PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No . 10

- 3655

RAHEEL AHMAD KHAN, individually and on behalf of others similarly situate d

v.

DELL INC.,

Appellant.

On Appeal from the United States District C ourt for the District of New Jersey ( D.C. No. 3 :09

- cv

- 03703 ) District Judge: Hon orable J oel A. Pisano

Argued on April 2 8 , 201 1

Before: S LOVITER

, GREENAWAY , JR and ROTH, Circuit Judges

(Opinion filed January 20, 2012 )2 Kristine M. Brown , Esquire (Argued)
Derin B. Dickerson , Esquire

A lston & Bird, LLP
1201 W. Peachtree Street
One Atlantic Center Atlanta, Georgia 30309

Craig Carpenito, Esquire Alston & Bird, LLP
90 Park A venue New York, NY 10016

- 1387

Co unsel for Appellant

F. Paul Bland, Jr. , Esquire (Argued )
Public Justice 1825 K Street, N.W., Suite 200 Washington, D.C. 20006

Elizabeth Berney , Esquire Eduard Korsinsky , Esquire Shannon Hopkins , Esquire Levi & Korsinsky, LLP 30 Broad Street, 1 5th Floor New York, NY 10004

Michael Korsinsky, Esquire Law Office of Michael Korsinsky 30 Broad Street, 15 th Floor New York, NY 10004

Counsel for Appellees3 ___________

O P I N I O N

___________

ROTH

, Circuit Judge :

This appea l involves a matter of first impression for
this Circuit

– whether Section 5 of the Federal Arbitration Act (FAA) requires the appointment of a substitute arbitrator when the arbitrator designated by the parties is unavailable.
Dell

, Inc.

, appeals from th e District of New Jersey‟s denial of Dell‟s Motion to Compel Arbitration and Stay Plaintiff‟s Claims. Dell contends that the District Court erred in denying
its motion to compel arbitration based on the District Court‟s belief that the arbitration provisi on was rendered
unenforceable because it provided for the parties to arbitrate exclusively before a forum that was unavailable when Khan commenced suit. The District Court also refused to appoint a substitute arbitrator, finding that it could not compel t he parties to submit to an arbitral forum to which they had not agreed.

I. F ACTUAL B ACKGROUND

Dell designed, manufactured, and distributed the 600m computer from 2003 to 2006. Khan purchased a Dell 600m computer in September 2004 for approximately $1,2 00.
Khan purchased the computer online throu gh Dell‟s website,
www.Dell.com . To complete the purchase

, K ha n was required to click a box stating “I AGREE to Dell‟s Terms and
Conditions of Sale.” Just beneath the box was a notice stating:4 The Terms and C onditions of Sale contain very important information about your rights and obligation s as well as limitations and exclusions that apply to you. They contain limitations of liability and warranty information. They also contain an agreement to resolve disp utes through arbitration, rather than through litigation. Please read them carefully.

As Dell‟s notice indicated, its Terms and Conditions of Sale

contain ed an arbitration provision that reads as follows:

13. Binding Arbitration. ANY CLAIM, DISPUTE, OR CONTROVERSY (WHETHER IN CONTRACT, TORT, OR OTHERWISE, WHETHER PREEXISTING, PRESENT OR FUTURE, AND INCLUDING STATUTORY, COMMON LAW,
INTENTIONAL TORT AND EQUITABLE CLAIMS)
BETWEEN CUSTOMER AND DELL, its agents, employees, principals, successors, assigns,
aff iliates (collectively for purposes of this paragraph, “Dell”) arising from or relating to5 this Agreement, its interpretation, or the breach, termination or validity thereof, the relationships which result from this Agreement (including, to the full extent permitted by applicable law, relationship s with third parties who are not signatories to this Agreement), Dell‟s advertising, or any related purchase SHALL BE
RESOLVED EXCLUSIVELY
AND FINALLY BY BINDING
ARBITRATION

A DMINISTERED BY THE
NATIONAL ARBITRATION FORUM (NAF) under its Code of Procedure then in effect (available via the Internet at http://www.arb

forum.com, or via telephone at 1

- 800

- 474

- 2371). The arbitration
wi ll be limited solely to the dispute or controversy between
customer and Dell. NEITHER
C USTOMER NOR DELL
SHALL BE ENTITLED TO JOIN
OR CONSOLIDATE CLAIMS
BY OR AGAINST OTHER CUSTOMERS, OR ARBITRATE
ANY CLAIM AS A
REPRESENTATIVE OR CLASS
ACTION OR IN A PRIVATE
ATTORNEY GENERAL
CAPACITY . This transaction6 involves interstate commerce, and this p rovision shall be governed by the Federal Arbitration Act 9
U.S.C. sec. 1

- 16 (FAA). Any
award of the arbitrator s shall be final and binding on each of the parties

. . . . Information may be obtained and claims may be filed with the NAF at P.O. Box 50191, Minneapolis, MN 5540 5

.

Rule 1 of the NAF‟s “Code and Procedure ,” referred to in paragraph 13 above, provide d that “[ t ]his Code shall be administered only by the National Arbitration Forum or by any entity or individual providing administrative services by agreement with the National Arbitration Forum.” Also, as we can see in paragraph 13, t he arbitration provision d id not designate a replacement forum in the event that NAF wa s unavailable for any reason

. But, as we see, t he Terms and
Conditions did inc orporate the Federal Arbitration Act

.

In addition, t he Terms and Conditions provided that Texas law would govern interpretation of the Agreement and of any sal es. The Terms and Conditions did not contain a severance provision and any alterations to the Terms and Conditions required the signature of both parties.

Khan allege d that his 600m suffered from design defects, causing his computer to overheat and thereby destroy the computer‟s motherboard. Khan replaced the motherboard multiple times. Aft er the third replacement, Dell refused to issue another replacement , claiming the warranty had expired. The 600m allegedly suffered from other design defects, which7 p revented it from being used in a manner consistent with Dell‟s marketing.

On July 24, 2009, Khan filed a putative consumer class action on behalf of himself and other similarly situated purchasers and lessees of defectiv ely designed 600m computers sold from approximately 2003 through 2006.
Khan asserted seven claims for (1) violations of the New Jersey Consumer Fraud Act, (2) breach of express warranty, (3) breach of implied warranty of merchantability or fitness for particular purpose, (4) fraud, (5) negligent misrepresentation, (6) breach of implied covenant of good
faith and fair dealin g, and (7) unjust enrichment. At the time the lawsuit was filed, the NAF had been barred from conducting consumer arbitrations by Consent Judgment, which resolved litigation brought by the Attorney General of
Minnesota. 1 The Consent Judgment “barred [ the NAF] from the business of arbitrating credit card and other consumer disputes and [ordered the NAF to] stop accepting any new consumer arbitrations or in any manner participate in the processing or administering of new consumer arbitrations.”
This was th e result of government investigations reveal ing
that the NAF engaged in various deceptive practices that

1 See generally “„ Arbitration’ or ‘Arbitrary’: The

Misuse o f Mandatory Arbitration to Collect Consumer Debts ” Before the Subcomm. on Domestic Policy, Oversight and
Government Reform Comm. 3

- 5 (2009) (statement of Minnesota Attorney General Lori Swanson), http://oversight.house.gov/images/stories/Hearings/pdfs/2009 0722Swanson.pdf (recounting Minnesota Attorney General‟s findings).8 disadvantaged consumers.

According to Khan, s uch practices include d :

(1) representing to consumers and the public that it was neutral;

(2) convi ncing credit card companies and other
creditors to include exclusive arbitration forum provisions in their contracts and making representations to such
entities that it would favor
the entities in the arbitrations; and

(3) identifying and appointing

an ti

- consumer arbitrators and withholding referrals to
arbitrators who decided cases against companies.

Khan also allege d that the Minnesota investigations
found that these practices encouraged some corporations to
select the NAF as their arbitration forum because of this prospect of favorable results. However, although Khan
suggest ed that Dell must have chosen the NAF based on its
corporate

- friendly disposition

, the record does not show that Dell was aware of these practices at the time that it selected
the NAF as the arbitral forum governing Khan‟s purchase or that Dell selected the NAF for any improper reason.9 On October 2, 2009, Dell moved to compel arbitration, arguing that the arbitration provision was binding and
covered all of Khan‟s claims. Khan did not dispute that the Terms and Conditions governed the contract. Khan did, however, assert that the arbitration provision was
unenforceable because the NAF, which the arbitration provision designated as the arbitral forum, was no longer permitted to cond uct consumer arbitrations. Khan further
contended that the NAF‟s designation was integral to the arbitration provision

. He argued, for that reason

, that, because
the NAF could not perform its function, the arbitration provision in the Terms and Conditions should not be enforced and the parties should proceed to litigation

.

On August 18, 2010, the District Court denied Dell‟s motion to compel arbitration and stay claims. See Khan v. Dell, Inc. , No. 09

- 3703 (JAP), 2010 WL 3283529 (D.N.J. August 18, 2010) . After surveying the relevant case law, and acknowledging that “the Third Circuit has not spoke n on the issue,” id. at *3, the District Court found that the clause in the
Terms and Conditions

– “ SHALL BE RESOLVED
EXCLUSIVELY AND FI NALLY BY BINDING

ARBITR ATION AND ADMINISTERED BY THE NATIONAL ARBITRATION FORUM (NAF) under its
Co de of Procedure then in effect”

– demonstrated “the parties‟ intent to arbitrate exclusive ly before a particular arbitrator, not simply an intent to arbitrate generally.” Id. at
*4

. The District Court noted that “[s]ome courts have held that § 5 [of] the Federal Arbitration Act ( “ FAA ” ) provides a mechanism for the appointment of an arbitrator when a
chos en arbitrator is unavailable ”

, id. at *2 , but that the designation here of the NAF as the arbitrator was “integral”
to the arbitration clause. Id. (citing Carideo v. Dell, Inc. , No.10 C06

- 1772JLR, 2009 WL 3485933 (W.D. Wash. Oct. 26, 2009) , and Ranzy v. Extra Cash of Texas, Inc. , No. H

- 09

- 3334, 2010 WL 936471 (S.D. Tex. March 11, 2010 ) ). The court concluded that granting Dell‟s motion to compel and appointing a substitute arbitrator would improperly force the parties to “submit to an arbitration proceeding to which they have not agreed.” Id. at 4.

II. J URISDICTION AND S TANDARD OF R EVIEW

A district court decides a motion to compel arbitration under the same standard it applies to a motion for summary judgment. Par

- Knit Mills, Inc. v. Stockbridge Fabrics Co.,
Ltd. , 636 F.2d 51, 54 & n.9 (3d Cir. 1980). “ The party opposing arbitratio n is given the benefit of all reasonable doubts and inferences that may arise.” Ka neff v. Delaware Title Loans, Inc. , 587 F.3d 616, 620 (3d Cir. 2009) (internal quotations omitted) . We exercise plenary review of questions concerning the “validity and enf orceability of an agreement to
arbitrate.” Edwards v. HOVENSA, LLC , 497 F.3d 355, 357 (3d Cir. 2007). Although we subject underlying factual matters to the clearly erroneous standard, i d. , the “legal question whether the [appellee] may be compelled to ar bitrate [his] claims ” is reviewed under the plenary standard. Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 7 F.3d 1110, 1113 (3d Cir. 1993).

III. A NALYSIS

In this appeal, we must determine whether the provision in the Terms and Cond itions that the NAF be the
arbitrator is exclusive to the NAF and is an integral part of the agreement between Dell and Khan, thus prevent ing the11 appointment of a su b st i tute arbitrator. Because this is a question of arbitrability, it is governed by the FA A. Puleo v. Chase Bank USA, N.A.

, 605 F.3d 172, 180 ( 3d Cir. 2010)

. Congress passed the FAA “in response to widespread judicial hostility to arbitration agreements

. ” AT&T Mobility LLC v. Concepcion

, __ U.S. __, __ , 131 S. Ct. 1740, 1745 (2011)

. The FAA reflects a “liberal fede ral policy favoring
arbitration. ” Moses H. Cone Mem ’ l Hosp

. v. Mercury Constr. Corp. , 460 U.S. 1, 24 (1983). The Supreme Court has unequivocally stated “that questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.” Id

. H owever, the FAA respects the “fundamental principle that arbitration is a matter of contract,” Rent

- A

- Center, West, Inc. v. Jackson

, __ U.S. __, __,

130 S. Ct. 2772, 2776 (2010), and that “ arbitration „ is a matter of consent, not coercion ,‟ ” Stolt

- Nielsen S.A. v. AnimalFeeds Int’l Corp.

, __ U.S. __, __, 130 S. Ct. 1758, 1773 (2010) (quoting Volt Info. Sci

. , Inc. v. B d. of Tr s. of Leland Stanford

Junior Univ. , 489 U.S. 468, 479 (1989))

.

The particular proble m presented in this case

– the unavailability of the NAF

– i s addressed in section 5 of the

FAA , which provides a mechanism for substituting an arbitrator when the designated arbitrator is unavailable. 2 See

2 Section 5 provides: If in the agreement provision be made for a method of

nam ing or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no metho d be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or if for any other reason there shall be a lapse in the naming of an arbitrator, or arbitrators or umpire, or in filling a vacancy, then up on the12 Brown v. ITT Consumer Fin. Corp. , 211 F.3d 1217 , 1222 (11th Cir. 2000) (“Where the chosen forum is unavailable . . . or has failed for some reason, § 5 applies and a substitute arbitrator may be named.”). In determining the applicability
of Section 5 of the FAA when an arbitrator is unavailable

, court s have focus ed on whether the designation of the arbitrator was “integral” to the arbitration provision or was merely an ancillary consideration. See , e.g. , Reddam v.

KPMG LLP , 457 F.3d 1054 , 1061 (9th Cir. 2006 )

, abrogated on other grounds by Atlantic Na t'l Trust LLC v. Mt. Hawley Ins. Co., 621 F.3d 931 (9th Cir. 2010) ; Brown , 211 F.3d at
1222

. As the Eleventh Circuit has articulated the standard:

“ [ o ] nly if the choice of forum is an integral part of the agreement to arbitrate, rather than an „ancillary logistical

concern , ‟ will the failure of the chosen forum preclude
arbitration.” Id

. In other words, a court will decline to appoint a substitute arbitrator, as provided in the FAA, only if the parties‟ choice of forum is “so central to the arbitration agreement that the unavailability of that arbitrator [brings] the agreement to an end.” Reddam , 457 F.3d at 1061

. In this light , the parties must have unambiguously expressed their intent not to arbitrate their disputes in the event that the designated a rbitral forum is unavailable.

application of either party to the controversy the court shall designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been

spe cifically named therein; and unless otherwise provided in the agreement the arbitration shall be by a single arbitrator.13 According to Khan, this standard ha s been met because the Terms and Conditions designate the NAF as the exclusive arbitral forum, implying that disputes should not be arbitrated
if the NAF is unavailable. Khan rel ies on the contract language that stat es that all disputes “ SHALL BE
RESOLVED EXCLUSIVELY AND FINALLY BY
BINDING ARBITRATION ADMIN I STERED BY THE
NATIONAL ARBITRATION FORUM.”

In our view, this language is ambiguous:
“EXCLUSIVELY” could be read to modify “BIND ING ARBITRATION,” “THE NATIONAL ARBITRATION FORUM,” or both.

Khan , however, points out that the NAF‟s rules are incorporated into the contract, and that these rules provide that all arbitrations must be conducted by the NAF or an entity having an agree ment with it. We conclude, however, that this requirement is also ambiguous as to what should happen in the event that the NAF is unavailable. T he NAF‟s rules provide that they shall be interpreted in a manner consistent with the FAA and that, if any por tion of the NAF rules are found to be unenforceable, that portion shall be severed and the remainder of the rules shall continue to apply.

Our finding of ambiguity is confirmed by the conflicting interpretations of this language adopted by the

courts t hat have considered it.

The court in Brown support s Dell‟s position that “exclusively” modifies “binding arbitration.” T he arbitration
agreement in Brown w as interpreted as demonstrating an intent to arbitrate that trumped the designation of a particula r14 arbitrator who was no longer available . In Brown , a former ITT employee argued that the arbitration clause between the parties

– which was virtually identical to the clause here

– was void because the NAF had been dissolved. Id. at 1220,
1222. The Ele venth Circuit found that the unavailability of
the NAF did not destroy the arbitration clause because Section 5 of the FAA provided a mechanism for appointing a replacement arbitrator. Id. at 1222. The court did note the

“ integral ” exception but found th at there was no evidence supporting the employee‟s claim that the forum provision was integral to the arbitration clause. Id.

Adler v. Dell, Inc. , 2009 WL 4580739 (E.D. Mich. Dec. 3, 2009), also supports Dell‟s position. The facts and arguments proffe red in Adler are identical to those before us

. After n oting the “integral” exception, the Adler c ourt articulated the presumption in favor of enforceability of
Section 5 of the FAA as follows : “when the arbitrator named in the arbitration agreement canno t or will not arbitrate the dispute, the court does not void the arbitration agreement. Instead, it appoints a different arbitrator, as provided in the
Federal Arbitra tion Act. ” Id. at *2. In addition

, the Adler
court found the clause “SHALL BE RESOLVED

EXCLUSIVELY AND FINALLY BY BINDING
ARBITRATION ADMINSTERED BY THE NATIONAL
ARBITRATION FORUM” was ambiguous on the issue of
whether the NAF‟s exclusive designation was integral to the provision or whether the intent to arbitrate superseded the NAF‟s desig nation. Id. T he c ourt concluded that the arbitration provision d id not meet the standard that an arbitration provision will fail only when the designation of an arbitrator is “as important a consid eration as the agreement
itself. ” I d. at *3

.15 On the othe r hand, in Carideo v. Dell, Inc. , No. C06

- 1772JLR, 2009 WL 3485933 (W.D. Wash. Oct. 26, 2009 ), a case factually similar to this one, the plaintiff who had bought an allegedly defective Dell computer

, b rought suit against
Dell

. Dell moved to compel arbitra tion

, pursuant to the arbitration provision that designated the NAF as the arbitral forum. Applying the Ninth Circuit‟s decision in Reddam , the
court in Carideo held that the parties‟ selection of the NAF was integral to the arbitration agreement. Caride o , 2009 WL
3485933 at *4. Because the court found that the selection of
the N AF and of its rules was integral to the arbitration provision, it concluded that appointing a substitute arbitrator would be a wholesale revision of the arbitration agreement.

I d. at *6

. In coming to its conclusion, however, the court stated that “[i]n general, the FAA provides that where the chosen arbitrator is unavailable, the court may appoint a
substitute arbitrator.” Id. at * 3 (emphasis added). We do not agree with the la nguage used by the Carideo court. We note that Section 5 provides that in the case of an unavailable arbitrator, “upon the application of either party to the
controversy the court shall designate and appoint an
arbitrator. ” 9 U.S.C. § 5 (emphasis added). T he difference
between may and shall significant. We do not find Carideo persuasive.

Although courts are divided on the issue, we conclude
that the “liberal federal policy in favor of arbitration”
counsels us to favor the Brown line of cases. T he language relied on by Khan is at best ambiguous as to whether the parties intended to have their disputes arbitrated in the event that NAF was unavailable for any reason. Because of the ambigu ity , it is not clear whether the designation of NAF is
ancillar y or is as important a consideration as the agreement16 to arbitrate itself. See Brown , 211 F.3d at 1222. Therefore, we must resolve this ambiguity in favor of arbitration. See Seus v. John Nuveen & Co., Inc. , 146 F.3d 175, 186 (3d Cir. 1998)

, overruled o n other grounds by Green Tree Fin. Corp. Al. v. Randolph , 531 U.S. 79 (2000 )

.

We note moreover that t he arbitration provision in the Terms and Conditions specifically incorporate d the FAA, 9
U.S.C. §§ 1

- 16, suggesting that, in the event of the NAF's

unav ailability, the FAA's procedures for addressing such a problem should apply. Finally, we note the notice

, provided to Khan when he accepted the Terms and Conditions, which stated that they “contain an agreement to resolve disputes through arbitration, rat her than through litigation.”

Khan , however, argues that, even if the NAF‟s designation as the arbitral forum wa s not integral to the Terms and Conditions, S ection 5 of the FAA nevertheless d id not apply here because NAF‟s unavailability wa s not a “lap se” within the meaning of statute. In support of this argument, Kahn cites In re Salomon Inc. S’holders’ Derivative Litig.

, 68 F.3d 554, 560 (2d Cir. 1995)

, a case in which the arbitral forum, the NYSE, had refused to arbitrate.
Khan argues that the word “lapse” in Section 5 of the FAA

mean s “a lapse in the naming of the arbitrator or in the filling of a vacancy on a panel of arbitrators or some other
mechanical breakdown in t he arbitrator selection process, ” not the NYSE‟s refusal to arbitrate the disput e

– or the NAF‟s unavailability to do so

.

We find In re Salomon unpersuasive. First, we do not see why the NAF‟s unavailability is not a “ mechanical
breakdown in t he arbitrator selection process.” Apparently

,17 the NAF‟s Consent Judgment with the S tate of Minnesota prevents it from acting as an arbitrator . This unavailability appears to us to be a breakdown in the mechanics of the appointment process. To take a narrow er construction of
S ection 5 would be inconsistent with the “liberal federal policy i n favor of arbitration” articulated in the FAA

.

We conclude therefore that the unavailability of NAF to hear the disputes between Khan and Dell constitutes a “lapse” within the meaning of Section 5. 3

IV. C ONCLUSION

The contract‟s language does not i ndicate the parties‟ unambiguous intent not to arbitrate their disputes if NAF is
unavailable

. Section 5 of the FAA requires a court to address
such un a vailability by appointing a substitute arbitrator. The District Court‟s contrary conclusion is at odds with the fundamental presumption in favor of arbitration. We will
therefore vacate the judgment of the District Court and
remand this case for further proceedings consistent with this opinion.

3 Because the District Court denied Dell‟s motion to compel arbitration, it did not address Khan‟s alternative argument that the arbi tration provision in the contract is
unconscionable. We leave it to the District Court to address this argument on remand.1 Raheel Ahmad Khan v. Dell, Inc.

, No. 10

- 3655

S LOVITER, Circuit Judge , dissenting

.

The majority opinion acknowledges that the Supreme Court has stated the “fundamental principle that arbitration is a matter of contract,” Rent

- A

- Center, West, Inc. v. Jac kson

,

____ U.S.

____ , 130 S. Ct. 2772, 2776 (2010) . Indeed it has so stated more than once. I dissent because the majority has given mere lip service to this “fundamental principle,” and its holding as applied in this particular case violates that princi ple. There is no ambiguity in the arbitration agreement.

T he plain text of the arbitration agreement clearly

states that the selection by Dell of the NAF as arbitrato r was integral to the agreement, and leads me to conclude that
Section 5 of the FAA is inapplicable and the unavailability of the NAF precludes arbitration

.

The arbitration clause in Dell’s Terms and Conditions
of Sale states:

13. Binding Arbitration. ANY CLAIM, DISPUTE, OR CONTROVERSY (WHETHER IN CONTRACT, TORT, OR OTHERWISE,

WHETHER P REEXISTING, PRESENT OR FUTURE, AND INCLUDING STATUTORY, COMMON LAW, INTENTIONAL TORT AND EQUITABLE CLAIMS) BETWEEN CUSTOMER AND DELL, its agents, employees, principals, successors, assigns, affiliates, (collectively for purposes of this paragraph, “Dell”) arising from or relating to this Agreement, its interpretation, or the breach, termination or validity thereof, the relationships which resulted from this Agreement (including, to the full extent permitted by applicable law, relationship with third parties who are not signatories to this Agreement), Dell’s advertising, or any related purchase SHALL BE RESOLVED
EXCLUSIVELY AND FINALLY BY BINDING
ARBITRATION ADMINISTERED BY THE NATIONAL ARBITRATION FORUM (NAF) under2 its Code of Procedure then in effect (avail able via the Internet at http://www.arb

- forum.com, or via telephone at 1

- 800

- 474

- 2371). The arbitration shall be limited solely to the dispute or controversy
between customer and Dell. NEITHER
CUSTOMER NOR DELL SHALL CONSOLIDATE
CLAIMS BY OR AGAINST OTHE R CUSTOMERS, OR ARBITRATE ANY CLAIM AS
A REPRESENTATIVE OR CLASS ACTION OR
IN A PRIVATE ATTORNEY GENERAL
CAPACITY . This transaction involves interstate commerce, and this provision shall be governed by the Federal Arbitration Act, 9 U.S.C. sec. 1

- 16 (FAA) . Any award of the arbitrator shall be final and binding on both of the parties .

. . . Information may be obtained and claims may be filed with the NAF at P.O. Box 50191, Minneapolis, MN 55404.

App. at A67.

The majority reasons that this language is

“ ambiguous” because “ ‘EXCLUSIVELY’ could be read to modify ‘BINDING ARBITRATION,’ ‘THE NATIONAL ARBITRATION FORUM,’ or both,” s ee Majority Opinion

supra page 13 , and that the “liberal federal policy in favor of arbitration” thus compels the court to resolve this
“amb iguity” in favor of arbitration. S ee Majority Opinion

supra page 15 . However, “the FAA’s proarbitration policy does not operate without regard to the wishes of the contracting parties.” Mastrobuono v. Shearson Lehman Hutton, Inc. , 514 U.S. 52, 57 (1995). The majority’s conclusion focuses solely on the language used rather than giving appropriate weight to the additional clues that
demonstrate the parties’ clear intent.

The phrase “ EXCLUSIVELY AND FINA LLY BY
BINDING ARBITRATION ADMINISTRATE D BY THE
NATIONAL ARBITRATION FORUM ” is written in all capital letters yet surrounded by clauses written in lower case
letters . This aesthetic prominence indicates the parties’ intent for the entire phrase to be read together and emphasize d as an essentia l pa rt of the agreement. Moreover, as noted by the District Court, “[t]he NAF is expressly named, the NAF’s3 rules are to apply, . . . no provision is made for an alternate arbitrator [, and the] language used is mandatory, not permissive.” App. at A12. The agreement also states that “[i]nformation may be obtained and claims may be filed with the NAF at P.O. Box 50191, Minneapolis, MN 55404 ,” again illustrating the central role that NAF was intended to play in arbitrations pursuant to this agreement.

Given “the consensual nature of private dispute resolution,” courts must respect the principle that “parties are generally free to structure their arbitration agreements as they
see fit.” Stolt

- Nielsen S.A. v. AnimalFeeds Int’l Corp. , 130 S. Ct. 1758, 17 74 (2010) (internal quotation marks and citation omitted)

. Here, the parties agreed only to binding arbitration
administered by the NAF. F ull analysis of the plain text of the agreement as a whole shows that the selection of the NAF
as arbitrator was an integral part of the agreement to arbitrate. Therefore, Section 5 of the FAA is inapplicable and the unavailability of the NAF precludes arbitration

. I respectfully
dissent.

There is yet another reason why Dell’s request to proceed via arbitration rath er than trial should not be granted, and that reason applies to this defendant in this case. The majority avoids any discussion of the underlying reason why arbitration by NAF is unavailable. In an action pending in Minnesota, the Minnesota Attorney Gene ral made public the results of its year

- long investigation that showed that NAF, far from being the neutral arbitration forum contemplated by Congress when it enacted the Federal Arbitration Act

, represented to corporations that it would appoint anti

consu mer arbitrators and discontinue referrals to arbitrators
who decided cases in favor of consumers. See Amicus Curiae Br. at 8, 13

- 15; see also Arbitration or “Arbitrary” : The

M isuse of Mandatory Arbitration to Collect Consumer Debts: Hearing Before the H. Domestic Policy Subcomm. of Comm.

o n O versight and Gov’t Reform , 111 th Cong. (July 22, 2009).

Rather than disputing the allegations, NAF accepted a consent judgment that barred it from administering and participating in all consumer arbitrations. See id

. (testimony of Lori Swanson, Minnesota Attorney General, at 3) (“Under the Consent Judgment, [NAF] is barred from the business of4 arbitrating credit card and other consumer disputes and must stop accepting any new consumer arbitrations or in any

manner pa rticipate [sic] in the processing or administering of new consumer arbitrations.”); see also App. at A273

- 76. It cannot be insignificant that Dell named NAF as the exclusive
forum in its arbitration clauses. It followed that the District
Court refused De ll’s request to designate a substitute
arbitrator. I t was certainly not error for the District Court in this case to deny substitution at the behest of Dell. Even assuming that in the usual case, substitution of a neutral arbitrator would be an accept abl e alternative, it is evident that this is not an ordinary case and we should affirm the District
Court’s denial of Dell’s motion.