Opinion ID: 213655
Heading Depth: 2
Heading Rank: 1

Heading: Arbitration Law

Text: A party seeking to compel arbitration under the FAA must demonstrate that a valid agreement to arbitrate exists, that the movant is entitled to invoke the arbitration clause, that the other party is bound by that clause, and that the claim asserted comes within the clause's scope. InterGen N.V. v. Grina, 344 F.3d 134, 142 (1st Cir.2003). Whether or not a dispute is arbitrable is typically a question for judicial determination. See Granite Rock, 130 S.Ct. at 2855 (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002)). Therefore, except where the parties clearly and unmistakably provide otherwise, it is the court's duty to interpret the agreement and to determine whether the parties intended to arbitrate grievances concerning a particular matter. [8] Granite Rock, 130 S.Ct. at 2858 (internal citation and quotation marks omitted); see also First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944-45, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). On the other hand, `procedural questions which grow out of the dispute and bear on its final disposition' are presumptively not for the judge, but for an arbitrator, to decide. Howsam, 537 U.S. at 84, 123 S.Ct. 588 (quoting John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964)). In addition, it is also presumed under federal law that the arbitrator should decide `allegation[s] of waiver, delay, or a like defense to arbitrability.' Id. (alteration in original) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)). Whether or not the parties have agreed to submit a certain dispute to arbitration depends on contract interpretation, which is a question of law. Combined Energies v. CCI, Inc., 514 F.3d 168, 171 (1st Cir.2008) (citation and internal quotation marks omitted). The FAA reflects the fundamental principle that arbitration is a matter of contract. Rent-A-Center, 130 S.Ct. at 2776. Therefore, the first principle that underscores all of the Supreme Court's arbitration decisions is that [a]rbitration is strictly a matter of consent, and thus is a way to resolve those disputes  but only those disputes  that the parties have agreed to submit to arbitration. Granite Rock, 130 S.Ct. at 2857 (emphasis in original) (citations and internal quotation marks omitted). While applying this principle, the Supreme Court has stated that courts should order arbitration of a dispute only where the court is satisfied that neither the formation of the parties' arbitration agreement nor (absent a valid provision specifically committing such disputes to an arbitrator) its enforceability or applicability to the dispute is in issue. Where a party contests either or both matters, the court must resolve the disagreement. Id. at 2857-58 (emphasis in original) (citations and internal quotation marks omitted). When deciding whether the parties agreed to arbitrate a certain matter. . ., courts generally . . . should apply ordinary state-law principles that govern the formation of contracts. First Options, 514 U.S. at 944, 115 S.Ct. 1920. In carrying out this endeavor, `due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration.' Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995) (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 476, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)). See also PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 15 (1st Cir.2010) (noting that federal law undeniably includes a policy favoring arbitration (citing Volt, 489 U.S. at 475-76, 109 S.Ct. 1248)). As the Supreme Court recently clarified in Granite Rock, courts discharge this duty by: (1) applying the presumption of arbitrability only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand; and (2) adhering to the presumption and ordering arbitration only where the presumption is not rebutted. 130 S.Ct. at 2858-59; see also IOM Corp. v. Brown Forman Corp., 627 F.3d 440, 450 (1st Cir.2010) (In evaluating the scope of . . . arbitration clauses, . . . arbitration will be ordered unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. (citation and internal quotation marks omitted)). Thus, where the court is persuaded that the parties' arbitration agreement was validly formed and that it cover[s] the dispute in question and [is] legally enforceable, Granite Rock, 130 S.Ct. at 2858 (emphasis added), and that the arbitration agreement is not otherwise subject to revocation upon such grounds as exist at law or in equity for the revocation of any contract, 9 U.S.C. § 2, Section 2 of the FAA requires that the court submit the dispute in question to arbitration. In Prima Paint, the Supreme Court addressed a situation where, although the respective arbitration clause clearly encompassed the dispute in question (i.e., whether a consulting agreement was void because of fraud in the inducement) and thus the scope of the arbitration clause was not at issue, a party nevertheless refused to enforce the arbitration clause on the ground that the nullity of the consulting agreement caused the arbitration clause included therein to also be null. Prima Paint, 388 U.S. at 398, 87 S.Ct. 1801. The Court applied the FAA and concluded that, because the parties did not specifically challenge the validity of the arbitration clause itself (e.g., no claim was advanced that the arbitration clause itself was fraudulently induced), the arbitration clause was severable from the consulting agreement and had to be enforced. The Supreme Court has subsequently reaffirmed this severability requirement in various cases. See, e.g., Rent-A-Center, 130 S.Ct. at 2778, Preston, 552 U.S. at 353-54, 128 S.Ct. 978, Buckeye, 546 U.S. at 447-49, 126 S.Ct. 1204. More recently, the Court explained that these cases simply appl[y] the requirement in § 2 of the FAA that courts treat an arbitration clause as severable from the contract in which it appears and enforce it according to its terms unless the party resisting arbitration specifically challenges the enforceability of the arbitration clause itself, or claims that the agreement to arbitrate was [n]ever concluded. Granite Rock, 130 S.Ct. at 2858 (second alternation in original) (citation and internal quotation marks omitted); see also Buckeye, 546 U.S. at 448, 126 S.Ct. 1204 (noting that the question of whether or not the arbitration clause is severable does not depend on whether the challenge at issue would render the contract as a whole voidable or void).