United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 11-2476

___________

Thomas A. Wootten, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the 

* Eastern District of Missouri.

Fisher Investments, Inc.; Fisher Asset *

Management, LLC, dba Fisher *

Investments, Inc.; Kenneth Fisher; *

Matthew Goldhaber; Michael Weston, *

*

Appellees. *

___________

Submitted: March 14, 2012

Filed: July 26, 2012

___________

Before MELLOY, SMITH and SHEPHERD, Circuit Judges.

___________

SMITH, Circuit Judge.

Thomas A. Wootten initiated an arbitration against his former investment

advisor, Fisher Investments, Inc. ("Fisher Investments"). During the arbitration, Fisher

Investments moved to dismiss Wootten's Missouri statutory claims based on the

arbitration agreement's Delaware choice-of-law provision. Ruling on Fisher

Investments' motion, the arbitrator dismissed Wootten's Missouri statutory claims and

sua sponte prohibited Wootten from adding a federal securities law claim. Wootten

then filed a civil action against Fisher Investments in the United States District Court
for the Eastern District of Missouri, re-alleging the Missouri statutory and federal

securities law claims and seeking a declaration that the arbitration agreement was

void. The district court1

 dismissed Wootten's claims without prejudice, deciding that

Wootten had to complete arbitration before he could pursue remedies in federal court.

We affirm. 

I. Background

Wootten, a former insurance agent, sought investment options for his retirement

savings. In September 2007, after receiving marketing materials from Fisher

Investments, Wootten met with Fisher Investments's Vice President Matthew

Goldhaber. Subsequently, on September 11, 2007 Wootten signed a written Letter of

Agreement (LOA), which acknowledged Wootten's retention of Fisher Investments

as his investment advisor. The LOA contained choice-of-law and arbitration

provisions, which stated:

13. GOVERNING LAW.

This Agreement will be governed by and construed in accordance with

the laws of the State of Delaware without giving effect to any conflict or

choice of law provisions.

* * *

18. PROBLEMS AND DISPUTES; ARBITRATION.

* * *

Any dispute, claim or controversy arising out of this Agreement or

otherwise between Fisher and the Client, including but not limited to the

breach, termination, enforcement, interpretation or validity of this

1

The Honorable Stephen N. Limbaugh, Jr., United States District Judge for the

Eastern District of Missouri.

-2-
Agreement and the scope and applicability of the agreement to arbitrate

contained in this paragraph shall be determined by arbitration before the

Judicial Arbitration and Mediation Service ("JAMS") office closest to

the Client's principal place of residence before one arbitrator who shall

be a retired judicial officer. Any claim asserted by the Client will not be

joined, for any purpose, with the claim or claims of any other person or

entity. The arbitration shall be administered by JAMS pursuant to the

Comprehensive Arbitration Rules and Procedures. The laws of the State

of Delaware shall govern the substantive rights of the parties. The

arbitration shall be final and binding, and judgment on the award may be

entered in any court having jurisdiction. Client understands that by

agreeing to arbitration, the Client is waiving all rights to seek remedies

in court, unless otherwise mandated by federal or state securities laws.

This clause will not prohibit the parties from seeking provisional

remedies in any court of competent jurisdiction. This paragraph shall

survive termination of this Agreement. 

After executing the LOA, Fisher Investments assigned Michael Weston to Wootten's

account as his investment counselor. At the time, unbeknownst to Wootten, Weston

was not licensed or registered as an investment advisor as required by law. Wootten

followed Weston's suggested investment strategy and did not diversify his portfolio

but instead invested all of his money in equities. 

In May 2008, Wootten called Weston with concerns about events in the

marketplace and inquired about Fisher Investments's intended response. Weston

attempted to allay Wootten's fears and suggested that, despite market jitters, Wootten

would still see a positive return on his investments. In July 2008, Wootten again called

Weston, concerned by mounting losses in his account with Fisher Investments.

Weston again expressed confidence in the original investment strategy and expressed

that Wootten did not need to assume a defensive stance at the time. On September 29,

2008, Fisher Investments sent a message to all of its clients stating, "now more than

ever we urge you to exercise continued patience." In response, Wootten sent Weston

a written complaint, demanding a formal review of the suitability of the recommended

-3-
portfolio. Fisher Investments responded to this letter, denying responsibility for

Wootten's losses. Wootten then wrote Fisher Investments' Chief Compliance Officer,

Tom Fishel, requesting reparation for his losses. Fishel rejected Wootten's request for

reparations. In November 2008, after suffering $316,000 in losses, Wootten liquidated

his retirement account with Fisher Investments. 

In October 2008, Wootten sought arbitration against Fisher Investments with

the Judicial Arbitration and Mediation Services (JAMS). The parties engaged in

written discovery, produced documents, and deposed potential witnesses. In late 2009,

Wootten filed a motion in the arbitration, seeking leave to amend to add an additional

Missouri Securities Act count. Fisher Investments opposed Wootten's motion and

moved to dismiss all of his Missouri statutory claims based on the LOA's Delaware

choice-of-law provision. In response, Wootten challenged the enforceability of the

LOA's arbitration provision. 

On December 10, 2009, the arbitrator dismissed Wootten's Missouri statutory

claims based on the Delaware choice-of-law provision. The arbitrator ruled that

[t]he parties entered into a written letter of Agreement ("LOA")

with two choice of law provisions that require the application of

Delaware law. If we find that the choice of law provisions in the LOA

are valid and enforceable, then Claimant's Missouri claims cannot stand.

 * * * 

Accordingly, the law of Delaware, alone, will be applied to govern the

dispute between Claimant and Respondent and their respective

substantive rights.

After the arbitrator's ruling, Wootten filed a motion to reconsider. On March 19, 2010,

the arbitrator denied Wootten's motion to reconsider and sua sponte prohibited

-4-
Wootten from adding a federal securities claim under the Investment Advisers Act of

1940 based on the Delaware choice-of-law-provision.

On April 9, 2010, while the arbitration was proceeding, Wootten filed a

complaint in federal court challenging the enforceability of the arbitration provision

in the LOA and asserting his dismissed Missouri and federal statutory claims. On

April 27, 2010, the arbitrator stayed the arbitration proceeding pending the outcome

of Wootten's federal action. Wootten then moved to enjoin the arbitration in federal

court. Fisher Investments filed a motion to dismiss Wootten's federal court action in

favor of arbitration. On March 31, 2011, the district court denied Wootten's motion

to enjoin the arbitration and granted Fisher Investments's motion to dismiss Wootten's

claims without prejudice based on the ongoing arbitration.

II. Discussion

Wootten challenges the district court's dismissal of his Missouri and federal

statutory claims based on the ongoing arbitration. Wootten argues that (1) the district

court has jurisdiction to address his claims; (2) the arbitrator limited the scope of the

arbitration agreement to only Delaware claims, thus allowing him to bring nonDelaware claims in federal court; (3) the arbitrator's interpretation of the arbitration

provision renders it void; (4) Fisher Investments waived its right to arbitrate; (5) the

arbitration agreement is unenforceable; (6) he did not waive his right to challenge the

arbitration agreement; and (7) the LOA's provisional remedies void the LOA's

arbitration provision.

A. Jurisdiction Over Wootten's Claims

Wootten argues that the district court erred in finding that the district court

lacked jurisdiction to adjudicate Wootten's Missouri and federal statutory claims. In

response, Fisher Investments counters that the complete arbitration rule prohibits the

district court from exercising jurisdiction until the arbitration is complete. "We review

-5-
the District Court's determination regarding subject matter jurisdiction de novo."

Monson v. Drug Enforcement Admin., 589 F.3d 952, 958 (8th Cir. 2009). 

"For an arbitration to be final and therefore federal court jurisdiction to be

proper, there must be a 'complete arbitration.' Some courts have called this the

'complete arbitration' rule." Local 36, Sheet Metal Workers Int'l Ass'n. AFL-CIO v.

Pevely Sheet Metal Co., 951 F.2d 947, 949–50 (8th Cir. 1992) (citation omitted).

"Whether [an arbitration] award indicates that [it] is final and whether the arbitrator

intended the award to be final are factors in determining if an arbitration award is

final." Id. at 949. 

Wootten argues that the complete arbitration rule does not apply in this case

because he is not challenging an arbitrator's interim decision. Wootten asserts that the

arbitrator made a final determination by limiting the scope of the arbitration to only

Delaware claims. According to Wootten, that final determination on the arbitration's

scope is immediately appealable. But reviewing the arbitrator's decision, we conclude

otherwise. The arbitrator found that the parties agreed that "the law of Delaware,

alone, will be applied to govern the dispute between Claimant and Respondent and

their respective substantive rights." In doing so, the arbitrator interpreted the

arbitration provision of the LOA to only allow Delaware law to establish and govern

the parties' substantive rights for any dispute arising from their relationship. Because

the ruling simply decided the substantive rights of the parities during the arbitration,

we find that Wootten is challenging an interim ruling and thus the complete arbitration

rule applies. See id. Because the complete arbitration rule applies, the district court did

not err in deciding that it did not have jurisdiction to adjudicate Wootten's claims.

B. Wootten's Claims Filed In Federal Court

Wootten next argues the arbitrator's interpretation of the LOA's arbitration

provision permits him to bring his Missouri and federal law statutory claims in federal

-6-
court. Specifically, Wootten argues that the arbitrator's interpretation of the LOA's

choice-of-law provision and choice-of-forum provision act in tandem to prevent

Wootten from pursuing his Missouri and federal statutory claims in arbitration.

Consequently, the LOA implicitly allows him to bring those claims in federal court

notwithstanding the ongoing arbitration proceedings. "We review a district court's

interpretation of a contractual arbitration provision de novo." Hudson v. ConAgra

Poultry Co., 484 F.3d 496, 499 (8th Cir. 2007). 

As expressed above, we find that Wootten is appealing the arbitrator's interim

decision as to the parties' substantive rights. See Part II. A. As such, we find that the

complete arbitration rule applies, and Wootten must fully arbitrate his claims before

he may ask a federal court to review the arbitrator's decision regarding a dispute

covered by the arbitration agreement. Thus, we find that the district court did not err

in requiring Wootten to fully arbitrate his claims before proceeding to a judicial

forum. 

C. Pubic Policy Concerns

Wootten argues that the arbitration agreement is void as against public policy

because it precludes Wootten's Missouri and federal statutory claims. We review a

district court's dismissal in favor of an ongoing arbitration de novo. See Green v.

SuperShuttle Int'l., Inc., 653 F.3d 766, 768 (8th Cir. 2011). 

Federal courts have expressed concern when an arbitration agreement limits

statutory rights. We have said that "[a]rbitration agreements encompassing federal

statutory claims are enforceable as long as the potential litigant can effectively

vindicate her statutory rights through arbitration." E.E.O.C. v. Woodmen of World Life

Ins. Soc'y, 479 F.3d 561, 565 (8th Cir. 2007). Similarly, where a choice-of-law

provision sought to curtail a party's rights under federal antitrust laws, the Supreme

Court noted in dicta "that in the event the choice-of-forum and choice-of-law clauses

operated in tandem as a prospective waiver of a party's right to pursue statutory

-7-
remedies for antitrust violations, we would have little hesitation in condemning the

agreement as against public policy." Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, Inc., 473 U.S. 614, 637 n.19 (1985).

Wootten correctly notes that federal courts have frowned upon arbitration

agreements that preclude important statutory remedies; however, when the complete

arbitration rule applies, available federal court remedies must wait their turn. This is

especially so here where the parties have committed to the arbitrator the determination

of whether the LOA's arbitration provisions are valid. See Rent-A-Center, W., Inc. v.

Jackson, 130 S. Ct. 2772 (2010) (deciding that the arbitrator must decide the

enforceability of the agreement where the parties agreed to arbitrate the enforceability

of the arbitration agreement).2

 Thus, while Wootten may have valid federal claims, he

must complete the arbitration before a court can hear those claims.

D. Waiver by Fisher Investments

Wootten also argues that Fisher Investments waived its right to arbitrate by

acting inconsistently with the arbitrative process. "We review the question of waiver

de novo." Stifel, Nicolaus & Co. v. Freeman, 924 F.2d 157, 158 (8th Cir. 1991).

2

The LOA states in relevant part: 

Any dispute, claim or controversy arising out of this Agreement or

otherwise between Fisher and the Client, including but not limited to the

breach, termination, enforcement, interpretation or validity of this

Agreement and the scope and applicability of the agreement to arbitrate

contained in this paragraph shall be determined by arbitration before the

Judicial Arbitration and Mediation Service . . . .

As explained in Section II.E below, we read this language to require that the arbitrator

decide the enforceability of the arbitration provision.

-8-
"To prove [Fisher] waived its right to arbitration, [Wootten] must show: (1)

[Fisher Investments] knew of an existing right to arbitration; (2) [Fisher Investments]

acted inconsistently with that right; and (3) [Fisher Investment]'s inconsistent acts

prejudiced [Wootten]." Id.

Wootten argues that Fisher Investments waived its right to arbitrate by

withholding material evidence, committing perjury, and refusing to comply with

JAMS rules. Wootten relies on Hooters of America, Inc. v. Phillips, 173 F.3d 933 (4th

Cir. 1999). We find that case inapposite and thus not persuasive. In Hooters, a former

employee complaining of sexual harassment threatened to sue Hooters. Id. at 935.

Hooters preemptively filed a motion to compel arbitration under the Federal

Arbitration Act. Id. The district court denied Hooters's motion, finding that Hooters's

promise to arbitrate was illusory because of the conditions it set for arbitration. Id. at

936. Affirming, the Fourth Circuit found that "Hooters materially breached the

arbitration agreement by promulgating rules so egregiously unfair as to constitute a

complete default of its contractual obligation to draft arbitration rules and to do so in

good faith." Id. at 938. 

Here, while Fisher Investments's alleged dilatory actions, if true, are regrettable,

Fisher Investments has nonetheless continued to participate in the arbitration.

Ultimately, Wootten received many, if not all, of the requested documents and

deposed Fisher Investments employees. Under these facts, we conclude that Fisher

Investments did not act inconsistently with the right to arbitrate and, thus, did not

waive its right to arbitrate.

E. Enforceability of the LOA's Arbitration Provision

Wootten argues that the district court erred by failing to evaluate the

enforceability of the LOA's arbitration provision. Fisher Investments counters that the

LOA's arbitration provision requires that the arbitrator decide the enforceability of the

-9-
arbitration agreement. We review de novo a district court's decision to dismiss in favor

of an ongoing arbitration. See Green, 653 F.3d at 768.

In Rent-A-Center v. Jackson, the United States Supreme Court decided

"whether, under the Federal Arbitration Act . . ., a district court may decide a claim

that an arbitration agreement is unconscionable, where the agreement explicitly

assigns that decision to the arbitrator." 130 S. Ct. at 2775. The Court held that, where

the parties agree to arbitrate the enforceability of the arbitration agreement, federal

courts must allow the arbitrator to determine that threshold issue first. Id. at 2777–78.3

Even before Rent-A-Center, this circuit held that federal courts should defer the

question of arbitrability to the arbitrator where the court finds "a clear and

unmistakable expression of the parties' intent to leave the question of arbitrability to

an arbitrator." Fallo v. High-Tech Inst., 559 F.3d 874, 878 (8th Cir. 2009).

Here, the LOA's arbitration provision states in relevant part: 

Any dispute, claim or controversy arising out of this Agreement or

otherwise between Fisher and the Client, including but not limited to the

breach, termination, enforcement, interpretation or validity of this

Agreement and the scope and applicability of the agreement to arbitrate

contained in this paragraph shall be determined by arbitration before the

Judicial Arbitration and Mediation Service . . . .

We read this language to be "a clear and unmistakable expression of the parties' intent

to leave the question of arbitrability to an arbitrator." Id. As such, the district court did

not err in declining to rule on the arbitrability of the LOA's arbitration provision.

3

An exception exists where a party "challenges the contract as a whole, either

on a ground that directly affects 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 contract invalid." Rent-A-Center, 130 S.Ct. at 2777–78.

-10-
F. Wootten's Waiver of the Right to Challenge Arbitrability

Wootten next argues that the district court erred in finding that he waived his

right to challenge the validity of the arbitration proceeding. "We review the question

of waiver de novo." Stifel, Nicolaus & Co., 924 F.2d at 158.

Assuming that Wootten did not waive his ability to challenge the validity of the

arbitration proceeding, as decided above, Wootten must first present that challenge to

the arbitrator. Because the arbitrator has not yet decided whether the LOA's arbitration

provision is enforceable, Wootten's challenge in federal court is premature. See Local

36, Sheet Metal Workers Int'l Ass'n. AFL-CIO, 951 F.2d at 949–50. 

G. Provisional Remedies Clause Applicability

Finally, Wootten argues that the district court erred in not applying the

provisional remedies in the LOA. Specifically, Wootten argues that the LOA allows

the federal court to declare the LOA's arbitration provision unenforceable. "We review

a district court's interpretation of a contractual arbitration provision de novo." Hudson,

484 F.3d at 499. 

The LOA's arbitration provision states, "This clause will not prohibit the parties

from seeking provisional remedies in any court of competent jurisdiction." Wootten

argues that this language "specifically allows for the court to evaluate the validity of

the arbitration provision in light of the Arbitrator's Orders precluding [his] statutory

claims." We disagree. We need not decide the meaning of the provisional remedies

provision because we find that the LOA's unambiguous language is at odds with

Wootten's interpretation. Specifically, the agreement provides that "breach,

termination, enforcement, interpretation or validity of this Agreement and the scope

and applicability of the agreement to arbitrate contained in this paragraph shall be

determined by arbitration before the Judicial Arbitration and Mediation Service."

Wootten invites us to ignore this language to allow a court to decide the enforceability

of the LOA's arbitration provision. We decline Wootten's invitation and find that the

-11-
district court did not err in refusing to interpret the LOA's provisional remedies

provision to override the express language that requires that the arbitrator decide the

agreement's enforceability. 

III. Conclusion

Accordingly, we affirm the judgment of the district court.

______________________________

-12-