Dimitri Shivkov v. Artex Risk Solutions, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DIMITRI SHIVKOV, individually and No. 19-16746
as a trustee of the Phoenix 2010
Revocable Trust; VASSIL ZHIVKOV; D.C. No.
KRISTINA TSONEV; SPECTRA 2:18-cv-04514-
SERVICES, INC.; DVS HOLDINGS SMM
LLC; ROBERT C. MILLER; BRENDA
MAE MILLER; BRUCE G. ROBINSON;
SARA VAN ALSTYNE ROBINSON; OPINION
SYMPHONY HOMES LLC; SYMPHONY
DEVELOPMENT CORPORATION;
KEITH BUTLER; REBECCA M.
BUTLER; ERIC K. WILKE; JULIE T.
WILKE; JOHN LINDER; NINA LINDER;
AFFILION OF COBRE VALLEY LLC;
AFFILION OF HUNTSVILLE PLLC;
AFFILION OF TEXAS PLLC; TAYLOR-
WILKE HOLDINGS LLC; TRADITIONS
EMERGENCY MEDICINE PA;
TREADSTONE EQUITY GROUP LLC;
UTA INVESTMENTS LLC;
BOOMERANG WB LLC; AZ STORAGE
1 LLC; AZ STORAGE 2 LLC;
BOOMERANG SONORAN LLC; RV
STORAGE LLC; STONE HAVEN
LODGE LLC; UTA HOLDINGS LLC;
WILKE MEDICAL DIRECTION PLLC;
5T CAPITAL FUND II LLC; 5T
CAPITAL HOLDINGS LLC; 5T
CAPITAL LLC; INGENUITY AUTO
2 SHIVKOV V. ARTEX RISK SOLUTIONS
LEASING LLC; INGENUITY AVIATION
LLC; INGENUITY EQUITY GROUP II
LLC; INGENUITY EQUITY GROUP III
LLC; INGENUITY EQUITY GROUP
LLC; INGENUITY LEASING COMPANY
II LLC; INGENUITY LEASING
COMPANY LLC; INGENUITY MATRIX,
INC.; INGENUITY PROFESSIONAL
SERVICES PLLC; BOURNE TEMPE
LAND LLC, on behalf of themselves
and all others similarly situated;
PAUL M. MCHALE; CYNTHIA
MCHALE; KEITH E. PEREIRA,
Individually and as a trustee of The
Blaser Family Revocable Trust
Dated March 10, 2006; KIMBERLY
BLASER, Individually and as a trustee
of The Blaser Family Revocable
Trust Dated March 10, 2006; BRIAN
R. TIFFANY; RYAN P. FRANK;
KATHERINE S. FRANK; CATION LLC;
FLORIDA CITRUS HOLDINGS LLC;
MCHALE CAPITAL MANAGEMENT
LLC; PS BAILEY LLC; BLASER
MANAGEMENT LLC; BLUE HORIZON
HOLDINGS LLC; BUTLER MEDICAL
GROUP, INC.; DEVOTION HOMES
LLC; GLASS HOUSE LLC; MAUI
LUXURY RENTALS LLC; SILVER
MEADOW INVESTING LLC; T&G
INVESTMENTS LLC; TREADSTONE
CORE3 LLC; TW MANAGEMENT
LLC; KAMAOLE LUXURY RENTALS
LLC; KANNAPALI BEACH HOLDINGS
SHIVKOV V. ARTEX RISK SOLUTIONS 3
LLC; OUR RETIREMENT LLC;
RESILIANT LLC; NADIM B. BIKHAZI;
KAREN A. KOSTLUK-BIKHAZI;
BRADLEY S. BULLARD; CATHLEEN
M. BULLARD; BLAKE G. WELLING;
STEPHANIE G. WELLING; BLAKE
WELLING MD PC; BRIAN TIFFANY
MD PC; UTAH SPINE CARE LLC;
WESTERN STATES MEDICAL LLC;
OGDEN CLINIC PROFESSIONAL
CORPORATION; BORSIGHT, INC.,
Plaintiffs-Appellants,
v.
ARTEX RISK SOLUTIONS, INC.; TSA
HOLDINGS LLC, FKA Tribeca
Strategic Advisors LLC; TBS LLC,
DBA PRS Insurance; KARL HUISH;
JEREMY HUISH; JIM TEHERO;
ARTHUR J. GALLAGHER & COMPANY;
DEBBIE INMAN; EPSILON ACTUARIAL
SOLUTIONS LLC; JULIE A. EKDOM;
AMERISK CONSULTING LLC;
PROVINCIAL INSURANCE PCC;
TRIBECA STRATEGIC ACCOUNTANTS
LLC; TRIBECA STRATEGIC
ACCOUNTANTS PLC,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Arizona
Stephen M. McNamee, District Judge, Presiding
4 SHIVKOV V. ARTEX RISK SOLUTIONS
Argued and Submitted July 7, 2020
Seattle, Washington
Filed September 9, 2020
Before: MICHAEL DALY HAWKINS, D. MICHAEL
FISHER, * and MILAN D. SMITH, JR., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
SUMMARY **
Arbitration
The panel affirmed the district court’s order compelling
individual arbitration and dismissing a putative class action
alleging violations of the Racketeer Influenced and Corrupt
Organizations Act and Arizona law.
Plaintiffs alleged that pursuant to agreements between
themselves and two defendants, defendants formed captive
insurance companies that plaintiffs owned, and to which
they paid insurance premiums. Plaintiffs claimed the
payments as tax-deductible business expenses without
recognizing them as taxable income. The IRS audited
plaintiffs, issued delinquency notices, and sought to impose
penalties. After settling with the IRS, plaintiffs filed suit,
*
The Honorable D. Michael Fisher, United States Circuit Judge for
the U.S. Court of Appeals for the Third Circuit, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
SHIVKOV V. ARTEX RISK SOLUTIONS 5
alleging that the captives were illegal and abusive tax
shelters, about which defendants failed to inform or advise
them.
The panel affirmed the district court’s order compelling
arbitration pursuant to an arbitration clause in the parties’
agreements. First, the panel held that the agreements were
not unenforceable on the grounds plaintiffs raised. Although
plaintiffs asserted that defendants breached a fiduciary duty
to point out and fully explain an arbitration clause, they
identified no state law authority recognizing such a duty.
Addressing an issue of first impression concerning the
survival of arbitration obligations following contract
termination, the panel held that the agreements did not
expressly negate the presumption in favor of post-
termination arbitration or clearly imply that the parties did
not intend for their arbitration obligations to survive
termination.
Second, the panel held that under Arizona contract law,
the arbitration clause encompassed all plaintiffs’ claims.
Third, joining other circuits, the panel held that the
availability of class arbitration is a gateway issue that a court
must presumptively decide. The panel concluded that the
parties’ agreements did not clearly and unmistakably
delegate that issue to the arbitrator. Because the agreements
were silent on class arbitration, they did not permit class
arbitration.
Finally, the panel concluded that pursuant to Arizona law
on alternative estoppel, all non-signatory defendants could
compel arbitration pursuant to the agreements.
6 SHIVKOV V. ARTEX RISK SOLUTIONS
COUNSEL
W. Ralph Canada Jr. (argued), David R. Deary, Jim L.
Flegle, Wilson E. Wray, John McKenzie, Donna Lee, and
Tyler M. Simpson, Loewinsohn Flegle Deary Simon LLP,
Dallas, Texas; Garrett W. Woktyns and James A. Bloom,
Schneider Wallace Cottrell Konecky Wotkyns, LLP,
Scottsdale, Arizona; for Plaintiffs-Appellants.
Stephen V. D’Amore (argued), Scott P. Glauberman,
Michael A. Skokna, and Reid F. Smith, Winston & Strawn
LLP, Chicago, Illinois; Barbara J. Dawson, Joseph G.
Adams, and Taryn J. Gallup, Snell & Wilmer LLP, Phoenix,
Arizona; for Defendants-Appellees Artex Risk Solutions
Inc., Arthur J. Gallagher & Company, and Debbie Inman.
Karl M. Tilleman (argued) and Erin E. Bradham, Dentons,
Phoenix, Arizona; for Defendants-Appellees TSA Holdings
LLC, TBS LLC, Karl Huish, Jeremy Huish, Jim Tehero,
Provincial Insurance PCC, and Tribeca Strategic
Accountants LLC.
J. Steven Sparks and Vincent Miner, Sanders & Parks,
Phoenix, Arizona, for Defendants-Appellees Epsilon
Actuarial Solutions LLC and Julie A. Ekdom.
J. Michael Low and Paul Gerding, Jr., Kutak Rock,
Scottsdale, Arizona, for Defendant-Appellee AmeRisk
Consulting LLC.
Michael J. Plati and Michael S. Rubin, Dickinson Wright
PLLC, Phoenix, Arizona, for Defendant-Appellee Tribeca
Strategic Accountants PLC.
SHIVKOV V. ARTEX RISK SOLUTIONS 7
OPINION
M. SMITH, Circuit Judge:
Plaintiffs 1, some eighty-one individuals and related
business entities, variously entered into agreements (the
Agreements) with Defendants Artex Risk Solutions, Inc.
(Artex) and TSA Holdings, LLC, formerly Tribeca Strategic
Advisors, LLC (Tribeca). Pursuant to these Agreements,
Artex and Tribeca formed and managed captive insurance
companies that Plaintiffs owned, and to which Plaintiffs paid
insurance premiums. Plaintiffs claimed the payments as tax-
deductible business expenses without recognizing them as
taxable income. Although this arrangement offered the
prospect of tax benefits, that prospect proved fleeting. The
IRS audited Plaintiffs, issued delinquency notices, and
sought to impose penalties.
After settling with the IRS, Plaintiffs brought this
putative class action suit against Defendants. 2 Plaintiffs
allege that the captives were illegal and abusive tax shelters,
about which Defendants failed to inform or advise Plaintiffs.
Plaintiffs’ pursuit of this suit, however, faced a roadblock:
the Agreements contain an arbitration clause (the Arbitration
1
Because the Plaintiffs are so numerous, and are each named in the
caption, we do not recount the names of all of them in the body of this
opinion.
2
In addition to Artex and Tribeca, Plaintiffs sued officers of Artex,
Tribeca, and the parent company of Artex, namely, Defendants Karl
Huish, Jeremy Huish, Jim Tehero, and Arthur J. Gallagher & Co.
Plaintiffs also sued TBS LLC d/b/a PRS Insurance; Debbie Inman (an
Artex employee); Epsilon Actuarial Solutions, LLC, Julie A. Ekdom
(CEO of Epsilon); AmeRisk Consulting, LLC; Provincial Insurance,
PCC; Tribeca Strategic Accountants, LLC; and Tribeca Strategic
Accountants, PLC. We refer to all as the “Defendants.”
8 SHIVKOV V. ARTEX RISK SOLUTIONS
Clause or Clause). The district court granted Defendants’
motion to compel arbitration and dismissed the operative
complaint without prejudice. Plaintiffs appeal.
We resolve several issues here. First, we hold that the
Agreements are not unenforceable on the grounds Plaintiffs
raise. Although Plaintiffs assert that Artex and Tribeca
breached a fiduciary duty to point out and fully explain an
arbitration clause, they identify no state law authority
recognizing such a duty. Addressing an issue of first
impression in our circuit concerning the survival of
arbitration obligations following contract termination, we
hold that the Agreements do not expressly negate the
presumption in favor of post-termination arbitration or
clearly imply that the parties did not intend for their
arbitration obligations to survive termination. Second, we
hold that the Arbitration Clause encompasses all Plaintiffs’
claims. Third, we join seven of our sister circuits in holding
that the availability of class arbitration is a gateway issue that
a court must presumptively decide. The Agreements here do
not clearly and unmistakably delegate that issue to the
arbitrator. Because the Agreements are silent on class
arbitration, they do not permit class arbitration. Finally, we
conclude that all non-signatory Defendants may compel
arbitration pursuant to the Agreements. Thus, we affirm.
BACKGROUND
I. The Agreements and the Arbitration Clause
Between 2009 and 2012, the various groups of Plaintiffs
retained Artex and Tribeca, both insurance management
companies, to provide services concerning the formation and
SHIVKOV V. ARTEX RISK SOLUTIONS 9
management of captive insurance companies for Plaintiffs.3
Pursuant to the Agreements, Artex and Tribeca, with support
from the other Defendants, conducted feasibility studies
concerning the creation of the respective captives, created
and managed the captives, calculated the captives’ estimated
federal tax payments, caused annual federal tax returns for
the captives to be prepared and filed, maintained the
captives’ accounting records, and reinsured the captives.
As is relevant here, the Agreements contain an
Arbitration Clause:
You and we agree that in the event of any
dispute that cannot be resolved between the
parties, that we will agree to seek to resolve
such disputes through mediation in Mesa,
Arizona, and if that fails, that all disputes will
be subject to binding arbitration in Mesa,
Arizona, with arbitrators to be agreed upon
by the parties, and if no agreement is reached,
then arbitrated by the American Arbitration
Association (AAA). Each party shall bear its
own costs in such mediation and arbitration.
To reduce time and expenses, we each waive
our right to litigate against one another
regarding the services provided and
obligations pursuant to this Agreement, and
instead you and we have chosen binding
arbitration. All claims or disputes will be
governed by Arizona law.
Several Agreements also contain a Termination and
Withdrawal section, which includes a clause concerning the
3
Artex acquired Tribeca in 2010.
10 SHIVKOV V. ARTEX RISK SOLUTIONS
survival of the terms of that section following termination of
the Agreement. 4
II. This Litigation
After settling with the IRS for tax liability issues arising
from deductions that they claimed for the premiums that they
paid to the captives, Plaintiffs filed a putative class action
complaint in the District of Arizona. In the operative one
hundred seventy-page First Amended Complaint (FAC),
Plaintiffs raised claims against all Defendants for breach of
fiduciary duty, negligence, negligent misrepresentation,
disgorgement, rescission, breach of contract and the duty of
good faith and fair dealing, fraud, civil conspiracy, aiding
and abetting breach of fiduciary duty and fraud, violations of
the federal Racketeer Influenced and Corrupt Organizations
(RICO) Act, 18 U.S.C. § 1961 et seq., and violations of the
Arizona RICO statute, Ariz. Rev. Stat. § 13-2301 et seq.
Defendants moved to compel arbitration, and separately
moved to dismiss. The district court granted the motion to
compel, ordered Plaintiffs to arbitrate their claims on an
individual basis, and dismissed the FAC without prejudice.
Plaintiffs timely appealed.
JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction pursuant to 28 U.S.C. § 1291 and
9 U.S.C. § 16(a)(3). Green Tree Fin. Corp.-Ala. v.
Randolph, 531 U.S. 79, 89 (2000); Johnmohammadi v.
Bloomingdale’s, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014).
“We review a district judge’s order to compel arbitration de
4
The Agreements of the following Plaintiffs contain this section:
Shivkov, Miller, Linder, Bikhazi, Welling, Bullard, Frank, and McHale,
as well as their corresponding entities. The Agreements of Plaintiffs
Butler, Wilke, Pereira, and Tiffany do not contain this section.
SHIVKOV V. ARTEX RISK SOLUTIONS 11
novo.” Casa del Caffe Vergnano S.P.A. v. ItalFlavors, LLC,
816 F.3d 1208, 1211 (9th Cir. 2016). We review factual
findings for clear error, and the interpretation and meaning
of contract provisions de novo. Nguyen v. Barnes & Noble
Inc., 763 F.3d 1171, 1175 (9th Cir. 2014).
ANALYSIS
Subject to certain exceptions not at issue here, the
Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., governs
arbitration agreements in contracts involving interstate
commerce. “The FAA reflects both a ‘liberal federal policy
favoring arbitration’ . . . and the ‘fundamental principle that
arbitration is a matter of contract,’. . . .” Kramer v. Toyota
Motor Corp., 705 F.3d 1122, 1126 (9th Cir. 2013) (quoting
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339
(2011)). “The basic role for courts under the FAA is to
determine ‘(1) whether a valid agreement to arbitrate exists
and, if it does, (2) whether the agreement encompasses the
dispute at issue.’” Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d
1052, 1058 (9th Cir. 2013) (en banc) (quoting Chiron Corp.
v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir.
2000)). State law governs the validity, revocability, and
enforceability of a contract. Id. Federal substantive law
governs the scope of an arbitration agreement. Kramer,
705 F.3d at 1126.
I. The Arbitration Clause is Enforceable
We turn first to the enforceability of the Clause.
Pursuant to the FAA, “[a] written provision in any . . .
contract evidencing a transaction involving commerce to
settle by arbitration a controversy thereafter arising out of
such contract . . . shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” 9 U.S.C. § 2. The savings
12 SHIVKOV V. ARTEX RISK SOLUTIONS
clause of this provision permits a party to challenge an
arbitration agreement pursuant to a generally applicable state
law contract defense, such as fraud, duress, or
unconscionability. Doctor’s Assocs., Inc. v. Casarotto,
517 U.S. 681, 686–87 (1996); Kilgore, 718 F.3d at 1058.
“As arbitration is favored, those parties challenging the
enforceability of an arbitration agreement bear the burden of
proving that the provision is unenforceable.” Mortensen v.
Bresnan Commc’ns, LLC, 722 F.3d 1151, 1157 (9th Cir.
2013). Plaintiffs challenge the enforceability of the
Arbitration Clause on two grounds. First, for all
Agreements, Plaintiffs argue that Artex and Tribeca
breached a state law fiduciary duty concerning arbitration
clauses. Second, for only some Agreements, Plaintiffs argue
that the Clause did not survive termination of the
Agreements. We address each challenge in turn.
A. The Breach of Fiduciary Duty Challenge
Plaintiffs aver that Artex and Tribeca had a fiduciary
duty to point out and explain the Arbitration Clause, which
they failed to do. Thus, Plaintiffs claim, Artex and Tribeca
effectively suppressed its existence in the less than ten-page
Agreements that Plaintiffs received and signed, and thereby
committed the legal equivalent of fraud. 5 Fraud is a basis to
revoke a contract under Arizona law. U.S. Insulation, Inc. v.
5
Plaintiffs made a similar argument in challenging the Clause as
procedurally unconscionable. The district court rejected that argument,
finding that that the record demonstrates that “Plaintiffs are sophisticated
people and businesses capable of negotiating this type of commercial
relationship.” The court further explained that although Plaintiffs argued
that Artex and Tribeca rushed them into signing the Agreements, only
one Plaintiff identified a time frame for signing an Agreement, which
spanned “a few weeks.” Plaintiffs do not challenge in this appeal the
court’s determination that the Clause is not unconscionable.
SHIVKOV V. ARTEX RISK SOLUTIONS 13
Hilro Constr. Co., Inc., 705 P.2d 490, 493–94 (Ariz. Ct.
App. 1985). However, to show fraud on the ground raised
here, Plaintiffs must show that Artex and Tribeca owed the
fiduciary duty that Plaintiffs claim exists under Arizona law.
We will assume arguendo that a fiduciary relationship arose
between Plaintiffs and Artex at some point in Defendants’
provision of captive insurance services. 6 Even assuming so,
Plaintiffs have not shown that, under Arizona law, it would
encompass a duty to point out and fully explain an arbitration
clause.
Plaintiffs direct us to a federal district court decision
interpreting Arizona law. See Katt v. Riepe, No. CV-14-
08042-PCT-DGC, 2014 WL 3720515 (D. Ariz. July 25,
2014). However, “we must adhere to state court decisions—
not federal court decisions—as the authoritative
interpretation of state law.” Daniel v. Ford Motor Co.,
806 F.3d 1217, 1223 (9th Cir. 2015). Neither did the
underlying Arizona state court decision on which Katt relied
hint at the existence of a duty that would require a
contracting party to point out and fully explain an arbitration
clause. See Leigh v. Loyd, 244 P.2d 356 (Ariz. 1952); Lerner
v. DMB Realty, LLC, 322 P.3d 909 (Ariz. Ct. App. 2014).
Although these decisions articulated a fiduciary duty to
disclose all material facts, that duty arose in the context of
the fiduciary relationship between a real estate broker and
the broker’s principal. See Leigh, 244 P.2d at 358 (“It is well
settled that a confidential relation exists between a real estate
agent and his principal,” which “impose[s] a duty on [the
agent] to disclose the true facts.”); Lerner, 322 P.3d at 919
(“A [real estate] broker owes a fiduciary duty to disclose
6
Because we assume this relationship, it is unnecessary to address
Plaintiffs’ request for additional discovery about whether a fiduciary
relationship existed.
14 SHIVKOV V. ARTEX RISK SOLUTIONS
material facts to its client.”). No such relationship existed
here.
The case before us is like one that the Arizona Court of
Appeals has already considered. In Dueñas v. Life Care
Centers of America, Inc., 336 P.3d 763 (Ariz. Ct. App.
2014), the plaintiff challenged the enforceability of an
arbitration agreement by arguing that an asserted fiduciary’s
failure to obtain the plaintiff’s signature for the agreement
rendered the agreement unenforceable. Id. at 771. The court
rejected that argument because the plaintiff had identified no
authority establishing that the duties involved in a fiduciary
relationship extend to “the purely commercial aspects of
their relationship.” Id. Like the plaintiff there, Plaintiffs fail
to identify any Arizona authority that would subject Artex
and Tribeca to a fiduciary duty in connection with an
arbitration clause. Thus, Plaintiffs have failed to show that
the Clause is unenforceable on this ground.
B. The Arbitration Clause Survival Challenge
Plaintiffs next argue that the Arbitration Clause in only
some of their Agreements is unenforceable because it did not
survive termination of the Agreements. 7 Whether a party
has agreed to arbitrate disputes following contract
termination depends upon whether the arbitration
obligations created under that contract remain enforceable.
See Biller v. S-H OpCo Greenwich Bay Manor, LLC, 961
F.3d 502, 513–14 & n.9 (1st Cir. 2020). We first address the
7
Plaintiffs raise this argument only for Plaintiffs Shivkov, Miller,
Linder, Bikhazi, Welling, Bullard, Frank, and McHale, as well as their
corresponding entities. Thus, this argument does not apply to Plaintiffs
Butler, Wilke, Pereira, and Tiffany.
SHIVKOV V. ARTEX RISK SOLUTIONS 15
framework applicable to post-termination arbitration and
then apply it here.
1. The Applicable Framework
Although the Supreme Court has not addressed the issue
of post-termination arbitration of disputes in the FAA
context, the Court has addressed this issue in the collective
bargaining context. In Litton Financial Printing Division v.
NLRB, the Court recognized a “presumption in favor of
postexpiration arbitration of matters unless ‘negated
expressly or by clear implication’ [for] matters and disputes
arising out of the relation governed by contract.” 501 U.S.
190, 204 (1991) (quoting Nolde Bros., Inc. v. Local No. 358,
Bakery & Confectionary Workers Union, AFL-CIO,
430 U.S. 243, 255 (1977)). The Court explained that “[w]e
presume as a matter of contract interpretation that the parties
did not intend a pivotal dispute resolution provision to
terminate for all purposes upon the expiration of the
agreement.” Id. at 208. For the presumption to apply, the
parties’ dispute must have “its real source in the contract.”
Id. at 205. This occurs “only where [the dispute] involves
facts and occurrences that arose before expiration, where an
action taken after expiration infringes a right that accrued or
vested under the agreement, or where, under normal
principles of contract interpretation, the disputed contractual
right survives expiration of the remainder of the agreement.”
Id. at 206 (emphasis added).
Although we have not addressed Litton’s application to
the FAA context, five sister circuits have. See Biller,
961 F.3d at 513; Breda v. Cellco P’ship, 934 F.3d 1, 7 (1st
Cir. 2019); Huffman v. Hilltop Cos., LLC, 747 F.3d 391,
395–96 (6th Cir. 2014); Wolff v. Westwood Mgmt., LLC,
558 F.3d 517, 520–21 (D.C. Cir. 2009); Koch v.
Compucredit Corp., 543 F.3d 460, 465–66 (8th Cir. 2008);
16 SHIVKOV V. ARTEX RISK SOLUTIONS
CPR (USA) Inc. v. Spray, 187 F.3d 245, 254–56 (2d Cir.
1999), abrogated on other grounds as explained in
Accenture LLP v. Spreng, 647 F.3d 72, 76 (2d Cir. 2011).
We are persuaded that the presumption also applies here. As
the Sixth Circuit has explained, “the need for an arbitration
provision to have post-expiration effect is intuitive, because
if ‘the duty to arbitrate automatically terminated upon
expiration of the contract, a party could avoid his contractual
duty to arbitrate by simply waiting until the day after the
contract expired to bring an action regarding a dispute that
arose while the contract was in effect.’” Huffman, 747 F.3d
at 395 (citation omitted). Thus, we also apply the Litton
framework here.
2. The Application of the Litton Presumption
Here
We do not doubt that the dispute here has “its real source
in the contract,” Litton, 501 U.S. at 205, because Plaintiffs
raised no argument on this issue in their opening brief and
thus waived the issue. Smith v. Marsh, 194 F.3d 1045, 1052
(9th Cir. 1999) (“[O]n appeal, arguments not raised by a
party in its opening brief are deemed waived.”). Plaintiffs
argue, however, that the parties expressly negated the
presumption, or clearly implied that their arbitration
obligations under the Agreements at issue would not survive
termination. Plaintiffs point to the following text in the
“Termination and Withdrawal” section:
The terms of this section shall survive the
termination of this Agreement and/or the
dissolution or other effective termination of
the business of [Artex or Tribeca] or the
insurance company.
SHIVKOV V. ARTEX RISK SOLUTIONS 17
Invoking the doctrine of expressio unius est exclusio
alterius, Plaintiffs contend that the survival clause contains
an exclusive list of the provisions that survive termination
which excludes the Arbitration Clause and thus expressly
negates the presumption or clearly implies that the parties
did not intend for their arbitration obligations to survive
termination. See Herman Chanen Constr. Co. v. Guy Apple
Masonry Contractors Inc., 453 P.2d 541, 543 (Ariz. Ct. App.
1969) (“[T]he expression in a contract of one or more things
of a class, implies the exclusion of all things not
expressed. . . .”).
The Sixth Circuit has already addressed the impact of a
survival clause on post-termination arbitration obligations.
See Huffman, 747 F.3d at 394–98. In Huffman, the Sixth
Circuit determined that the freestanding survival clause
there—which included half the agreement’s provisions but
not the arbitration clause—was insufficient to overcome the
presumption in favor of post-termination arbitration. Id.
Acknowledging that the expressio unius doctrine
“present[ed] a trick[y] question,” the Sixth Circuit
determined that “considering the contract as a whole—the
survival clause and its relationship to the other clauses in the
agreement—is the correct way to determine whether the
parties unambiguously intended for the arbitration clause to
expire with the contract.” Id. at 397 (emphasis added). The
Sixth Circuit adopted this mode of analysis due to “the
strong federal policy in favor of arbitration,” id. at 394,
pursuant to which a court “resolv[es] any doubts as to the
parties’ intentions in favor of arbitration,” id. at 395
(quoting Nestle Waters N. Am., Inc. v. Bollman, 505 F.3d
498, 503 (6th Cir. 2007)). The Sixth Circuit also noted that
the presumption of arbitrability should not be denied for
“broadly-worded arbitration clauses” unless it may be said
with positive assurance that the arbitration clause is not
18 SHIVKOV V. ARTEX RISK SOLUTIONS
susceptible of an interpretation that covers the asserted
dispute. Id.We are persuaded that looking to the Agreements as a
whole is the proper mode of analysis here. The FAA
“establishes ‘a liberal federal policy favoring arbitration
agreements.’” Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612,
1621 (2018) (quoting Moses H. Cone Mem’l Hosp. v.
Mercury Constr. Corp., 460 U. S. 1, 24 (1983)); see also
Kramer, 705 F.3d at 1126 (recognizing strong federal policy
in favor of arbitration). Although Plaintiffs contend that the
Arbitration Clause is not as broadly worded as the clause in
Huffman, we reject that argument in Part II and thus the
scope of the Clause also lends support to looking to the
contract as a whole. Finally, Arizona law also looks to the
contract as a whole to ascertain the parties’ intent. Elm Ret.
Ctr., LP v. Callaway, 246 P.3d 938, 941–42 (Ariz. Ct. App.
2010) (“To determine the parties’ intent, we ‘look to the
plain meaning of the words as viewed in the context of the
contract as a whole.’” (quoting United Cal. Bank v.
Prudential Ins. Co., 681 P.2d 390, 411 (Ariz. Ct. App.
1983))).
Looking to the Agreements as a whole, the survival
clause is insufficient to expressly negate the presumption in
favor of post-termination arbitration or clearly imply that the
parties intended for their arbitration obligations to terminate
with the Agreements. The Agreements lack an exhaustive
survival clause. Instead, the clause here appears in and
concerns only the insular terms established by the
“Termination and Withdrawal” section. We doubt that the
parties intended for an insular survival clause tucked into a
section establishing unique obligations and duties upon the
termination of the Agreement to comprehensively identify
SHIVKOV V. ARTEX RISK SOLUTIONS 19
the Agreement terms that would survive termination. 8 That
doubt grows here because, as in Huffman, the Agreements
contain severability and integration clauses outside the
section with the survival clause. 747 F.3d at 397. “[I]t is
illogical to conclude that upon expiration of the contract, the
parties no longer intended” for these provisions to apply.
See id.
Other provisions of the Agreements also suggest
ambiguity about the survival clause on which Plaintiffs rely.
The Agreements contain sections that disclaim liability for
any underwriting losses and impose general limitations on
liability, whether direct or indirect, arising out of, in
connection with, or related in any way to an Agreement or
services provided pursuant to it. The latter provision
expressly precludes certain types of damages that may be
recovered, including, in relevant part, punitive damages,
taxes and interest due to any taxing authority or government
agency, penalties payable to any taxing authority or
government agency, and attorneys’ fees. These are
limitations that the parties are unlikely to have intended to
terminate with the Agreements, particularly given the broad
scope of the limitations on liability and the fact that the
limitations plainly concern events that are likely to occur
post-termination.
Considering the Agreements as a whole, we cannot find
that the parties expressly negated the presumption in favor
of post-termination arbitration, or clearly implied that their
8
Although Plaintiffs argue that reading the contract as a whole
renders the survival clause mere surplusage, that argument circularly
justifies not looking to the entire contract by presupposing that the clause
has the meaning Plaintiffs ascribe it. The point of the analysis here is to
ascertain whether the clause plainly bears that meaning or not.
20 SHIVKOV V. ARTEX RISK SOLUTIONS
arbitration obligations would not survive termination. We
might have arrived at a different conclusion if the survival
clause stated that only the terms of that section and no other
terms in the Agreement would survive termination, if the
Agreement included a comprehensive survival clause, or
even if the Arbitration Clause explicitly stated that it does
not survive termination. Of course, the Agreements contain
no such language. Because “we cannot say with certainty
that the parties did not intend for the arbitration clause to
survive expiration of the contract,” the parties’ arbitration
obligations remain intact. See id. at 398.
II. The Arbitration Clause Encompasses Plaintiffs’
Claims
We turn next to whether the Arbitration Clause
encompasses all of Plaintiffs’ claims here. “[A] party can be
forced to arbitrate only those issues it specifically has agreed
to submit to arbitration.” First Options of Chi., Inc. v.
Kaplan, 514 U.S. 938, 945 (1995). “When deciding whether
the parties agreed to arbitrate a certain matter . . . courts
generally . . . should apply ordinary state-law principles that
govern the formation of contracts.” Id. at 944. Under
Arizona law, a contract is ambiguous when it “can be
reasonably construed in more than one manner.” Leo
Eisenberg & Co., Inc. v. Payson, 785 P.2d 49, 52 (Ariz.
1989). “[A]s with any other contract, the parties’ intentions
control, but those intentions are generously construed as to
issues of arbitrability.” Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). In the
face of any ambiguity, “under the federal presumption in
favor of arbitration, an arbitrator would have jurisdiction to
arbitrate claims.” Comedy Club, Inc. v. Improv W. Assocs.,
553 F.3d 1277, 1285 (9th Cir. 2009).
SHIVKOV V. ARTEX RISK SOLUTIONS 21
The Clause provides in the first instance (with emphasis
added) that: “You and we agree that in the event of any
dispute that cannot be resolved between the parties, that we
will agree to seek to resolve such disputes through mediation
. . . and if that fails, that all disputes will be subject to
binding arbitration.” Defendants understandably rely on this
sweeping language to conclude that the Clause includes all
Plaintiffs’ claims.
Plaintiffs, however, draw our attention to other language
in the Clause which they argue narrows its scope. Plaintiffs
focus on the Clause’s third sentence: “[t]o reduce time and
expenses, we each waive our right to litigate against one
another regarding the services provided and obligations
pursuant to this Agreement, and instead you and we have
chosen binding arbitration.” It is a “standard rule of contract
interpretation” that “specific terms control over general
ones.” United States ex rel. Welch v. My Left Foot
Children’s Therapy, LLC, 871 F.3d 791, 797 (9th Cir. 2017)
(quoting S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885,
891 (9th Cir. 2003)); see also Elm Ret. Ctr., LP, 246 P.3d
at 942 (“[B]ecause specific contract provisions express the
parties’ intent more precisely than general provisions,
specific provisions qualify the meaning of general
provisions.”). 9 Treating the Clause’s third sentence as a
more specific term concerning scope, we discern that the
parties intended to arbitrate “any” and “all disputes”
9
We will assume that Plaintiffs meant to rely on this standard and
directly applicable contract rule because Plaintiffs’ reliance on Mesquite
Lake Assocs. v. Lurgi Corp., 754 F. Supp. 161 (N.D. Cal. 1991), is
unpersuasive. Unlike in Mesquite, the Clause does not limit its scope
through a provision that “any controversy or dispute between the Parties
concerning this Agreement and specifically subject to resolution
pursuant to this Article shall be subject to arbitration . . . .” Id. at 162(emphasis added).
22 SHIVKOV V. ARTEX RISK SOLUTIONS
“regarding the services provided and obligations pursuant to
this Agreement.” So understood, the Clause still remains
broad. See, e.g., Simula, Inc. v. Autoliv, Inc., 175 F.3d 716,
720 (9th Cir. 1999) (concluding that a clause encompassing
“[a]ll disputes arising in connection with this Agreement”
should be construed and applied liberally); Republic of
Nicaragua v. Standard Fruit Co., 937 F.2d 469, 479 (9th Cir.
1991) (similar). The district court methodically explained
why all of the claims here are subject to arbitration on this
reading.
Plaintiffs nonetheless tell us that the district court erred
in sending their various non-breach of contract claims to
arbitration by pointing to a disclaimer in the Agreements,
pursuant to which Artex and Tribeca explained that they
“do[] not provide any legal, tax, or accounting advice.”
Plaintiffs aver that “tax or legal advice” was not among the
services and obligations under the Agreements, and thus
their claims concerning such advice are excluded from
arbitration. This argument hinges entirely on the meaning of
“tax or legal advice.” Curiously, Plaintiffs do not offer any
interpretation of those terms. Repeating a bare assertion that
this phrase excludes their non-contract claims without
supporting argument does not make it so. 10 See Navajo
Nation v. U.S. Forest Serv., 535 F.3d 1058, 1079 n.26 (9th
Cir. 2008) (en banc) (“It is well-established that a bare
assertion in an appellate brief, with no supporting argument,
is insufficient to preserve a claim on appeal.”). Because the
10
Although Plaintiffs rely on Khan v. BDO Seidman, LLP,
935 N.E.2d 1174 (Ill. App. Ct. 2010), that case says nothing about the
issue here, namely the meaning of the phrase “tax or legal advice” for
the Agreements at issue. Thus, apart from the fact that we are not bound
by that decision, Plaintiffs’ list of factual comparisons with that case
does nothing to overcome their failure to offer any meaning of these
terms in the Agreements here.
SHIVKOV V. ARTEX RISK SOLUTIONS 23
Agreements provide that Artex and Tribeca would prepare
federal tax returns and calculate estimated tax payments for
the captives, Plaintiffs’ argument, at best, points to
ambiguity that we must resolve in favor of arbitration. See
Comedy Club, 553 F.3d at 1286. Thus, we still conclude that
the Clause encompasses all Plaintiffs’ claims.
III. The Availability of Class Arbitration
Plaintiffs brought this suit as a putative class action
against Defendants involving “hundreds if not thousands” of
class members. The district court, however, ordered
individual arbitration. We must determine next (1) whether
the availability of class arbitration is a “gateway question”
that a court must presumptively decide and, if so, (2) whether
the parties nevertheless clearly and unmistakably delegated
the issue to the arbitrator, and (3) if not, whether the
Agreements permit class arbitration. We address each issue
in turn.
A. The Availability of Class Arbitration is a Gateway
Issue for a Court to Presumptively Decide
The Supreme Court has distinguished between two
categories of issues, each of which has a different
presumption as to whether a court or an arbitrator should
decide them. See Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79, 83 (2002); Martin v. Yasuda, 829 F.3d 1118,
1122–23 (9th Cir. 2016). In the first category of issues are
“potentially dispositive gateway question[s] . . . of
arbitrability” that “contracting parties would likely have
expected a court to . . . decide[].” Howsam, 537 U.S. at 83(internal quotation marks omitted). “This category includes
issues . . . such as ‘whether the parties are bound by a given
arbitration clause’ or whether ‘an arbitration clause in a
concededly binding contract applies to a particular type of
24 SHIVKOV V. ARTEX RISK SOLUTIONS
controversy.’” Martin, 829 F.3d at 1123 (quoting Howsam,
537 U.S. at 84). “These disputes are ‘for judicial
determination unless the parties clearly and unmistakably
provide otherwise.’” Id. (quoting Howsam, 537 U.S. at 83).
The second category encompasses “procedural” issues,
which are “presumptively not for the judge, but for an
arbitrator, to decide.” Id. (quoting Howsam, 537 U.S. at 84).
Examples of issues in this category are whether a party has
satisfied the arbitral forum’s statute of limitations for filing
a case, whether a party has satisfied certain requirements of
a procedural grievance, and “allegation[s] of waiver, delay,
or a like defense to arbitrability.” Howsam, 537 U.S. at 84–
85 (quoting Moses H. Cone, 460 U.S. at 25).
The Supreme Court has not had occasion to decide
whether the availability of class arbitration is a gateway
issue for a court to decide pursuant to this framework. See
Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1417 n.4 (2019)
(not deciding the question because the parties agreed that the
issue was one for the court to decide); Oxford Health Plans
LLC v. Sutter, 569 U.S. 564, 569 n.2 (2013) (not deciding
the question because the parties agreed that the issue was one
for the arbitrator to decide); Stolt-Nielsen S.A. v.
AnimalFeeds Int’l Corp., 559 U.S. 662, 680 (2010) (not
deciding the question because the parties entered into a
supplemental agreement that expressly assigned the issue of
the availability of class arbitration to the arbitration panel).
Seven of our sister circuit courts, however, have
concluded that the availability of class arbitration is a
gateway question for a court to presumptively decide. 11 See
11
The Second and Tenth Circuits have assumed without deciding
that the availability of class arbitration is a gateway issue that is
presumptively for a court to decide. See Dish Network, L.L.C. v Ray,
SHIVKOV V. ARTEX RISK SOLUTIONS 25
20/20 Commc’ns, Inc. v. Crawford, 930 F.3d 715, 718–19
(5th Cir. 2019); Herrington v. Waterstone Mortg. Corp.,
907 F.3d 502, 506–07 (7th Cir. 2018); JPay, Inc. v. Kobel,
904 F.3d 923, 935–36 (11th Cir. 2018); Catamaran Corp. v.
Towncrest Pharmacy, 864 F.3d 966, 972 (8th Cir. 2017); Del
Webb Cmtys., Inc. v. Carlson, 817 F.3d 867, 873 (4th Cir.
2016); Opalinski v. Robert Half Int’l Inc., 761 F.3d 326,
334–35 (3d Cir. 2014); Reed Elsevier, Inc. v. ex rel.
LexisNexis Div. v. Crockett, 734 F.3d 594, 598–99 (6th Cir.
2013). We have also concluded that the availability of class
arbitration is a gateway issue in an unpublished and
nonprecedential memorandum disposition. See Eshagh v.
Terminix Int’l Co., 588 F. App’x 703, 704 (9th Cir. 2014).
Faced with whether class arbitration is a gateway
question here, we see no reason to create an unnecessary
circuit split, or to depart from what we have already
suggested. We find persuasive the three reasons that the
Seventh Circuit has succinctly identified for why class
arbitration is a gateway issue. See Herrington, 907 F.3d
at 507–08. The first and second reasons assimilate the issue
of class arbitration into what we have already recognized are
gateway issues presumptively for a court to decide:
“(1) whether there is an agreement to arbitrate between the
parties; and (2) whether the agreement covers the dispute.”
Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015)
(citing Howsam, 537 U.S. at 84). The third reason concerns
900 F.3d 1240, 1245 (10th Cir. 2018) (acknowledging the consensus
among “many circuits” but assuming the issue and concluding that the
parties clearly and unmistakably delegated the issue to an arbitrator);
Wells Fargo Advisors, L.L.C. v. Sappington, 884 F.3d 392, 395 (2d Cir.
2018) (same).
26 SHIVKOV V. ARTEX RISK SOLUTIONS
the Supreme Court’s treatment of class arbitration. We
briefly consider each of these reasons.
The Seventh Circuit has explained first that “[t]he
availability of class . . . arbitration involves a foundational
question of arbitrability: whether the potential parties to the
arbitration agreed to arbitrate.” Herrington, 907 F.3d at 507.
This is the familiar gateway question of whether there is an
agreement to arbitrate between the parties. See Brennan,
796 F.3d at 1130. Plaintiffs filed a putative class complaint,
seeking to represent “hundreds if not thousands of” possible
class members. The availability of class arbitration raises
the question whether any of those possible class members
have actually agreed to arbitration in the first place as well
as the question whether the Agreements show that Artex and
Tribeca agreed to arbitrate rather than litigate with those
members. Thus, answering this question “resolves the
foundational question of ‘with whom’ [Artex and Tribeca]
chose to arbitrate.” See Herrington, 907 F.3d at 508
(quoting Stolt-Nielsen, 559 U.S. at 683).
Relatedly, the Seventh Circuit has explained that
“whether a contract permits class . . . arbitration involves a
second . . . question of arbitrability: whether the agreement
to arbitrate covers a particular controversy.” Id. This is the
familiar gateway question of scope. See Brennan, 796 F.3d
at 1130. Notably, the Clause here provides that “[y]ou and
we agree that in the event of any dispute that cannot be
resolved between the parties,” “such disputes” will be
resolved by mediation and arbitration. The availability of
class arbitration raises the question whether Artex and
Tribeca agreed to arbitrate particular disputes not only with
the Plaintiffs, but also with possible class members.
Answering this question resolves the question of whether the
parties agreed to arbitrate particular disputes.
SHIVKOV V. ARTEX RISK SOLUTIONS 27
Third, and “most important[ly],” the Seventh Circuit has
explained that class arbitration belongs to the gateway
category because “the structural features of class arbitration
make it a ‘fundamental’ change from the norm of bilateral
arbitration.” Herrington, 907 F.3d at 509 (quoting Stolt-
Nielsen, 559 U.S. at 686). The Supreme Court has all but
endorsed this reason for treating class arbitration as a
gateway issue. According to the Court, class arbitration:
(1) “sacrifices the principal advantage of arbitration—its
informality—and makes the process slower, more costly,
and more likely to generate procedural morass than final
judgment,” Concepcion, 563 U.S. at 348, (2) “requires
procedural formality” because “[i]f procedures are too
informal, absent class members would not be bound by the
arbitration,” id. at 349, and (3) “greatly increases risks to
defendants,” id. at 350. In short, “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.” Stolt-
Nielsen, 559 U.S. at 685. As seven circuits have recognized,
the Court’s discussion of class arbitration is a weighty thumb
on the scale in favor of treating class arbitration as a gateway
issue for a court to presumptively decide. See 20/20
Commc’ns, 930 F.3d at 719; Herrington, 907 F.3d at 509;
JPay, 904 F.3d at 933–34; Catamaran Corp., 864 F.3d
at 971–72; Del Webb Cmtys., 817 F.3d at 875–76; Opalinski,
761 F.3d at 333–34; Reed Elsevier, 734 F.3d at 598.
We are not persuaded by Plaintiffs’ arguments for why
we should not treat the availability of class arbitration as a
gateway issue for a court. Plaintiffs rely on a concurrence
that is concededly not the law of any circuit. See Dish
Network, L.L.C., 900 F.3d at 1252–57 (Tymkovich, C.J.,
concurring). That concurrence criticizes the third reason we
have identified as nothing more than “Supreme Court dicta
28 SHIVKOV V. ARTEX RISK SOLUTIONS
and good policy.” Id. at 1255. But when the Court speaks,
we should take notice. See Zal v. Steppe, 968 F.2d 924, 935
(9th Cir. 1992), as amended (July 31, 1992) (Noonan, J.,
concurring in the result in part and dissenting in part)
(“[D]icta of the Supreme Court have a weight that is greater
than ordinary judicial dicta as prophecy of what that Court
might hold. We should not blandly shrug them off because
they were not a holding.”). As we have explained, the
Supreme Court has repeatedly underscored why class
arbitration is different and thus should be treated differently.
See Stolt-Nielsen, 559 U.S. at 685; Concepcion, 563 U.S.
at 348–50. Naturally, seven circuits have taken notice, and
so do we.
Plaintiffs also argue that class arbitration is a procedural
issue for an arbitrator to decide in light of the Court’s passing
references to class actions as “procedures” in Epic Systems,
138 S. Ct. at 1624–25, and the fact that the Federal Rules of
Civil Procedure treat class actions as procedural. We are not
persuaded. As the Seventh Circuit has observed, Epic
Systems did not decide whether class arbitration is a gateway
question, see Herrington, 907 F.3d at 506, and thus that
decision is not of any help. More fundamentally, that a class
action is a “classically” procedural mechanism in federal
court under Federal Rule of Civil Procedure 23, Dish
Network, L.L.C., 900 F.3d at 1254 (Tymkovich, C.J.,
concurring), is of no moment here. In the arbitration context,
we are concerned with whether the parties to the requested
arbitration have agreed to that particular dispute resolution,
and, if so, what the scope of that agreement is. See Stolt-
Nielsen, 559 U.S. at 687 (underscoring “the consensual basis
of arbitration”). Therefore, the relevant metric is not the
labeling of a particular mechanism in federal court as
“procedural”, but rather the categories of gateway issues in
reviewing an arbitration agreement that the Court has
SHIVKOV V. ARTEX RISK SOLUTIONS 29
instructed determine whether an issue is presumptively for a
court or an arbitrator to decide absent further agreement by
the parties. See Rent-A-Center, West, Inc. v. Jackson,
561 U.S. 63, 69 (2010) (describing gateway questions for a
court as issues “such as whether the parties have agreed to
arbitrate or whether their agreement covers a particular
controversy” (emphasis added)).
We have already explained how the question of the
availability of class arbitration interlocks with gateway
issues that a court must presumptively decide. Plaintiffs
offer no persuasive reason for why we should nevertheless
treat class arbitration as akin to the exemplary questions for
an arbitrator to presumptively decide, nor do we see one that
would warrant a circuit split. See Howsam, 537 U.S. at 85(identifying as “procedural” questions presumptively for an
arbitrator as “whether prerequisites such as time limits,
notice, laches, estoppel, and other conditions precedent to an
obligation to arbitrate have been met”); see also Global
Linguist Solutions, LLC v. Abdelmeged, 913 F.3d 921, 923
(9th Cir. 2019) (reaching result partly to avoid an
unnecessary circuit split). Thus, we conclude that class
arbitration is a gateway issue for a court to presumptively
decide.
B. The Parties Did Not Clearly and Unmistakably
Delegate the Issue of Class Arbitration to the
Arbitrator
Having resolved that class arbitration is a gateway issue,
Plaintiffs tell us that the Clause evidences a clear and
unmistakable intent to delegate the issue to the arbitrator as
follows: (1) the Clause refers to the AAA (i.e., the American
Arbitration Association), (2) which renders the AAA Rules
applicable, (3) which in turn encompass the AAA’s
Supplementary Rules, (4) which include Supplementary
30 SHIVKOV V. ARTEX RISK SOLUTIONS
Rule 3’s instruction that “the arbitrator shall determine as a
threshold matter . . . whether the applicable arbitration
clause permits the arbitration to proceed on behalf of or
against a class,” and (5) thus the parties delegated the issue
of class arbitration to the arbitrator.
Plaintiffs’ argument touches on a circuit split on whether
incorporation of the AAA Rules is sufficient evidence that
the parties clearly and unmistakably delegated the issue of
class arbitration to the arbitrator. Compare Catamaran
Corp., 864 F.3d at 973 (concluding that an arbitration
agreement’s incorporation of the AAA Rules without
specific reference to class arbitration is insufficient);
Chesapeake Appalachia, LLC v. Scout Petroleum, LLC,
809 F.3d 746, 761 (3d Cir. 2016) (same), cert. denied, 137 S.
Ct. 40 (2016), Reed Elsevier, 734 F.3d at 599 (concluding
that a clause which incorporated the AAA Rules “does not
clearly and unmistakably assign to an arbitrator the question
whether the agreement permits classwide arbitration”), with
JPay, 904 F.3d at 936–42 (reasoning that incorporation of
the AAA Rules is sufficient and explaining disagreement
with Third, Sixth, and Eighth Circuits).
We need not take sides in this circuit split here because
Plaintiffs fail to clear a threshold hurdle. The crux of
Plaintiffs’ argument is our decision in Brennan v. Opus
Bank. The arbitration clause there provided that “any
controversy or claim arising out of this [Employment]
Agreement or [Brennan’s] employment with the Bank or the
termination thereof . . . shall be settled by binding arbitration
in accordance with the Rules of the American Arbitration
Association.” 796 F.3d at 1128 (alterations in original;
emphasis added). We concluded that, at least in a contract
between sophisticated parties, “incorporation of the AAA
Rules constitutes clear and unmistakable evidence that
SHIVKOV V. ARTEX RISK SOLUTIONS 31
contracting parties agreed to arbitrate arbitrability.” Id.
at 1130 (internal quotation marks omitted; emphasis added).
Thus, we sided with “‘[v]irtually every circuit to have
considered the issue.’” Id. (first alteration in original;
quoting Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d
1069, 1074 (9th Cir. 2013)). Unlike the arbitration clause in
Brennan, the Clause does not incorporate the AAA Rules,
and thus Brennan does not apply.
Unable to identify a textual reference to the AAA Rules,
Plaintiffs nonetheless contend that the “obvious and
unavoidable implication of an agreement to arbitrate before
the AAA is an agreement to submit to the AAA’s arbitration
rules.” But we have never held that a mere reference to the
AAA shows clear and unmistakable intent to delegate a
gateway issue to an arbitrator, and Plaintiffs identify no
authority from any sister circuit holding as much. Even if
we thought the “obvious and unavoidable implication” of a
reference to the AAA is consent to the AAA Rules when a
clause refers only to the AAA, the Clause here does not do
so. The Clause provides first for mediation, second for
arbitration by an arbitrator selected by the parties, and, only
if the parties cannot agree on an arbitrator, arbitration before
the AAA. We cannot find clear and unmistakable evidence
that the parties intended to delegate the gateway issue of
class arbitration to the arbitrator by virtue of the AAA Rules
when arbitration before the AAA is but the final option in
the dispute procedure that the Clause outlines. 12
12
Plaintiffs contend that only the non-AAA portions of the Clause
are an unenforceable bare agreement to agree and thus the AAA is the
default option. The FAA and Arizona’s Revised Uniform Arbitration
Act, however, both permit enforcement of an agreement regarding the
method of naming or appointing an arbitrator. See 9 U.S.C. § 5; Ariz.
Rev. Stat. § 12-1503.
32 SHIVKOV V. ARTEX RISK SOLUTIONS
In light of the Clause here, Plaintiffs’ reliance on Belnap
v. Iasis Healthcare, 844 F.3d 1272 (10th Cir. 2017), is
misplaced. The arbitration clause there provided that “[t]he
arbitration shall be administered by JAMS and conducted in
accordance with its Streamlined Arbitration Rules and
Procedures (the “Rules”), except as provided otherwise
herein.” Id. at 1276. Rejecting the plaintiff’s argument that
the agreement left open the rules that would govern
arbitration because the parties could choose another dispute
resolution service, the Tenth Circuit explained that “[t]he
plain language of the Agreement establishes the JAMS Rules
as the default controlling rubric.” Id. at 1282. The Clause
here, however, neither refers to the AAA Rules, nor does it
establish those Rules as the “default controlling rubric.” See
id. Although the Clause provides for the possibility that
arbitration may occur before the AAA if the parties cannot
agree on an arbitrator, “such a possibility is not enough for
us to say that” the AAA Rules are the Clause’s “ordinary
controlling standard.” See id. Because Plaintiffs do not
claim that any other provision demonstrates a clear and
unmistakable intent to delegate the availability of class
arbitration to the arbitrator, we conclude that the availability
of class arbitration remains a gateway issue.
C. The Agreements Do Not Permit Class Arbitration
The final issue that we must decide on class arbitration
is straightforward. “Neither silence nor ambiguity provides
a sufficient basis for concluding that parties to an arbitration
agreement agreed to undermine the central benefits of
arbitration itself,” Lamps Plus, 139 S. Ct. at 1417, namely,
“the individualized form of arbitration envisioned by the
FAA,” id. at 1416. As the district court concluded, because
the Agreements are silent on class arbitration, they do not
SHIVKOV V. ARTEX RISK SOLUTIONS 33
permit it. Thus, the court properly compelled individual
arbitration pursuant to the Agreements.
IV. The Non-Signatory Defendants May Compel
Arbitration
The final issue for us is whether all Defendants may
compel arbitration of Plaintiffs’ claims. Several Defendants
are not signatories to the Agreements (the Non-Signatory
Defendants). Although only Jim Tehero and Karl Huish
signed the Agreements on Artex and Tribeca’s behalf,
Plaintiffs concede that these Defendants as well as Jeremy
Huish and Arthur J. Gallagher & Co. may compel
arbitration. Nevertheless, Plaintiffs argue that no other Non-
Signatory Defendant may compel arbitration. 13 We
disagree.
“[A] litigant who is not a party to an arbitration
agreement may invoke arbitration under the FAA if the
relevant state contract law allows the litigant to enforce the
agreement.” Kramer, 705 F.3d at 1128 (citing Arthur
Andersen LLP v. Carlisle, 556 U.S. 624, 632 (2009)).
Arizona law recognizes alternative estoppel, pursuant to
which a non-signatory may compel arbitration of a
signatory’s claims. Sun Valley Ranch 308 Ltd. P’ship ex rel.
Englewood Props., Inc. v. Robson, 294 P.3d 125, 134–35
(Ariz. Ct. App. 2012). A non-signatory may compel
arbitration when “each of a signatory’s claims against a
nonsignatory makes reference to or presumes the existence
of the written agreement,” such that “the signatory’s claims
13
The remaining Non-Signatory Defendants include TBS LLC d/b/a
PRS Insurance; Debbie Inman; Epsilon Actuarial Solutions, LLC; Julie
A. Ekdom; AmeRisk Consulting, LLC; Provincial Insurance, PCC;
Tribeca Strategic Accountants, LLC; and Tribeca Strategic Accountants,
PLC.
34 SHIVKOV V. ARTEX RISK SOLUTIONS
arise out of and relate directly to the written agreement.” Id.
at 135 (quoting CD Partners, LLC v. Grizzle, 424 F.3d 795,
798 (8th Cir. 2005)). 14 As the district court concluded, all
Non-Signatory Defendants may compel arbitration pursuant
to this standard. 15
Plaintiffs’ allegations about Defendants’ misconduct
regarding the captive insurance services presume and
“intimately rel[y]” on the existence of the Agreements. See
Kramer, 705 F.3d at 1132. We have already determined in
Part II that Plaintiffs’ claims are subject to arbitration even
if we construe the Clause as limited to the services and
obligations under the Agreements. It follows that Plaintiffs’
claims necessarily presume the existence of the Agreements.
Indeed, the entire complaint concerns Defendants’ captive
insurance services, which encompassed the formation,
oversight, operation, and management of captive insurance
companies for Plaintiffs pursuant to the Agreements. The
Agreements also provide that Artex and Tribeca would hire
third parties in connection with the services, thus
underscoring that the claims presume the existence of the
Agreements even for the Non-Signatory Defendants. See
Sun Valley, 294 P.3d at 135 (finding that the nonsignatory
14
Alternative estoppel may also apply when “the relationship
between the signatory and nonsignatory defendants is sufficiently close
that only by permitting the nonsignatory to invoke arbitration may
evisceration of the underlying arbitration agreement between the
signatories be avoided.” Sun Valley, 294 P.3d at 134 (quoting CD
Partners, 424 F.3d at 798). Because Defendants do not invoke this
ground, we decline to address whether Plaintiffs would be estopped on
this basis.
15
It is unnecessary for us to resolve the parties’ dispute about the
standard of review for the district court’s decision. Whether we review
de novo or for an abuse of discretion, we affirm the district court.
SHIVKOV V. ARTEX RISK SOLUTIONS 35
“may nevertheless compel plaintiffs to arbitrate their claims
against him” because “the trier of fact will be required to
consider the [underlying agreements] in resolving plaintiffs’
claims, and [the non-signatory’s] conduct is intertwined with
that of other defendants who signed the [underlying
agreement].”).
We are not persuaded by Plaintiffs’ counterarguments.
Plaintiffs aver that they could bring all their claims against
the Non-Signatory Defendants regardless of whether the
Agreements existed, and thus alternative estoppel does not
apply. This argument proves nothing because it is not the
relevant test under Arizona law. See id.Relying on Kramer, 705 F.3d at 1133, Plaintiffs argue
further that mere allegations of substantially interdependent
and concerted misconduct by signatories and non-
signatories, standing alone, are insufficient to permit non-
signatories to compel arbitration. But in Kramer we rejected
the non-signatory defendants’ invocation of equitable
estoppel based only on “sparse portions” of the pleadings
concerning interdependent conduct by the defendants. Id. In
contrast, the FAC makes pervasive allegations of concerted
conduct by the Defendants. We have also explained why
Plaintiffs’ claims presume the existence of the Agreements
even for the Non-Signatory Defendants. Thus, we conclude
that all Non-Signatory Defendants can compel arbitration.
CONCLUSION
For the foregoing reasons, the district court correctly
granted Defendants’ motion to compel and ordered
arbitration of Plaintiffs’ claims on an individual basis.
AFFIRMED.