had been “fraud in
the inducement of the arbitration clause itself,” then the
court would have considered it. 388 U. S., at 403–404.
“To immunize an arbitration agreement from judicial
challenge on the ground of fraud in the inducement would
be to elevate it over other forms of contract,” id., at 404,
n. 12. In some cases the claimed basis of invalidity for the
contract as a whole will be much easier to establish than
the same basis as applied only to the severable agreement
to arbitrate. Thus, in an employment contract many
elements of alleged unconscionability applicable to the
entire contract (outrageously low wages, for example)
would not affect the agreement to arbitrate alone. But
even where that is not the case—as in Prima Paint itself,
where the alleged fraud that induced the whole contract
equally induced the agreement to arbitrate which was part
of that contract—we nonetheless require the basis of
challenge to be directed specifically to the agreement to
arbitrate before the court will intervene.
8 RENT-A-CENTER, WEST, INC. v. JACKSON
Opinion of the Court
Here, the “written provision . . . to settle by arbitration a
controversy,” 9 U. S. C. §2, that Rent-A-Center asks us to
enforce is the delegation provision—the provision that
gave the arbitrator “exclusive authority to resolve any
dispute relating to the . . . enforceability . . . of this
Agreement,” App. 34. The “remainder of the contract,”
Buckeye, supra, at 445, is the rest of the agreement to
arbitrate claims arising out of Jackson’s employment with
Rent-A-Center. To be sure this case differs from Prima
Paint, Buckeye, and Preston, in that the arbitration provi
sions sought to be enforced in those cases were contained
in contracts unrelated to arbitration—contracts for con
sulting services, see Prima Paint, supra, at 397, check
cashing services, see Buckeye, supra, at 442, and “personal
management” or “talent agent” services, see Preston,
supra, at 352. In this case, the underlying contract is
itself an arbitration agreement. But that makes no differ
ence.3 Application of the severability rule does not depend
on the substance of the remainder of the contract. Section
2 operates on the specific “written provision” to “settle by
arbitration a controversy” that the party seeks to enforce.
Accordingly, unless Jackson challenged the delegation
provision specifically, we must treat it as valid under §2,
——————
3 The
dissent calls this a “breezy assertion,” post, at 1, but it seems to
us self-evident. When the dissent comes to discussing the point, post,
at 11, it gives no logical reason why an agreement to arbitrate one
controversy (an employment-discrimination claim) is not severable from
an agreement to arbitrate a different controversy (enforceability).
There is none. Since the dissent accepts that the invalidity of one
provision within an arbitration agreement does not necessarily invali
date its other provisions, post, at 7, n. 7, it cannot believe in some sort
of magic bond between arbitration provisions that prevents them from
being severed from each other. According to the dissent, it is fine to
sever an invalid provision within an arbitration agreement when
severability is a matter of state law, but severability is not allowed
when it comes to applying Prima Paint Corp. v. Flood & Conklin Mfg.
Co., 388 U. S. 395 (1967).
Cite as: 561 U. S. ____ (2010) 9
Opinion of the Court
and must enforce it under §§3 and 4, leaving any chal
lenge to the validity of the Agreement as a whole for the
arbitrator.
C
The District Court correctly concluded that Jackson
challenged only the validity of the contract as a whole.
Nowhere in his opposition to Rent-A-Center’s motion to
compel arbitration did he even mention the delegation
provision. See App. 39–47. Rent-A-Center noted this fact
in its reply: “[Jackson’s response] fails to rebut or other
wise address in any way [Rent-A-Center’s] argument that
the Arbitrator must decide [Jackson’s] challenge to
the enforceability of the Agreement. Thus, [Rent-A-
Center’s] argument is uncontested.” Id., at 50 (emphasis in
original).
The arguments Jackson made in his response to Rent-A-
Center’s motion to compel arbitration support this conclu
sion. Jackson stated that “the entire agreement seems
drawn to provide [Rent-A-Center] with undue advantages
should an employment-related dispute arise.” Id., at 44
(emphasis added). At one point, he argued that the limita
tions on discovery “further suppor[t] [his] contention that
the arbitration agreement as a whole is substantively
unconscionable.” Ibid. (emphasis added). And before this
Court, Jackson describes his challenge in the District
Court as follows: He “opposed the motion to compel on the
ground that the entire arbitration agreement, including the
delegation clause, was unconscionable.” Brief for Respon
dent 55 (emphasis added). That is an accurate description
of his filings.
As required to make out a claim of unconscionability
under Nevada law, see 581 F. 3d, at 919, he contended
that the Agreement was both procedurally and substan
tively unconscionable. It was procedurally unconscion
able, he argued, because it “was imposed as a condition of
10 RENT-A-CENTER, WEST, INC. v. JACKSON
Opinion of the Court
employment and was non-negotiable.” App. 41. But we
need not consider that claim because none of Jackson’s
substantive unconscionability challenges was specific to
the delegation provision. First, he argued that the Agree
ment’s coverage was one sided in that it required arbitra
tion of claims an employee was likely to bring—contract,
tort, discrimination, and statutory claims—but did not
require arbitration of claims Rent-A-Center was likely to
bring—intellectual property, unfair competition, and trade
secrets claims. Id., at 42–43. This one-sided-coverage
argument clearly did not go to the validity of the delega
tion provision.
Jackson’s other two substantive unconscionability ar
guments assailed arbitration procedures called for by the
contract—the fee-splitting arrangement and the limita
tions on discovery—procedures that were to be used dur
ing arbitration under both the agreement to arbitrate
employment-related disputes and the delegation provision.
It may be that had Jackson challenged the delegation
provision by arguing that these common procedures as
applied to the delegation provision rendered that provision
unconscionable, the challenge should have been consid
ered by the court. To make such a claim based on the
discovery procedures, Jackson would have had to argue
that the limitation upon the number of depositions causes
the arbitration of his claim that the Agreement is unen
forceable to be unconscionable. That would be, of course, a
much more difficult argument to sustain than the argu
ment that the same limitation renders arbitration of his
factbound employment-discrimination claim unconscion
able. Likewise, the unfairness of the fee-splitting ar
rangement may be more difficult to establish for the arbi
tration of enforceability than for arbitration of more
complex and fact-related aspects of the alleged employ
ment discrimination. Jackson, however, did not make any
arguments specific to the delegation provision; he argued
Cite as: 561 U. S. ____ (2010) 11
Opinion of the Court
that the fee-sharing and discovery procedures rendered
the entire Agreement invalid.
Jackson’s appeal to the Ninth Circuit confirms that he
did not contest the validity of the delegation provision in
particular. His brief noted the existence of the delegation
provision, Brief for Appellant in No. 07–16164, p. 3, but
his unconscionability arguments made no mention of it,
id., at 3–7. He also repeated the arguments he had made
before the District Court, see supra, at 9, that the “entire
agreement” favors Rent-A-Center and that the limitations
on discovery further his “contention that the arbitration
agreement as a whole is substantively unconscionable,”
Brief for Appellant 7–8. Finally, he repeated the argu
ment made in his District Court filings, that under state
law the unconscionable clauses could not be severed from
the arbitration agreement, see id., at 8–9.4 The point of
this argument, of course, is that the Agreement as a whole
is unconscionable under state law.
Jackson repeated that argument before this Court. At
oral argument, counsel stated: “There are certain elements
of the arbitration agreement that are unconscionable and,
under Nevada law, which would render the entire arbitra
tion agreement unconscionable.” Tr. of Oral Arg. 43 (em
phasis added). And again, he stated, “we’ve got both
certain provisions that are unconscionable, that under
Nevada law render the entire agreement unconscionable
. . . , and that’s what the Court is to rely on.” Id., at 43–44
——————
4 Jackson’s argument fails. The severability rule is a “matter of sub
stantive federal arbitration law,” and we have repeatedly “rejected the
view that the question of ‘severability’ was one of state law, so that if
state law held the arbitration provision not to be severable a challenge
to the contract as a whole would be decided by the court.” Buckeye, 546
U. S., at 445 (citing Prima Paint, 388 U. S., at 400, 402–403; Southland
Corp. v. Keating, 465 U. S. 1, 10–14 (1984); Allied-Bruce Terminix Cos.
v. Dobson, 513 U. S. 265, 270–273 (1995)). For the same reason, the
Agreement’s statement that its provisions are severable, see App. 37,
does not affect our analysis.
12 RENT-A-CENTER, WEST, INC. v. JACKSON
Opinion of the Court
(emphasis added).
In his brief to this Court, Jackson made the contention,
not mentioned below, that the delegation provision itself is
substantively unconscionable because the quid pro quo he
was supposed to receive for it—that “in exchange for ini
tially allowing an arbitrator to decide certain gateway
questions,” he would receive “plenary post-arbitration
judicial review”—was eliminated by the Court’s subse
quent holding in Hall Street Associates, L. L. C. v. Mattel,
Inc., 552 U. S. 576 (2008), that the nonplenary grounds for
judicial review in §10 of the FAA are exclusive. Brief for
Respondent 59–60. He brought this challenge to the
delegation provision too late, and we will not consider it.5
See 14 Penn Plaza LLC v. Pyett, 556 U. S. ___, ___ (2009)
(slip op., at 24).
* * *
We reverse the judgment of the Court of Appeals for the
Ninth Circuit.
It is so ordered.
——————
5 HallStreet Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576 (2008),
was decided after Jackson submitted his brief to the Ninth Circuit, but
that does not change our conclusion that he forfeited the argument.
Jackson could have submitted a supplemental brief during the year and
a half between this Court’s decision of Hall Street on March 25, 2008
and the Ninth Circuit’s judgment on September 9, 2009. Moreover,
Hall Street affirmed a rule that had been in place in the Ninth Circuit
since 2003. Id., at 583–584, and n. 5.
Cite as: 561 U. S. ____ (2010) 1
STEVENS, J., dissenting
SUPREME COURT OF THE UNITED STATES
_________________
No. 09–497
_________________
RENT-A-CENTER, WEST, INC., PETITIONER v.
ANTONIO JACKSON
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[June 21, 2010]
JUSTICE STEVENS, with whom JUSTICE GINSBURG,
JUSTICE BREYER, and JUSTICE SOTOMAYOR join, dissent
ing.
Neither petitioner nor respondent has urged us to adopt
the rule the Court does today: Even when a litigant has
specifically challenged the validity of an agreement to
arbitrate he must submit that challenge to the arbitrator
unless he has lodged an objection to the particular line in
the agreement that purports to assign such challenges to
the arbitrator—the so-called “delegation clause.”
The Court asserts that its holding flows logically from
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S.
395 (1967), in which the Court held that consideration of a
contract revocation defense is generally a matter for the
arbitrator, unless the defense is specifically directed at the
arbitration clause, id., at 404. We have treated this hold
ing as a severability rule: When a party challenges a
contract, “but not specifically its arbitration provisions,
those provisions are enforceable apart from the remainder
of the contract.” Buckeye Check Cashing, Inc. v.
Cardegna, 546 U. S. 440, 446 (2006). The Court’s decision
today goes beyond Prima Paint. Its breezy assertion that
the subject matter of the contract at issue—in this case, an
arbitration agreement and nothing more—“makes no
difference,” ante, at 7, is simply wrong. This written
2 RENT-A-CENTER, WEST, INC. v. JACKSON
STEVENS, J., dissenting
arbitration agreement is but one part of a broader em
ployment agreement between the parties, just as the
arbitration clause in Prima Paint was but one part of a
broader contract for services between those parties. Thus,
that the subject matter of the agreement is exclusively
arbitration makes all the difference in the Prima Paint
analysis.
I
Under the Federal Arbitration Act (FAA), 9 U. S. C.
§§1–16, parties generally have substantial leeway to
define the terms and scope of their agreement to settle
disputes in an arbitral forum. “[A]rbitration is,” after all,
“simply a matter of contract between the parties; it is a
way to resolve those disputes—but only those disputes—
that the parties have agreed to submit to arbitration.”
First Options of Chicago, Inc. v. Kaplan, 514 U. S. 938,
943 (1995). The FAA, therefore, envisions a limited role
for courts asked to stay litigation and refer disputes to
arbitration.
Certain issues—the kind that “contracting parties would
likely have expected a court to have decided”—remain
within the province of judicial review. Howsam v. Dean
Witter Reynolds, Inc., 537 U. S. 79, 83 (2002); see also
Green Tree Financial Corp. v. Bazzle, 539 U. S. 444, 452
(2003) (plurality opinion); AT&T Technologies, Inc. v.
Communications Workers, 475 U. S. 643, 649 (1986).
These issues are “gateway matter[s]” because they are
necessary antecedents to enforcement of an arbitration
agreement; they raise questions the parties “are not likely
to have thought that they had agreed that an arbitrator
would” decide. Howsam, 537 U. S., at 83. Quintessential
gateway matters include “whether the parties have a valid
arbitration agreement at all,” Bazzle, 539 U. S., at 452(plurality opinion); “whether the parties are bound by a
given arbitration clause,” Howsam, 537 U. S., at 84; and
Cite as: 561 U. S. ____ (2010) 3
STEVENS, J., dissenting
“whether an arbitration clause in a concededly binding
contract applies to a particular type of controversy,” ibid.It would be bizarre to send these types of gateway matters
to the arbitrator as a matter of course, because they raise
a “ ‘question of arbitrability.’ ”1 See, e.g., ibid.; First Op
tions, 514 U. S., at 947.
“[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. In
this case we are concerned with the first of these catego
ries: whether the parties have a valid arbitration agree
ment. This is an issue the FAA assigns to the courts.2
Section 2 of the FAA dictates that covered arbitration
agreements “shall be 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. “[S]uch
grounds,” which relate to contract validity and formation,
include the claim at issue in this case, unconscionability.
See Doctor’s Associates, Inc. v. Casarotto, 517 U. S. 681,
687 (1996).
Two different lines of cases bear on the issue of who
decides a question of arbitrability respecting validity, such
as whether an arbitration agreement is unconscionable.
Although this issue, as a gateway matter, is typically for
the court, we have explained that such an issue can be
delegated to the arbitrator in some circumstances. When
——————
1 Although it is not clear from our precedents, I understand “gateway
matters” and “questions of arbitrability” to be roughly synonymous, if
not exactly so. At the very least, the former includes all of the latter.
2 Gateway issues involving the scope of an otherwise valid arbitration
agreement also have a statutory origin. Section 3 of the FAA provides
that “upon being satisfied that the issue involved in such suit . . . is
referable to arbitration under such an agreement,” a court “shall . . .
stay the trial of the action until such arbitration has been had.” 9
U. S. C. §3.
4 RENT-A-CENTER, WEST, INC. v. JACKSON
STEVENS, J., dissenting
the parties have purportedly done so, courts must examine
two distinct rules to decide whether the delegation is
valid.
The first line of cases looks to the parties’ intent. In
AT&T Technologies, we stated that “question[s] of arbi
trability” may be delegated to the arbitrator, so long as the
delegation is clear and unmistakable. 475 U. S., at 649.
We reaffirmed this rule, and added some nuance, in First
Options. Against the background presumption that ques
tions of arbitrability go to the court, we stated that federal
courts should “generally” apply “ordinary state-law princi
ples that govern the formation of contracts” to assess
“whether the parties agreed to arbitrate a certain matter
(including arbitrability).” 514 U. S., at 944. But, we
added, a more rigorous standard applies when the inquiry
is whether the parties have “agreed to arbitrate arbitrabil
ity”: “Courts should not assume that the parties agreed to
arbitrate arbitrability unless there is clear and unmistak
able evidence that they did so.”3 Ibid. (internal quotation
marks and brackets omitted). JUSTICE BREYER’s unani
mous opinion for the Court described this standard as a
type of “revers[e]” “presumption”4—one in favor of a judi
cial, rather than an arbitral, forum. Id., at 945. Clear and
unmistakable “evidence” of agreement to arbitrate arbi
trability might include, as was urged in First Options, a
course of conduct demonstrating assent,5 id., at 946, or, as
——————
3 We have not expressly decided whether the First Options delegation
principle would apply to questions of arbitrability that implicate §2
concerns, i.e., grounds for contract revocation. I do not need to weigh in
on this issue in order to resolve the present case.
4 It is a “revers[e]” presumption because it is counter to the presump
tion we usually apply in favor of arbitration when the question con
cerns whether a particular dispute falls within the scope of a conced
edly binding arbitration agreement. First Options, 514 U. S., at 944–
945.
5 In First Options we found no clear and unmistakable assent to dele
gate to the arbitrator questions of arbitrability, given the parties’
Cite as: 561 U. S. ____ (2010) 5
STEVENS, J., dissenting
is urged in this case, an express agreement to do so. In
any event, whether such evidence exists is a matter for the
court to determine.
The second line of cases bearing on who decides the
validity of an arbitration agreement, as the Court ex
plains, involves the Prima Paint rule. See ante, at 6. That
rule recognizes two types of validity challenges. One type
challenges the validity of the arbitration agreement itself,
on a ground arising from an infirmity in that agreement.
The other challenges the validity of the arbitration agree
ment tangentially—via a claim that the entire contract (of
which the arbitration agreement is but a part) is invalid
for some reason. See Buckeye, 546 U. S., at 444. Under
Prima Paint, a challenge of the first type goes to the court;
a challenge of the second type goes to the arbitrator. See
388 U. S., at 403–404; see also Buckeye, 546 U. S., at 444–
445. The Prima Paint rule is akin to a pleading standard,
whereby a party seeking to challenge the validity of an
arbitration agreement must expressly say so in order to
get his dispute into court.
In sum, questions related to the validity of an arbitra
tion agreement are usually matters for a court to resolve
before it refers a dispute to arbitration. But questions of
arbitrability may go to the arbitrator in two instances: (1)
when the parties have demonstrated, clearly and unmis
takably, that it is their intent to do so; or (2) when the
validity of an arbitration agreement depends exclusively
on the validity of the substantive contract of which it is a
part.
II
We might have resolved this case by simply applying the
——————
conduct. Respondents in that case had participated in the arbitration,
but only to object to proceeding in arbitration and to challenge the
arbitrators’ jurisdiction. That kind of participation—in protest, to
preserve legal claims—did not constitute unmistakable assent to be
bound by the result. Id., at 946–947.
6 RENT-A-CENTER, WEST, INC. v. JACKSON
STEVENS, J., dissenting
First Options rule: Does the arbitration agreement at
issue “clearly and unmistakably” evince petitioner’s and
respondent’s intent to submit questions of arbitrability to
the arbitrator?6 The answer to that question is no. Re
spondent’s claim that the arbitration agreement is uncon
scionable undermines any suggestion that he “clearly” and
“unmistakably” assented to submit questions of arbitrabil
ity to the arbitrator. See Restatement (Second) of Con
tracts §208, Comment d (1979) (“[G]ross inequality of
bargaining power, together with terms unreasonably
favorable to the stronger party, may confirm indications
that the transaction involved elements of deception or
compulsion, or may show that the weaker party had no
meaningful choice, no real alternative, or did not in fact
assent or appear to assent to the unfair terms”); American
Airlines, Inc. v. Wolens, 513 U. S. 219, 249 (1995)
(O’Connor, J., concurring in judgment and dissenting in
part) (“[A] determination that a contract is ‘unconscion
able’ may in fact be a determination that one party did not
intend to agree to the terms of the contract”).7 The fact
——————
6 Respondenthas challenged whether he “meaningfully agreed to the
terms of the form Agreement to Arbitrate, which he contends is proce
durally and substantively unconscionable.” 581 F. 3d 912, 917 (CA9
2009). Even if First Options relates only to “manifestations of intent,”
as the Court states, see ante, at 5–6, n. 1 (emphasis deleted), whether
there has been meaningful agreement surely bears some relation to
whether one party has manifested intent to be bound to an agreement.
7 The question of unconscionability in this case is one of state law.
See, e.g., Perry v. Thomas, 482 U. S. 483, 492, n. 9 (1987). Under
Nevada law, unconscionability requires a showing of “ ‘both procedural
and substantive unconscionability,’ ” but “less evidence of substantive
unconscionability is required in cases involving great procedural
unconscionability.” D. R. Horton, Inc. v. Green, 120 Nev. 549, 553–554,
96 P. 3d 1159, 1162 (2004). I understand respondent to have claimed,
in accord with Nevada law, that the arbitration agreement contained
substantively unconscionable provisions, and was also the product of
procedural unconscionability as a whole. See Brief for Respondent 3
(“[Respondent] argued that the clause is procedurally unconscionable
Cite as: 561 U. S. ____ (2010) 7
STEVENS, J., dissenting
that the agreement’s “delegation” provision suggests
assent is beside the point, because the gravamen of re
spondent’s claim is that he never consented to the terms in
his agreement.
In other words, when a party raises a good-faith validity
challenge to the arbitration agreement itself, that issue
must be resolved before a court can say that he clearly and
unmistakably intended to arbitrate that very validity
question. This case well illustrates the point: If respon
dent’s unconscionability claim is correct—i.e., if the terms
of the agreement are so one-sided and the process of its
making so unfair—it would contravene the existence of
clear and unmistakable assent to arbitrate the very ques
tion petitioner now seeks to arbitrate. Accordingly, it is
necessary for the court to resolve the merits of respon
dent’s unconscionability claim in order to decide whether
the parties have a valid arbitration agreement under §2.
Otherwise, that section’s preservation of revocation issues
for the Court would be meaningless.
This is, in essence, how I understand the Court of Ap
peals to have decided the issue below. See 581 F. 3d 912,
917 (CA9 2009) (“[W]e hold that where, as here, a party
challenges an arbitration agreement as unconscionable,
and thus asserts that he could not meaningfully assent to
——————
because he was in a position of unequal bargaining power when it was
imposed as a condition of employment”); id., at 3–4 (identifying three
distinct provisions of the agreement that were substantively uncon
scionable); accord, 581 F. 3d, at 917.
Some of respondent’s arguments, however, could be understood as
attacks not on the enforceability of the agreement as a whole but
merely on the fairness of individual contract terms. Such term-specific
challenges would generally be for the arbitrator to resolve (at least so
long as they do not go to the identity of the arbitrator or the ability of a
party to initiate arbitration). Cf. Restatement (Second) of Contracts
§208 (1979) (providing that “a contract or term thereof [may be] uncon
scionable” and that in the latter case “the remainder of the contract
without the unconscionable term” may be enforced).
8 RENT-A-CENTER, WEST, INC. v. JACKSON
STEVENS, J., dissenting
the agreement, the threshold question of unconscionability
is for the court”). I would therefore affirm its judgment,
leaving, as it did, the merits of respondent’s unconscion
ability claim for the District Court to resolve on remand.
III
Rather than apply First Options, the Court takes us
down a different path, one neither briefed by the parties
nor relied upon by the Court of Appeals. In applying
Prima Paint, the Court has unwisely extended a “fantas
tic” and likely erroneous decision. 388 U. S., at 407(Black, J., dissenting).8
As explained at the outset, see supra, at 3–7, this case
lies at a seeming crossroads in our arbitration jurispru
dence. It implicates cases such as First Options, which
address whether the parties intended to delegate ques
tions of arbitrability, and also those cases, such as Prima
Paint, which address the severability of a presumptively
valid arbitration agreement from a potentially invalid
contract. The question of “Who decides?”—arbitrator or
court—animates both lines of cases, but they are driven by
different concerns. In cases like First Options, we are
concerned with the parties’ intentions. In cases like Prima
Paint, we are concerned with how the parties challenge
the validity of the agreement.
Under the Prima Paint inquiry, recall, we consider
whether the parties are actually challenging the validity
of the arbitration agreement, or whether they are chal
——————
8 Justice Black quite reasonably characterized the Court’s holding in
Prima Paint as “fantastic,” id., at 407 (dissenting opinion), because the
holding was, in his view, inconsistent with the text of §2 of the FAA,
388 U. S., at 412, as well as the intent of the draftsmen of the legisla
tion, id., at 413–416. Nevertheless, the narrow holding in that case has
been followed numerous times, see Buckeye Check Cashing, Inc. v.
Cardegna, 546 U. S. 440 (2006), and Preston v. Ferrer, 552 U. S. 346(2008), and, as the Court correctly notes today, neither party has asked
us to revisit those cases, ante, at 6.
Cite as: 561 U. S. ____ (2010) 9
STEVENS, J., dissenting
lenging, more generally, the contract within which an
arbitration clause is nested. In the latter circumstance,
we assume there is no infirmity per se with the arbitration
agreement, i.e., there are no grounds for revocation of the
arbitration agreement itself under §2 of the FAA. Accord
ingly, we commit the parties’ general contract dispute to
the arbitrator, as agreed.
The claim in Prima Paint was that one party would not
have agreed to contract with the other for services had it
known the second party was insolvent (a fact known but
not disclosed at the time of contracting). 388 U. S., at 398.
There was, therefore, allegedly fraud in the inducement of
the contract—a contract which also delegated disputes to
an arbitrator. Despite the fact that the claim raised would
have, if successful, rendered the embedded arbitration
clause void, the Court held that the merits of the dispute
were for the arbitrator, so long as the claim of “fraud in
the inducement” did not go to validity of “the arbitration
clause itself.” Id., at 403 (emphasis added). Because, in
Prima Paint, “no claim ha[d] been advanced by Prima
Paint that [respondent] fraudulently induced it to enter
into the agreement to arbitrate,” and because the arbitra
tion agreement was broad enough to cover the dispute, the
arbitration agreement was enforceable with respect to the
controversy at hand. Id., at 406.
The Prima Paint rule has been denominated as one
related to severability. Our opinion in Buckeye, set out
these guidelines:
“First, as a matter of substantive federal arbitration
law, an arbitration provision is severable from the
remainder of the contract. Second, unless the chal
lenge is to the arbitration clause itself, the issue of the
contract’s validity is considered by the arbitrator in
the first instance.” 546 U. S., at 445–446.
Whether the general contract defense renders the entire
10 RENT-A-CENTER, WEST, INC. v. JACKSON
STEVENS, J., dissenting
agreement void or voidable is irrelevant. Id., at 446. All
that matters is whether the party seeking to present the
issue to a court has brought a “discrete challenge,” Preston
v. Ferrer, 552 U. S. 346, 354 (2008), “to the validity of the
. . . arbitration clause.” Buckeye, 546 U. S., at 449.
Prima Paint and its progeny allow a court to pluck from
a potentially invalid contract a potentially valid arbitra
tion agreement. Today the Court adds a new layer of
severability—something akin to Russian nesting dolls—
into the mix: Courts may now pluck from a potentially
invalid arbitration agreement even narrower provisions
that refer particular arbitrability disputes to an arbitra
tor. See ante, at 6–7. I do not think an agreement to
arbitrate can ever manifest a clear and unmistakable
intent to arbitrate its own validity. But even assuming
otherwise, I certainly would not hold that the Prima Paint
rule extends this far.
In my view, a general revocation challenge to a stand
alone arbitration agreement is, invariably, a challenge to
the “ ‘making’ ” of the arbitration agreement itself, Prima
Paint, 388 U. S., at 403, and therefore, under Prima Paint,
must be decided by the court. A claim of procedural un
conscionability aims to undermine the formation of the
arbitration agreement, much like a claim of unconscion
ability aims to undermine the clear-and-unmistakable
intent requirement necessary for a valid delegation of a
“discrete” challenge to the validity of the arbitration agree
ment itself, Preston, 552 U. S., at 354. Moreover, because
we are dealing in this case with a challenge to an inde
pendently executed arbitration agreement—rather than a
clause contained in a contract related to another subject
matter—any challenge to the contract itself is also, neces
sarily, a challenge to the arbitration agreement.9 They are
——————
9 As respondent asserted in his opposition to petitioner’s motion to
compel arbitration, “the lack of mutuality regarding the type of claims
Cite as: 561 U. S. ____ (2010) 11
STEVENS, J., dissenting
one and the same.
The Court, however, reads the delegation clause as a
distinct mini-arbitration agreement divisible from the
contract in which it resides—which just so happens also to
be an arbitration agreement. Ante, at 6–7. Although the
Court simply declares that it “makes no difference” that
the underlying subject matter of the agreement is itself an
arbitration agreement, ante, at 7, that proposition does not
follow from—rather it is at odds with—Prima Paint’s
severability rule.
Had the parties in this case executed only one contract,
on two sheets of paper—one sheet with employment
terms, and a second with arbitration terms—the contract
would look much like the one in Buckeye. There would be
some substantive terms, followed by some arbitration
terms, including what we now call a delegation clause—
i.e., a sentence or two assigning to the arbitrator any
disputes related to the validity of the arbitration provi
sion. See Buckeye, 546 U. S., at 442. If respondent then
came into court claiming that the contract was illegal as a
whole for some reason unrelated to the arbitration provi
sion, the Prima Paint rule would apply, and such a gen
eral challenge to the subject matter of the contract would
go to the arbitrator. Such a challenge would not call into
question the making of the arbitration agreement or its
invalidity per se.
Before today, however, if respondent instead raised a
challenge specific to “the validity of the agreement to
arbitrate”—for example, that the agreement to arbitrate
was void under state law—the challenge would have gone
to the court. That is what Buckeye says. See 546 U. S., at
444. But the Court now declares that Prima Paint’s plead
——————
that must be arbitrated, the fee provision, and the discovery provision,
so permeate the Defendant’s arbitration agreement that it would be
impossible to sever the offending provisions.” App. 45.
12 RENT-A-CENTER, WEST, INC. v. JACKSON
STEVENS, J., dissenting
ing rule requires more: A party must lodge a challenge
with even greater specificity than what would have satis
fied the Prima Paint Court. A claim that an entire arbi
tration agreement is invalid will not go to the court unless
the party challenges the particular sentences that delegate
such claims to the arbitrator, on some contract ground
that is particular and unique to those sentences. See ante,
at 8–10.
It would seem the Court reads Prima Paint to require,
as a matter of course, infinite layers of severability: We
must always pluck from an arbitration agreement the
specific delegation mechanism that would—but for present
judicial review—commend the matter to arbitration, even
if this delegation clause is but one sentence within one
paragraph within a standalone agreement. And, most
importantly, the party must identify this one sentence and
lodge a specific challenge to its validity. Otherwise, he
will be bound to pursue his validity claim in arbitration.
Even if limited to separately executed arbitration
agreements, however, such an infinite severability rule is
divorced from the underlying rationale of Prima Paint.
The notion that a party may be bound by an arbitration
clause in a contract that is nevertheless invalid may be
difficult for any lawyer—or any person—to accept, but this
is the law of Prima Paint. It reflects a judgment that the
“ ‘national policy favoring arbitration,’ ” Preston, 552 U. S.,
at 353, outweighs the interest in preserving a judicial
forum for questions of arbitrability—but only when ques
tions of arbitrability are bound up in an underlying dis
pute. Prima Paint, 388 U. S., at 404. When the two are so
bound up, there is actually no gateway matter at all: The
question “Who decides” is the entire ball game. Were a
court to decide the fraudulent inducement question in
Prima Paint, in order to decide the antecedent question of
the validity of the included arbitration agreement, then it
would also, necessarily, decide the merits of the underly
Cite as: 561 U. S. ____ (2010) 13
STEVENS, J., dissenting
ing dispute. Same, too, for the question of illegality in
Buckeye; on its way to deciding the arbitration agree
ment’s validity, the court would have to decide whether
the contract was illegal, and in so doing, it would decide
the merits of the entire dispute.
In this case, however, resolution of the unconscionability
question will have no bearing on the merits of the underly
ing employment dispute. It will only, as a preliminary
matter, resolve who should decide the merits of that dis
pute. Resolution of the unconscionability question will,
however, decide whether the arbitration agreement itself
is “valid” under “such grounds as exist at law or in equity
for the revocation of any contract.” 9 U. S. C. §2. As
Prima Paint recognizes, the FAA commits those gateway
matters, specific to the arbitration agreement, to the
court. 388 U. S., at 403–404. Indeed, it is clear that the
present controversy over whether the arbitration agree
ment is unconscionable is itself severable from the merits
of the underlying dispute, which involves a claim of em
ployment discrimination. This is true for all gateway
matters, and for this reason Prima Paint has no applica
tion in this case.
IV
While I may have to accept the “fantastic” holding in
Prima Paint, id., at 407 (Black, J., dissenting), I most
certainly do not accept the Court’s even more fantastic
reasoning today. I would affirm the judgment of the Court
of Appeals, and therefore respectfully dissent.