United States Court of Appeals Fifth Circuit 

## FILED August 23, 2006 Charles R. Fulbruge III Clerk UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

____________ No. 05-30090

____________ LONNIE BROWN; ET AL.,

Pl aint iffs, versus PACIFIC LIFE INSURANCE CO; ET AL.,

Defendants.

______________________________________________________ CITIGROUP GLOBAL MARKETS, INC; SMITH BARNEY,

Pl aint iffs-Intervenor Defendants-Appellees, PACIFIC LIFE INSURANCE CO; GE LIFE AND ANNUITY INSURANCE COMPANY,

Intervenor-Plaintiffs-Appellees,

versus JERRY O. BROWN; PAT BROWN,

Defendants-Interven or Defendants-Appellant s, LONNIE BROWN; NETTIE BROWN,

Intervenor Defendants-Appellants.

_______________________________________________________ CITIGROUP GLOBAL MARKETS INC; SMITH BARNEY,

Pl aint iffs-Appellees,

versus-2- LONNIE BROWN; NETTIE BROWN,

Defendants-Appellants. Appeal from the United States District Court For the Middle District of Louisiana

Before JOLLY, SMITH, and GARZA, Circuit Judges. EMILIO M. GARZA, Circuit Judge: Lonnie Brown, Nettie Brown, Jerry Brown, and Pat Brown (“the Browns”) appeal from an order staying pro c eedings and com pelling arbitration of their claims against Cit igroup Global Markets, Inc., fo rm

erly Sm it h Barney (“Smith Barney”), G.E. Life & Annuity Insurance Company (“GE”), and Pacific Life Insurance Company (“Pacific”) (collectively “Appellees”). I Th e Browns are investors in, and beneficiaries of, Smith Barney securities brokerage accounts. Sm it h Barney’s representative, Patrick Hol t (“Holt”), managed these accounts, invest ing in variable annuities from GE and Pacific, as well as a variety of stocks. Upset wit h Hol

t’s invest ment decisions, the Browns sued Sm it h Barney, GE, Pacific, and Hol t in Loui siana state court (“the State Action”), alleging fraud, negligence, and breach of various

com mo n law and statutory duties. The defendants removed the State Action to federal district court. Soon th ereafter, Smith Barney, with intervenors GE and Pacific, filed two separate civil act io ns against the Browns in federal court (“the Federal Actions”): one against Lonnie and Nettie Brown, and one against Jerry and Pat Brown. Both l awsuits sought an order compelling arbitration of the Browns’ claims pursuant to the Federal Arbit ration Act (“FAA”), 9 U.S.C. §§ 1-16, based on1 “The [FAA] provides two parallel devices for enforcing an arbitration agreement: a stay

of lit igation in any case raising a dispute referable to arbitration, 9 U.S.C. § 3, and an affirmative order to engage in arbitration, § 4.” Moses H. Cone Mem’l. Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 22 (1983). Section 3 provides:

If any suit or proceeding be brought in any of the courts of the Unit ed States upon any issue referable to arbitration under an agreement in writing fo r such arbitration, the court in which such suit is pending, upon being sati sfied th at the issue invo lved in such suit or proceeding is referable to arbitration under such an agreem ent, shall on application of one of the parties stay the tri al o f t he action until such arbitration has b een had in accordance with the terms of the agreement, providing the app l icant fo r the stay is not in default in proceeding with such arbitration. 9 U.S.C. § 3; see Midwest Mech. Contractors, Inc. v. Commonwealth Constr. Co. , 801 F.2d 748, 751 (5th Cir. 1986) (“If the issues in a case are within the reach of the agreement, the district court has no discretion under section 3 to deny the stay.”). Section 4 provides in pertinent part:

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement fo r arbitration may peti tion any Unit ed States district court which, save fo r such agreement, would have jurisdiction under Ti tle 28, in a civil action or in admiralty of the subject mat ter of a suit arising out of the controversy between the parties, fo r an order directing th at such arbitration pr oceed in t he manner provided for in such agreement. 9 U.S.C. § 4; see Bhatia v. Johnston , 818 F.2d 418, 421 (5th Cir. 1987) (noting th at, under section 4, a district court must direct the parties to proceed to arbitration of issues covered by an arbitration agreement). -3- arbitration clauses th at were included in Sm it h Barney’s client agreement wit h the Browns. Appellees also moved for a stay pending arbitration in the State Action pursuant to section 3 of the FAA. 1 Soon thereafter, Sm

it h Barney and Pacific mo ved to com pel arbitration under the FAA in the Federal Actions. Around this time, the district court consolidated the State Action with the Federal Actions. Smith Barney, with Pacific joining, then filed a reply in support of the mo tions to com pel arbitration and to stay the consolidated action, arguing for a stay based upon section 3.-4-

Contem poraneously wit h this flurry of activit y, the Browns mo ved to remand the State Action

as untimely removed. They also moved to dismiss t he Federal Actions and the complaints in int ervention on jurisdictional grounds, asserting th at Hol t, a non-party to the Federal Actions, is an indispensable party under Federal Rule of Civil Procedure 19 whose jo inder would destroy diversity of cit izenship. They also argued that the court should abstain from exercising jurisdiction. The district court remanded the State Action but denied the motion to dismiss the Federal Actions. Rather th an consider the issue of arbitrability, however, the court stayed the Federal Actions pending the outcom

e in the remanded State Action because “[i]t would be a waste of judicial resources and of the parties’ time and treasure if both federal and the state court were to proceed simult aneously in t hese cases . . . .” The Appellees mo ved in the Federal Actions to alt er or amend the stay order, arguing th at the pol icy favoring arbitration required lift ing th e stay and ordering arbitration despite the threat of piecemeal lit igation in st ate and federal court. The di strict court agreed, vacating the stay as improvidently issued and ordering additional briefing addressing the issue of arbitrability. Aft er receiving briefing, the district court addressed the “sole issue to be decided” in the Federal Actions—arbitrability of the Browns’ claims against the App ellees. The di strict court concluded th at the Browns were bound by an arbitration clause in their client agreements and were

com pelled to arbitrate their claims against Sm it h Barney. It al so concluded that the actions of Smith Barney, int ervenors GE and Pacific, and Hol t were “inext ricably int ertwined” because “[t]here is no way to bring actions against eit her [GE or Pacific] wit hout considering the actions of Sm it h Barney and it s employee, Patrick Hol t.” Applying equitable estoppel, the court then ordered arbitration of the claims against Pacific and GE as well. Wit hout of fering a basis for its authority, the district court2 9 U.S.C. § 16 provides: (a) An appeal may be taken from-- (1) an order-- (A) refusing a stay of any action under section 3 of this ti tle, (B) denying a peti tion unde r secti on 4 of this t it le t o order arbitration to proceed, (C) denying an application under section 206 of this ti tle to com

pel arbitration, (D) confirming or denying confirmation of an award or parti al award, or (E) m odifying, correcting, or vacating an award; (2) an interlocutory order granting, continuing, or modifying an injunct io n against an arbitration th at is subject to this ti tle; or (3) a final decision wit h respect to an arbitration th at is subject to this t it le. (b) Except as otherwi se provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order-- (1) granting a stay of any action under section 3 of this title; (2) directing arbitration to proceed under section 4 of this ti tle; (3) com pelling arbitration under section 206 of this title; or (4) refusing to enjo in an arbitration th at is subject to this ti tle. -5- then “stay[ed] the Browns’ actions against all the defendants wit hin it s jurisdiction, to include Sm it h Barney, Pacific, and GE pending binding arbitration.” II The Browns appeal from the district court’s order com pelling arbitration and staying proceedings. Appellees contend that this court does not have jurisdiction to hear the Browns’ appeal. As always, we have “jurisdiction to determ ine our own jurisdiction.” Cerveceria Cuauhtemoc Moctezuma S.A. de C.V. v. Mont. Beverage Co. , 330 F.3d 284, 286 (5th Cir. 2003). Section 16(b) of the FAA fo rbids appeals of int erlocutory orders granting a stay under section 3 or directing arbitration to proceed under section 4. 2 However, “a final decision with respect to an-6-

arbitration” is appealable under section 16(a)(3). A decision is considered final under the FAA if it “ends the lit igation on the m erits and leaves nothing more for the court to do but execute the judgment.” Green Tree Fin. Corp.-Ala. v. Randolph , 531 U.S. 79, 86 (2000). In this case, the district court granted the sole remedy sought by the plaint iffs in the Federal Actions—an order com

pelling arbitration. Alt hough the district court did not dismiss the case, there

was nothing left fo r the court to do but execute the judgment. S ee Am. Heritage Life Ins. Co. v. Orr , 294 F.3d 702, 708 (5th Cir. 2002) (holding th at the district court’s decision was final and appealable where it ordered arbitration, stayed proceedings, and clo sed the case). Under G reen Tree , the order

com pelling arbitration in t he Federal Actions ended the litigation in federal court on the merits and was a final appealable decision under 9 U.S.C. § 16(a)(3). See Sphere Drake Ins. PLC v. Marin e Tow ing, Inc. , 16 F.3d 666, 668 (5th Cir. 1994) (“The civil action was an independent proceeding brought solely to test arbitrability and stay the various law suits. The arbitration order amounts to

a final disposition in this context and ends the lit igation.”); McDermott Int’l, Inc. v. Underwriters at Lloyds , 981 F.2d 744, 746 (5th Cir. 1993) (“Generally, if the only is sue before the court is the dispute’s arbitrability, . . . a court’s decision on that issue constitutes a final decision.”). Appellees argue th at the stay in t his case rendered the order non-appealable under 9 U.S.C. § 16(b)(1). S ee 9 U.S.C. § 16(b)(1) (specifying th at an appeal may not be taken from an int erlocutory order granting a stay under 9 U.S.C. § 3). That it stayed the Browns’ actions within its jurisdiction is, however, of no mo ment unless the stay was of proceedings before the district court under 9 U.S.C. § 3. Here, the district court did not state the authority fo r its stay , and it is impossible to discern from the record whether the district court th ought it s stay was issued pursuant to section 3. Alt hough the only authority cit ed in the parties’ mo tions was section 3, the court’s terse statem ent that i t was3 For example, Appellees suggest that the prior consolidation of the Federal Actions and State

Action placed the entire litigation within the scope of the district court’s federal jurisdiction:

Here the Sm

it h Barney Actions were actually consolidated with the removed State proceeding, and thus the district court had jurisdiction over the State Proceeding at one time. As a result, when the district court stayed t he State Proceeding, it was staying the underlying lit igation th at was at one time consolidated before the district court. Theref ore, the di strict court’s Arbitration Order staying the State Proceeding was not a final decision under the G reen Tree line o f cases. By contrast, the district court could have stayed proceedings p ursuant to 28 U.S.C. § 2283. Under section 2283, a district court has the authority to stay proceedings in state court where necessary to protect or effectuate it s judgment. Here, such a stay may have been needed to protect the district court’s determ inat io n t hat the Browns’ claims against the Appellees be arbitrated rather th an adjudicated in state court. The Browns have not challenged on appeal the district court’s stay of the state court proceeding. -7- staying “t he Browns’ actions against all the defendants wit hin it s jurisdiction” is subject to multiple plausible int erpretations. 3 We must speculate upon the authority fo r the stay based upon brief language in the order, the numerous overl apping and multifarious motions of the parties, and our interpretation of the voluminous district court filings in th ree separate cases—cases th at have been consol idated and separated, removed and remanded. Under such circumstances, remand to the district court for clarification is of

ten required. S ee, e.g., Joseph v. City of New Orleans , 110 F.3d 252, 253 (5th Cir. 199 7) (remanding to the district court to clarify its order where such clarification was needed to determ ine appellate jurisdiction). Remand is unnecessary in t his case. Based upon our independent review of the record, we conclude th at the stay could not have been issued pursuant to 9 U.S.C. § 3. S ee Gulf Guar. Life Ins. Co. v . Conn. Gen. Life Ins. , 304 F.3d 476, 481-82 (5th Cir. 2002) (reviewing the district court’s4 This situation is similar to that addressed by Judge Dennis in his concurrence in A merican

Heritage : [T]he stay of the state-court proceedings does not impact our

jurisdictional analysis. Although section 3 of the FAA allo ws courts to stay lit igation brought before them, the statute does not authorize federal courts to enjo in ongoing state proceedings. Consequently, the district court did not grant “a stay of any action under section 3 of this ti tle . . . .” More importantly, because the district court reached final decisions wit h respect to arbitration, the stay com ponent of it s orders did not transform them int o unappealable “int erlocutory order[s]” under section 16(b). “There is nothing interlocutory about an order com pelling arbitration that does all that the court has t o do.” A ccordingly, the stay does not prevent us from exercising ap pellate jurisdiction. 294 F.3d at 714 (citations omitted).

5 “Through Section 16, Congress intended to promote arbitration by ‘permitting interlocutory appeals of orders favoring lit igation over arbitration and precluding review of interlocutory orders th at favor arbitration.’ ” Adams v. Ga. Gul f Corp. , 237 F.3d 538, 540 (5th Cir. 2001) (quoting -8- arbitration order and the record to determ ine appellate jurisdiction); In the Matter of Legel, Braswell Gov't Sec. Corp ., 648 F.2d 321, 326 n.8 (5th Cir. Unit B 1981) (“Where a district court fails to make necessary findings, a remand fo r entry of such findings is the usual recourse for an appellate court; however, where all of the issues on appeal may be fairly resolved from the record presented, a remand may not be required.”). That section, by its terms, do es not auth orize a federal court to enjoin ongoing state proceedings—such as the remanded State Action—only federal proceedings. And, furthermore, the record discloses th at there was nothing left fo r the di strict court to stay in t he Federal Actions after it remanded the State Action and ordered the parties to the arbitration table. Unless the district court was staying some undefined or future proceedings in the Federal Actions, it s stay order could have only applied to actions against the Appellees in the remanded State Action. 4 Such a stay could not be properly issued pursuant to section 3. 5Forsythe Int'l, S.A. v. Gibbs Oil Co. , 915 F.2d 1017, 1020 (5th Cir.1990)); see also C HARLES ALAN

WRIGHT ET AL ., FEDERAL P RACTICE AND P ROCEDU RE § 3914.17 (2d ed. 1992) (noting that the appellate review provisions “fit well wit h the general purpose to prefer arbitration to lit igation”). It appears inco nsist ent wit h the pol icy favoring expeditious arbitration to permit immediat e appeals of arbitration orders where the underlying litigation is filed in state court and is not removable.

[T]he pro-arbitration aims of the statute’ s advocates have been achieved in the “embedded” [where the lit igation and arbitration proceedings are in the federal court together] proceeding. They have not been, however, in the independent proceeding [where the arbitration proceeding is separate from the unde rlying lit igation]. T here, a deci sio n in favo r of arbitration can be appealed forthwith, tying the parties down in continued lit igation of the issue and swelling the cost--in time, effo rt, and m oney--of resolving the dispute, which is wholly at war with the purpose of arbitration and wholly inco nsist ent with what the sponsors of § 16 wanted to accomplish. David D. Siegel, Practice Com ment ary , 9 U.S.C.A. § 16, at 494 (West Supp. 1999). Despite these concerns, the courts have viewed the question of reviewabilit y as purely an issue of statutory language and have refused to read congressional int ent to overcom e this apparent inco nsist ency. S ee Great Earth Co., Inc. v. Simons , 288 F.3d 878, 886 (6th Cir. 2002) (“The fact th at a separate but related state-court action remain s pending does not alter the fact that ‘[t]he decision to compel arbitration settled everything th at was before the district court in this case.’ ” (citing Prudential Ins. Co. v. Lai , 42 F.3d 1299, 1302 (9th Cir. 1994))); Stedor Enter., Ltd. v. Armtex, Inc ., 947 F.2d 727, 732 (4th Cir. 1991) (“We recognize th at the result we reach here has been roundl y crit icized on grounds of public policy.”). We do not decide differently here. -9- We hold th at the distric t c ourt did not i ssue a section 3 stay and, furthermore, that the arbitration order is a final decision under Green Tree and 9 U.S.C. § 16(a)(3). Accordingly, the order is appealable. III Having determ

ined our jurisdiction on appeal, we turn to the Br own s’ contention that the district court erred by: (A) exercising jurisdiction over the Federal Actions; (B) refusing to abstain from exercising jurisdiction; (C) rul ing th at the arbitration agreement is valid and binding; and (D) rul ing t hat the Browns’ claims against Pacific and GE are arbitrable.6 Wit hout diversity jurisdiction, Appellees lack an independent basis for the district court’s

jurisdiction over the Federal Actions as the FAA does not confer federal question jurisdiction. -10- A The Browns assert th at the district court erred in denying their mo tion to dismiss the Federal Actions because Holt is an indispensable party whose jo inder would destroy diversity jurisdiction. 6 We review the denial of a mo tion to dismiss fo r failure to jo in an indispensable party fo r an abuse of discretion. HS Res., Inc. v. Wingate , 327 F.3d 432, 438-39 (5th Cir. 2003). Under Rule 19, a person subject to process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined if:

(1) in the person’s absence com plete relief cannot be accorded amo ng th ose already parties, or (2) the person claims an int erest relating to the subject of the action and is so sit uated that the di sposition of the action in the person’s absence may (i) as a practical matter impair or impede the person's ability to protect th at int erest or (ii) leave any of the persons already parties subject to a substanti al risk of incurring double, mult iple, o r otherwi se inconsistent obligations by reason of the claimed int erest. FED . R. C IV . P. 19(a). If a person who qualifies under Rule 19(a) cannot be made a party because, fo r example, jo inder would destroy subject-matter juri sdiction, a federal court must determine whether that person is “indispensable.” In making this determination, the court should consider:

fir st, to what ext ent a judgm ent rendered in the person’s absence might be prejudicial to the person or th ose already parties; second, the extent to which, by protective provisions in t he j udgment, by the shaping of relief, or other m easures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fo urth, whether the plaint iff will have an adequate remedy if t he action is dismissed for nonjoinder. FED . R. C IV . P. 19(b). When assessing these factors, the relevant inquiry is whether “in equity and good conscience the action shall proce e d amo ng the parties before it , or should be dismissed, the-11-

absent person being thus regarded as indispensable.” Id .; see Pulitzer-Polster v. Pulitzer , 784 F.2d 1305, 1309 (5th Cir. 1986) (noting that the Rule 19 inquiry is “highly practical” and “fact-based”). The district court did not abuse it s discretion in finding th at Hol t is not an indispensable party under Rule 19(b). The threat of piecemeal, inconsistent litigation of claims and issues, the Browns’ primary concern, is insufficient ly prejudicial to render a party indispensable under Rule 19 given the of t-stated preference fo r arbitration under the FAA. Snap-On Tools Corp. v. Mason , 18 F.3d 1261, 1267 (5th Cir. 1994); see Doctor’s Assocs., Inc. v. Distajo , 66 F.3d 438, 446 (2d Cir. 1995) (noting th at any prejudice from piecemeal lit igation is overcom e by the “strong bias in favor of arbitration”). Furthermore, the Browns’ “fear th at the federal and state courts will reach conflicting int erpretations of the arbitration clauses [themselves] does not present the degree of prejudice necessary to support

a conclusion th at [Hol

t] is an indispensable party .” PaineWebber, Inc. v. Cohen , 276 F.3d 197, 203 (6th Cir. 2001); see Bio-Analytical Servs., Inc. v. Edgew ater Hosp., Inc. , 565 F.2d 450, 453 & n.3 (7th Cir. 1977) (refusing to find an absent party indispensable where “t he only danger is inco nsist ent judgments on the arbitration issue”). Given the slight risk of prejudice, consideration of the extent to which any prejudice c an be reduced or el iminat ed, Rule 19(b)’s second factor, is largely

u nnecessary. S ee Cohen , 276 F.3d at 205. As to the third factor under Rule 19(b), requiring arbitration of these claims in accordance wit h the arbitration agreement, while allo wing a state court to pronounce upon the issue of arbitrability, does not render the potenti al judgment inadequate. I d

. Finally, alt hough the state court may be able to provide an adequate alt er native remedy, such availabilit y is insufficient reason fo r deciding th at an FAA action should not proceed. B io-Analytical Servs., Inc. , 565 F.2d at 453. B7 This doctrine only applies when there are parallel proceedings pending in federal and state

court. R epublic Bank Dallas, Nat’l Assoc. v. McIntosh , 828 F.2d 1120, 1121 (5th Cir. 1987). Suits are “parallel” if they “invo lv[e] the same parti es and the same issues.” I d

. at 1121 (quoting PPG Indus., Inc. v. Cont’l Oil Co. , 478 F.2d 674, 682 (5th Cir.1 973)). The Federal Actions are not precisely parallel to the State Action. Alt hough Holt is a party to the State Action, he is not party to the Federal Actions. The issues are also arguably different. The Browns filed the State Action seeking a judicial remedy fo r alleged tortious actions by the Appellees and Hol t. The Appellees filed the Federal Actions to compel arbitration. Although it is well-established th at the Colorado River abstention doctrine cannot be invo ked to avoid federal jurisdiction where suits are not parallel, Diamond Offshore Co. v. A& B Builders, Inc ., 30 2 F.3d 531, 540 (5th Ci r. 2002), we have recognized that “it may be th at there need not be applied in every inst ance a mincing insist ence on precise identity” of parties and issues, McIntosh , 828 F.2d at 1121. Because we conclude t hat abstention is inappropriate, we need not resolve whether these proceedings are parallel fo r purposes of the Colorado River abstention doctrine. S tew art v. W. Heritage Ins. Co. , 438 F.3d 488, 493 (5th Cir. 2006). -12- The Browns argue that the district court should have abstained from exercising jurisdiction

over the Federal Actions. They assert that the district court misapplied the abstention doctrine set fo rth in Colorado River Water Conservation District v. United States , 424 U.S. 800 (1976). “We apply a two-tiered standard of review in abstention cases. Although we review a district court’s abstention rul

ing fo r abuse of discretion, we review de novo whether the requirements of a particular abstention doctrine are sati sfied.” Nationw ide Mut. Ins. Co. v. Unauthorized Practice of Law Comm. , 283 F.3d 650, 652 (5th Cir. 2002). Under the Colorado River doc tri ne, a court may abstain from a case under “exceptional circumstances.” K

elly Inv., Inc. v. Cont’l Common Corp ., 315 F.3d 494, 497 (5th Cir. 2002). 7 There are six factors for determining whether “exceptional circumstances” exist: (1) assumption by eit her state or f ederal court over a res; (2) relative inco nvenience of the fo ra; (3) avoidance of piecemeal lit igation; (4) order in which jurisdiction was obtained by the concurrent fo ra; (5) extent federal law provides the rules of decision on the merit s; and (6) adequacy of the state proceedings in protecting the rights of the party invoking federal jurisdiction. S tew art , 438 F.3d at 491; see Colo. River , 424-13-

U.S. at 818; Moses H. Cone , 460 U.S. at 23. “[T]he decision whether to dismiss a federal action because of parallel state-court lit igation does not rest on a mec h anical checklist, but on a careful balancing of the impo rtant factors as they apply in a given case, wit h the balance heavily weighted in favor of the exercise of juri sdiction.” M oses H. Cone , 460 U.S. at 16; see Black See Inv., Ltd. v. United Heritage Corp ., 204 F.3d 647, 650 (5th Cir. 2000) (similar). The Browns’ sole argument in favor of abstention is th at the state court may decide th at the

case against Hol

t is not arbitrable aft er the district court decided th at the claims against Sm it h Barney

are arbitrable. They assert that the possibility of piecemeal litigation, the third factor in the abstention analysis, required the district court to abstain from the exercise of jurisdiction. We found a similar argument unconvincing in Snap-On Tools

. In that case, t he plaintiffs-appellants argued that abstention was appropri ate where certain state defendants would not participate in the arbitration because they were neit her parties to the federal actions nor the arbitration agreement. We expressed doubt th at the state court would determ ine the issue of arbitrability differently from the federal court and also fo und th at “some piecemeal lit igation” is som etimes “t he inevit able result of a congressional pol icy st rongly favoring arbitration.” Snap-On Tools , 18 F.3d at 1266. The Browns attem

pt to distinguish this case from Snap-On Tools

. They argue that abstention is warranted where the state court’s arbitrability determination may affect a party to the arbitration agreement, not a non-party as in Snap-On Tools . They assert that “ Moses H. Cone only condones piecemeal lit igation where one of the parties to the underlying dispute is not a party the arbitration agreement” and that Snap-On Tools did not decide this issue differently. “Abst ention from the exercise o f federal j uri sdiction is the exception, not the rule.” Colo. River , 424 U.S. at 813. It i s now well-established that the FAA “declared a national policy in favor8 “[A]s a mat ter of federal law, arbitration agreements and clauses are to be enforced unless

they are invalid under principles of state law that govern all contracts.” Iberia Credit Bureau, Inc. v. Cingular Wireless LLC , 379 F.3d 159, 166 (5th Cir. 2004). “[G]enerally applicable contract -14- of arbitration.” Mun. Energy Agency of Miss. v. Big Rivers Elec. Corp ., 804 F.2d 338, 342 (5th Cir. 1986). Congress’s int ent was “to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible.” M oses H. Cone , 460 U.S. at 22. Allo wing a federal court to order arbitration, even where a state court may construe an arbitration clause differently, is fully consistent wit h this est ablished congressional intent. This conclusion is not altered simply because a state court’s arbitrability decision may involve a party to the arbitration agreement. S ee Cohen , 276 F.3d at 207 (stating th at the desire to avoid lit igating a single issue, including arbitrability, in mult iple fo ra “is insufficient to overcom e the strong federal pol

icy supporting arbitration”). Indeed, it would appear anti

thetical to the FAA’s recognized purpose to require a district court to decline jurisdiction over a properl y filed FAA action simply because a party to an arbitrable contract cannot be jo ined in t he federal action. S ee Safety Nat’l Casualty Corp. v. Bristol-Myers Squibb Co. , 214 F.3d 562, 564 (5th Cir. 2000) (noting th at, under Moses H. Cone , the possibilit y of p iecem eal lit igation must give way to the overriding federal pol icy to give effect to arbitration agreements). The Browns provide no reasons in law or pol icy fo r favoring the distinction they propose, and we see no reason for carving out such a distinction in this case. C Even if the district court properl y exercised jurisdiction, the Browns assert that the district court erred by com

pelling arbitration of their claims. They contend that their consent to arbitrate was vit iat ed by fraud and error and, furthermore, th at the arbitration clause itself is a contract of adhesion. 8 We review the grant of a motion to compel arbitration de novo . Webb v. Investacorp,defenses, such as fraud, duress or unconscionability, may be appl ied to invalidate arbitration agreements wit hout contravening § 2 [of the FAA].” Doctor’s Assocs. v. Casarotto , 517 U.S. 681, 687 (1996). -15- Inc ., 89 F.3d 252, 257 (5th Cir. 1996); Bailey , 364 F.3d at 263. “In adjudicating a mo tion to com pel arbitration under the [FAA], courts generally conduct

a two-step inquiry.” Webb , 89 F.3d at 257-58. The court m ust first determine whether the parties agreed to arbitrate the dispute. I d

. at 258 (citing Mitsubishi Mo tors Corp. v. Soler Chrysler-Plymo uth, Inc

. , 473 U.S. 614, 626 (1985)). “This determination involves two considerations: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls wit hin the scope of th at arbitration agreement.” I d

. The court then must determ

ine if any legal constraints fo reclose arbitration of th ose claims. Mitsubishi Motors , 473 U.S. at 628. On appeal, the Browns challenge only the validit y of their consent to arbitrate. “Challenges to the validit y of arbitration agreements ‘upon such grounds as exist at law or in equity for the revocation of any contract’ can be divided into two types.” B uckeye Check Cashing, Inc. v. Cardegna , 126 S.Ct. 1204, 1208 (2006). The first challenges the validity of the arbitration agreement it self; t he second challenges the contract as a whole. Id . A federal court decides challenges to the making of an agreement to arbitrate. P rima Paint Corp. v. Flood & Conklin Mfg. Co. , 388 U.S. 395, 403-04 (1967). Conversely, “a challenge to the validity [of a contract] as a whole, and not specifically to the arbitration clause, must go to the arbitrator.” B uckeye Check Cashing, 126 S.Ct. at 1210. Alt hough the Browns argue fraud and error, they do not distinguish between their attacks on the validit y of the client agreements and the arbitration clauses themselves. They assert only that they-16-

would not have entered int o the client agreements containing the arbitration clauses if Holt had not misrepresented the terms of their invest ment s. Where claims of error, fraud, or unconscionability do not specifically address the arbitration agreement it self, they are properl y addressed by the arbitrator, not a federal court. Primerica Life Ins. Co. v. Brow n , 304 F.3d 469, 470 (5th Cir. 2002); Rojas v. TK Commc’n, Inc ., 87 F.3d 745, 749 (5th Ci r. 1996). Accordingly, we may not address whether fraud or error vitiates the Browns’ contract. We may, however, address the Browns’ argument th at the arbitration clauses themselves are contracts of adhesion and, therefore, unenforceable. The Browns rely primarily upon Sutton Steel & Supply, Inc. v. BellSouth Mobility, Inc. , 776 So.2d 589 (La. Ct. App. 2000), and Simpson v. Grimes , 849 So.2d 740 (La. Ct. App. 2004). The Louisiana Supreme Court has, however, recently abrogated Sutton Steel and Simpson in Aguillard v. Auction Management Corp. , 908 So.2d 1 (La. 2005). In A guillard , the court attem pted to “resolve a split amo ng the circuits regarding the enforceability of arbitration agreements contained wit hin consumer standard fo rm contracts under a ‘contract of adhesion’ analysis . . . .” Id . at 3. It decl ared:

In summation, a contract is o ne of adhesion when either its form, print , or unequal term s call int o question the consent of the nondrafting party and it is demonstrated th at the co nt ract i s unenforceable, due to lack of consent or error which vit iat es consent. Accordingly, even if a contract is standard in fo rm and print ed in small fo nt , if it does not call int o question the non-drafting party’s consent and if it is not demonstrate d that the non-drafting party did not consent or his consent is vit iat ed by erro r, the contract i s not a contract of adhesion. Id

. at 10 -11. Applying these principles, the Louisiana Supreme Court found no evidence that the plaint iff did not consent. The plaintiff in A guillard signed the docum ent and, according to the court, “a party who signs a written inst rum ent is presumed to know it s contents.” I d

. at 17. The court al so-17-

fo und no evidence th at inequality in the parties’ respectiv e bargaining positions vitiated consent “because the plaint iff could have avoided arbitration and the contractual provi sio ns as a whole by simply not signing the agreement.” Id . Finally, t he court examined the arbitration agreement it self and found that the lower court, in following Sutton Steel and Simpson , “erred as a matter of law in declaring the arbitration clause adhesionary” because, inter alia , the print was not unreasonably small, the contract was only two pages, and the contract was mutually burdensome. Id . at 16-18. The arbitration clauses in the Browns’ client agre ements are not unconscionable and the district court did not err in finding them valid. As in A guillard , the Browns were not fo rced to agree to the terms of th ose clauses. They could have avoided arbitration by not engaging Smith Barney’s services. There is nothing exceptional or burdensome about these clauses, and there is no reason to believe t hat the Browns did not knowingly and willingly accept their terms. D Provided the agreements are valid, the Browns do not dispute the arbitrability of their claims against Smith Barney. They argue, however, that the district court erred by estopping the Browns from asserting that the lack of a written arbitration agreement precluded arbitration of their claims against GE and Pa cific. We review for abuse of discretion the district court’s use of equitable estoppel

. Grigson v. Creative Artists Agency, LLC , 210 F.3d 524, 528 (5th Cir. 2000). Alt hough arbitration is a mat ter of contract that generally binds only signatories, a party to an arbitration agreement may be equitably estopped from litigating its claims against non-parties in court and may be ordered to arbitration. Id . at 526 (citing MS Dealer Serv. Corp. v. Franklin , 1779 This circuit does not stand alone in approving the use of equitable estoppel against a nonparty to an arbitration agreement. S ee, e.g., Dominium Austin Partners, L.L.C. v. Emerson , 248 F.3d 720, 728 (8th Ci

r. 2001); S unkist Soft Drinks, Inc. v. Sunkist Growers, Inc ., 10 F.3d 753, 7 56-58 (11th Cir. 1993); J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A. , 863 F.2d 315, 320-21 (4th Cir. 1988); McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co. , 741 F.2d 342, 344 (7th Cir. 1984). -18- F.3d 942, 947 (11th Ci

r. 1999)). 9 In G rigson , we held th at a non-signatory to an arbitrati on agreement can com

pel arbitration: (1) when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting it s claims against a non-signatory; or (2) when the signatory raises allegati ons of substantially interdependent and concerted misco nduct by both the non-signatory and one or mo re signatories to the contract. I d

. at 527. We reasoned that equi ty does not allo w a party to “ seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on t he other hand, deny arbitration’s applicabilit y because the defendant is a non-signatory.” I d

. at 528; see Wash. Mut. Fin. Group, LLC v. Bailey , 3 64 F.3d 260, 263 (5th Ci r. 2004) (stating that a plaintiff should not be able to claim the benefit of a contract and simult aneously avoid its burdens). “[T]he result in Grigson and similar cases makes sense because the parties resisting arbitration had expressly agree d to arbi trate cl aims o f t he very type that they asserted against the nonsignatory.” B ridas S.A.P.I.C. v. Gov’t of Turkm. , 345 F.3d 347, 361 (5th Cir. 2003). Alt hough clo se, we conclude th at the district court did not abuse it s discretion in determ ining th at the Browns were estopped under Grigson ’s second prong from asserting th at a lack of a written arbitration agreement precluded arbitration. The district court’s finding that there was no way to bring actions against GE and Pacific with out considering the actions of Smith Barney and Patrick10 The Browns’ claims against Pacific and GE sound in fraud, negligence, and breach of

various com

mo n law and statut ory duties. They allege that, through Holt as their agent, those entities: (1) misrepresented facts and insurance pol icy provisions to ob tain an unjust advantage; (2) failed to disclose th at the Browns were purchasing a variable annuity; and (3) misrepresented th at the invest ment plan met the needs of Lonnie and Netty Brown. They also allege that GE and Pacific negligently conferred powers of agency and failed to properly train and supervise Holt. -19- Hol t, is not patentl

y inco rrect. 10 Whether and how GE and Pacific defrauded o r breached duties owed to the Browns depends, in som e part, upon the nature of tortious acts allegedly com mit ted by Hol t and Sm it h Barney—acts th at would be covered by the arbitration agreement—as well as any tortious acts by GE and Pacific. S ee Hill v. GE Power Sys., Inc. , 282 F.3d 343, 349 (5th Cir. 2002) (finding no abuse of discretion where a plaint iff alleges “int erdependent and concerted misco nduct,” while denying th at it s claims are int ertwined wit h an agreement containing an arbitration clause). As the Browns fail to allege tortious acts by GE and Pacific th at are separate and apart from Hol t’s, we

can only conclude th at the com plaint asserts concerted misco nduct by all parties. “To constitute an abuse of discretion, the district court’s decision must be eit her premised on an erroneous application of the law, or on an assessment of the evidence th at is clearly erroneous.” G rigson , 210 F.3d at 528. “By t his measure the district court did not abuse its discretion.” Hill , 282 F.3d at 349. IV For the reasons stated, we AFFIRM the district court’s order staying proceedings and

com pelling arbitration of the Browns’ disputes against Smith Barney, Pacific, and GE.