Court Opinion

ID: 4438150
Source: CourtListenerOpinion
Date Created: 2019-09-13 17:00:19.183854+00
Date Added: 2024-06-11T09:24:50.214519
License: Public Domain

PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
               ________________

                     No. 18-3567
                  ________________

IN RE: REMICADE (DIRECT PURCHASER) ANTITRUST
                  LITIGATION

  JOHNSON & JOHNSON; JANSSEN BIOTECH, INC.,
                                        Appellants
      ____________________________________

     On Appeal from the United States District Court
        for the Eastern District of Pennsylvania
              (E.D. Pa. No. 2-18-cv-00303)
       District Judge: Honorable J. Curtis Joyner
      ____________________________________

                 Argued on July 9, 2019
                     ___________

 Before: SHWARTZ, KRAUSE, and FUENTES, Circuit
                    Judges

          (Opinion filed: September 13, 2019)
Ashley E. Bass
Covington & Burling
850 10th Street, N.W.
One City Center
Washington, DC 20001

William F. Cavanaugh, Jr. [Argued]
Adeel A. Mangi
Sara A. Arrow
Patterson Belknap Webb & Tyler
1133 Avenue of the Americas
New York, NY 10036

Leslie E. John
Burt M. Rublin
Ballard Spahr
1735 Market Street
51st Floor
Philadelphia, PA 19103

      Counsel for Appellants

David F. Sorensen [Argued]
Andrew C. Curley
Zachary D. Caplan
Berger Montague
1818 Market Street
Suite 3600
Philadelphia, PA 19103

                               2
Daniel J. Walker
Berger Montague
2001 Pennsylvania Avenue NW
Suite 300
Washington, DC 20006

Archana Tamoshunas, Esq.
Taus Cebulash & Landau
80 Maiden Lane
Suite 1204
New York, NY 10038

       Counsel for Appellee

                  ______________________

                 OPINION OF THE COURT
                 ______________________

KRAUSE, Circuit Judge.

        Johnson & Johnson and its subsidiary Janssen Biotech,
Inc. appeal the District Court’s denial of their motion to compel
arbitration of federal antitrust claims asserted by Rochester
Drug Cooperative (RDC) on the ground that those claims fall
within the scope of an agreement to arbitrate all claims “arising
out of or relating to” a distribution contract between them. We
conclude that RDC’s antitrust claims, which allege that
Johnson & Johnson and Janssen Biotech’s anticompetitive
conduct caused RDC to pay artificially inflated prices for
products purchased under the distribution contract, do “arise
out of or relate to” the distribution contract. Accordingly, we

                               3
will reverse and remand for the District Court to refer the
matter to arbitration.

I.    Background

       RDC is a direct purchaser and wholesaler of Remicade,
the brand name of infliximab, which is a “biologic infusion
drug”1 manufactured by Johnson & Johnson and Janssen
Biotech (J&J) and used to treat inflammatory conditions such
as rheumatoid arthritis and Crohn’s disease. For many years,
Remicade was the only infliximab drug on the market, but that
position was threatened when the Food and Drug
Administration (FDA) began approving “biosimilars” of
Remicade—that is, drugs produced by other companies that
have been deemed by the FDA to have no clinically meaningful
differences from Remicade. The thrust of RDC’s allegations
is that J&J sought to maintain Remicade’s monopoly by
engaging in an anticompetitive scheme referred to as a
“Biosimilar Readiness Plan” (Plan), which consisted of, inter
alia, (1) “[i]mposing biosimilar-exclusion contracts on
insurers that either [i] require insurers to deny coverage for
biosimilars altogether or [ii] impose unreasonable
preconditions . . . governing coverage”; (2) “[m]ulti-product
bundling of J&J’s Remicade with other J&J drugs, biologics,
and medical devices”; and (3) “[e]xclusionary agreements and
bundling arrangements with healthcare providers similar to
those entered into with insurers.” JA 100.

      1
         RDC Br. 3. A biologic drug is one “derived from
natural, biological sources.” Id. at 3 n.9 (citation omitted).

                              4
       To be clear, RDC’s own contractual relationship with
J&J is limited to a 2015 Distribution Agreement (Agreement),2
which is not alleged to be part of J&J’s Plan. The Agreement
establishes RDC as an “Authorized Distributor of Record” and
sets out various logistical obligations for its distribution of
J&J’s pharmaceutical products, including Remicade. JA 169.
While the Agreement does not specify an exact purchase price
for Remicade, it does provide that J&J “will sell Products to
the Distributor at the applicable Product’s Wholesale
Acquisition Cost (the ‘WAC’ or ‘List Price’).” JA 172.

       The Agreement also contains a “Dispute Resolution”
term (i.e., arbitration clause), which provides, in pertinent part:

       4.21 Dispute Resolution. (a) Any controversy or
       claim arising out of or relating to this agreement
       (including without limitation any controversy or
       claim involving the parent company,
       subsidiaries, or affiliates under common control
       of the Company or the Distributor (a
       “Dispute”)), shall first be submitted to mediation
       according to the Commercial Mediation
       Procedures of the American Arbitration
       Association (“AAA”) . . . .

       (b) Any Dispute that cannot be resolved by
       mediation within 45 days . . . shall be resolved
       by arbitration in accordance with the
       Commercial Arbitration Rules of the AAA . . .

       2
         The Agreement was executed between RDC and JOM
Pharmaceuticals Inc., a J&J entity that handles J&J’s
distribution contracts.

                                5
       and the Federal Arbitration Act, 9 U.S.C. §1 et
       seq.

JA 188.

        RDC brought claims under Sections 1 and 2 of the
Sherman Act based on J&J’s alleged anticompetitive conduct,
and J&J moved to compel arbitration on the basis that those
claims “aris[e] out of or relat[e] to” the Agreement. The
District Court denied J&J’s motion on the ground that RDC’s
antitrust claims are not arbitrable because they “are separate
from, and cannot be resolved based on,” the Agreement. In re
Remicade Antitrust Litig., No. 18-cv-00303, 2018 WL
5314775, at *8 (E.D. Pa. Oct. 26, 2018) (alterations in
original). In so concluding, the District Court relied heavily on
this Court’s decision in CardioNet, Inc. v. Cigna Health Corp.,
751 F.3d 165 (3d Cir. 2014), where we explained—in the
context of a clause providing for arbitration of disputes
“regarding the performance or interpretation of the
Agreement”—that whether the plaintiff’s claims were within
the scope of the clause depended on whether “the claims at
issue relate to the performance or interpretation of the
Agreement.” Id. at 174–75. Although the arbitration clause in
this case used significantly broader language, the District Court
reasoned that RDC’s antitrust claims likewise “did not arise
from the Agreement [with J&J],” In re Remicade Antitrust
Litig., 2018 WL 5314775, at *8, because “whether [J&J]
performed its obligations under the Agreement has no bearing
on whether it harmed [RDC],” id. (alterations in original)
(quoting CardioNet, 751 F.3d at 175). J&J timely appealed.

                               6
II.    Discussion3

        On appeal, the parties dispute (A) as a threshold matter,
whether federal or state law governs the scope of an agreement
to arbitrate, and (B) if state law does apply, whether the
arbitration agreement here, properly interpreted, encompasses
RDC’s statutory antitrust claims. We address each issue in
turn.

       A.     The Law Governing the Scope of Arbitration

        The Federal Arbitration Act (FAA) reflects the
“national policy favoring arbitration and places arbitration
agreements on equal footing with all other contracts.” Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443
(2006); see 9 U.S.C. § 2 (“A written provision in . . . a contract
evidencing a transaction involving commerce to settle by
arbitration a controversy . . . 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.”). Because the underlying principle of all arbitration
decisions is that “arbitration is strictly a matter of consent,”

       3
         The District Court had jurisdiction under 28 U.S.C. §§
1331 and 1367(a). Although there has been no final judgment,
we have jurisdiction under the Federal Arbitration Act, which
permits interlocutory appeals from an order denying a motion
to compel arbitration. See Zimmer v. CooperNeff Advisors,
Inc., 523 F.3d 224, 228 (3d Cir. 2008); 9 U.S.C. § 16(a)(1)(B)
(providing that an appeal may be taken from an order denying
a petition to compel arbitration). “We exercise plenary review
over questions of law concerning the applicability and scope of
arbitration agreements.” Zimmer, 523 F.3d at 228 (citation
omitted).

                                7
Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1415 (2019)
(alterations omitted) (quoting Granite Rock Co. v. Teamsters,
561 U.S. 287, 299 (2010)), the “FAA requires courts to
‘enforce arbitration agreements according to their terms,’”
Lamps Plus, 139 S. Ct. at 1415 (quoting Epic Sys. Corp. v.
Lewis, 138 S. Ct. 1612, 1621 (2018)). But before compelling
any party to arbitrate pursuant to the FAA, a court must
consider two “gateway” questions: (1) “whether the parties
have a valid arbitration agreement at all” (i.e., its
enforceability), and (2) “whether a concededly binding
arbitration clause applies to a certain type of controversy” (i.e.,
its scope). Id. at 1416–17 (citation omitted); see Kirleis v.
Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 160 (3d Cir.
2009).

        As we recently observed in Jaludi v. Citigroup, No. 16-
3577, 2019 WL 3558978 (3d Cir. Aug. 6, 2019), “[i]n applying
state law at step one, we do not invoke the presumption of
arbitrability.” Id. at *7 (citations omitted). “At step two,
however, ‘in applying general state-law principles of contract
interpretation to the interpretation of an arbitration agreement
. . . due regard must be given to the federal policy favoring
arbitration.’” Id. (quoting Volt Info. Scis., Inc. v. Bd. of Trs.,
489 U.S. 468, 475 (1989)). Here, because “the parties do not
contest the enforceability of the Agreement’s arbitration
provision,” In re Remicade Antitrust Litig., 2018 WL 5314775,
at *3, this case turns on step two, that is, whether the alleged
antitrust violations fall within the scope of the Agreement’s
arbitration clause providing for arbitration of any “controversy
or claim arising out of or relating to” the Agreement, JA 188.

        The parties disagree as to the applicable body of law
used to interpret the scope of that clause. While J&J argues
that it “is a matter of federal law” and the federal presumption

                                8
in favor of arbitration therefore ends the inquiry, J&J Br. 8–9
(quoting Century Indem. Co. v. Certain Underwriters at
Lloyd’s, 584 F.3d 513, 524 (3d Cir. 2009) (quoting China
Minmetals Materials Imp. & Exp. Co. v. Chi Mei Corp., 334
F.3d 274, 290 (3d Cir. 2003))), RDC contends that courts must
apply “‘ordinary state law principles to evaluate arbitration
agreements’ (so long as they do not conflict with the FAA),”
RDC Br. 18 (quoting MacDonald v. CashCall, Inc., 883 F.3d
220, 228 (3d Cir. 2018)). The truth, we conclude, lies
somewhere in between. While RDC’s view generally accords
better with Supreme Court precedent, at least as the starting
point, see Lamps Plus, 139 S. Ct. at 1415, we take this
opportunity to delve into the interplay between state and
federal law and, in the process, to clarify our Court’s case law.

       To place our holding today in context, we briefly review
our case law to date. Early on, we held that “whether a
particular dispute is within the class of those disputes governed
by the arbitration and choice of law clause is a matter of federal
law.” Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk
GmbH, 585 F.2d 39, 43 (3d Cir. 1978). But the Supreme Court
disagreed, holding in First Options of Chicago, Inc. v Kaplan,
514 U.S. 938 (1995), that “[w]hen deciding whether the parties
agreed to arbitrate a certain matter (including arbitrability),
courts generally . . . should apply ordinary state-law principles
that govern the formation of contracts.” Id. at 944. And we
acknowledged that disagreement in China Minmetals, where
we observed that under Becker, “federal law applie[d] to the
interpretation of arbitration agreements,” China Minmetals,
334 F.3d at 290 (alterations and citations omitted), and then
“recognized, however, that the Supreme Court in First
Options stated that a court deciding whether the parties agreed
to arbitrate a certain matter should apply ‘ordinary state-law

                                9
principles governing contract formation,’” id. (citation
omitted).

       In China Minmetals, however, we did not have occasion
to hold that Becker was abrogated because “whether we
appl[ied] federal law or New Jersey law, the result [was] the
same.” 334 F.3d at 291. But in Moon v. Breathless Inc., 868
F.3d 209 (3d Cir. 2017), the issue was squarely presented, and
we definitively announced, as to “an arbitration clause’s
scope,” that “[p]ursuant to the precedent of the Supreme Court
of the United States, state law applies: ‘When deciding whether
the parties agreed to arbitrate a certain matter (including
arbitrability), courts generally . . . should apply ordinary state-
law principles that govern the formation of contracts.’” Id. at
212–13 (quoting First Options, 514 U.S. at 944).

        In the case before us today, notwithstanding First
Options and Moon, J&J insists that an arbitration clause’s
scope “is a matter of federal law,” so that the federal antitrust
claims at issue here necessarily fall within the scope of the
Agreement based on the federal presumption of arbitrability.
J&J Br. 9 (emphasis omitted) (quoting Century Indem., 584
F.3d at 524). J&J’s argument is premised on Century
Indemnity—an opinion issued between China Minmetals and
Moon. There, although we ultimately concluded that the
arbitration clause was broad enough to include the dispute at
issue “with or without the [federal] presumption of
arbitrability,” Century Indem., 584 F.3d at 556, we also stated
that “the determination of whether ‘a particular dispute is
within the class of those disputes governed by the arbitration
clause . . . is a matter of federal law,’” id. at 524 (quoting China
Minmetals¸ 334 F.3d at 290).

                                10
        Century Indemnity is not controlling here for three
reasons. First, as apparent, the language concerning the
governance of federal law was ultimately dictum. It was also
incomplete. The quoted language from China Minmetals was
itself quoting Becker, and we proceeded to then acknowledge
in the very next sentence that Becker’s approach was contrary
to that taken by First Options. Century Indem., 584 F.3d at
524 (quoting China Minmetals¸ 334 F.3d at 230 (quoting First
Options, 514 U.S. at 944)). Yet Century Indemnity quoted only
the first sentence and omitted the second. Whether an
oversight or omission, we must pay heed to intervening
Supreme Court precedent. See Karns v. Shanahan, 879 F.3d
504, 514–15 (3d Cir. 2018).

        Second, when the choice of state or federal law
governing the scope of an arbitration clause was squarely
before us in Moon, we held, relying on First Options, that
“state law applies” and proceeded to apply it. Moon, 868 F.3d
at 213. We are bound to follow our Circuit’s precedent, so
Moon is controlling. See Karns, 879 F.3d at 514 (quoting 3d
Cir. I.O.P. 9.1).

        Third, as we also recognized in Moon, “the precedent of
the Supreme Court of the United States” has made clear that
state law serves as the baseline for ascertaining an arbitration
clause’s scope, notwithstanding the fact that federal law may
also, under certain circumstances, have a role to play. 868 F.3d
at 212–13; see Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,
559 U.S. 662, 681 (2010) (“While the interpretation of an
arbitration agreement is generally a matter of state law, the
FAA imposes certain rules of fundamental importance,
including the basic precept that arbitration is a matter of
consent, not coercion.” (internal quotation marks and citations
omitted)); Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630

                              11
(2009) (holding that the FAA “creates substantive federal law
. . . requiring courts to place [arbitration] agreements upon the
same footing as other contracts,” but that nothing in the FAA
“purports to alter background principles of state contract law
regarding the scope of [arbitration] agreements” (internal
quotation marks citation omitted)).

        So, what is the role of federal law in interpreting the
scope of an arbitration agreement? As we noted in Jaludi, “in
applying general state-law principles of contract interpretation
to the interpretation of an arbitration agreement . . . due regard
must be given to the federal policy favoring arbitration.” 2019
WL 3558978, at *7 (quoting Volt Info. Scis., 489 U.S. at 475).
Thus, the federal law favoring arbitration embodied in the FAA
“provides the default rule” where no state law definitively
determines whether a given claim is inside or outside the scope
of an arbitration agreement. Lamps Plus, 139 S. Ct. at 1418
(noting that the Supreme Court “ha[s] repeatedly held that
ambiguities about the scope of an arbitration agreement must
be resolved in favor of arbitration” (citations omitted));
see White v. Sunoco, Inc., 870 F.3d 257, 262 (3d Cir. 2017)
(“[T]he presumption of arbitrability applies only where an
arbitration agreement is ambiguous about whether it covers the
dispute at hand. Otherwise, the plain language of the contract
holds.” (citation omitted)). And certain general principles of
federal law apply in resolving that ambiguity, see, e.g.,
Battaglia v. McKendry, 233 F.3d 720, 725 (3d Cir. 2000)
(noting that this presumption is “particularly applicable where
the arbitration clause at issue is broad”), and enforcing
arbitration agreements, see, e.g., Am. Express Co. v. Italian
Colors Rest., 570 U.S. 228, 233 (2013) (noting that “courts
must rigorously enforce arbitration agreements according to
their terms (internal quotation marks and citation omitted)).

                               12
          Additionally, federal law may also come into play by
way of preemption. For example, federal law will preempt
otherwise-applicable state law that would invalidate an
agreement to arbitrate not simply by application of “generally
applicable contract defenses, such as fraud, duress, or
unconscionability,” AT&T Mobility LLC v. Concepcion, 563
U.S. 333, 339 (2011) (quoting Doctor’s Assocs., Inc. v.
Casarotto, 517 U.S. 681, 687 (1996)), but rather because it
violates the FAA’s so-called “equal-treatment principle”—that
is, if it “appl[ies] only to arbitration or [] derive[s] [its] meaning
from the fact that an agreement to arbitrate is at issue,” Kindred
Nursing Ctrs. Ltd. P’ship v. Clark, 137 S. Ct. 1421, 1426
(2017) (citation omitted). And just this past term, the Supreme
Court held that a state law rule of contra proferentem was
preempted to the extent it was used to construe an agreement
to arbitrate claims on a classwide basis and, thus, to the extent
it “stands as an obstacle to the accomplishment and execution
of the full purposes and objectives of the FAA.” Lamps Plus,
139 S. Ct. at 1416 (internal quotation marks omitted) (quoting
Concepcion, 563 U.S. at 352); accord Stone v. Doerge, 328
F.3d 343, 345 (7th Cir. 2003) (Easterbrook, J.) (explaining that
while “most interpretive disputes must be resolved under state
law,” federal law “does affect . . . the extent to which state law
may specify special rules for arbitration: any rule of state law
disfavoring or prohibiting arbitration for a class of transactions
is preempted” (citation omitted)).

        In sum, while federal law may tip the scales in favor of
arbitration where state interpretive principles do not dictate a
clear outcome, see, e.g., White, 870 F.3d at 262, may displace
state law through preemption, see, e.g., Lamps Plus, 139 S. Ct.
at 1416, or may inform the interpretive analysis in other ways,
see, e.g., Battaglia, 233 F.3d at 725; Am. Express, 570 U.S. at

                                 13
233, applicable state law governs the scope of an arbitration
clause—as it would any other contractual provision—in the
first instance.4 We therefore turn to the question of the scope
of the arbitration clause before us, looking to the applicable
state law—that of New Jersey.5

       B.     The Scope of the Agreement’s Arbitration
              Clause

        When it comes to ascertaining the scope of an
arbitration provision, New Jersey “[c]ourts have generally read
the terms ‘arising out of’ or ‘relating to’ [in] a contract as

       4
         Indeed, it would not be practicable, as J&J posits, to
apply state law when it comes to the enforceability or validity
of an arbitration provision (i.e. at step one), but to exclusively
apply federal law when it comes to interpreting the provision’s
scope (i.e. step two), particularly given how easily arguments
pertaining to scope can be repackaged in terms of
enforceability. See Oral Argument at 33:52-34:41 (RDC
arguing that, whether viewed as a question of enforceability or
scope, “we end up in the same place” because “if this
agreement is construed to cover our antitrust claims, it is
unenforceable”).
       5
         The Agreement states only that “the arbitrator” (e.g.,
not the courts) “must interpret any dispute arising out of or
relating to this agreement in accordance with the laws of New
Jersey,” JA 188, and does not make explicit that the law of New
Jersey governs interpretation of the contract generally.
Nonetheless, as the parties proceed on that assumption, so do
we. See Moon, 868 F.3d at 213 (assuming without deciding
that the state law on which the parties agreed applied to the
interpretation of an arbitration clause).

                               14
indicative of an ‘extremely broad’ agreement to arbitrate any
dispute relating in any way to the contract.” Curtis v. Cellco
P’ship, 992 A.2d 795, 802 (N.J. Super. Ct. App. Div. 2010)
(alterations in original) (citations omitted). “Such broad
clauses have been construed to require arbitration of any
dispute between the contracting parties that is connected in any
way with their contract.” Id. (citations omitted).

        Consistent with that approach, the New Jersey
Appellate Division has held that the phrase “[a]ny other
unresolved disputes arising out of this Agreement”
encompasses antitrust claims challenging allegedly
anticompetitive conduct that resulted in overcharges based on
the underlying contract. EPIX Holdings Corp. v. Marsh &
McLennan Cos., 982 A.2d 1194, 1199, 1204 (N.J. Super. Ct.
App. Div. 2009), overruled in part on other grounds by Hirsch
v. Amper Fin. Servs., 71 A.3d 849 (N.J. 2013). Relying on the
Second Circuit’s similar reasoning in JLM Indus., Inc. v. Stolt–
Nielsen, S.A., 387 F.3d 163, 178 (2d Cir. 2004), the Appellate
Division explained that “the claims the . . . defendants seek to
arbitrate not only ‘arise out of’, but are undeniably intertwined
with the contract . . . since it is the fact of [plaintiff’s] entry into
the contract containing the allegedly inflated price and other
oppressive terms that gives rise to the claimed injury.” EPIX
Holdings Corp., 982 A.2d at 1207. And on that basis, the court
found it “difficult to conceive how plaintiff could maintain its
claim for damages without reference to, and reliance upon, the
underlying contract.” Id.; see Pop Test Cortisol, LLC v. Merck
& Co., Inc., A-5403-12T4, 2014 WL 1660605, at *1, *6 (N.J.
Super. Ct. App. Div. Apr. 28, 2014) (applying EPIX and
holding that an arbitration provision applying to “[a]ll disputes
arising out of or relating to this Agreement” encompassed state
statutory claims and federal RICO claims).

                                  15
        That reasoning applies equally here, where the
gravamen of RDC’s complaint is that J&J’s anticompetitive
Plan “enabled [it] to sell its branded Remicade infliximab
product at artificially inflated prices,” JA 132, and the only
“inflated price[]” that could have caused RDC’s injury was the
price it paid J&J for Remicade, i.e., the WAC or list price
provided in the Agreement, JA 172. Thus, RDC’s antitrust
claims are “undeniably intertwined” with the Agreement
because “it is the fact of [RDC’s] entry into the [Agreement]
containing the allegedly inflated price . . . that gives rise to the
claimed injury.”6 EPIX Holdings Corp., 982 A.2d at 1207; see
also JLM Indus., Inc., 387 F.3d at 173, 176 (holding antitrust
claims “aris[e] out of” contracts where the “central factual
allegations of the complaint” involve “a core issue of the
contracts between the parties—allegations that the price terms
set forth in those contracts have been artificially inflated as a
result of the [anticompetitive conduct]” of the defendants);
S+L+H S.p.A. v. Miller–St. Nazianz, Inc., 988 F.2d 1518, 1524

       6
          J&J also argues that two later provisions in the
“Dispute Resolution” section expand the universe of arbitrable
issues beyond those “arising out of or related to” the
Agreement: namely, portions of subsection (d) providing that
“EACH PARTY IRREVOCABLY WAIVES ITS RIGHT TO
TRIAL OF ANY ISSUE BY JURY,” and limiting an
arbitrator’s award of enhanced damages, interest, or attorneys’
fees “EXCEPT AS MAY BE REQUIRED BY STATUTE.”
J&J Br. 19 (quoting JA 188). The District Court rejected that
argument, explaining that the structure of the “Dispute
Resolution” section indicates that those provisions refer only
to “claims otherwise encompassed by [subsection (a)],” In re
Remicade Antitrust Litig., 2018 WL 5314775, at *5, and we
agree.

                                16
(7th Cir. 1993) (observing that a claim “that draws its very
essence from the fact of and performance under the
[Agreement] in question . . . necessarily is a claim that arises
out of and relates to the Agreement” (first alteration in original)
(internal quotation marks omitted)).

        RDC contends that ascertaining the scope of the
arbitration clause by considering whether “the claim[s] would
not exist” except for the Agreement, RDC. Br. 36, contravenes
this Court’s recent admonition against “equat[ing] the meaning
of ‘arising out of’ with the concept of but-for causation,”
Reading Health Sys. v. Bear Stearns & Co., 900 F.3d 87, 100
n.59 (3d Cir. 2018) (quoting Omron Healthcare, Inc. v.
Maclaren Exports Ltd., 28 F.3d 600, 602 (7th Cir. 1994)
(“‘Arising out of’ and ‘arising under’ are familiar phrases, and
courts have resisted the siren call of collapsing them to but-for
causation.”)). But we are not swayed by the fact that RDC’s
antitrust claims could not exist but-for the Agreement; what is
dispositive is that they cannot be adjudicated without
“reference to, and reliance upon,” it.7 EPIX Holdings Corp.,
982 A.2d at 1207.

       7
         By contrast, many of the cases on which RDC relies
(none of which are binding on this Court) involve antitrust
claims that the court could “resolve . . . without reference to
the agreement containing the arbitration clause.” NCR Corp.
v. Korala Assocs., Ltd., 512 F.3d 807, 814 (6th Cir. 2008)
(emphasis added); see also AlliedSignal, Inc. v. B.F. Goodrich
Co., 183 F.3d 568, 573 (7th Cir. 1999) (holding that antitrust
claims alleging supracompetitive prices were not arbitrable
because the underlying contract, “though it d[id] provide for
shared information and cooperation, d[id] not regulate the price
[defendant] may charge”). In any event, to the extent there

                                17
        And even if RDC’s inevitable reliance on the
Agreement to prove injury were not enough to render its claims
“arising out of” the Agreement, they need only “relat[e] in any
way to the [Agreement]” to be “related to” it. Curtis, 992 A.2d
at 802 (citation omitted). “An arbitration provision covering
claims ‘relating to’ a contract is broader than one which covers
claims merely arising out of a contract.” Yale Materials
Handling Corp. v. White Storage & Retrieval Sys., Inc., 573
A.2d 484, 486 (N.J. Super. Ct. App. Div. 1990) (citation
omitted). New Jersey courts have interpreted the term
“relating to” in the arbitration clause context to be “extremely
broad,” Angrisani v. Fin. Tech. Ventures, L.P., 952 A.2d 1140,
1146 (N.J. Super. Ct. App. Div. 2008), which we understand
to mean—as we have held in the forum selection clause
context—that a claim need only have “some ‘logical or causal
connection’” to the agreement to be related to it, John Wyeth
& Bro. Ltd v. Cigna Int’l Corp., 119 F.3d 1070, 1074 (3d Cir.
1997) (quoting Webster’s Third New International Dictionary
1916 (1971)). Here, we have no difficulty finding that RDC’s
antitrust claims “relate to” the Agreement, which sets the drug
prices and governs the commercial relationship between the
parties.

        RDC argues, in the alternative, that even if the
arbitration provision is broad enough to encompass RDC’s
antitrust claims, the claims are nonetheless outside the scope
of the Agreement because the provision fails to comply with
New Jersey’s rule of contractual interpretation requiring
waivers of constitutional or statutory rights to be stated “clearly
and unambiguously.” Atalese v. U.S. Legal Servs. Grp., 99

may be tension between those holdings and that of the Second
Circuit in JLM, New Jersey courts to date have embraced the
latter. See EPIX Holdings Corp., 982 A.2d at 1207.

                                18
A.3d 306, 309 (N.J. 2014). Underlying New Jersey’s rule is
the notion that agreements to arbitrate, “like any other contract,
must be the product of mutual assent,” id. at 312–13 (internal
quotation marks and citation omitted), and because “an average
member of the public may not know—without some
explanatory comment—that arbitration is a substitute for the
right to have one’s claim adjudicated in a court of law,” id. at
313, arbitration clauses will not be construed to encompass
constitutional or statutory rights absent some “concrete
manifestation” of the intention to do so, Garfinkel v.
Morristown Obstetrics & Gynecology Assocs., 773 A.2d 665,
672 (N.J. 2001); see Moon, 868 F.3d at 214–15 (interpreting
the rule as requiring an arbitration clause to contain three
components: “First, it must identify the general substantive
area that the arbitration clause covers”; “Second, it must
reference the types of claims waived by the provision”; “Third,
it must explain the difference between arbitration and
litigation”).

        While the New Jersey Supreme Court has not
definitively resolved the scope of the rule, it has applied it thus
far only in the context of employment and consumer contracts.
See Kernahan v. Home Warranty Adm’r of Fla., Inc., 199 A.3d
766, 784 (N.J. 2019) (consumer); Atalese, 99 A.3d at 312–13
(N.J. 2014) (consumer); Martindale v. Sandvik, Inc., 800 A.2d
872, 883 (N.J. 2002) (employment); Garfinkel, 773 A.2d at
665 (employment); see also Moon, 868 F.3d at 214–15
(employment). Moreover, in its most recent discussion of the
rule, the New Jersey Supreme Court emphasized that “the
consumer context of the contract [in Atalese] mattered,”
Kernahan, 199 A.3d at 777, and that the “twin concerns”
animating its application of the rule there were that (1) “a
consumer is not necessarily versed in the meaning of law-

                                19
imbued terminology about procedures tucked into form
contracts” (as opposed to “individually negotiated” ones), and
that (2) “plain language explanations of consequences had
been required in contract cases in numerous other settings
where a person would not be presumed to understand that what
was being agreed to constituted a waiver of a constitutional or
statutory right,” id. Neither concern applies to J&J and RDC’s
Agreement.

       Even before Kernahan’s strong intimation that the rule
applies only where the parties have unequal bargaining power
and levels of sophistication—as in the employment and
consumer contexts—the New Jersey Appellate Division has
held on several occasions that the rule “d[oes] not extend . . .
to commercial contracts,” i.e., contracts that resulted “from a
lengthy negotiation process” and where no party was an
“average member[] of the public.”8 Victory Entm’t, Inc. v.
Schibell, No. A-3388-16T2, 2018 WL 3059696, at *8 (N.J.
Super. Ct. App. Div. June 21, 2018) (citation omitted); see also
Columbus Circle N.J., LLC v. Island Constr. Co., No. A-1907-
15T1, 2017 WL 958489, at *3 (N.J. Super. Ct. App. Div. Mar.
13, 2017) (rejecting application of Atalese to the contract at
issue, which was not “a consumer contract of adhesion where
[one party] . . . possessed superior bargaining power and was
the more sophisticated party” (alteration in original) (citation
omitted)); Gastelu v. Martin, No. A-0049-14T2, 2014 WL
10044913, at *6 & n.4 (N.J. Super. Ct. App. Div. July 9, 2015)
       8
          Where an unanswered question of New Jersey law
requires us to “predict how the Supreme Court of [New Jersey]
would decide the question,” we give “due regard” to decisions
of the intermediate appellate courts. Specialty Surfaces Int’l,
Inc. v. Cont’l Cas. Co., 609 F.3d 223, 237 (3d Cir. 2010)
(citation omitted).

                              20
(“Parties to a commercial contract can express their intention
to arbitrate their disputes rather than litigate them in court,
without employing any special language . . . . In the present
case . . . we are dealing with commercial business transaction
[sic] and, therefore, the standard is not as stringent [as the one
put forward in Atalese].”).

       Here, there is no dispute that the Agreement is a
commercial contract or that both J&J and RDC are “highly
sophisticated participant[s] in the pharmaceutical market,” J&J
Br. 27, as opposed to “average member[s] of the public,”
Atalese, 99 A.3d at 312. Taking into account the illustrative
statements in Kernahan, and affording “due regard” to the
decisions of the intermediate appellate courts declining to
extend the rule to commercial contracts, Specialty Surfaces,
609 F.3d at 237, we conclude that the rule does not apply to the
Agreement between J&J and RDC in any event, and thus does
not narrow the scope of the arbitration provision.

        Because we conclude that the rule does not apply here,
we need not address whether the Agreement’s arbitration
clause satisfies it or, if it does not, whether notwithstanding the
New Jersey Supreme Court’s statement in Atalese that the rule
is “not specific to arbitration provisions,” 99 A.3d at 313, it
would be preempted—either because it is “too tailor-made to
arbitration agreements . . . to survive the FAA’s edict against
singling out those contracts for disfavored treatment,” Kindred
Nursing Ctrs., 137 S. Ct. at 1427, or because it “interferes with
fundamental attributes of arbitration,” Lamps Plus, 139 S. Ct.
at 1418.9

       9
         We note that the New Jersey Supreme Court may
address this issue in Skuse v. Pfizer, Inc., 202 A.3d 1 (N.J.

                                21
       Accordingly, because RDC’s antitrust claims “aris[e]
out of or relate[] to” the Agreement, they must be arbitrated.

III.   Conclusion

       For the foregoing reasons, we will reverse the judgment
of the District Court and remand for further proceedings
consistent with this opinion.

Super. Ct. App. Div. 2019), certif. granted, C-922 Sept. Term
2018, 2019 WL 2403144 (N.J. June 3, 2019); see also
Kernahan, 199 A.3d at 786 (Albin, J., concurring) (explaining
that New Jersey requires “that an arbitration clause must
simply explain to the average consumer what it forecloses . . .
[and] do[es] not discriminate against an arbitration agreement
by requiring it to [explain its purpose]”); Atalese, 99 A.3d at
313–14 (giving examples of the New Jersey “clear and
unmistakable” requirement being applied in various non-
arbitration contexts).

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