## United States Court of Appeals
FOR THE EIGHTH CIRCUIT

___________
No. 08-2437

___________ Jan Fallo; Pamela Epperson; Laura * Muehlan; Verne Anderson; Amy * Clark; Yulanda Diamond; Monica * Licklider; Latonya Love; Mary * McNurlin; Jessica Richardson; * Kisha Robinson; Patricia * Stuteville; Zach Green; Dene Beck; * Carrie Boyer; Jamika Brewer; * Yulanda Boyd; Kelly Brewster; * Kristeena Cloud; Jenna Edelen; * LaToya Hardin; Tameila Hardley; * Tynesha Hooker; Luctoine * Jean-Philippe; Barbara Johnson; * Appeal from the United States DeAndre Johnson; Alonzo Jones; * District Court for the Margie Kelley; Diane Mitchell; * Western District of Missouri. Marina Paltsmakher; Lectura * Sanders; Deannia Sherman; * Lindsay Sims; Tammy Simsheuser; * Mary Surridge; Dawn Williams- * Kleoppel; Peggy Wilson; Linda * Womack, *

* Appellees, *

* v. *

* High-Tech Institute, * * Appellant. *

___________-2- Submitted: January 13, 2009 Filed: March 24, 2009

___________ Before BYE, COLLOTON and GRUENDER, Circuit Judges.

___________ GRUENDER, Circuit Judge.

Thirty-eight current and former student s filed suit against High-Tech Institute (“High-Tech”). High-Tech m oved to compel arbitration, arguing that an arbitrator should determine whether the students’ tortclaims were within the scope of the arbitration provision in the students’ enrollm ent agreements. The district court held that it had the authority to determine the que stion of arbitrability, that the arbitration provision did not cover the students’ tort claims, and that High-Tech’s motion to compel arbitration should be denied. High-Tech appeals, and for the reasons discussed below, we reverse.

I. BACKGROUND

On October 25, 2007, thirteen current a nd former students filed suit against High-Tech, a for-profit voca tional school, in the Circuit Court of Jackson County, Missouri. The complaint alleged th at High-Tech engaged in fraudulent misrepresentation, violated the Missour i Merchandising Practices Act, negligently trained and supervised employees, and breached the enrollment agreement it had entered into with each student. High-Tech removed the case to fe deral district court under 28 U.S.C. § 1332. High-Techthen moved to compel arbitration pursuant to the arbitration clause contained in the enro llment agreement and to stay the judicial proceedings. The arbitration clause in the enrollment agreement states:

Any controversy or claim arising out of or relating to this Agreement, or breach thereof, no matter how pleaded or styled, shall be settled by-3- arbitration in accordance with the Commercial Rules of the American Arbitration Association at Kansas City, Missouri, and judgment upon the award rendered by the Arbitrator ma y be entered in any court having jurisdiction.

The enrollment agreement also contains a separate provision concerning governing law, which provides:

The laws of the State of Missouri sh all govern this Agreement. Should the School institute proceedings for monies due from the Student for services provided, the Student sha ll pay all costs, including reasonable attorneys fees, court costs and collection fees, incurred by the School.

The district court granted in part a nd denied in part High-Tech’s motion to compel arbitration, finding that the arbitration clause was not unconscionable and that the arbitration provision required only the students’ breach of contract claim to be submitted to arbitration. Th e district court also stayed judicial proceedings pending the outcome of arbitration on the breach of contract claim. The students then voluntarily dismissed their breach of contr act claim and filed an amended complaint, which added twenty-five plaintiffs and incl uded only the three tort claims. High-Tech filed a second motion to compel arbitrati on and to continue the stay of judicial proceedings. High-Tech argued that the que stion of arbitrability should be determined by an arbitrator, rather than the district court, and, alternatively, that the arbitration provision requires arbitration of the tort claims.

The district court denied High-Tech’s second motion, holding that it had the authority to decide the question of arb itrability because the parties did not clearly agree to leave the arbitrability issue to an arbitrator. The court then found that the arbitration provision did not compel arbitration of the students’ three tort claims. High-Tech appeals, arguing that the district court erred in determining that it had the authority to decide the question of arbitr ability. High-Tech also argues that even if-4- the district court correctly answered the question of arbitrability, it erred in finding that the arbitration provision did not cover the students’ tort claims.

II. DISCUSSION

We first address High-Tech’s argument that the district court erred by determining that it had the authority to d ecide the threshold question of arbitrability of the students’ tort claims. We review de novo a district court’s decision to deny a motion to compel arbitration. EEOC v. Woodmen of the World Life Ins. Soc’y , 479 F.3d 561, 565 (8th Cir. 2007). “Just as the arbitrability of the me rits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question ‘who has the primary power to decide arbitrab ility’ turns upon what the parties agreed about that matter.” First Options of Chi., Inc. v. Kaplan , 514 U.S. 938, 943 (1995) (internal citations omitted). Courts should not find thatparties agreed to arbitrate the question of arbitrability “[u]nless the parties clear ly and unmistakably provide otherwise.” AT & T Techs., Inc. v. Co mmc’ns Workers of Am. , 475 U.S. 643, 649 (1986). Thus, we must determine whether the parties to the enrollment agreement “clearly and unmistakably” intended for an arbitrator to determine the question of arbitrability.

The arbitration provision in the enrollm ent agreement states that disputes arising out of the enrollment agreement “s hall be settled by arbitration in accordance with the Commercial Rules of the American Arbitration Association [‘AAA Rules’].” High-Tech argues that the provision’s inco rporation of the AAA Rules clearly and unmistakably demonstrates that the parties intended to arbitrate the question of arbitrability because Rule 7(a) of the AAA Rules provides that arbitrators determine their own jurisdiction.

We have not “directly addressed the e ffect of the AAA jurisdictional rule on arbitrability disputes.” Express Scripts, Inc. v. Aegon Direct Mktg. Servs., Inc. , 516 F.3d 695, 701 (8th Cir. 2008). However, we have previously addressed the effect of-5- incorporating the National Association of Securities Dealers (“NASD”) Code’s jurisdictional rule. FSC Secs. Corp. v. Freel , 14 F.3d 1310, 1312-13 (8th Cir. 1994). Section 35 of the NASD Code, at issue in FSC , provides that arbitrators have the authority to “interpret and determine the applicability of all provisions under [the NASD] Code.” Id. at 1312. This court held that the parties’ incorporation of the NASD Code included an adoption of Secti on 35 and was a “‘clear and unmistakable’ expression of [the parties’] intent to leave the question of arbitrability to the arbitrators.” Id. at 1312-13.

The act of incorporating Rule 7(a) of the AAA Rules provides even clearer evidence of the parties’ intent to leave th e question of arbitrability to the arbitrator than does the act of incorporating Secti on 35 of the NASD Code because Rule 7(a) expressly gives the arbitrator “the power to rule on his or her own jurisdiction.” Consequently, we conclude that the arb itration provision’s incorporation of the AAA Rules, like the incorporation of the NASD Code in FSC , constitutes a clear and unmistakable expression of the parties’ intent to leave the question of arbitrability to an arbitrator. See FSC , 14 F.3d at 1312. Most of oursister circuits that have considered this issue agree with our c onclusion that an arbitration provision’s incorporation of the AAA Rules—or other rules giving arbitrators the authority to determine their own jurisdiction—is a cl ear and unmistakable expression of the parties’ intent to reserve the question of arbitrability for the arbitrator and not the
court. See, e.g.
, Qualcomm Inc. v. Nokia Corp ., 466 F.3d 1366, 1373 (Fed. Cir. 2006); Terminix Int’l Co. v. Palmer Ranch LP , 432 F.3d 1327, 1332 (11th Cir. 2005); Contec Corp. v. Remote Solution Co. , 398 F.3d 205, 208 (2d Cir. 2005); Apollo Computer, Inc. v. Berg , 886 F.2d 469, 472-73 (1st Cir. 1989). But see Riley Mfg. Co. v. Anchor Glass Container Corp. , 157 F.3d 775, 780 (10th Cir. 1998) (finding that the parties did not specifically intend to submit the question of arbitrability to an arbitrator despite a reference to the AAA Rule s in the arbitration provision).-6- The students raise several arguments in support of the district court’s decision to deny High-Tech’s motion to compel arbitr ation of their tort claims. First, the students argue that the arbitration pr ovision is unconscionable and therefore unenforceable. Under Missouri law, “[u]nconscionab ility has two aspects: procedural unconscionability and substantive unconscionability.” State ex rel. Vincent v. Schneider , 194 S.W.3d 853, 858 (Mo. 2006). “ Procedural unconscionability deals with the formalities of making the contract , while substantive unconscionability deals with the terms of the contract itself.” Id.

The students contend that the arbitrati on clause is procedurally unconscionable because the arbitration provision appeared infine print on the back of the contract, there was no negotiation between the partie s concerning arbitration, and High-Tech was in a superior bargaining position. Th e enrollment agreement, however, consisted of a single sheet of paper printed on both side s that set out basic terms, such as tuition and other fees, course and graduation re quirements, transferring and termination options, and refund and leave of absence po licies. The arbitration provision was not hidden in unreadable fine prin t among these other terms. See id . (explaining that one aspect of procedural unconscionability include s “unreadable fine print”). Moreover, the students presented no evidence that High- Tech used high-pressure sales tactics to coerce them into signing th e enrollment agreement. See id. Although High-Tech may have been in a superior bargaining positi on, the contract terms were clear, and a reasonable person could expect that disputes would be arbitrated. See Swain v. Auto Servs., Inc. , 128 S.W.3d 103, 107-08 (Mo. Ct. App. 2003). Therefore, we agree with the district court that the arbitration clause is not procedurally unconscionable. Because we find no procedural unconscionability , we need not reach the substantive unconscionability question. See Whitney v. Alltel Commc’ns, Inc. , 173 S.W.3d 300, 308 (Mo. Ct. App. 2005) (“Generally ther e must be both procedural and also substantive unconscionability before a c ontract or clause can be voided.”); cf. Kan. City Urology, P.A. v. United Healthcare Servs. , 261 S.W.3d 7, 15 (Mo. Ct. App.-7- 2008) (reversing the trial court’s finding of unconscionability where it found only substantive unconscionability and not procedural unconscionability).

Next, the students contend that even if the arbitration provision is enforceable, the district court correctly determined thatit had the authority to decide the question of arbitrability. The students argue that the governing law provision of the enrollment agreement requires the application of Miss ouri law, which states that a court must determine the question of arbitrability as a matter of law. See Dunn Indus. Group, Inc. v. City of Sugar Creek , 112 S.W.3d 421, 428 (Mo. 2003) . However, the Supreme Court has held that an arbitration pr ovision’s incorporation of the AAA Rules supersedes a choice-of-law provision contained in the same agreement. Preston v. Ferrer , 552 U.S. ---, 128 S. Ct. 978, 989 (2008) (explaining that the “‘best way to harmonize’ the parties’ adoption of the AAA Rules and their selection of California law is to read the latter to encompass prescriptions governing the substantive rights and obligations of the partie s, but not the State’s ‘special rules limiting the authority of arbitrators’” (quoting Mastrobuono v. Shearson Lehman Hutton, Inc. , 514 U.S. 52, 63-64 (1995))). Thus, the arbitration provision’s incorporation of the AAA Rules supersedes Missouri law regarding the question of arbitrability.

Finally, the students argue that the gove rning law provision conflicts with the arbitration provision, thereby undermining th e conclusion that the parties intended to authorize an arbitrator to determine the que stion of arbitrability. In particular, the students argue that the reference to “c ourt costs” conflicts with a clear and unmistakable intent to arbitrate. However, after participating in arbitration, a party may seek to have the arbitrator’s order c onfirmed, modified or vacated in a court, thereby incurring court costs. See, e.g.
, Crawford Group, Inc. v. Holekamp , 543 F.3d 971, 976 (8th Cir. 2008). Thus, the govern ing law provision’s reference to “court costs” is not inconsistent w ith a clear and unmistakable in tent to arbitrate because it merely provides that High-Tech may recover court costs in the event that one of the parties files a post-arbitration action in court. See Wildflower Cmty. Ass’n v.1 As a result, we need not reach High- Tech’s alternative argument that the district court erred in finding that the stude nts’ tort claims were not within the scope of the arbitration provision. -8- Rinderknecht , 25 S.W.3d 530, 534 (Mo. Ct. App. 2000) (explaining that “[e]ach provision [of a contract] is construed inharmony with the others to give each provision a reasonable meaning and avoid an interpretation that renders some provisions useless”). The students furthe r contend that the governing law provision’s statement that the “Student shall pay all costs, including reasonable attorneys fees” conflicts with AAA Rule 43. See AAA Rule 43(d)(ii) (providing that an arbitrator may award attorneys’ fees in certain circ umstances, including when authorized by the arbitration agreement). We see no conf lict between the governing law provision and AAA Rule 43(d)(ii) because the enrollment agreement inthis case contains the arbitration clause and expressly authorizes an award of attorneys’ fees. Thus, the governing law provision does not undermine our conclusi on that the parties had a clear and unmistakable intent to arbitrate.

We find that the district court erred when it held that it had the authority to determine the question of arbitrability becau se the parties’ incorporation of the AAA Rules is clear and unmistakable evidence thatthey intended to allow an arbitrator to answer that question. 1 Accordingly, we conclude th at the district court erred in denying High-Tech’s motion to compel arbitration and to continue the stay of judicial proceedings. See 9 U.S.C. § 3 (stating that a court “shall on application of one of the parties stay the trial of the action until . . . arbitration has been had in accordance with the terms of the agreement”).

III. CONCLUSION

For the foregoing reasons, we reverse a nd remand to the district court with instructions to enter an order granting Hi gh-Tech’s motion to co mpel arbitration and continue the stay of judicial proceedings.

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