Court Opinion

ID: 2999060
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:50:10.156769+00
Date Added: 2024-06-11T13:24:21.284867
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

05-3437
EMPLOYERS INSURANCE COMPANY OF WAUSAU,
                                           Plaintiff-Appellant,
                              v.

CENTURY INDEMNITY COMPANY,
                                          Defendant-Appellee.
                        ____________
          Appeal from the United States District Court
             for the Western District of Wisconsin.
           No. 05-C-0263—John C. Shabaz, Judge.
                        ____________
    ARGUED FEBRUARY 6, 2006—DECIDED APRIL 4, 2006
                   ____________

  Before FLAUM, Chief Judge, and ROVNER and SYKES,
Circuit Judges.
  FLAUM, Chief Judge.          Defendant-Appellee Century
Indemnity Company (“Century”) is an insurance company
that has entered into reinsurance agreements with a
number of reinsurers, including Plaintiff-Appellant Em-
ployers Insurance Company of Wausau (“Wausau”). Two
of the reinsurance agreements between Century and
Wausau are at issue in this appeal. Century paid money to
its insureds under certain reinsured policies and maintains
that its reinsurers, including Wausau, must reimburse it for
those payments. Century demanded that its reinsurers
2                                                    No. 05-3437

participate in a consolidated arbitration to determine
liability for the payments. Wausau acknowledges that its
reinsurance agreements require it to arbitrate, but argues
that it cannot be required to participate in a consolidated
arbitration.
  Wausau brought suit in federal district court, seeking
declaratory judgment. Wausau urged the district court
to find that it was entitled to two separate arbitrations
for the two reinsurance agreements it has with Century.
Wausau also sought a declaration that it could not be
required to participate in a consolidated arbitration with
other reinsurers. The district court found for Century. It
held that the question whether Century could be required to
participate in a consolidated arbitration was a question for
the arbitrator, not the court. The district court ordered
Wausau to appoint an arbitrator in accordance with the
terms of the Agreements and proceed to arbitration with
Century. Wausau appeals. For the following reasons, we
affirm.

                        I. Background
  Wausau and Century are insurance companies. In this
case, Century is the insurer and Wausau the reinsurer.
Century has issued an insurance policy to Aqua-Chem, Inc.
(“Aqua-Chem”). Century and Wausau entered into two
reinsurance agreements pertaining to the Aqua-Chem
policy, the First Excess Agreement and the Second Excess
Agreement (“Agreements”). Each of the Agreements covers
a different “layer” of the Aqua-Chem policy.1 Aqua-Chem

1
  A “layer” begins coverage at a certain level (the “attachment
point” of coverage) and ends coverage at a certain level (the
limit of coverage). For example, a $10 million insurance policy
could be split into three different layers: the insurer could retain
                                                      (continued...)
No. 05-3437                                                     3

was subject to liability for asbestos bodily injury claims and
presented the claims to Century for payment. Century paid
the claims and billed its reinsurers for their alleged shares
of Aqua-Chem’s claims. Several reinsurers, including
Wausau, did not pay Century. Therefore, in October 2004,
Century demanded that these reinsurers participate in a
consolidated arbitration. Century also demanded
that Wausau and the other reinsurers collectively name
an arbitrator within 60 days of the demand; otherwise,
Century would name an arbitrator for them.
  Wausau acknowledges that it is required to arbitrate with
Century. The First Excess Agreement and the Second
Excess Agreement contain identical arbitration clauses. The
arbitration clauses state, in relevant part:
    ARBITRATION
    As a condition precedent to any right of action hereun-
    der, any dispute arising out of this Agreement shall
    be submitted to the decision of a board of arbitra-
    tion composed of two arbitrators and an umpire meeting
    in New York, New York, unless otherwise agreed.
    The members of the board of arbitration shall be active
    or retired disinterested officials of insurance or reinsur-
    ance companies or Underwriters at Lloyd’s, London not
    under the control of either party to this Agreement.
    Each party shall appoint its arbitrator and the two
    arbitrators shall choose an umpire before instituting the
    hearing. If the respondent fails to appoint its arbitrator
    within 60 days after being requested to do so by the

1
   (...continued)
liability for the first $1 million in claims, enter a reinsurance
agreement that attaches at the $1 million point and provides
$4 million in coverage, and enter a second reinsurance agree-
ment that attaches at the $5 million point and provides $5 million
in coverage.
4                                                    No. 05-3437

    claimant, the latter shall also appoint the second
    arbitrator. If the two arbitrators fail to agree on the
    appointment of an umpire within 60 days after their
    nomination, each of them shall name three of whom the
    other shall decline two, and the decision shall be made
    by drawing lots.
  The Agreements do not contain any express provisions
regarding consolidated arbitration.
  While acknowledging that it must arbitrate, Wausau
objected to participating in a consolidated arbitration.
Wausau argued that the First and Second Excess Agree-
ments are separate contracts and contain no language
expressing Wausau’s consent to participate in one arbitra-
tion involving both contracts or any arbitration involv-
ing other reinsurers.
  Wausau filed suit in federal district court, seeking a
declaration that 1) it was entitled to separate arbitration
proceedings for the First and Second Excess Agreements
and 2) these proceedings must be independent of any
arbitration between Century and its other reinsurers.
Allstate, another reinsurer, intervened in the case as
a plaintiff.2 Wausau and Allstate filed for summary judg-
ment. Century filed a motion to dismiss and a cross-motion
for summary judgment.
  The district court granted in part and denied in part
Wausau’s motion for summary judgment. It found that
the arbitrator, not the court, should decide whether consoli-
dation is permitted under the parties’ Agreements, based on
Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003).
The district court explained that, absent evidence of the
parties’ contrary agreement, procedural issues like consoli-

2
  Allstate did not appeal from the district court’s judgment and is
not a party to this proceeding.
No. 05-3437                                                5

dation are for the arbitrator to decide. The district court
continued, however, that each Agreement “provides an
unambiguous procedure for the creation of its own arbitra-
tion panel to resolve this and any other disputes that might
later arise.” The district court therefore ordered Wausau
and Allstate to submit to separate arbitrations, where “their
arbitrators may consider the issue of consolidation once
they have been seated.”
   Wausau appealed. It also filed a motion with the dis-
trict court to stay its order, pending exhaustion of Wausau’s
appeal. The district court denied the motion. Wausau then
filed a motion for a stay with this Court, which was denied
on October 20, 2005.

                      II. Discussion
  In this case, both parties admit that the Agreements’
arbitration clauses are silent as to whether consolidated
arbitration is permissible. The central question on appeal
is who should decide whether the Agreements forbid
consolidated arbitration: the district court, or the arbitra-
tor? This Circuit and the Supreme Court have yet to resolve
that exact question.
   Wausau argues that the issue of whether consolidation is
allowed is a question of “arbitrability” that must be ad-
dressed by the court, unless there is clear and unmistakable
evidence that the parties intended the arbitrator to decide.
Century argues the opposite, that the issue of consolidation
is a procedural one that should be resolved by the arbitrator
in the first instance, unless the parties’ arbitration agree-
ment provides that the court must resolve it.
  The Supreme Court has established a framework for
analyzing the issue we are presented with. In First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), the Su-
preme Court considered the question of who should deter-
6                                               No. 05-3437

mine whether a given dispute is arbitrable—the court or the
arbitrator. The Court held that, unless the arbitration
agreement is clear and unmistakable that the issue of
arbitrability is for the arbitrator, it should be resolved by
the court. Id. at 944. Wausau maintains that the dispute
over consolidation is a dispute over arbitrability, and thus
must be resolved by the court.
  Wausau incorrectly characterizes the consolidation
question as a question of arbitrability. Cases since First
Options have helped clarify which questions qualify as
“arbitrability” questions. In Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79 (2002), the Court explained:
      Linguistically speaking, one might call any poten-
    tially dispositive gateway question a “question of
    arbitrability,” for its answer will determine whether the
    underlying controversy will proceed to arbitration on
    the merits. The Court’s case law, however, makes clear
    that, for purposes of applying the interpretive rule, the
    phrase “question of arbitrability” has a far more limited
    scope. The Court has found the phrase applicable in the
    kind of narrow circumstance where contracting parties
    would likely have expected a court to have decided the
    gateway matter, where they are not likely to have
    thought that they had agreed that an arbitrator would
    do so, and, consequently, where reference of the gate-
    way dispute to the court avoids the risk of forcing
    parties to arbitrate a matter that they may well not
    have agreed to arbitrate.
Id. at 83-84.
  The Howsam Court provided two examples of “a gate-
way dispute” that would raise a question of arbitrability
and thus should be decided by a court: 1) a dispute re-
garding “whether the parties are bound by a given arbitra-
tion clause”; and 2) “a disagreement about whether an
No. 05-3437                                                 7

arbitration clause in a concededly binding contract ap-
plies to a particular type of controversy.” Id. at 84. The
Court also explained that “[t]he phrase ‘question of
arbitrability’ is not applicable in other kinds of general
circumstances where parties would likely expect that an
arbitrator would decide the gateway matter.” Id. For
example, “ ‘ “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.” Id.
(quoting John Wiley & Sons, Inc. v. Livingston, 376 U.S.
543, 557 (1964)) (emphasis added). The Howsam Court
decided that a question regarding the applicability of a
National Association of Securities Dealers time-limit rule
was presumptively for the arbitrator. The Court explained
that “such a dispute seems an ‘aspec[t] of the [controversy]
which called the grievance procedures into play.’ ” Id. at
85 (quoting John Wiley & Sons, 376 U.S. at 559).
   We find based on Howsam that the question of whether
an arbitration agreement forbids consolidated arbitration is
a procedural one, which the arbitrator should resolve.
It does not involve whether Wausau and Century are bound
by an arbitration clause or whether the arbitration clause
covers the Aqua-Chem policies. Instead, the consolidation
question concerns grievance procedures—i.e., whether
Century can be required to participate in one arbitration
covering both the Agreements, or in an arbitration with
other reinsurers.
  Our holding is consistent with the decisions of our sister
circuits in similar cases. For instance, in Shaw’s Supermar-
kets, Inc. v. United Food and Commercial Workers Union,
Local 791, 321 F.3d 251 (2003), the First Circuit relied on
Howsam in deciding that the arbitrator, not a court, should
determine if arbitrations can be consolidated. See id. at 254-
55. The court found that consolidation is a procedural issue.
Id. at 254. Shaw’s Supermarket involved three collective
bargaining agreements (“CBAs”), each of which provided for
8                                               No. 05-3437

arbitration as the fourth and final step of a multi-part
grievance process. Id. at 252. The court found that the
parties agreed that their disputes were arbitrable, and
therefore there was not a dispute over arbitrability, which
would be decided by a court. Since there was “no evidence
in the CBAs here that the parties did not expect their
disputes regarding matters such as consolidation to be
resolved through arbitration,” the arbitrator should decide
whether consolidation was appropriate. Id. at 254. The
court also concluded that “[l]eaving the decision whether to
consolidate the three proceedings in the hands of the
arbitrator comports with long-standing precedent resolving
ambiguities regarding the scope of arbitration in favor of
arbitrability.” Id. at 254.
  Similarly, in Dockser v. Schwartzberg, 433 F.3d 421 (4th
Cir. 2006), the Fourth Circuit determined that the arbitra-
tor, rather than the court, should determine whether one
arbitrator, rather than three, should preside over the
arbitration. Id. at 426. Dockser involved an arbitration
provision, contained in a settlement agreement, that
provided that one arbitrator should be appointed. Id. at
423-24. The arbitration provision also provided that
American Arbitration Association (“AAA”) rules and
procedures should be applied in choosing the arbitrator. Id.
The AAA rules allow for the appointment of either 1 or 3
arbitrators. Id. The defendant filed a demand for arbitra-
tion with the AAA, requesting 3 arbitrators. Id. at 423. The
plaintiffs filed suit, alleging that the defendant’s request
violated the parties’ arbitration provision. Id. at 424. The
court determined that the issue of how many arbitrators
should be used “fits squarely within the Supreme Court’s
jurisprudence regarding what constitutes a ‘procedural’
question.” Id. at 426. The court explained that “the issue
here ‘concerns neither the validity of the arbitration clause
nor its applicability to the underlying dispute between the
parties,’ but rather ‘what kind of arbitration proceeding the
No. 05-3437                                                 9

parties agreed to.’ ” Id. (quoting Green Tree, 539 U.S. at
452). Thus, the issue was a procedural one for the arbitra-
tor. Id.
   We agree with the approach of the First and Fourth
Circuits. Using the same analysis, we find that consolida-
tion is a procedural issue. Wausau and Century agree that
their underlying dispute regarding the Aqua-Chem claims
is subject to arbitration. Thus, the only question is the kind
of arbitration proceeding their Agreements allow. This
comes down to a matter of contract interpretation, which
the arbitrator is well qualified to address. See We Care Hair
Dev., Inc. v. Engen, 180 F.3d 838, 844 (7th Cir. 1999) (“Once
the court determines that an arbitration clause is enforce-
able, the status of the other contract terms is for the
arbitrator to decide.”); R.J. Corman Derailment Servs., LLC
v. Int’l Union of Operating Eng’rs, Local Union 150, 335
F.3d 643, 650-51 (7th Cir. 2003) (“[A]fter a court ascertains
that the subject matter of a particular dispute is covered by
the parties’ arbitration agreement, any procedural ques-
tions—such as whether the arbitration procedures were
properly followed—are reserved for the arbitrator.”); George
Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577, 581 (7th
Cir. 2001) (“[T]he arbitrator has considerable leeway so long
as he respects the limits the parties’ contract and public law
place on his discretion.”); see also Green Tree, 539 U.S. at
452-53 (stating that “[a]rbitrators are well situated to
answer” questions related to “what kind of arbitration
proceedings the parties agreed to”). Additionally, our
conclusion is consistent with longstanding federal policy
favoring arbitration. See, e.g., Buckeye Check Cashing, Inc.
v. Cardegna, No. 04-1264, slip op. at 3, 546 U.S. ___, 126
S. Ct. 1204 (U.S. Feb. 21, 2006); Continental Cas. Co. v. Am.
Nat’l Ins. Co., 417 F.3d 727, 730-31 (7th Cir. 2005); James
v. McDonald’s Corp., 417 F.3d 672, 676-77 (7th Cir. 2005);
Welborn Clinic v. MedQuist, Inc., 301 F.3d 634, 639 (7th
Cir. 2002); CK Witco Corp. v. Paper Allied Indus., 272 F.3d
419, 421-22 (7th Cir. 2001).
10                                               No. 05-3437

  Although we reach our decision based on Howsam, we
recognize that the district court based its decision on Green
Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003). In
Green Tree, the Supreme Court addressed whether a court
or an arbitrator should determine if the parties’ arbitration
agreements allowed for class arbitration. See id. at 447. A
plurality of the Court decided that the issue was for the
arbitrator. Id. at 452-53. The plurality recognized that “[i]n
certain limited circumstances, courts assume that the
parties intended courts, not arbitrators, to decide a particu-
lar arbitration-related matter.” Id. at 452. However, the
plurality explained:
       The question here—whether the contracts forbid class
     arbitration—does not fall into this narrow exception. It
     concerns neither the validity of the arbitration clause
     nor its applicability to the underlying dispute between
     the parties. Unlike First Options, the question is not
     whether the parties wanted a judge or an arbitrator to
     decide whether they agreed to arbitrate a matter.
     Rather the relevant question here is what kind of
     arbitration proceeding the parties agreed to. That
     question . . . concerns contract interpretation and
     arbitration procedures. Arbitrators are well situated to
     answer that question.
Id. at 452-53.
  Likewise, in this case the question of whether Wausau
and Century’s Agreements forbid consolidated arbitration
concerns the kind of arbitration proceeding the parties
agreed to. Thus, the parties’ disagreement is not one
over “arbitrability,” as that term has been described by
the Supreme Court. See Howsam, 537 U.S. at 85.
  We acknowledge, however, that there is debate regard-
ing the precedential effect—if any—of the plurality opin-
ion in Green Tree. We are therefore hesitant to base our
decision on it. When, as in Green Tree, “a fragmented Court
No. 05-3437                                                11

decides a case and no single rationale explaining the result
enjoys the assent of five Justices, ‘the holding of the Court
may be viewed as that position taken by those Members
who concurred in the judgments on the narrowest grounds.’   ”
Marks v. United States, 430 U.S. 188, 193 (1977) (internal
citation omitted); see also Ben’s Bar, Inc. v. Vill. of
Somerset, 316 F.3d 702, 715 n.20 (7th Cir. 2003). Century
argues that the narrowest holding in Green Tree is that
issues regarding the number of arbitrations to be held are
for the arbitrator to address. Wausau argues that there is
no holding that garnered a majority vote and, in the
alternative, that the narrowest holding is that the parties’
contracts sent the class arbitration issue to the arbitrator.
  Identifying the narrowest holding in Green Tree re-
quires us to consider the procedural history of that case.
The case concerned contracts between Green Tree, a
commercial lender, and its customers. Green Tree, 539 U.S.
at 447. Each contract contained an arbitration clause
governed by the Federal Arbitration Act. Id. Customers of
Green Tree filed two separate suits against the company in
South Carolina state court, alleging violations of the South
Carolina Consumer Protection Code. Id. at 447, 449. In both
cases, plaintiffs sought, and eventually were granted, class
certification. Id. at 449. Also in both cases, plaintiffs were
awarded class damages and attorney’s fees. Id. The trial
court affirmed the awards, and Green Tree appealed,
arguing that class arbitration was not allowed under the
parties’ arbitration agreements. Id. The South Carolina
Supreme Court withdrew both cases from the appeals court,
assumed jurisdiction, and consolidated the proceedings. Id.
at 450. The South Carolina Supreme Court found that the
parties’ arbitration agreements were silent as to class
arbitration, that class arbitration was therefore authorized,
and that the arbitration had properly taken that form. Id.
The United States Supreme Court reviewed that decision to
determine if class arbitration complied with the Federal
Arbitration Act. Id.
12                                                 No. 05-3437

  Justice Breyer wrote the opinion of the Court, which
Justices Scalia, Souter and Ginsburg joined. Justice Breyer
determined that the arbitrator, rather than the court,
should have decided whether the parties’ agreements forbid
class arbitration. Id. at 451. Justice Breyer also found that
remand to the arbitrators was necessary—even though the
South Carolina Supreme Court had reached the correct
conclusion that class arbitration was allowed under the
agreements—because in each underlying case “there [was]
at least a strong likelihood . . . that the arbitrator’s decision
[to employ class arbitration procedures] reflected a court’s
interpretation of the contracts rather than an arbitrator’s
interpretation.” Id. at 454.
  Justice Stevens wrote a concurrence in Green Tree
and provided the fifth vote for the plurality’s judgment.
Justice Stevens found that the South Carolina Supreme
Court properly “held as a matter of state law that class-
action arbitrations are permissible if not prohibited by
the applicable arbitration agreement, and that the
agreement[s] between these parties is silent on the issue.”
Id. at 454 (Stevens, J., concurring). Justice Stevens dis-
agreed that remand was required. He explained:
       Arguably the interpretation of the parties’ agreement
     should have been made in the first instance by the
     arbitrator, rather than the court. See Howsam v. Dean
     Witter Reynolds, Inc., 537 U.S. 79 (2002). Because
     the decision to conduct a class-action arbitration
     was correct as a matter of law, and because petitioner
     has merely challenged the merits of that decision
     without claiming that it was made by the wrong
     decisionmaker, there is no need to remand the case
     to correct the possible error.
Green Tree, 539 U.S. at 455 (Stevens, J., concurring).
Justice Stevens recognized, however, that if he were to vote
to simply affirm the South Carolina Supreme Court’s
No. 05-3437                                                13

decision, “there would be no controlling judgment of the
Court.” Id. Thus, “to avoid that outcome, and because
Justice Breyer’s opinion expresses a view of the case close to
[his] own, [Justice Stevens] concur[red] in the judgment.”
Id.
  Taking these two opinions together, we cannot identify a
single rationale endorsed by a majority of the Court. Justice
Breyer reasoned that 1) consolidation is a procedural
question for the arbitrator; 2) the Supreme Court should not
reach the question whether the parties’ agreements forbid
class arbitration; and 3) remand is required so that the
arbitrators can address whether the agreements forbid class
arbitration. Justice Stevens, in contrast, reasoned that 1)
the South Carolina Supreme Court correctly held as a
matter of state law that the parties’ agreements do not
forbid class arbitration; and 2) remand was not required,
because the parties did not argue that the arbitrator, rather
than the court, should have decided the appropriateness of
class arbitration. The Justices’ rationales do not overlap.
  We are aware that the Fifth Circuit has reached a
different conclusion regarding the precedential value of
Green Tree. In Pedcor Management Co., Inc. Welfare Benefit
Plan v. Nations Personnel of Texas, Inc., 343 F.3d 355 (5th
Cir. 2003), the Fifth Circuit determined that the narrowest
ground for decision in Green Tree was that the validity of
class arbitration is to be decided by the arbitrator, absent
evidence that the parties intended the court to resolve the
issue. The Pedcor court explained:
      The basis on which Justice Stevens would have
    decided the case—that the state court judgment was
    correct as a matter of law—fails to constitute the
    most narrow grounds on which the case was decided.
    The four-member plurality specifically rejected the legal
    interpretation of the state court because it was a
    decision by the wrong decision-maker. The grounds
14                                                No. 05-3437

     of the Stevens concurrence also differed from the three-
     member dissent which would have upheld the state
     court’s ability to make the decision but would have
     reversed on the merits of that court’s decision to allow
     class arbitration. Justice Stevens did express
     his agreement, however, with the principle laid down by
     the plurality that arbitrators should be the first ones to
     interpret the parties’ agreement. As a result, the plural-
     ity’s governing rationale in conjunction with Justice
     Stevens’s support of that rationale substantially guides
     our consideration of this dispute.
Pedcor, 343 F.3d at 358-59 (second emphasis added).
  We cannot conclude, as the Fifth Circuit did, that Justice
Stevens agreed that the arbitrator should be the first to
interpret the parties’ agreements to determine if they allow
class arbitration. Justice Stevens’s only references to this
point are that “arguably” the arbitrator should
have interpreted the agreements first, and that remand was
unnecessary to correct the “possible error” of having the
court interpret the agreements first. Although it may be
likely that Justice Stevens agreed with the plurality that an
arbitrator should be the first to interpret the agreements,
Justice Stevens argued that the Court should not have
addressed the issue, since it was not raised by the parties.
We choose not to identify the controlling rationale of Green
Tree by presuming how Justice Stevens would have decided
the issue if the parties had actually raised it.
  Fortunately, in this case we need not rely on Green Tree.
The Supreme Court made clear in Howsam, 537 U.S. at 84,
that procedural issues are presumptively for the arbitrator
to decide. Consolidation is a procedural issue. See Shaw’s
Supermarkets, 321 F.3d at 254; cf. Dockser, 433 F.3d at 426.
Thus, Wausau now has the burden to show that the Agree-
ments require the court, rather than the arbitrator, to
address the consolidation issue. See Howsam, 537 U.S. at
No. 05-3437                                               15

84; Dockser, 433 F.3d at 427 (“[T]he onus is on the party
seeking litigation on a procedural issue to show that the
agreement somehow excludes that issue from arbitration.”).
  Wausau has not met its burden. The Agreements make no
mention of consolidation, as Wausau necessarily concedes.
The arbitration clause in each Agreement states, in relevant
part, that “any dispute arising out of this Agreement shall
be submitted” to arbitration. This Court has found that the
“any dispute arising out of” language “does not address the
question of who decides”—the court or the arbitrator. Conn.
Gen. Life Ins. Co. v. Sun Life Assurance Co., 210 F.3d 771
(7th Cir. 2000). The Agreements do not discuss who decides
disputes regarding consolidation, so we presume the
arbitrator decides.
  The final issue we must address is how the parties are to
proceed with arbitration. The parties have different inter-
pretations of the district court’s opinion: Century maintains
that the opinion requires Wausau to appoint one arbitrator,
for one arbitration covering both Agreements. Wausau
maintains that the opinion requires it to appoint two
arbitrators, one for each of two arbitrations (one under the
First Excess Agreement, and one under the Second).
  In the ordering clause of its opinion, the district court
stated:
    It is . . . ordered that defendant proceed to arbitration
    with plaintiff Employer’s Insurance Company of
    Wausau in accordance with the terms of their agree-
    ments. Wausau shall appoint its arbitrator. Defendant
    shall appoint its arbitrator. Thereafter the two arbitra-
    tors shall choose an umpire in accordance with the
    terms of their agreements.
  It is clear from this language that the district court
intended to require Wausau to appoint one arbitrator
and proceed to one arbitration, covering both Agreements.
16                                              No. 05-3437

  Wausau argues that ordering it to arbitrate both Agree-
ments in one arbitration would conflict with the terms
of the arbitration clauses, for example by not allowing “each
party to appoint its arbitrator.” We should not and will not
consider this argument. The question before us is whether
the parties’ Agreements specify who is to decide whether
consolidated arbitration is allowed—the court or the
arbitrator. We have determined that the Agreements do not
specify and that questions regarding consolidation are
presumptively for the arbitrator. Wausau is free to argue at
the arbitration that separate arbitrations for the First
Excess Agreement and Second Excess Agreement are
required under the contracts’ terms. If the arbitration panel
agrees, it can require the parties to proceed as it deems
appropriate.

                     III. Conclusion
For the foregoing reasons, we AFFIRM the district court.
No. 05-3437                                        17

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

               USCA-02-C-0072—4-4-06