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Citizens of Humanity, LLC, a Delaware limited

liability company, and CM Laundry, LLC, 

a California limited liability company, 

appellants, v. Applied Underwriters

Captive Risk Assurance Company, 

Inc., a British Virgin Islands

company, appellee.

___ N.W.2d ___

Filed April 6, 2018. No. S-17-178.

1. Arbitration and Award. Arbitrability presents a question of law.

2. Judgments: Appeal and Error. On a question of law, an appellate court 

reaches a conclusion independent of the court below.

3. Final Orders: Arbitration and Award. A court order staying an action 

pending arbitration is a final, appealable order under Neb. Rev. Stat. 

§ 25-1902 (Reissue 2016), because it affects a substantial right and is 

made in a special proceeding.

4. Federal Acts: Contracts: Arbitration and Award: Intent. The purpose of the Federal Arbitration Act is to make arbitration agreements as 

enforceable as other contracts, but not more so.

5. Federal Acts: Insurance: Contracts: Arbitration and Award. The 

Uniform Arbitration Act, at Neb. Rev. Stat. § 25-2602.01(f)(4) (Reissue 

2016), limits the enforceability of mandatory arbitration in an agreement concerning or relating to an insurance policy of future policyholder claims.

6. Federal Acts: Insurance: States. Under the McCarran-Ferguson Act, 

state law regulating the business of insurance reverse preempts federal 

laws that do not specifically govern insurance.

7. ____: ____: ____. Under the McCarran-Ferguson Act, courts consider 

three elements for determining when a state law controls over a federal 

statute: (1) The federal statute does not specifically relate to the business 

of insurance; (2) the state law was enacted for regulating the business of 

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

06/22/2018 08:18 AM CDT
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insurance; and (3) the federal statute, if applied, operates to invalidate, 

impair, or supersede the state law.

8. Federal Acts: Insurance: Contracts: Arbitration and Award. 

The Federal Arbitration Act does not preempt Neb. Rev. Stat. 

§ 25-2602.01(f)(4) (Reissue 2016).

9. Courts: Statutes: Intent. When two statutes are capable of coexistence, 

it is the duty of the courts, absent a clearly expressed congressional 

intention to the contrary, to regard each as effective.

10. Courts: Statutes. Courts will harmonize overlapping statutes so long as 

each reaches some distinct cases.

11. Federal Acts: Contracts: Arbitration and Award. The Federal 

Arbitration Act’s saving clause permits agreements to arbitrate to be 

invalidated by generally applicable contract defenses.

12. Contracts: Public Policy. A promise or other term of an agreement is 

unenforceable on grounds of public policy if legislation provides that it 

is unenforceable or the interest in its enforcement is clearly outweighed 

in the circumstances by a public policy against the enforcement of 

such terms.

13. Courts: Contracts: Arbitration and Award. Unless the parties clearly 

and unmistakably provide otherwise, the question of whether the parties 

agreed to arbitrate is decided by the court, not the arbitrator.

14. ____: ____: ____. Disputes about arbitrability for a court to decide 

include questions 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 controversy.

15. Arbitration and Award. Parties may delegate arbitrability to the arbitrator, because it is up to the parties to determine whether a particular 

matter is primarily for arbitrators or for courts to decide.

16. Federal Acts: Contracts: Arbitration and Award: Words and 

Phrases. A delegation clause is an agreement to arbitrate a threshold 

issue and is simply an additional, severable, antecedent arbitration 

agreement the party seeking arbitration asks the court to enforce, and the 

Federal Arbitration Act operates on this additional arbitration agreement 

just as it does on any other.

17. Federal Acts: Contracts: Arbitration and Award. A delegation agreement, like any other arbitration agreement, is valid under the Federal 

Arbitration Act except by application of 9 U.S.C. § 2 (2012), which 

invalidates such agreements upon such grounds as exist at law or in 

equity for the revocation of any contract.

18. Federal Acts: Arbitration and Award: Presumptions. Under the 

Federal Arbitration Act, there is a presumption of arbitrability, and any 

doubts are resolved in favor of arbitration.
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19. Federal Acts: Contracts: Arbitration and Award. Under the Federal 

Arbitration Act, if a delegation provision is valid, the validity of the 

remainder of the arbitration contract is for the arbitrator to decide.

20. ____: ____: ____. Two types of validity challenges under the Federal 

Arbitration Act are (1) a challenge specifically to the validity of the 

agreement to arbitrate and (2) a challenge to the contract as a whole, 

either on a ground that directly affects the entire agreement or on the 

ground that the illegality of one of the contract’s provisions renders the 

whole contract invalid. Only the first type of challenge is relevant to a 

court’s determination of a challenged arbitration agreement. A party’s 

challenge to another provision of the contract, or to the contract as a 

whole, does not prevent a court from enforcing a specific agreement 

to arbitrate.

21. Federal Acts: Contracts: Arbitration and Award: Courts. Under 

the Federal Arbitration Act, a challenge to a delegation provision must 

be directed specifically to the delegation before the court will assume 

authority over the matter.

22. Contracts. A court must consider a contract as a whole and, if possible, 

give effect to every part of the contract.

23. Insurance: Contracts: Arbitration and Award. A delegation of arbitrability of future policyholder claims in an agreement concerning 

or relating to an insurance policy is invalid under Neb. Rev. Stat. 

§ 25-2602.01(f)(4) (Reissue 2016).

Appeal from the District Court for Douglas County: Shelly

R. Stratman, Judge. Reversed and remanded for further 

proceedings.

Jonathan J. Papik and Andre R. Barry, of Cline, Williams, 

Wright, Johnson & Oldfather, L.L.P., for appellants.

David A. Blagg and Michael K. Huffer, of Cassem, Tierney, 

Adams, Gotch & Douglas, and Spencer Y. Kook, of Hinshaw 

& Culbertson, L.L.P., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Kelch, and

Funke, JJ.

Miller-Lerman, J.

I. NATURE OF CASE

Appellants, Citizens of Humanity, LLC, and CM Laundry, 

LLC (collectively Citizens), filed a declaratory judgment action 
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in the district court for Douglas County in connection with a 

dispute in which appellee, Applied Underwriters Captive Risk 

Assurance Company, Inc. (AUCRA), claimed it was owed 

money from Citizens. Citizens appeals from an order of the 

district court for Douglas County, in which the court granted 

AUCRA’s motion to stay the court case pending arbitration, 

including arbitration of the issue of arbitrability. Because we 

conclude that the district court’s ruling enforcing delegation of 

the issue of arbitrability was error, we reverse this ruling and 

remand the cause for further proceedings.

II. STATEMENT OF FACTS

Citizens of Humanity is a blue jean manufacturing company 

organized in Delaware with its principal place of business in 

California. Its subsidiary, CM Laundry, is organized and has 

its principal place of business in California, and its business is 

laundering the blue jeans manufactured by its parent company 

before they are sold to customers. AUCRA is organized in the 

British Virgin Islands and has its principal place of business in 

Douglas County, Nebraska.

1. EquityComp and the Reinsurance

Participation Agreement

Citizens purchased a workers’ compensation insurance package known as the EquityComp program. The EquityComp 

program is a workers’ compensation program marketed by 

AUCRA and offered through California Insurance Company. 

The program is sometimes referred to by AUCRA as a “profitsharing plan.” Under this program, Citizens purchased a workers’ compensation policy identified as a “guaranteed cost” 

policy from California Insurance Company and Continental 

National Indemnity, which are affiliated with AUCRA but 

are not parties to this appeal. Citizens’ “Request to Bind 

Coverages & Services” for the EquityComp workers’ compensation policies stated that issuance of the insurance coverage was conditioned on Citizens’ executing a “Reinsurance 

Participation Agreement” (RPA). Citizens executed the related 
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RPA with AUCRA on August 8, 2012. The RPA is the subject 

of this appeal.

By Citizens’ participation in the EquityComp program, and 

by the terms of the RPA, portions of Citizens’ premiums and 

losses billed by the affiliated workers’ compensation insurers were to be subsequently ceded to AUCRA. AUCRA then 

agreed to fund a segregated account or “cell” held by AUCRA. 

The amount to be funded into the cell would be dependent 

on a prospective formula set forth in the RPA that would take 

into account claims filed against Citizens’ workers’ compensation policies. This was known as Citizens’ “loss experience.” 

Citizens, through its segregated cell account, effectively would 

be partially self-insured, because it would then be responsible 

for an amount equal to all of its actual losses under the workers’ compensation policies, up to a limit. Excess losses, beyond 

that limit, would be paid by the workers’ compensation insurance, but such experience would obligate the insured to fund 

the cell in a greater amount.

The EquityComp proposal materials claimed that the “Profit 

Sharing Plan is not a filed retrospective rating plan or dividend 

plan.” However, the RPA required a 3-year minimum contractual commitment and amounts subsequently returned to the 

insured or increases in premiums were computed based on past 

loss experience.

Two types of workers’ compensation policies—guaranteed 

cost and retrospective rating plan—have been described in case 

law, and we find the following description to be consistent with 

treatise authority. See 5 Steven Plitt et al., Couch on Insurance 

3d § 69:16 (2012). The opinion in Nat. Convention v. Applied 

Underwriters Captive, 239 F. Supp. 3d 761, 769 (S.D.N.Y. 

2017), states:

A [guaranteed cost] policy essentially fixes insurance premiums at the outset, meaning that the actual cost of the 

claims against the policy will not cause premiums to fluctuate during the life of the policy. . . . By contrast, a [retrospective rating plan] policy is loss sensitive, meaning 
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that premiums can fluctuate during the life of the policy 

depending on the actual cost of the claims . . . .

Retrospective pricing has long been recognized. See American 

Ins. Co. v. C.S. Mc Crossan, Inc., 829 F.2d 702 (8th Cir. 1987) 

(discussing retrospective pricing). For purposes of this suit, we 

view the RPA as an agreement adding a feature of retrospective 

pricing thereby impacting the underlying “guaranteed cost” 

workers’ compensation policies. And for completeness, we 

note that our characterization of the RPA is not critical to our 

disposition, but, rather, as we discuss below, illustrates that the 

RPA is “concerning or relating to an insurance policy” under 

Neb. Rev. Stat. § 25-2602.01(f)(4) (Reissue 2016).

AUCRA has patented its “Reinsurance Participation Plan.” 

See “Reinsurance Participation Plan,” U.S. Patent No. 7,908,157 

B1 (issued Mar. 15, 2011). See, also, Nat. Convention v. Applied 

Underwriters Captive, supra. The patent states as follows:

One of the challenges of introducing a fundamentally 

new premium structure into the marketplace is that the 

structure must be approved by the respective insurance 

departments regulating the sale of insurance in the states 

in which the insureds operate.

In the United States, each state has its own insurance 

department and each insurance department must give its 

approval to sell insurance with a given premium plan 

in its respective jurisdiction. Getting approval can be 

extremely time consuming and expensive, particularly 

with novel approaches that a department hasn’t had experience with before. Also, many states require insurance 

companies to only offer small sized and medium sized 

companies a Guaranteed Cost plan, without the option of 

a retrospective plan. In part, this is because of governmental rules and laws that regulate the insurance industry.

Disclosed herein is a reinsurance based approach to providing non-linear retrospective premium plans to insureds 

that may not have the option of such a plan directly.

U.S. Patent No. 7,908,157 B1, col. 6, lines 22-40.
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The patent further explains that the insured can “have a 

retrospective rating plan because of the arrangement among 

the insurance carrier . . . , the reinsurance company . . . , and 

the insured even though, in fact, the insured has Guaranteed 

Cost insurance coverage with the insurance carrier.” Id., col. 7, 

lines 51-54. See, also, Nat. Convention v. Applied Underwriters 

Captive, supra.

This patented arrangement has been scrutinized and found 

noncompliant by several state insurance commissions. The 

arrangement has been deemed in violation of state insurance 

laws, generally for the reason that the RPA is considered 

a collateral agreement that modifies the underlying compliant guaranteed cost policy. Nat. Convention v. Applied 

Underwriters Captive, supra (summarizing insurance commission cease-and-desist orders filed in California, Vermont, 

and Wisconsin).

2. Provisions in the RPA Pertaining

to the Arbitration Issue

The RPA includes an arbitration provision which provides, 

in pertinent part:

13. Nothing in this section shall be deemed to amend or 

alter the due date of any obligation under this Agreement. 

Rather, this section is only intended to provide a mechanism for resolving accounting disputes in good faith.

(A) It is the express intention of the parties to resolve 

any disputes arising under this Agreement without resort 

to litigation in order to protect the confidentiality of their 

relationship and their respective businesses and affairs. 

Any dispute or controversy that is not resolved informally pursuant to sub-paragraph (B) of Paragraph 13 

arising out of or related to this Agreement shall be fully 

determined in the British Virgin Islands under the provisions of the American Arbitration Association.

(B) All disputes between the parties relating in any 

way to (1) the execution and delivery, construction or 

enforceability of this Agreement, (2) the management 
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or operations of the Company, or (3) any other breach 

or claimed breach of this Agreement or the transactions contemplated herein shall be settled amicably by 

good faith discussion among all of the parties hereto, 

and, failing such amicable settlement, finally determined 

exclusively by binding arbitration in accordance with the 

procedures provided herein. The reference to this arbitration clause in any specific provision of this Agreement is 

for emphasis only, and is not intended to limit the scope, 

extent or intent of this arbitration clause, or to mean 

that any other provision of this Agreement shall not be 

fully subject to the terms of this arbitration clause. All 

disputes arising with respect to any provision of this 

Agreement shall be fully subject to the terms of this 

arbitration clause.

The RPA also contains a choice-of-law clause providing for 

Nebraska law, stating:

16. This Agreement shall be exclusively governed by 

and construed in accordance with the laws of Nebraska 

and any matter concerning this Agreement that is not 

subject to the dispute resolution provisions of Paragraph 

13 hereof shall be resolved exclusively by the courts of 

Nebraska without reference to its conflict of laws.

3. Procedural History and

Present Dispute

A dispute over costs arose, and AUCRA claimed that Citizens 

owed it $842,802.78. Citizens contended that its participation 

in the RPA was premised on assurances of cost savings, but 

Citizens instead incurred excessive costs under the RPA.

On December 12, 2014, AUCRA filed an arbitration demand 

with the American Arbitration Association. Citizens filed a 

counterclaim with the association, alleging that it could not be 

compelled to arbitrate.

On February 9, 2015, Citizens filed a complaint against 

AUCRA and other defendants in a trial court in Los Angeles, 

California. In January 2016, the California trial court overruled 
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a renewed motion by Citizens to stay the arbitration. In April, 

Citizens dismissed AUCRA as a defendant in the California 

action. After AUCRA was dismissed, the remaining defendants filed a “renewed” motion to compel arbitration and 

stay the California action. On July 14, the California trial 

court overruled the remaining defendants’ motion to compel 

arbitration. The California court determined that the RPA’s 

arbitration clause was unenforceable under the controlling 

Nebraska statute, § 25-2602.01(f)(4). On November 22, 2017, 

the California Court of Appeal affirmed the California trial 

court’s order refusing to compel arbitration. See Citizens 

Humanity v. Applied Underwriters, 17 Cal. App. 5th 806, 226 

Cal. Rptr. 3d 1 (2017).

In April 2016, 1 day after it had dismissed AUCRA from 

the California action, Citizens filed the present action against 

AUCRA in the district court for Douglas County. An amended 

complaint was filed on July 25. In this action, Citizens asked 

the district court to enjoin the arbitration which had been 

commenced by AUCRA. Citizens alleged that it could not be 

compelled to arbitrate for various reasons, including the fact 

that § 25-2602.01(f)(4) prohibits mandatory arbitration provisions in “any agreement concerning or relating to an insurance 

policy other than a contract between insurance companies 

including a reinsurance contract.” By virtue of is pleading and 

arguments made to the district court, Citizens challenges the 

enforceability of arbitration, including the delegation of arbitribility to an arbitrator.

AUCRA filed a motion to dismiss this action or, in the alternative, to stay this action pending arbitration. After a hearing, 

in an order filed January 19, 2017, the district court sustained 

the motion to stay this action pending arbitration. In reaching 

its conclusion, the court reasoned that because Citizens and 

AUCRA were organized and had principal places of business in different states and the RPA involved interstate commerce, the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 to 14 

(2012), governed its analysis. The court determined that based 
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on the “broad and sweeping language” of the RPA’s arbitration provision, the provision’s incorporation of the American 

Arbitration Association rules, and Citizens lack of a direct 

challenge to delegation of arbitrability, the parties had “clearly 

and unmistakably delegated threshold issues of arbitrability to 

an arbitrator.”

Having rejected Citizens’ arguments claiming that it was 

not required to arbitrate, the court sustained AUCRA’s motion 

to stay this action, thus delegating the issue of arbitrability to 

the arbitrator.

This appeal followed.

III. ASSIGNMENTS OF ERROR

Citizens assigns error to the district court, for (1) determining that the FAA and not Nebraska state law governed the 

enforceability of the RPA’s arbitration agreement, (2) finding that delegation of arbitrability in the RPA was enforceable rather than finding that it was unenforceable under 

§ 25-2602.01(f)(4), (3) failing to find that the arbitration 

clause as a whole was unenforceable under § 25-2602.01(f)(4), 

and (4) staying the case pending arbitration.

IV. STANDARD OF REVIEW

[1,2] Arbitrability presents a question of law. Speece v. 

Allied Professionals Ins. Co., 289 Neb. 75, 853 N.W.2d 169 

(2014). On a question of law, we reach a conclusion independent of the court below. Id.

V. ANALYSIS

AUCRA contended that under its broad arbitration agreement, the RPA requires all questions concerning construction 

and enforceability of that agreement, including applicability of § 25-2602.01(f)(4), to be decided by an arbitrator and 

that the FAA alone governs the RPA’s arbitration provision 

(notwithstanding the RPA’s general choice of Nebraska law 

provision) and thus moved to stay arbitration under the FAA. 

AUCRA therefore asserts that the district court correctly 
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reasoned that under FAA jurisprudence, Citizens did not 

adequately and specifically challenge the RPA arbitration provisions and that therefore, the arbitration should proceed. See 

Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S. Ct. 

2772, 177 L. Ed. 2d 403 (2010).

Citizens contended that because paragraph 16 of the RPA provides that the RPA “shall be exclusively governed” by Nebraska 

law, the antiarbitration provision of § 25-2602.01(f)(4) renders 

the arbitration provisions of the RPA, including arbitration 

of arbitrability, unenforceable. Citizens reasons that because 

this court has held that § 25-2602.01 regulates the business 

of insurance and by virtue of the federal McCarran-Ferguson 

Act, see Speece v. Allied Professionals Ins. Co., supra, the 

court should determine the threshold question of arbitrability. 

Citizens further asserts that because the arbitration provisions 

in the RPA are invalid under § 25-2602.01(f)(4), the district 

court erred when it granted AUCRA’s motion to stay the case 

to permit arbitration.

Below, we examine the relevant statutory framework 

forming the basis of the parties’ dispute and conclude that 

§ 25-2602.01(f)(4) applies to this case and that the arbitration 

provision delegating the issue of arbitrability to the arbitrator—

sometimes referred to as a “delegation clause”—in the RPA 

is invalid. We explain why the gateway issue of arbitrability 

should have been decided in the district court, and we reverse, 

and remand for further proceedings.

1. Jurisdiction Is Proper

[3] As an initial matter, we note that a court order staying an action pending arbitration is a final, appealable order 

under Neb. Rev. Stat. § 25-1902 (Reissue 2016), because it 

affects a substantial right and is made in a special proceeding. 

See Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 

N.W.2d 538 (2010). See, also, Shasta Linen Supply v. Applied 

Underwriters, 290 Neb. 640, 861 N.W.2d 425 (2015). In this 

context, a stay has the same effect as a dismissal, because the 

“parties cannot litigate their dispute in state courts.” Kremer 
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v. Rural Community Ins. Co., 280 Neb. at 600, 788 N.W.2d 

at 548. Therefore, this court has jurisdiction to consider this 

appeal of the district court’s order granting AUCRA’s motion 

to stay the case.

2. Relevant Statutes

We first identify the federal and state statutes relevant to 

our analysis.

(a) The FAA

The FAA, at 9 U.S.C. § 2, provides, in pertinent part, that 

“[a] written provision in . . . a 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.” The 

FAA was enacted in “response to judicial hostility to arbitration,” CompuCredit Corp. v. Greenwood, 565 U.S. 95, 97, 132 

S. Ct. 665, 181 L. Ed. 2d 586 (2012), and to ensure judicial 

enforcement of privately made agreements to arbitrate. That is, 

the FAA “‘declare[d] a national policy favoring arbitration.’” 

Nitro-Lift Technologies, L. L. C. v. Howard, 568 U.S. 17, 20, 

133 S. Ct. 500, 184 L. Ed. 2d 328 (2012) (quoting Southland 

Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 

1 (1984)).

[4] As noted, § 2 of the FAA extends its jurisdiction over 

arbitration agreements contained within “‘contract[s] evidencing a transaction involving commerce’” and governs whether 

such an arbitration provision is enforceable. Aramark Uniform 

& Career Apparel v. Hunan, Inc., 276 Neb. 700, 705, 757 

N.W.2d 205, 209 (2008). The U.S. Supreme Court has given 

this jurisdictional phrase a broad interpretation to give expansive scope to the FAA. Aramark Uniform & Career Apparel 

v. Hunan, Inc., supra. See, also, Kremer v. Rural Community 

Ins. Co., supra. However, it has been observed that the purpose 

of the FAA is “to make arbitration agreements as enforceable 

as other contracts, but not more so.” Prima Paint v. Flood & 
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Conklin, 388 U.S. 395, 404 n.12, 87 S. Ct. 1801, 18 L. Ed. 2d 

1270 (1967). Thus, an arbitration agreement under the FAA 

is enforced according to its terms “unless the FAA’s mandate 

has been ‘overridden by a contrary congressional command.’” 

CompuCredit Corp. v. Greenwood, 565 U.S. at 98 (quoting 

Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 

107 S. Ct. 2332, 96 L. Ed. 2d 185 (1987)).

(b) The McCarran-Ferguson Act

As we have explained in previous opinions of this court, 

Congress passed the McCarran-Ferguson Act, 15 U.S.C. 

§§ 1011 to 1015 (2012), to overturn a U.S. Supreme Court 

decision under the Commerce Clause that threatened the continued supremacy of states to regulate “‘the activities of insurance companies in dealing with their policyholders.’” Kremer 

v. Rural Community Ins. Co., 280 Neb. at 604, 788 N.W.2d at 

550 (quoting SEC v. National Securities, Inc., 393 U.S. 453, 

89 S. Ct. 564, 21 L. Ed. 2d 668 (1969)). It has been stated 

that the “McCarran-Ferguson Act . . . endows states with plenary authority over the regulation of insurance and, in certain 

instances, exempts state laws from FAA preemption.” Milmar 

v. Applied Underwriters, 58 Misc. 3d 497, 501, 68 N.Y.S.3d 

645, 648 (2017).

The McCarran-Ferguson Act sets out the statutory provision 

relevant to the case before us: “No Act of Congress shall be 

construed to invalidate, impair, or supersede any law enacted 

by any State for the purpose of regulating the business of 

insurance, or which imposes a fee or tax upon such business, 

unless such Act specifically relates to the business of insurance 

. . . .” 15 U.S.C. § 1012(b). By virtue of this provision, the 

federal McCarran-Ferguson Act creates a narrow circumstance 

under which federal law does not preempt state laws regulating 

the business of insurance.

(c) § 25-2602.01

[5] Although state laws vary on whether or not agreements 

to arbitrate future disputes under an insurance policy are 
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enforceable, a provision in Nebraska’s Uniform Arbitration 

Act, § 25-2602.01(f)(4), decidedly limits the enforceability 

of mandatory arbitration of future policyholder claims. See 

John M. Gradwohl, Arbitration: Interface of the Federal 

Arbitration Act and Nebraska State Law, 43 Creighton L. Rev. 

97 (2009).

In relevant part, § 25-2602.01 provides generally for the 

enforcement of arbitration agreements and states:

(b) A provision in a written contract to submit to arbitration any controversy thereafter arising between the 

parties is valid, enforceable, and irrevocable, except upon 

such grounds as exist at law or in equity for the revocation of any contract, if the provision is entered into voluntarily and willingly.

However, subsection (f)(4) of § 25-2602.01, excepts from 

this provision “any agreement concerning or relating to an 

insurance policy other than a contract between insurance companies including a reinsurance contract.”

In other words, where applied, § 25-2602.01 provides that 

agreements to arbitrate existing and future agreements are 

valid and enforceable except in specified circumstances sometimes referred to as “antiarbitration provisions.” See Kremer 

v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538 

(2010). Agreements to arbitrate “concerning or relating to an 

insurance policy” are one such circumstance where arbitration is not permitted. Such agreements would be invalid, and 

contrary contract provisions agreed to by the parties do not 

control over this statutory bar to enforcement of arbitration. 

See § 25-2602.01(d).

3. Where They Interact, the McCarran-Ferguson Act

Generally Preserves § 25-2602.01(f)(4) 

From Preemption by the FAA

The three statutory schemes just described interact in the 

instant case and, on appeal, present the narrow issues of 

whether the McCarran-Ferguson Act causes § 25-2602.01(f)(4) 

to reverse preempt the FAA, thus rendering the delegation 
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of arbitrability under the RPA invalid and whether the court 

should have decided this threshold issue.

[6] As noted above, the FAA provides that written provisions for arbitration are valid and enforceable and that the 

FAA preempts inconsistent state laws that apply solely to the 

enforceability of arbitration provisions. However, under the 

McCarran-Ferguson Act, state law regulating the business of 

insurance reverse preempts federal laws that do not specifically 

govern insurance. See 1 Steven Plitt et al., Couch on Insurance 

3d § 2:5 at 2-28 (2009) (discussing types of state laws “saved” 

by McCarran-Ferguson Act, including state uniform arbitration acts).

[7] As we have previously stated, in the insurance area under 

the McCarran-Ferguson Act, courts consider three elements for 

determining when a state law controls over a federal statute: 

(1) The federal statute does not specifically relate to the business of insurance; (2) the state law was enacted for regulating 

the business of insurance; and (3) the federal statute, if applied, 

operates to invalidate, impair, or supersede the state law. See 

Kremer v. Rural Community Ins. Co., supra.

[8] Applying these elements to § 25-2602.01(f)(4), we have 

held in previous cases that (1) the FAA is a federal law which 

does not specifically relate to the business of insurance; (2) 

§ 25-2602.01(f)(4) is a state statute enacted to regulate the 

business of insurance; and (3) the FAA, if applied, would 

operate to invalidate, impair, or supersede § 25-2602.01(f)(4). 

See, Speece v. Allied Professionals Ins. Co., 289 Neb. 75, 853 

N.W.2d 169 (2014); Kremer v. Rural Community Ins. Co., 

supra. Based on these conclusions, and applying § 1012(b) 

of the McCarran-Ferguson Act, we have concluded under the 

facts of these previous cases that the FAA was reverse preempted by § 25-2602.01(f)(4) but that due to the fact a second federal law relating to insurance was at play in these 

cases, the second federal law ultimately served to preempt 

§ 25-2602.01(f)(4). See, Speece v. Allied Professionals Ins. 

Co., supra; Kremer v. Rural Community Ins. Co., supra. Thus, 
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unless another applicable federal insurance law directly preempts § 25-2602.01(f)(4), agreements to arbitrate future controversies in insurance policies are invalid under Nebraska law. 

Kremer v. Rural Community Ins. Co., supra. See, also, Speece 

v. Allied Professionals Ins. Co., supra. In the instant case, aside 

from our consideration of the FAA and the McCarran-Ferguson 

Act, no other federal law has been proposed which bears 

directly on the RPA. Compare, Speece v. Allied Professionals 

Ins. Co., supra (determining that second federal law, Liability 

Risk Retention Act of 1986, which specifically related to business of insurance, was not reverse preempted by Nebraska antiarbitration law, § 25-2602.01(f)(4), under McCarran-Ferguson 

Act); Kremer v. Rural Community Ins. Co., supra (determining 

that second federal law, Federal Crop Insurance Act, which 

specifically related to business of insurance, was not reverse 

preempted by Nebraska antiarbitration law, § 25-2602.01(f)(4), 

under McCarran-Ferguson Act).

[9,10] AUCRA contends that there is an inherent conflict 

between the FAA and the McCarran-Ferguson Act because the 

latter implicates § 25-2602.01(f)(4). AUCRA asserts that the 

FAA, which generally favors arbitration agreements, trumps 

the other statutes. We believe there is no such conflict. 

Instead, we note that “‘[w]hen two statutes are capable of 

co-existence . . . it is the duty of the courts, absent a clearly 

expressed congressional intention to the contrary, to regard 

each as effective.’” Vimar Seguros y Reaseguros, S. A. v. M/V 

Sky Reefer, 515 U.S. 528, 533, 115 S. Ct. 2322, 132 L. Ed. 

2d 462 (1995) (quoting Morton v. Mancari, 417 U.S. 535, 94 

S. Ct. 2474, 41 L. Ed. 2d 290 (1974)). And courts will harmonize overlapping statutes “so long as each reaches some 

distinct cases.” J. E. M. Ag Supply, Inc. v. Pioneer Hi-Bred 

International, Inc., 534 U.S. 124, 144, 122 S. Ct. 593, 151 L. 

Ed. 2d 508 (2001). Thus, when two federal statutes, each with 

its own scope and purpose and imposing different requirements and protections, complement each other, “it would 

show disregard for the congressional design to hold that 
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Congress nonetheless intended one federal statute to preclude 

the operation of the other.” POM Wonderful LLC v. CocaCola Co., ___ U.S. ___, 134 S. Ct. 2228, 2238, 189 L. Ed. 

2d 141 (2014). Below, we explain that the applicable statutes 

are harmonious.

[11,12] As we read the statutes, there is no conflict between 

the McCarran-Ferguson Act and the FAA, because, although 

the FAA generally favors arbitration, through its savings 

clause—“save upon such grounds as exist at law or in equity 

for the revocation of any contract”—the FAA does not permit 

illegal or invalid agreements to arbitrate to be enforced. See 

9 U.S.C. § 2. It has been held that the FAA’s “saving clause 

permits agreements to arbitrate to be invalidated by ‘generally applicable contract defenses.’” AT&T Mobility LLC v. 

Concepcion, 563 U.S. 333, 339, 131 S. Ct. 1740, 179 L. Ed. 2d 

742 (2011) (quoting Doctor’s Associates, Inc. v. Casarotto, 517 

U.S. 681, 116 S. Ct. 1652, 134 L. Ed. 2d 902 (1996)). Illegality 

and inconsistency with statutorily prescribed public policy 

are widely recognized general contract defenses. Restatement 

(Second) of Contracts § 178(1) at 6 (1981) (“[a] promise or 

other term of an agreement is unenforceable on grounds of 

public policy if legislation provides that it is unenforceable or 

the interest in its enforcement is clearly outweighed in the circumstances by a public policy against the enforcement of such 

terms”). The illegality of an arbitration “agreement concerning 

or relating to an insurance policy” under § 25-2602.01(f)(4) 

would constitute grounds warranting invalidation of that agreement under § 2 of the FAA.

Were we considering a single agreement to arbitrate in an 

“agreement concerning or relating to an insurance policy,” by 

harmonizing the federal statutory framework and ultimately 

applying § 25-2602.01(f)(4), the parties’ arbitration provision 

would not be valid on this basis, and our analysis would end 

here. However, in this case, the issues delegated to the arbitrator in the parties’ agreement encompassed arbitrability itself 

and we must determine whether the court may consider the 
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parties’ assertions regarding the propriety of delegating arbitrability to the arbitrator.

4. Threshold Issue of Arbitrability Is Question

for the Court, Not Arbitrator, When Party

Specifically Challenges Validity

of Delegation Agreement

AUCRA contends that the parties clearly and unmistakably 

agreed to arbitrate threshold issues, including arbitrability, 

and argues that whether § 25-2602.01 applies to invalidate 

any feature of the parties’ arbitration clause is a question of 

enforceability of the arbitration agreement, which the parties reserved for the arbitrator. AUCRA further asserts that 

when considering Citizens’ challenge, we should presume the 

validity of the parties’ broad arbitration agreement, including 

the broad delegation of arbitrability contained in the RPA. 

AUCRA relies primarily on a U.S. Supreme Court decision 

applying the FAA to a delegation provision and which concluded under the facts therein to leave “any challenge to the 

validity of the Agreement as a whole for the arbitrator.” RentA-Center, West, Inc. v. Jackson, 561 U.S. 63, 72, 130 S. Ct. 

2772, 177 L. Ed. 2d 403 (2010).

(a) Delegation of Arbitrability

[13,14] It has been held that unless the parties clearly and 

unmistakably provide otherwise, the question of whether the 

parties agreed to arbitrate is decided by the court, not the arbitrator. AT&T Technologies v. Communications Workers, 475 

U.S. 643, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986). Disputes 

about arbitrability for a court to decide include questions 

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 controversy.’” 

BG Group, PLC v. Republic of Argentina, ___ U.S. ___, 134 S. 

Ct. 1198, 1206, 188 L. Ed. 2d 220 (2014) (quoting Howsam v. 

Dean Witter Reynolds, Inc., 537 U.S. 79, 123 S. Ct. 588, 154 

L. Ed. 2d 491 (2002)). Disputes over “formation of the parties’ 
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arbitration agreement” and “its enforceability or applicability to the dispute” at issue are “matters . . . ‘the court’ must 

resolve.” Granite Rock Co. v. Teamsters, 561 U.S. 287, 299-

300, 130 S. Ct. 2847, 177 L. Ed. 2d 567 (2010).

[15-19] Parties, however, may delegate arbitrability to the 

arbitrator, because “it is up to the parties to determine whether 

a particular matter is primarily for arbitrators or for courts to 

decide.” BG Group, PLC v. Republic of Argentina, 134 S. Ct. 

at 1206. A contractual provision that delegates to the arbitrator 

all questions regarding the scope or enforceability of an arbitration provision is referred to as a “delegation clause.” See, 

e.g., Rent-A-Center, West, Inc. v. Jackson, supra. A delegation 

clause is an agreement to arbitrate a threshold issue and is simply an additional, severable, antecedent arbitration agreement 

the party seeking arbitration asks the court to enforce, and the 

FAA operates on this additional arbitration agreement just as 

it does on any other. Id. The additional delegation agreement, 

like any other arbitration agreement, is valid under the FAA 

except by application of § 2 of the FAA, which invalidates 

such agreements “‘upon such grounds as exist at law or in 

equity for the revocation of any contract.’” Rent-A-Center, 

West, Inc. v. Jackson, 561 U.S. at 70 (quoting 9 U.S.C. § 2). 

Under the FAA, there is a presumption of arbitrability, and any 

doubts are resolved in favor of arbitration. AT&T Technologies 

v. Communications Workers, supra. Under the FAA, if the delegation provision is valid, the validity of the remainder of the 

arbitration contract is for the arbitrator to decide. See Nitro-Lift 

Technologies, L. L. C. v. Howard, 568 U.S. 17, 133 S. Ct. 500, 

184 L. Ed. 2d 328 (2012).

(b) Challenging a Delegation 

of Arbitrability

A presumption that agreements to arbitrate threshold issues 

are valid “does not mean that they are unassailable.” RentA-Center, West, Inc. v. Jackson, 561 U.S. at 71. “If a party 

challenges the validity under § 2 [of the FAA] of the precise 
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agreement to arbitrate at issue, the federal court must consider 

the challenge before ordering compliance with the agreement 

under § 4.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 

at 71. See, also, Nitro-Lift Technologies, L. L. C. v. Howard,

supra. Arbitration is purely a matter of contract. Cornhusker 

Internat. Trucks v. Thomas Built Buses, 263 Neb. 10, 637 

N.W.2d 876 (2002). Delegation agreements, like other agreements to arbitrate, are not “immunize[d] . . . from judicial 

challenge,” because to do so would be to “elevate it over other 

forms of contract.” Prima Paint v. Flood & Conklin, 388 U.S. 

395, 404 n.12, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967). And, 

as we have indicated above, “[a]s the ‘saving clause’ in § 2 [of 

the FAA] indicates, the purpose of Congress . . . was to make 

arbitration agreements as enforceable as other contracts, but 

not more so.” Prima Paint v. Flood & Conklin, 388 U.S. at 

404 n.12.

[20] Two types of validity challenges under § 2 have been 

identified. They are (1) a “‘challenge[] specifically [to] the 

validity of the agreement to arbitrate’” and (2) a challenge 

to “‘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, West, Inc. v. Jackson, 561 U.S. 63, 70, 130 S. 

Ct. 2772, 177 L. Ed. 2d 403 (2010) (quoting Buckeye Check 

Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S. Ct. 1204, 

163 L. Ed. 2d 1038 (2006)). According to the U.S. Supreme 

Court, only the first type of challenge is relevant to a court’s 

determination of a challenged arbitration agreement. See RentA-Center, West, Inc. v. Jackson, supra. A party’s challenge to 

another provision of the contract, or to the contract as a whole, 

does not prevent a court from enforcing a specific agreement 

to arbitrate. Id.

In Rent-A-Center, West, Inc. v. Jackson, 561 U.S. at 71-72, 

the U.S. Supreme Court examined a delegation clause similar 

to that at issue in this case, and stated:
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Here, the “written provision . . . to settle by arbitration 

a controversy,” 9 U.S.C. § 2, that [the employer] asks 

us to enforce is the delegation provision—the provision 

that gave the arbitrator “exclusive authority to resolve 

any dispute relating to the . . . enforceability . . . of this 

Agreement,” . . . Section 2 operates on the specific “written provision” to “settle by arbitration a controversy” that 

the party seeks to enforce. Accordingly, unless [the objector] challenged the delegation provision specifically, we 

must treat it as valid under § 2, and must enforce it under 

§§ 3 and 4, leaving any challenge to the validity of the 

Agreement as a whole for the arbitrator.

[21] In Rent-A-Center, West, Inc. v. Jackson, supra, the 

Court determined that under the FAA, a challenge to a delegation provision must be directed specifically to the delegation before the court will assume authority over the matter. 

In examining the objector’s challenge, the Court determined 

that he had raised his challenge to the delegation provision 

too late in appellate litigation and that thus, the Court would 

not consider it in light of clear contract language delegating 

arbitrability. Id. In the instant case, the district court grounded 

its decision on Rent-A-Center, West, Inc. and determined, inter 

alia, that Citizens’ challenge was directed to the entire arbitration agreement and that due to a lack of specificity, the resolution of the threshold issue of arbitrability was to be arbitrated 

before the arbitrator.

(c) National Litigation of Delegation

We are aware of cases around the country challenging the 

delegation feature of the RPA, inter alia, on the grounds of state 

antiarbitration insurance laws similar to § 25-2602.01(f)(4). 

See, Minnieland Private Day Sc. v. Applied Underwriters, 867 

F.3d 449 (4th Cir. 2017), cert. denied ___ U.S. ___, 138 S. 

Ct. 926, 200 L. Ed. 2d 203 (2018); South Jersey Sanitation v. 

Applied Underwriters, 840 F.3d 138 (3d Cir. 2016); Citizens 

Humanity v. Applied Underwriters, 17 Cal. App. 5th 806, 226 
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Cal. Rptr. 3d 1 (2017); Milmar v. Applied Underwriters, 58 

Misc. 3d 497, 68 N.Y.S.3d 645 (2017); Milan Exp. Co., Inc. 

v. Applied Underwriters Captive Risk Assur. Co., Inc., 590 

Fed. Appx. 482 (6th Cir. 2014); Jade Apparel, Inc. v. United 

Assurance, Inc., No. A-2001-14T1, 2016 WL 5939470 (N.J. 

Super. Oct. 13, 2016) (unpublished opinion); Mountain Valley 

Property, Inc. v. Applied Risk Services, Inc., No. 1:15-CV-187-

DBH, 2016 WL 755614 (D. Me. Feb. 25, 2016) (unpublished 

order); Randazzo Enterprises, Inc. v. Applied Underwriters 

Captive Risk Assurance Company, Inc., No. 5:14-CV-02374-

EJD, 2014 WL 6997961 (N.D. Cal. Dec. 11, 2014) (unpublished order). A circuit split has arisen between the Third 

and Sixth Circuits and the Fourth Circuit in which the Third 

and Sixth Circuits have ordered arbitration and the Fourth 

Circuit has allowed the court to consider a challenge to the 

RPA’s delegation clause. See, Minnieland Private Day Sc. 

v. Applied Underwriters, supra; South Jersey Sanitation v. 

Applied Underwriters, supra; Milan Exp. Co., Inc. v. Applied 

Underwriters Captive Risk Assur. Co., Inc., supra.

Relying primarily on Rent-A-Center, West, Inc. v. Jackson, 

561 U.S. 63, 130 S. Ct. 2772, 177 L. Ed. 2d 403 (2010), as 

did the district court in this case, the Third and Sixth Circuits 

concluded that when a challenge could apply equally to the 

arbitration agreement as a whole and the delegation provision, 

the challenge is not specific to the delegation provision and 

the delegation provision must be enforced. See, South Jersey 

Sanitation v. Applied Underwriters, supra; Milan Exp. Co., Inc. 

v. Applied Underwriters Captive Risk Assur. Co., Inc., supra. 

Based on the reasoning discussed below, and contrary to the 

Third and Sixth Circuits, we favor the approach taken by the 

Fourth Circuit, because it did not erroneously conflate a challenge to the validity of the RPA’s delegation clause and the 

nature of the inquiry necessary to resolve that challenge. See 

Minnieland Private Day Sc. v. Applied Underwriters, supra. 

See, also, Citizens Humanity v. Applied Underwriters, supra; 

Milmar v. Applied Underwriters, supra.
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5. Citizens Specifically Challenges the Validity

of the Agreements to Arbitrate, Including

the Arbitration Provision Delegating

Arbitrability Issues, Distinguishing

This Case From Rent-A-Center, 

West, Inc. v. Jackson

AUCRA contends that this action for declaratory judgment 

is based in substantive law and is a challenge to the entire 

agreement to arbitrate. Given the record, we reject this contention. Instead, we read Citizens’ challenge in its amended 

complaint and in oral arguments at the district court to be a 

sufficiently specific challenge to the validity of the delegation 

clause under Rent-A-Center, West, Inc. v. Jackson, supra, and 

a challenge which should have been considered by the district court.

As noted above, in Rent-A-Center, West, Inc. v. Jackson, 

561 U.S. at 73, an employee challenged “‘the entire agreement’” as unconscionable and did not raise a more specific 

challenge to the delegation provision until later on appeal. 

(Emphasis in original.) In contrast, Citizens’ amended complaint addressed the RPA’s arbitration provisions in addition 

to the underlying RPA. Paragraph 32 alleges: “[AUCRA] 

cannot compel [Citizens] to arbitrate because the RPA is 

governed by Nebraska law and under Nebraska law, specifically Neb. Rev. Stat. § 25-2602.01(f)(4), mandatory arbitration 

provisions . . . are . . . unenforceable.” In its prayer for relief, 

Citizens requested the court to “declare that there is no valid 

and enforceable agreement to arbitrate the parties’ dispute.” 

The parties’ dispute, according to the amended complaint, 

included whether Citizens could be compelled to arbitrate. 

At the hearing on AUCRA’s motion to stay pending arbitration, Citizens made clear at the trial level that its challenge 

to arbitration included the delegation of arbitrability. Contrary 

to the type of challenge made in Rent-A-Center, West, Inc. 

v. Jackson, supra, here, Citizens specifically challenges the 

validity of the arbitration clauses, including the arbitration 
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provision which delegates arbitrability to the arbitrator, based 

on § 25-2602.01(f)(4).

[22] As part of resolving Citizens’ challenge, we must inquire 

whether the RPA’s delegation clause could be enforced under 

Nebraska law. However, this additional inquiry necessary to 

address Citizens’ challenge does not make it a challenge to the 

entire agreement. A court must consider a contract as a whole 

and, if possible, give effect to every part of the contract. Brozek 

v. Brozek, 292 Neb. 681, 874 N.W.2d 17 (2016). At paragraph 

16 of the RPA, the parties chose to apply Nebraska law, including Nebraska’s Uniform Arbitration Act and necessarily the 

antiarbitration provision in § 25-2602.01(f)(4). We must apply 

the Nebraska choice-of-law provision to the challenge to the 

delegation clause in order to determine whether the delegation clause could be enforced. See, also, Citizens Humanity 

v. Applied Underwriters, 17 Cal. App. 5th 806, 226 Cal. Rptr. 

3d 1 (2017). Compare Pinela v. Neiman Marcus Group, Inc., 

238 Cal. App. 4th 227, 190 Cal. Rptr. 3d 159 (2015). In this 

regard, we note that an arbitration agreement contrary to policy 

and unenforceable under statute is just as unenforceable as 

any other illegal contract that is contrary to public policy. See 

Prima Paint v. Flood & Conklin, 388 U.S. 395, 87 S. Ct. 1801, 

18 L. Ed. 2d 1270 (1967). The unenforceability of a contract 

which is contrary to public policy is a “generally applicable” 

doctrine, not one specifically applied to disfavor arbitration. 

AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341, 131 S. 

Ct. 1740, 179 L. Ed. 2d 742 (2011).

Even though resolving Citizens’ challenge may require this 

court to ask whether the RPA includes an “agreement concerning or relating to an insurance policy” under § 25-2602.01(f)(4), 

this inquiry does not transform the § 25-2602.01(f)(4) challenge into one implicating the RPA as a whole under RentA-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S. Ct. 

2772, 177 L. Ed. 2d 403 (2010). See Milmar v. Applied 

Underwriters, 58 Misc. 3d 497, 68 N.Y.S.3d 645 (2017). 

Compare South Jersey Sanitation v. Applied Underwriters, 
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840 F.3d 138 (3d Cir. 2016). Citizens’ challenge to arbitration based on the preemptive effect of the McCarran-Ferguson 

Act and § 25-2602.01(f)(4) goes to the validity of the arbitration agreement, including its arbitration provision delegating arbitrability, but not the validity of the RPA as a whole. 

See, Rent-A-Center, West, Inc. v. Jackson, supra; Milmar v. 

Applied Underwriters, supra. See, also, Minnieland Private 

Day Sc. v. Applied Underwriters, 867 F.3d 449 (4th Cir. 2017), 

cert. denied ___ U.S. ___, 138 S. Ct. 926, 200 L. Ed. 2d 203 

(2018); Citizens Humanity v. Applied Underwriters, supra. 

Under Rent-A-Center, West, Inc. v. Jackson, supra, where 

properly presented, the court must consider the threshold arbitrability issue before it can order arbitration. See, also, NitroLift Technologies, L. L. C. v. Howard, 568 U.S. 17, 133 S. Ct. 

500, 184 L. Ed. 2d 328 (2012). The district court erred when it 

failed to inquire about arbitrability.

6. The RPA Is an “[A]greement [C]oncerning

or [R]elating to an [I]nsurance [P]olicy” 

and Does Not Evade Application of

§ 25-2602.01(f)(4) or Fall Into

Any of Its Exceptions

Having concluded that Citizens lodged a specific challenge against the validity of the delegation provision as contrary to the antiarbitration provision in § 25-2602.01(f)(4), 

we next consider whether the RPA is within the scope of that 

provision. Although AUCRA attempts to evade the ambit of 

§ 25-2602.01(f)(4) by asserting that the RPA is not an insurance policy, we note that § 25-2602.01(f)(4) requires us to 

determine only whether the RPA is an “agreement concerning 

or relating to an insurance policy.” The phrase “relating to” 

is to be read broadly and should be interpreted as being comprehensive of the subject indicated. Central States Found. v. 

Balka, 256 Neb. 369, 590 N.W.2d 832 (1999).

We note that in South Jersey Sanitation v. Applied 

Underwriters, supra, the Third Circuit considered our dicta 
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from Kremer v. Rural Community Ins. Co., 280 Neb. 591, 788 

N.W.2d 538 (2010), discussing the insurance policies there at 

issue and determined that our comment suggested that application of § 25-2602.01(f)(4) was limited to agreements in 

insurance policies. But such an interpretation would render the 

words “concerning or relating to an insurance policy” meaningless. See § 25-2602.01(f)(4). The whole and every part of 

a statute must be considered in fixing the meaning of any of 

its parts. In re Estate of Evertson, 295 Neb. 301, 889 N.W.2d 

73 (2016). Under the Nebraska statute, whether or not the RPA 

is itself an insurance policy is not the determinative inquiry; 

§ 25-2602.01(f)(4) applies to agreements which merely are 

“concerning or relating to” insurance. Compare, Minnieland 

Private Day Sc. v. Applied Underwriters, supra (remanding 

factual question of whether RPA was “insurance contract” 

under language of Virginia antiarbitration law); Minnieland 

Private Day Sch., Inc. v. AUCRA, No. 1:15-cv-01695AJT-IDD 

(E.D. Va. Nov. 9, 2017) (unpublished order) (concluding upon 

remand as matter of law that RPA is insurance contract).

Notwithstanding the obvious facts, described in our 

“Statement of Facts” section and repeated below, showing that 

the RPA is an “agreement concerning or relating to an insurance policy,” AUCRA contends that the RPA is reinsurance and 

is a “contract between insurance companies including a reinsurance contract,” and therefore excepted from the antiarbitration import of § 25-2602.01(f)(4). As discussed above, the RPA 

has the hallmarks of a retrospective rating plan, albeit achieving that similarity through an unusual contractual arrangement. 

Despite its billing as a “Reinsurance Participation Agreement,” 

the RPA is a mandatory component of a program of workers’ compensation insurance and sold with a minimum 3-year 

term to add a retrospective pricing feature into a guaranteed 

cost insurance policy. See, e.g., 5 Steven Plitt et al., Couch on 

Insurance 3d § 69:16 (2012).

The fact that the RPA references a “Reinsurance Treaty,” 

or an additional contract between AUCRA and its affiliated 
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workers’ compensation insurers, does not for purposes of this 

case convert the RPA into a “reinsurance contract” “between 

insurance companies” even if the affiliated insurers participate in a pooling arrangement and act as billing agents for 

the EquityComp program. See § 25-2602.01(f)(4). Citizens is 

not an insurer, see Neb. Rev. Stat. § 44-102 (Reissue 2010), 

and the RPA between Citizens and AUCRA is not reinsurance, 

see Neb. Rev. Stat. § 44-103(16) (Reissue 2010). The RPA 

was not executed between insurance companies. Contrary 

to AUCRA’s assertion, the RPA is therefore not “a reinsurance contract” nor “between insurance companies” under 

§ 25-2602.01(f)(4). We decline here to characterize the RPA 

as reinsurance, and, as reflected in other cases, we are not 

alone in rejecting AUCRA’s varied characterizations of its 

agreement. See, Citizens Humanity v. Applied Underwriters, 

17 Cal. App. 5th 806, 820, 226 Cal. Rptr. 3d 1, 11 (2017) 

(taking judicial notice of 2016 consent order entered into by 

California Insurance Company and California Department of 

Insurance defining term “RPA” as “‘ancillary or collateral to 

a guaranteed cost workers’ compensation insurance policy that 

covers claims by California workers’”); Milmar v. Applied 

Underwriters, 58 Misc. 3d 497, 68 N.Y.S.3d 645 (2017) (concluding RPA concerns or relates to insurance); Minnieland 

Private Day Sch., Inc. v. AUCRA, supra (determining RPA is 

insurance contract).

[23] Above, we noted the extensive relationship between the 

RPA and affiliated policies of workers’ compensation insurance throughout the marketing and sale of the EquityComp 

program, its billing, the creation of a cell in which insurance 

premiums would be placed, and a retrospective rate pricing feature drawn from the insureds’ workers’ compensation 

claims. The RPA was an integral part of the EquityComp 

program, which provided workers’ compensation insurance 

to Citizens. We conclude that the RPA is an “agreement concerning or relating to an insurance policy other than a contract between insurance companies including a reinsurance 
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contract” and that thus, § 25-2602.01(f)(4) applies. Because 

the RPA is within the ambit of Nebraska’s antiarbitration 

statute, § 25-2602.01(f)(4), whereunder certain agreements to 

arbitrate are prohibited, the RPA arbitration provision which 

delegates arbitrability is an invalid agreement. Accordingly, 

the trial court erred when it granted AUCRA’s motion to 

stay the court case so that an arbitrator could decide issues 

of arbitrability.

VI. CONCLUSION

In this case, we examine only the district court’s decision 

enforcing the delegation clause in the RPA which had the 

effect of referring the issue of arbitrability to the arbitrator. 

Even if Citizens was required to challenge the delegation 

clause of the RPA under a discrete and specific standard used 

in the FAA, Citizens properly challenged the validity of the 

delegation of arbitrability. Giving full effect to the parties’ 

choice of Nebraska law, we harmonize the FAA in conjunction with the McCarran-Ferguson Act and § 25-2602.01(f)(4) 

and conclude that state law regulating the business of insurance is not preempted by the FAA. Section 25-2602.01(f)(4) 

invalidates the parties’ delegation provision in the RPA and 

operates here to reserve issues of arbitrability for the court 

to decide. The district court should have considered Citizens’ 

challenge to the validity of delegating arbitrability to the 

arbitrator. See Neb. Rev. Stat. § 25-2603(b) (Reissue 2016). 

Having concluded that questions of arbitrability should have 

been determined by the district court, not an arbitrator, we 

reverse the district court’s ruling that the issue of arbitrability 

was delegated to the arbitrator and remand the cause for further proceedings, including the enforceability of the remainder 

of the arbitration provision.

 Reversed and remanded for

further proceedings.

Kelch, J., not participating in the decision.

Wright, J., not participating.