Court Opinion

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Date Created: 2015-09-21 21:21:25.956083+00
Date Added: 2024-06-11T11:42:51.761657
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USCA1 Opinion

	

                            United States Court of Appeals
                            United States Court of Appeals
                                For the First Circuit
                                For the First Circuit
                                 ____________________

        No. 95-2188

                              PAINEWEBBER INCORPORATED,

                                Plaintiff, Appellant,

                                          v.

               MOHAMAD S. ELAHI, KOKAB MOAREFI ELAHI AND MARYAM ELAHI,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Douglas P. Woodlock, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                Boudin, Circuit Judge,
                                        _____________
                            Bownes, Senior Circuit Judge,
                                    ____________________
                              and Stahl, Circuit Judge.
                                         _____________

                                 ____________________

            Steven L. Manchel  with whom David  A. Forman and  Choate, Hall  &
            _________________            ________________      _______________
        Stewart were on brief for appellant.
        _______
            Philip M.  Giordano with whom Giordano & Champa, P.A. was on brief
            ___________________           _______________________

        for appellees.

                                 ____________________

                                     July 3, 1996
                                 ____________________

                      STAHL, Circuit  Judge.  Mohamad S.  Elahi, his wife
                      STAHL, Circuit  Judge.
                             ______________

            Kokab Moarefi Elahi, and  their daughter Maryam Elahi, former

            clients  of  the  investment  firm  PaineWebber  Incorporated

            ("PaineWebber"),   sought   arbitration  of   several  claims

            stemming  from ill-fated  investments.   PaineWebber  filed a

            complaint  in   federal  district   court  seeking   to  stay

            arbitration, alleging that the  claims were time-barred under

            the terms of the arbitration  agreement.  The district  court

            dismissed  PaineWebber's complaint  and  granted the  Elahis'

            motion to  compel arbitration.   PaineWebber appeals,  and we

            affirm.

                                          I.
                                          I.
                                          __

                                      Background
                                      Background
                                      __________

                      The  Elahis  opened  investment brokerage  accounts

            with PaineWebber in 1986  and executed a "Client's Agreement"

            providing that:

                      all controversies which may arise between
                      [the  Elahis and  PaineWebber] concerning
                      any transaction in  any account(s) or the
                      construction,  performance  or breach  of
                      this  or any other agreement between [the
                      Elahis  and PaineWebber] .  . .  shall be
                      determined    by   arbitration.       Any
                      arbitration shall be  in accordance  with
                      the  rules in  effect of  either the  New
                      York Stock Exchange, Inc., American Stock
                      Exchange,  Inc., National  Association of
                      Securities   Dealers,   Inc.,  or   where
                      appropriate,  the  Chicago Board  Options
                      Exchange or National Futures Association,
                      as the [client] may elect.

                                         -2-
                                          2

            It also  provided that "[t]his agreement  and its enforcement

            shall be construed and governed  by the laws of the  State of

            New York."

                      Some  time in 1994, the Elahis notified PaineWebber

            of their intention to  pursue claims that one of  its brokers

            had sold them unsuitable  and highly speculative investments,

            falsely  guaranteed  a  twelve-percent  minimum  return,  and

            deceptively assured them  that their investments were  secure

            when  in fact  they had  already lost  a significant  part of

            their  initial investment.  On August 3, 1994, the Elahis and

            PaineWebber executed  an agreement  to toll, as  of June  28,

            1994, the  running of all  statutes of limitations  and other

            defenses based  on the passage of time,  apparently hoping to

            reach a  negotiated settlement.   The  effective date  of the

            tolling agreement was more than seven years after the Elahis'

            last purchase of an investment from PaineWebber.  

                      On December 29, 1994,  the Elahis filed a Statement

            of Claim with the National Association of Securities Dealers,

            Inc. ("NASD"),  seeking arbitration  of claims arising  under

            the  federal  securities  laws,  Massachusetts  statutes, and

            various Massachusetts common law theories of fraud and breach

            of fiduciary  duty.   PaineWebber responded by  bringing this

            action for declaratory and  injunctive relief, seeking to bar

            the arbitration of the  Elahis' claims.  PaineWebber asserted

            that the arbitration rules of the NASD precluded claims filed

                                         -3-
                                          3

            more  than six years after the purchase of the investments at

            issue.   Specifically, PaineWebber  pointed to Section  15 of

            the NASD Code of  Arbitration Procedure ("section 15"), which

            provides:

                      Time Limitation Upon Submission
                      _______________________________
                           Sec.  15.   No  dispute,  claim,  or
                      controversy   shall   be   eligible   for
                      submission to arbitration under this Code
                      where six (6) years have elapsed from the
                      occurrence  or event  giving rise  to the
                      act  or  dispute, claim,  or controversy.
                      This section shall not  extend applicable
                      statutes  of  limitations,  nor shall  it
                      apply to  any case  which is  directed to
                      arbitration  by  a  court   of  competent
                      jurisdiction.

            PaineWebber  postulated  that  the  Elahis' claims  were  not

            "eligible   for  submission  to   arbitration"  because  they

            concerned securities  purchased more than  seven years before

            the effective date  of the tolling  agreement and over  eight

            years before  the claim  for arbitration was  filed with  the

            NASD.  The Elahis' countered by filing motions (1) to dismiss

            PaineWebber's complaint  and (2) to compel  arbitration under

            the Federal Arbitration Act, 9 U.S.C.   4.

                      The  district court  granted  the Elahis'  motions.

            The  court  found   that  the  parties  had  signed  a  valid

            arbitration  agreement  covering  disputes   over  investment

            transactions, and  consequently ruled that  the applicability

            of the time-bar provision of section 15 was a question to  be

                                         -4-
                                          4

            determined  by  the   arbitrator  rather  than  the   court.1

            PaineWebber appeals.

                                         II.
                                         II.
                                         ___

                                      Discussion
                                      Discussion
                                      __________

                      PaineWebber argues  on appeal  that the section  15

            time bar makes the Elahis' claims ineligible for arbitration,

            and that the  court, not the arbitrator must therefore decide

            the timeliness  question.   The  issue  before us,  then,  is

            whether the time-bar provision is to be construed and applied

            by the  arbitrator  or  by the  court.2   We  are  the  tenth

            circuit court  to address that question;  our sister circuits

            are split  five-to-four.   The Third, Sixth,  Seventh, Tenth,

            and Eleventh Circuits  have held that  the court must  decide

            the applicability  of the  section 15  time bar;  the Second,

            Fifth,  and Eighth,  and  Ninth Circuits  have held  that the

                                
            ____________________

            1.  The district  court based  its decision on  its published
            opinion in a similar  case, PaineWebber, Inc. v. Landay,  903
                                        _________________    ______
            F. Supp. 193 (D. Mass. 1995), which the court incorporated by
            reference  in its  unpublished memorandum  and order  in this
            case.

            2.  Ultimately,  the arbitrator  or the  court will  probably
            need to  determine (1) whether the  only relevant "occurrence
            or event" triggering the time bar was the Elahis' purchase of
            investments, or whether the time bar should be measured  from
            the date of alleged  subsequent acts or omissions related  to
            the  investments, and (2) whether the time bar is absolute or
            subject  to  equitable tolling.    We need  not  decide those
            issues.   We are faced  solely with the  question whether the
            district  court correctly referred the time bar issues to the
            arbitrator, or should have decided them itself.

                                         -5-
                                          5

            arbitrator decides.3   In our  view, this  body of  appellate

            caselaw leaves important aspects of the  problem unaddressed,

            as  we  shall explain.    The  relevant Supreme  Court  cases

            provide  guidance, but  do not point  clearly to  the correct

            result  in this  case.   Consequently, we  embark on  our own

            analysis.

                      Because  this appeal  presents a  question of  law,

            appellate  review is plenary.  See McCarthy v. Azure, 22 F.3d
                                           ___ ________    _____

            351, 354 (1st Cir. 1994) (applying de novo review to district
                                               _______

            court's ruling on scope of arbitration agreement); Commercial
                                                               __________

            Union Ins. Co.  v. Gilbane Bldg. Co., 992 F.2d  386, 388 (1st
            ______________     _________________

            Cir.  1993) (explaining  that determination  of arbitrability

            depends on  contract interpretation,  which is a  question of

            law).

                      PaineWebber presents two  basic arguments: (1) that

            the parties' contractual choice of New York law was made with

            the intent to require the court, not the arbitrator, to apply

            the  section 15 time bar,  as New York  caselaw requires; and

            (2) that, under federal law, the time bar presents a question

            of arbitrability to be  decided by the court, in  the absence

            of  clear  evidence  that  the  parties  intended  to  submit

            arbitrability  determinations to  arbitration.    We  address

            these arguments in order.

                                
            ____________________

            3.  The  cases  are  listed   and  discussed  infra  in  part
                                                          _____
            II.B.1.a.

                                         -6-
                                          6

            A.  Effect of the Choice-of-Law Clause
            ______________________________________

                      The  agreement between  PaineWebber and  the Elahis

            provides that "[t]his agreement  and its enforcement shall be

            construed and governed by the laws of the State of New York."

            Relying  on that choice-of-law  provision, PaineWebber argues

            that  we must reverse the district  court's order because New

            York  courts have  held  that courts,  not arbitrators,  must

            decide  the applicability of the  section 15 time  bar.  See,
                                                                     ___

            e.g., Merrill  Lynch, Pierce, Fenner & Smith, Inc. v. Ohnuma,
            ____  ____________________________________________    ______

            630 N.Y.S.2d 724, 725  (N.Y. App. Div. 1995);  Merrill Lynch,
                                                           ______________

            Pierce, Fenner &  Smith, Inc. v. DeChaine, 600  N.Y.S.2d 459,
            _____________________________    ________

            460 (N.Y. App. Div.), leave to appeal denied, 624 N.E.2d 694
                                  ______________________

            (1993).  

                      Thus, our first task is to determine if the choice-

            of-law provision  settles the  question whether the  court or

            the arbitrator decides the effect of the section 15 time bar.

            Somewhat paradoxically, federal arbitration law  dictates the

            effect of the clause selecting New York law.

                      Section 2  of the Federal Arbitration Act ("FAA"),4

                                
            ____________________

            4.  Section 2 of the FAA 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  or transaction . . . shall
                      be  valid, irrevocable,  and enforceable,
                      save upon such grounds as exist at law or
                      in  equity  for  the  revocation  of  any
                      contract.

                                         -7-
                                          7

            "is a  congressional declaration of a  liberal federal policy

            favoring  arbitration  agreements, notwithstanding  any state

            substantive or  procedural policies to the  contrary."  Moses
                                                                    _____

            H.  Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
            _______________________    _____________________

            24  (1983).   Although "[t]he  FAA contains  no express  pre-

            emptive provision,"  and "[does not] reflect  a congressional

            intent to occupy the entire field of arbitration," Volt Info.
                                                               __________

            Sciences, Inc. v. Board of  Trustees of Leland Stanford,  Jr.
            ______________    ___________________________________________

            Univ., 489 U.S. 468, 477 (1989), it was intended to "create a
            _____

            body of federal substantive law of arbitrability,  applicable

            to any arbitration agreement within the coverage of the Act."

            Moses H. Cone,  460 U.S. at 24.  There is no dispute that the
            _____________

            agreement between these  parties is within  the scope of  the

            FAA, because it  is clearly one "involving  commerce" as that

            phrase was broadly construed in Allied-Bruce Terminix Cos. v.
                                            __________________________

            Dobson, 115 S.  Ct. 834,  839-43 (1995).   And, the  question
            ______

            whether  a court or an arbitrator applies the section 15 time

            bar relates  closely to "arbitrability," so we must apply the

            federal  common  law  of  arbitrability  that  has  developed

            pursuant to the FAA.  See Moses H. Cone, 460 U.S. at 24.
                                  ___ _____________

                      The "primary purpose" of the FAA is to ensure "that

            private  agreements  to arbitrate  are enforced  according to

            their terms."  Volt, 489 U.S. at 479.  "Arbitration under the
                           ____

            Act is a  matter of  consent, not coercion,  and parties  are

                                
            ____________________

            9 U.S.C.   2.

                                         -8-
                                          8

            generally  free to  structure  their agreements  as they  see

            fit."  Id.   Thus, whether an  issue is to be  decided by the
                   ___

            arbitrator is  a matter  of the parties'  contractual intent.

            See Mastrobuono  v. Shearson Lehman Hutton, Inc.,  115 S. Ct.
            ___ ___________     ____________________________

            1212, 1216 (1995).

                      The Supreme  Court has explained that  the FAA "not

            only 'declared  a national policy favoring  arbitration,' but

            actually 'withdrew  the  power of  the  states to  require  a

            judicial  forum  for  the  resolution  of  claims  which  the

            contracting parties agreed to  resolve by arbitration.'"  Id.
                                                                      ___

            at 1215-16 (quoting  Southland Corp. v. Keating, 465  U.S. 1,
                                 _______________    _______

            10 (1984)).  More recently,  the Supreme Court explained that

            if a state law  is applicable to contracts generally,  it may

            be applied to arbitration agreements, but a state law that is

            specifically and solely  applicable to arbitration agreements

            is  displaced  by   the  FAA.    Doctor's  Assocs.,  Inc.  v.
                                             ________________________

            Casarotto, 116 S. Ct. 1652,  1655-56 (1996).  Therefore,  New
            _________

            York  law cannot require the  parties in this  case to submit
                             _______

            the  question of  the section  15 time  bar to  a  court; the

            question  is  whether  the parties  intended,  through  their
                                                ________

            general choice of New  York law, to adopt for  themselves the

            New  York  caselaw requiring  that  courts,  not arbitrators,

            decide the time bar.

                      Based    on    the   "national    policy   favoring

            arbitration," Mastrobuono,  115 S.  Ct. at 1216,  the Supreme
                          ___________

                                         -9-
                                          9

            Court in Mastrobuono held that the choice-of-law provision in
                     ___________

            a broker-client agreement did not indicate an intent to adopt

            New York  caselaw barring arbitrators  from awarding punitive

            damages.   115 S. Ct. at  1215-18.  The Court  found that the

            parties'  choice of  New  York law  was  not "an  unequivocal

            exclusion of punitive damages," id. at 1217, and [a]t most  .
                                            ___

            . .  introduce[d] an ambiguity into  an arbitration agreement

            that would otherwise allow punitive damages awards."   Id. at
                                                                   ___

            1218.   The Court resolved  that ambiguity both  "in favor of

            arbitration,"  id., and  "against the  interest of  the party
                           ___

            that  drafted it," id. at 1219, and found that the choice-of-
                               ___

            law clause  did not speak  to the power of  the arbitrator to

            award punitive damages, id.
                                    ___

                        Following  the principles and  analysis set forth

            in Mastrobuono,  we (like the  district court) find  that the
               ___________

            choice-of-law clause  in this  case is  not an expression  of

            intent to  adopt  New York  caselaw requiring  the courts  to

            apply  section 15.    Here, the  breadth  of the  arbitration

            clause --  encompassing "all  controversies . .  . concerning

            any transaction"  as well as the  "construction, performance,

            or breach" of the agreement  -- militates against reading the

            choice-of-law clause  as a  limit on the  arbitrator's power.

            Moreover,  the agreement provides  that "arbitration shall be

            in accordance with the rules in  effect of the . . . [NASD],"

            which  further  undermines the  likelihood  that the  parties

                                         -10-
                                          10

            intended  to adopt  arbitration rules  contained in  New York

            caselaw.    In sum, we can  do no better than  to borrow from

            Mastrobuono:
            ___________

                      We  think the  best way to  harmonize the
                      choice-of-law    provision    with    the
                      arbitration  provision  is  to read  "the
                      laws  of  the  State  of  New   York"  to
                      encompass substantive principles that New
                      York  courts  would  apply,  but  not  to
                      include   special   rules  limiting   the
                      authority  of  arbitrators.    Thus,  the
                      choice-of-law provision covers the rights
                      and  duties of  the  parties,  while  the
                      arbitration clause covers arbitration . .
                      . .

            Id. at 1219.
            ___

                      Thus,  relying  on Mastrobuono,  we  hold  that the
                                         ___________

            parties' contractual choice of New York law  does not require

            a  judicial determination  of  the effect  of  the NASD  Code

            section  15  time  bar.5     We  move  on  to   consider  the

            arbitration clause  itself (and the NASD  Code of Arbitration

            Procedure  incorporated therein)  to determine,  in light  of

            federal arbitration  law, whether  the parties  intended that

            the arbitrator or the court apply the time bar.

            B.  Interpreting Section 15
            ___________________________

                                
            ____________________

            5.  This  conclusion  is  not inconsistent  with  Volt  Info.
                                                              ___________
            Sciences, Inc. v.  Board of Trustees of  Leland Stanford, Jr.
            ______________     __________________________________________
            Univ.,  489  U.S. 468  (1995).   In  Volt, the  Supreme Court
            _____                                ____
            deferred  to  the  California  court's  finding  under  state
            contract law  that the parties had  intended their choice-of-
            law clause  to adopt  California rules governing  arbitration
            procedures.   Id. at  476.  Here,  we must  determine de novo
                          ___                                     __ ____
            what the parties intended  by their choice-of-law clause, and
            we follow Mastrobuono.   See Mastrobuono, 115 S. Ct.  at 1217
                      ___________    ___ ___________
            n.4.

                                         -11-
                                          11

                      A cardinal principle of federal  arbitration law is

            that "`arbitration is a matter of contract and a party cannot

            be required to submit to arbitration any dispute which he has

            not  agreed so  to  submit.'"    AT&T Technologies,  Inc.  v.
                                             ________________________

            Communications  Workers  of Am.,  475  U.S.  643, 648  (1986)
            _______________________________

            (quoting United  Steelworkers v.  Warrior & Gulf  Navig. Co.,
                     ____________________     __________________________

            363  U.S. 574,  582 (1960)).6   Where  the parties  have made

            clear what issues are  to be arbitrated, and what  issues are

            excluded  from arbitration, it is easy to give effect to that

            principle.  The difficulty comes where the existence or scope

            of  the agreement to arbitrate is unclear; in that situation,

                                
            ____________________

            6.  Earlier,  one   might  have  doubted   whether  appellate
            decisions   concerning  labor  arbitration   would  apply  to
            commercial arbitration.    Today, there  is little  question.
            The  Supreme Court  relied heavily  upon a  labor arbitration
            case in its recent decision in First Options of Chicago, Inc.
                                           ______________________________
            v. Kaplan, 115  S. Ct. 1920,  1923-25 (1995) (applying  labor
               ______
            arbitration  precedents,  particularly  AT&T,   to  determine
                                                    ____
            whether courts or  arbitrators decide  arbitrability under  a
            commercial  arbitration  agreement).     We  believe  it   is
            appropriate to  follow the  Supreme Court's lead  in applying
            the particular  labor arbitration  cases cited herein  to the
            particular issue  in this commercial arbitration  case.  See,
                                                                     ___
            e.g., McCarthy v.  Azure, 22  F.3d 351, 354  (1st Cir.  1994)
            ____  ________     _____
            (applying   labor   arbitration   precedents  in   commercial
            arbitration case).   Cf. Finegold, Alexander  & Assocs., Inc.
                                 ___ ____________________________________
            v.  Setty &  Assocs., Ltd.,  81 F.3d  206, 207-08  (D.C. Cir.
                ______________________
            1996) (discussing application of labor arbitration precedents
            in commercial  arbitration cases,  and stating "there  may no
            longer  be much  of a  distinction between  the two  lines of
            cases . .  . but  precision constrains us  to avoid  treating
            them  interchangeably"); Raytheon Co. v. Automated Bus. Sys.,
                                     ____________    ____________________
            Inc.,  882 F.2d 6, 10-11 (1st Cir. 1989) (explaining that use
            ____
            of labor  arbitration precedents is inappropriate in deciding
            whether  commercial arbitrators have  power to award punitive
            damages, given  different considerations in  long-term labor-
            management  relationships  and  short-term, often  "one-shot"
            commercial relationships).

                                         -12-
                                          12

            federal  arbitration  law  must  provide  default  rules  and

            presumptions.

                      Because a party will not be coerced to arbitrate an

            issue unless he  has so  agreed, the Supreme  Court has  held

            that:

                      the question of arbitrability  -- whether
                      a[n] .  . . agreement creates  a duty for
                      the parties to  arbitrate the  particular
                      grievance  --  is  undeniably a  judicial
                      determination.      Unless  the   parties
                      clearly    and    unmistakably    provide
                      otherwise,  the  question of  whether the
                      parties  agreed  to  arbitrate  is  to be
                      decided by the court, not the arbitrator.
              
            Id. at 649,  followed in  First Options of  Chicago, Inc.  v.
            ___          ___________  _______________________________

            Kaplan, 115  S. Ct. 1920,  1923-25 (1995).  In  this case, if
            ______

            the   section   15  time   bar   is   determinative  of   the

            "arbitrability" of  the Elahis'  claim, then, under  AT&T and
                                                                 ____

            First Options, the district court must construe and apply the
            _____________

            time bar,  unless we  find "clear and  unmistakable" evidence

            that  the  parties  agreed  to  have  the  arbitrator  decide

            arbitrability.  

                      But the presumption established  in AT&T and  First
                                                          ____      _____

            Options    --   that   courts,    not   arbitrators,   decide
            _______

            "arbitrability" unless the parties clearly intend otherwise -

            -  is an  exception to the  "liberal federal  policy favoring

            arbitration."   See Moses H. Cone,  460 U.S. at 24.  Pursuant
                            ___ _____________

            to that  policy, the Supreme  Court has  established a  broad

            presumption  of arbitrability:  "any  doubts  concerning  the

                                         -13-
                                          13

            scope of arbitrable  issues should  be resolved  in favor  of

            arbitration, whether the problem  at hand is the construction

            of the contract  language itself or an  allegation of waiver,

            delay,  or a like defense  to arbitrability."   Id. at 24-25.
                                                            ___

            Accordingly,   if   the   time    bar   does   not    control

            "arbitrability," the  issue of  the time  bar's applicability

            would  be one for the  arbitrator under the broad arbitration

            clause, absent  a  clear indication  to the  contrary in  the

            parties' agreement.   See  Mastrobuono, 115  S.  Ct. at  1218
                                  ___  ___________

            ("[A]mbiguities  as to  the scope  of the  arbitration clause

            itself [must be] resolved in favor of arbitration.") (quoting

            Volt, 489 U.S.  at 476);  AT&T, 475 U.S.  at 650  (explaining
            ____                      ____

            established rule  that where  broad arbitration clause  is in

            force,  presumption of arbitrability  exists unless "forceful

            evidence"   indicates   intent    to   exclude   claim   from

            arbitration).   In other  words, if an  "arbitrability" issue

            arises, it  is  presumptively for  the court  to decide;  but

            issues   other   than   "arbitrability"   are   presumptively

            arbitrable, that is, for the arbitrator to decide.

                      Because the  agreement  is not  unmistakably  clear

            about whether the  court or  the arbitrator is  to apply  the

            time bar, this case  hinges on which of the  two presumptions

            we apply:   (1)  issues of "arbitrability"  are presumptively

            for  the   court  to  decide,   or  (2)  issues   other  than

            "arbitrability" are presumptively  for the arbitrator.   And,

                                         -14-
                                          14

            which  presumption we apply hinges on whether the time bar is

            an "arbitrability" issue, in the sense that the Supreme Court

            used that term  in AT&T and First Options.   Thus, we venture
                               ____     _____________

            into a definitional maze to determine whether or not the NASD

            time bar presents an issue of "arbitrability."

                      1.  Does the  time bar  present an  "arbitrability"
                      ___________________________________________________

                      issue?
                      ______

                      The Supreme Court's  most recent discourse on  "who

            decides arbitrability"  appears in First Options,  115 S. Ct.
                                               _____________

            at 1923-25.  In First Options,  the "arbitrability" issue was
                            _____________

            whether Kaplan  and his  wife were bound  to arbitrate  their

            personal  liability  for  the  debts of  their  wholly  owned

            investment corporation,  given that  they had  not personally

            signed the arbitration agreement  that undisputedly bound the

            corporation.   Thus, we can glean from First Options that the
                                                   _____________

            issue  of whether  a  person is  a  party to  an  arbitration

            agreement is an "arbitrability" issue, and presumptively  for

            the court to decide.

                      In  AT&T,  the other  Supreme  Court  case on  "who
                          ____

            decides arbitrability," the "arbitrability" issue was whether

            the subject  matter of  the underlying dispute  was expressly
                _______________

            made  non-arbitrable  by   the  terms   of  the   arbitration

            agreement.     The  arbitration   clause  of  the  collective

            bargaining agreement ("CBA") in  AT&T expressly did not cover
                                             ____

            disputes  "excluded from  arbitration by other  provisions of

                                         -15-
                                          15

            this contract."   AT&T, 475  U.S. at 645.   The  CBA provided
                              ____

            further that the employer, AT&T, was free to exercise certain

            management   functions,   including   the    termination   of

            employment, "not subject to the provisions of the arbitration

            clause."  Id.   Another CBA term provided that  layoffs would
                      ___

            occur  in reverse  order  of seniority,  defining layoffs  as

            terminations  resulting from  "lack  of  work"; the  "layoff"

            provision did  not  specify whether  it  was subject  to,  or

            excepted  from, the arbitration clause.   Id.   The issue was
                                                      ___

            whether  the  union  could  compel  arbitration  over certain

            layoffs, or, instead, whether the layoffs were non-arbitrable

            management functions.  The Supreme  Court held that the issue

            whether "layoffs" were an arbitrable subject matter was to be

            decided by  the courts,  not the  arbitrator, given  that the

            parties had expressly agreed that certain subjects, including

            "termination  of employment,"  were not  arbitrable.   Id. at
                                                                   ___

            651.  Thus, we glean from AT&T  that the question whether the
                                      ____

            subject matter  of the underlying dispute is within the scope

            of  an   expressly  limited   arbitration  agreement  is   an

            "arbitrability" issue.

                      In the  case at hand,  it is without  question that

            PaineWebber  and the  Elahis  are parties  to an  arbitration

            agreement  of broad  scope, and  that the  underlying dispute

            over unsuitable  investments concerns a  subject matter  that

            they  intended  to   arbitrate.    Nonetheless,   PaineWebber

                                         -16-
                                          16

            contends  that  the NASD  section  15 time  bar  prevents the

            arbitrator from  hearing any aspect of  this dispute, because

            the  time bar  is a  "substantive eligibility  requirement." 

            The question before  us, then, is  whether the timeliness  of

            submission goes to  the "arbitrability" of the  merits of the

            underlying  dispute,  within  the  meaning of  that  term  as

            suggested by AT&T and First Options.
                         ____     _____________

                      The    Supreme    Court    has     twice    defined

            "arbitrability":  in  AT&T as  "whether the .  . .  agreement
                                  ____

            creates a duty  for the parties  to arbitrate the  particular

            grievance," id. at 649; and in First Options as "whether they
                        ___                _____________

            agreed to arbitrate the merits" of the dispute, 115 S. Ct. at

            1923.    It is  not immediately  obvious  how to  apply these

            definitions  to determine  whether the  NASD time  bar is  an

            arbitrability issue.

                      One could  say here that "arbitrability"  is not an

            issue, because  the parties  clearly agreed to  arbitrate the

            merits   of   disputes    about   investment    transactions.

            Alternatively, one could say that the  parties only agreed to

            arbitrate investment  disputes less  than six years  old,7 in

                                
            ____________________

            7.  The  parties  apparently  agree  that the  NASD  Code  of
            Arbitration  Procedure  was  incorporated  by  reference into
            their agreement,  even though it was not known at the time of
            execution that the NASD  would be the chosen arbitral  forum.
            Cf.  PaineWebber Inc. v. Bybyk,  81 F.3d 1193,  1201 (2d Cir.
            ___  _______________     _____
            1996) (holding that NASD Code not incorporated into identical
            client-broker   arbitration   agreement   because  NASD   not
            identifiable as actual arbitral forum at time of execution of
            the agreement).

                                         -17-
                                          17

            which case the  time bar would  be an "arbitrability"  issue.

            But  where does  that  logic  take  us?    Many  a  mandatory

            procedural rule  could be  called an "arbitrability"  rule if

            the failure  to comply  prevented arbitration of  the merits.

            For example,  one might say  that, by incorporating  the NASD

            rules, the  parties agreed  to arbitrate only  those disputes

            for  which  the arbitrator's  fee  has  been paid;  questions

            relating to  the fee could be  called "arbitrability" issues.

            It would  be illogical, though,  to conclude that  the court,

            not  the  arbitrator, must  determine if  the proper  fee was

            paid.   Thus,  it  is not  immediately  clear how  we  should

            determine,  at the margins at least,  what is and what is not

            an  arbitrability   issue.    Seeking  more   light  on  what

            "arbitrability" means and whether the  section 15 time bar is

            an  "arbitrability" issue,  we  next examine  the rulings  of

            other circuits on the  question whether courts or arbitrators

            apply the section 15 time bar.  

                           a. Decisions of other circuits
                           ______________________________

                                i. Five circuits conclude the court must
                                ________________________________________

                                decide
                                ______

                      Five  circuits (the  Third, Sixth,  Seventh, Tenth,

            and  Eleventh) have interpreted the time bar of section 15 to

            be  a substantive eligibility  requirement that constitutes a

            jurisdictional prerequisite to arbitration, and thus for  the

                                         -18-
                                          18

            court  to  apply.8   See,  e.g., Cogswell  v.  Merrill Lynch,
                                 ___   ____  ________      ______________

            Pierce,  Fenner & Smith, Inc., 78 F.3d 474, 478-81 (10th Cir.
            _____________________________

            1996) (collecting and discussing cases from other  circuits);

            Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Cohen, 62 F.3d
            ___________________________________________    _____

            381, 383-84  (11th Cir.  1995); PaineWebber Inc.  v. Hoffman,
                                            ________________     _______

            984 F.2d 1372, 1378 (3d Cir. 1993);  Roney and Co. v. Kassab,
                                                 _____________    ______

            981 F.2d 894, 898-900 (6th Cir. 1992); Edward D. Jones &  Co.
                                                   ______________________

            v. Sorrells, 957 F.2d 509, 512-13 (7th Cir. 1992).   
               ________

                      In essence,  these  decisions rest  on an  asserted

            "plain language"  interpretation of section 15:   because the

            rule  provides  that  claims  over  six  years  old  are  not

            "eligible  for  submission"  to arbitration,  these  circuits
             ________       __________

            conclude that  it limits the jurisdiction  of the arbitrator,

            and consequently,  any question about the  application of the

            rule to the  facts of a  particular case is  for the  courts.

            Having characterized the time bar as an "arbitrability" issue

            presumptively for  the courts  under AT&T and  First Options,
                                                 ____      _____________

            these circuits, examining agreements  substantially identical

            to  the Elahis',  find  no clear  evidence  of an  intent  to

            arbitrate the time-bar issue.  

                      In  our view,  the language  of section  15 is  not

            plain and unambiguous.  Section 15  of the NASD Code does not

                                
            ____________________

            8.  Some  of the  cited cases  involve an  identical time-bar
            rule of the New York Stock Exchange, and we see  no reason to
            distinguish  the cases.  Furthermore, none  of the cases turn
            on  the minor variations  in the language  of the arbitration
            clauses in the broker-client agreements.

                                         -19-
                                          19

            speak  to  who decides  the  applicability of  the  time bar.
                       ___

            Section   15  does   not   plainly  create   a  question   of

            "arbitrability,"  because it  does  not address  whether  the

            basic  subject matter of the  dispute is within  the scope of

            the arbitration clause.

                      One could credibly view  section 15 as analogous to

            a  statute   of  limitations   rather  than   a  "substantive

            eligibility  requirement."    Courts  have  often  held  that

            timeliness issues  are for the  arbitrator to decide,  so the

            mere  fact  that  the  rule  creates   a  time-based  bar  to

            successful  assertion of a claim does not by itself create an

            "arbitrability"  issue for the court.  See Moses H. Cone, 460
                                                   ___ _____________

            U.S. at 24-25 (1983); Local 285, Serv. Employees Int'l  Union
                                  _______________________________________

            v. Nonotuck Resource Assocs., Inc.,  64 F.3d 735, 739-40 (1st
               _______________________________

            Cir. 1995); O'Neel v. National Ass'n of Secs.  Dealers, Inc.,
                        ______    ______________________________________

            667 F.2d 804, 807 (9th Cir. 1982).

                      The Seventh Circuit's analysis  relied in part on a

            1988 letter  written by an  NASD staff attorney  stating that

            "the  NASD will not process a claim that falls wholly outside

            the  six year period," finding the letter to be an indication

            that section  15 is an  eligibility requirement that  must be

            decided by the courts.   See PaineWebber Inc. v.  Farnam, 870
                                     ___ ________________     ______

            F.2d 1286,  1292 (7th Cir.  1989).  In our  view, reliance on

            the NASD staff attorney's  letter is misplaced.  There  is no

            assurance  that the  letter represented  the position  of the

                                         -20-
                                          20

            NASD at the time.  More importantly, it does  not reflect the

            current view of the  NASD.  Recently, the NASD  has concluded

            that section  15 is silent  on whether courts  or arbitrators
                                ______

            decide if an action is time-barred.  The NASD has proposed an

            amendment to  section 15  which would  provide that  the NASD

            Director   of   Arbitration   would  make   the   eligibility

            determination under the six-year time-bar rule.  59 Fed. Reg.

            39,373,  39,373-74 (July  26, 1994),  quoted in  Cogswell, 78
                                                  _________  ________

            F.3d at  479.9  The NASD, explaining the amendment's purpose,

            stated  that  "Section  15  does  not  specify  who  has  the

            authority  to determine if a claim is eligible for submission

            to arbitration."   Id.   The NASD's 1994  statement seriously
                               ___

            undermines  the  five-circuit  majority's   "plain  language"

            rationale, as  well as any  reliance on the  staff attorney's

            letter as an agency opinion entitled to some deference.

                      In sum, we are not persuaded by the analysis of the

            five-circuit majority.

                                ii.  Four  circuits  say  the  arbitrator
                                _________________________________________

                                decides
                                _______

                                
            ____________________

            9.  The NASD withdrew the  proposed amendment in October 1994
            based  on  concerns  expressed  in public  comments,  and  is
            apparently still working "to develop a proposal acceptable to
            all  parties concerned."   Letter  from Suzanne  E. Rothwell,
            NASD  Associate  General Counsel,  to  Mark Barracca,  Branch
            Chief, Division  of Market  Regulation of the  Securities and
            Exchange  Commission  (Oct. 12,  1994).    In our  view,  the
            withdrawal  of the  proposed  amendment does  not negate  the
            significance of the NASD's statement in 1994 that  section 15
            does  not specify who  decides the applicability  of the time
            bar. 

                                         -21-
                                          21

                      Four  circuits  -- the  Second, Fifth,  Eighth, and

            Ninth --  take the view  that the  section 15 time  bar is  a

            matter for the arbitrator to decide.  While we agree with the

            result  these  circuits  reach,  in our  view,  their  varied

            analyses leave important questions unanswered.  

                      In Smith  Barney Shearson,  Inc. v. Boone,  47 F.3d
                         _____________________________    _____

            750,  753-54  (5th Cir.  1995),  the  Fifth  Circuit  drew  a

            distinction between issues of "substantive arbitrability" and

            "procedural  arbitrability."    Given the  broad  arbitration

            clause  between  the parties  in Boone,  the court  held that
                                             _____

            section  15  raised timeliness  issues  that  "are issues  of

            procedural  arbitrability   and  must   be  decided  by   the

            arbitrator."10  Id. at 754.
                            ___

                                
            ____________________

            10.  The Fourth  Circuit, which has not  decided the question
            presented  here,  appears  to   embrace  the  "substance  vs.
            procedure"  approach of  the  Fifth Circuit.    In Miller  v.
                                                               ______
            Prudential Bache  Secs., Inc.,  884 F.2d 128,  132 (4th  Cir.
            _____________________________
            1989), cert. denied,  497 U.S. 1004  (1990), the court  found
                   ____________
            that  a clause  in a  broker-client agreement  providing that
            "arbitration was to be conducted in accordance with the rules
            of   the  arbitration   forum   governed   only   arbitration
            procedure."   The precise holding in Miller, though, was that
                                                 ______
            although the  NASD's procedural  rules made the  NASD's anti-
            fraud provisions inapplicable,  the NASD  arbitrator was  not
            barred from applying the anti-fraud provisions of other stock
            exchanges  to which Prudential-Bache  belonged.   That result
            followed from  the court's finding that  the NASD arbitration
            rules related  only to  arbitration "procedure," and  not the
            "substantive  rules  that  may  bear  on  the merits  of  the
            underlying  dispute."  Id.   It would appear  that the Fourth
                                   ___
            Circuit's  analytical  approach  (i.e., that  the  procedural
                                              ____
            rules  of  the  arbitral   forum  are  incorporated  into  an
            arbitration agreement only  to govern arbitration  procedure)
            would lead  to the same result with  respect to the NASD time
            bar:    the NASD  Code  of  Arbitration Procedure,  including
            section 15, is for the arbitrator to interpret and apply.

                                         -22-
                                          22

                      The Eighth Circuit held that section 15 was for the

            arbitrator to apply, but declined to address whether the NASD

            time bar was procedural  or substantive.  FSC Secs.  Corp. v.
                                                      ________________

            Freel, 14 F.3d 1310, 1312 n.2 (8th Cir. 1994).   Instead, the
            _____

            court in Freel determined that  another provision of the NASD
                     _____

            Code  of Arbitration Procedure, section 35,  was a "clear and

            unmistakable expression"  of the parties' intent  to have the

            arbitrator decide  the applicability  of the section  15 time

            bar.   Id.  at  1312-13.   Section  35 of  the  NASD Code  of
                   ___

            Arbitration  Procedure provides that "[t]he arbitrators shall

            be empowered to interpret  and determine the applicability of

            all provisions under this Code."  Id. at 1312.
                                              ___

                      Finally, and most recently, the Second Circuit held

            that  the arbitrator  decides the  applicability of  the time

            bar.  In  PaineWebber, Inc.  v. Bybyk, 81  F.3d 1193,  1196,
                      _________________     _____

            1198-99 (2d  Cir. 1996),  the court assumed  without analysis

            that  the section  15 time  bar presented  an "arbitrability"

            question  in the sense  of AT&T and  First Options.   But the
                                       ____      _____________

            court also  found that the broad  arbitration agreement ("any

            and all controversies which may arise concerning the account"

            were to be arbitrated) was clear and unmistakable evidence of

            the  parties'  intent   to  have  the  arbitrator   determine

            arbitrability.  Id. at 1199-200.   In reaching the conclusion
                            ___

            that  this intent  was  "clear and  unmistakable," the  court

            said,  somewhat  paradoxically, that  it  would construe  any

                                         -23-
                                          23

            ambiguities against  the drafter, PaineWebber.   Id. at 1199.
                                                             ___

            The Bybyk court went on to say that it did not need to decide
                _____

            whether the  time bar was substantive  or procedural, because

            it  determined  that  the  NASD rules  were  not  effectively

            incorporated into the parties' agreement.  Id. at 1201.  But,
                                                       ___

            the court further stated, even if the NASD rules and the time

            bar had  been incorporated, Section 35  (discussed above with

            the Eighth Circuit's Freel decision) clearly "commit[ted] all
                                 _____

            issues, including issues of arbitrability and  timeliness, to

            the arbitrators."   Id. at  1202.  Thus,  the Second  Circuit
                                ___

            relied on several  alternative grounds to find that  the time

            bar should be applied by the arbitrator.

                      The Ninth  Circuit has  held that "the  validity of

            time-barred defenses to enforcement of arbitration agreements

            should generally be determined  by the arbitrator rather than

            the  court.  O'Neel v. National Ass'n of Secs. Dealers, Inc.,
                         ______    _____________________________________

            667 F.2d  804, 807 (9th Cir. 1982).  But the O'Neel court was
                                                         ______

            applying a previous NASD  five-year time limit for submission

            to arbitration, not the present section 15.  Moreover, O'Neel
                                                                   ______

            contains no  analysis  of the  issue,  as the  Ninth  Circuit

            simply adopted an earlier Second Circuit case, Conticommodity
                                                           ______________

            Services v. Phillip &  Lion, 613 F.2d 1222, 1224-26  (2d Cir.
            ________    _______________

            1980),  which  has  since   been  supplanted  by  the  Second

            Circuit's more  recent analysis in  Bybyk, 81  F.3d at  1193.
                                                _____

            Nonetheless,  it appears that O'Neel is still good law in the
                                          ______

                                         -24-
                                          24

            Ninth Circuit, and we believe the same result would obtain in

            that circuit with respect to section 15.

                           b. Our analysis
                           _______________

                      In our view, we  must determine whether the parties

            intended the time bar to be an "arbitrability" issue, i.e., a
            ________                                              ____

            threshold  issue that must be decided by a court before there

            can be any arbitration.  After all, the intent of the parties

            always controls what is  to be arbitrated.  AT&T, 475 U.S. at
                                                        ____

            648.    Given  the  existence  here  of  a  valid  and  broad

            arbitration  clause  covering "all  controversies" concerning

            investment transactions "or the construction,  performance or

            breach  of this  or  any other  agreement,"  did the  parties

            intend  that  the time  bar  of section  15  should determine
            ______

            "arbitrability"  as  that term  is  used  in AT&T  and  First
                                                         ____       _____

            Options?
            _______

                      If the  parties  clearly intend  that a  particular

            issue must be resolved by the courts before there is any duty

            to submit to arbitration,  then the courts must respect  that

            intent by deciding the issue.  See AT&T, 475 U.S. at 648.  On
                                           ___ ____

            the other hand, if it is ambiguous whether the parties intend

            a  given issue to be an "arbitrability" issue, we must make a

            sensible presumption about their intent.

                      Thus, if the parties have  (1) entered into a valid

            arbitration     agreement    (satisfying     First    Options
                                                         ________________

            "arbitrability"),  and (2)  the arbitration  agreement covers

                                         -25-
                                          25

            the  subject matter  of the  underlying dispute  between them

            (satisfying AT&T "arbitrability"), then we will  presume that
                        ____

            the  parties have  made a  commitment to  have an  arbitrator

            decide all the remaining issues necessary to reach a decision

            on the merits of  the dispute.  Put differently,  the signing

            of a valid agreement  to arbitrate the merits of  the subject

            matter in dispute presumptively pushes the parties across the

            "arbitrability" threshold; we  will then  presume that  other

            issues  relating  to  the substance  of  the  dispute  or the

            procedures of arbitration are for the  arbitrator.  Cf. Moses
                                                                ___ _____

            H. Cone,  460 U.S. at 24-25.  But, if the parties clearly and
            _______

            unmistakably provide that an issue is one of "arbitrability"

            -- i.e.,  that the issue is  a threshold matter  that must be
               ____

            determined before  any adjudicative power will  be granted to

            the  arbitrator --  then  the court  must respect  that clear

            expression of intent and  decide that threshold issue, rather

            than compelling arbitration.

                      This presumption  about whether  an  issue goes  to

            "arbitrability" is  consistent with  both the federal  policy

            favoring arbitration and common sense about the likely intent

            of parties who have agreed to arbitrate the subject matter of

            the  underlying dispute.   We believe  that parties  who have

            agreed to  arbitrate a given  subject most likely  intend and

            expect  that the  arbitrator should  resolve all  issues that

                                         -26-
                                          26

            arise  concerning that subject; if they do not, we think they

            would clearly express their contrary intent.

                      The  presumption  that  we  now  adopt  (i.e., that
                                                               ____

            issues  other  than  (1)  the  existence  of  an  arbitration

            agreement  between the  parties and  (2) whether  the subject

            matter of the underlying  dispute is within the scope  of the

            arbitration  clause  are  presumptively  not  "arbitrability"

            issues) must not be confused with -- and in no way diminishes

            -- the  presumption, established  in AT&T and  First Options,
                                                 ____      _____________

            that issues of  arbitrability are normally  to be decided  by

            courts, not arbitrators.  The presumption that we adopt today

            is  about whether  an issue  is one  of "arbitrability";  the
                      _______

            AT&T/First Options  presumption is  about who  decides issues
            ____ _____________                        ____________

            that have been classified as "arbitrability" issues.

                      The Court explained  in First Options that  parties
                                              _____________

            are  unlikely to have focused  on the question  of who should

            decide arbitrability, and therefore the courts should presume

            that they did not intend to submit arbitrability issues to an

            arbitrator.  115 S.  Ct. at 1924-25.   This is obvious  where

            the "arbitrability" question is whether there is an agreement

            at all (as in  First Options); certainly a party  who did not
                           _____________

            sign  the  agreement  did  not  consider  who  should  decide

            arbitrability.   This presumption  (that arbitrability issues

            are for the courts) also makes sense where the subject matter

            of the dispute may be outside the scope of an otherwise valid

                                         -27-
                                          27

            agreement  (as in AT&T); in  such a case,  the parties likely
                              ____

            believed  that it was  enough to exclude  certain issues from

            the arbitration clause, and probably  did not think about the

            arbitrator's power to decide  whether a particular close case

            was excluded or not.

                      On the  other hand, where the  parties have clearly

            agreed  to arbitrate  the subject  of the  underlying dispute

            between them, as the  parties have here, it is  unlikely that

            they intended  other issues related  to the dispute,  such as

            the  timeliness of the submission of the claim, to affect the

            "arbitrability"  of   the  dispute.     Such  an   intent  is

            particularly  unlikely  where  the arbitration  clause  is as

            broad  as it  is in  this case.   Thus,  we presume  that the

            parties here did not intend to make the section 15 time bar a

            threshold "arbitrability" question  to be  determined by  the

            courts rather than an arbitrator.

                                         -28-
                                          28

                      2. Did the parties clearly and unmistakably express
                      ___________________________________________________

                      an   intent  to   make   the  NASD   time  bar   an
                      ___________________________________________________

                      "arbitrability" issue?
                      ______________________

                        Although  we presume  that the  time bar  was not

            intended  to be an arbitrability issue, we do not stop there;

            we must look closely at the agreement between PaineWebber and

            the Elahis for  any clear and  unmistakable expression of  an

            intent  contrary  to that  presumption.    We apply  "general

            state-law  principles  of   contract  interpretation"  to  an

            arbitration agreement,  but with "due regard"  to the federal

            policy favoring arbitration.   Volt, 489 U.S. at  475-76; see
                                           ____                       ___

            also First Options, 115  S. Ct. at 1924; Mastrobuono,  115 S.
            ____ _____________                       ___________

            Ct. at 1219 & n.9.  As the parties have directed, we look  to

            New  York contract  law.   "[T]he  court  must ascertain  the

            intent  of the parties from the plain meaning of the language

            employed,"  and a "contract should be construed so as to give

            full  meaning and effect  to all  its provisions."   American
                                                                 ________

            Express Bank  Ltd. v. Uniroyal,  Inc., 562 N.Y.S.2d  613, 614
            __________________    _______________

            (N.Y. App. Div. 1990),  leave to appeal denied,  569 N.Y.S.2d
                                    ______________________

            611 (1991).    A contract term is ambiguous if it is "capable

            of  more  than  one  meaning when  viewed  objectively  by  a

            reasonably intelligent person who has examined the context of

            the entire integrated  agreement and who is  cognizant of the

            customs,  practices,  usages,  and terminology  as  generally

            understood  in the  particular trade  or business."   Walk-In
                                                                  _______

                                         -29-
                                          29

            Med. Ctrs., Inc. v.  Breuer Capital Corp., 818 F.2d  260, 263
            ________________     ____________________

            (2d Cir. 1987) (applying New York law).

                      Our analysis of the  agreement reveals no clear and

            unmistakable  expression of  intent  that the  NASD time  bar

            should be  an arbitrability  issue, nor  that the  time bar's

            applicability should not be arbitrated.  The agreement simply

            says that "arbitration  shall be in accordance with the rules

            in effect of  . .  . [the NASD]."11   PaineWebber's  argument

            that  the time bar is  an arbitrability issue  centers on the

            "eligible  for  submission"  language  of  section  15   ("No

            dispute,  claim,  or   controversy  shall  be   eligible  for
                                                            _____________

            submission to arbitration under this Code where six (6) years
            __________

            have  elapsed  .  . .  .").    PaineWebber  asserts that  the

            arbitrator  is  only empowered  to  act  on claims  that  are

            "eligible  for submission" to the NASD,  thus someone else --

            the  court --  must  decide  if  a  claim  is  "eligible  for

            submission."

                                
            ____________________

            11.  The notion of the Elahis having an intent with regard to
            section 15 is somewhat artificial -- it seems unlikely that a
            small, private investor would  have any specific knowledge of
            the  NASD arbitration  rules.   But the  parties here  do not
            dispute  that the  NASD rules  were effectively  incorporated
            into their  agreement, nor  is  there any  argument that  the
            agreement was an unconscionable  contract of adhesion.  Thus,
            by incorporation, the  parties have committed to  be bound by
            section 15, whether  or not  they even knew  it existed,  let
            alone  understood what it meant.   See Level  Export Corp. v.
                                               ___ ___________________
            Wolz, Aiken & Co.,  111 N.E.2d 218, 221 (N.Y.  1953) (one who
            _________________
            accepts a contract is deemed to know its contents).

                                         -30-
                                          30

                      As we concluded earlier  in our analysis of whether

            the time bar presented an arbitrability  issue, PaineWebber's

            view  is  plausible,  but  it   is  not  the  only  plausible

            interpretation of this  phrase.  "Submission  to arbitration"

            could mean  submission for  full adjudication of  the merits,

            rather than  submission for preliminary  determinations, such

            as  whether   the  claim  is  time-barred,   or  whether  the

            appropriate fee was paid, or whether the  claim was submitted

            on the proper forms.  The NASD itself  recently stated, as we

            have noted, that  "Section 15  does not specify  who has  the

            authority  to determine if a claim is eligible for submission

            to arbitration."   59 Fed. Reg. 39,373,  39,373-74, quoted in
                                                                _________

            Cogswell, 78 F.3d at 479-80.   Thus, we conclude, as  did the
            ________

            NASD itself,  that the "eligible for  submission" language in

            section  15 is  not  a clear  expression  of intent  to  make

            timeliness an arbitrability issue.

                      A  number  of  other  considerations   support  our

            conclusion  that section 15 was not clearly intended to be an

            arbitrability  issue  for judicial  determination.12   First,

                                
            ____________________

            12.  We  choose not to rely on another line of precedent that
            would justify our  decision.  In John  Wiley & Sons, Inc.  v.
                                             ________________________
            Livingston, 376  U.S. 543,  555-59 (1964), the  Supreme Court
            __________
            held  that the  effect  of a  four-week  time limit  for  the
            submission of grievances was a matter for the arbitrator, not
            the court.  The  CBA in Wiley provided that "[t]he failure by
                                    _____
            either  party   to  file  the  grievance   within  this  time
            limitation  shall  be  construed  and  be  deemed  to  be  an
            abandonment  of  the  grievance."   Id.  at  556  n.11.   The
                                                ___
            employer  argued that no duty to arbitrate had arisen because
            of the union's  failure to timely file its grievance.  Id. at
                                                                   ___

                                         -31-
                                          31

            the  existence  of  NASD  Code  section  35,  empowering  the

            arbitrator  to "interpret and  determine the applicability of

            all  provisions  under  this  Code,"  strongly  undercuts any

            argument that the parties intended the section 15 time bar to

            be an arbitrability issue  to be decided only by  the courts.

            See Bybyk, 81 F.3d at 1202; Freel, 14 F.3d at 1312.
            ___ _____                   _____

                      Second, the section 15 time bar is part of the NASD

            Code  of Arbitration Procedure,  thus one would  assume it is

            intended to be applied by the NASD itself  to control its own

                                
            ____________________

            556.  The Court  explained that "[o]nce it is  determined, as
            we  have, that the parties are obligated to submit the matter
            of  a dispute  to arbitration,  'procedural' questions  which
            grow out of  the dispute  and bear on  its final  disposition
            should be left to the arbitrator."  Id. at 557.
                                                ___
                      Recently,  we followed  Wiley in  Local  285, Serv.
                                              _____     _________________
            Employees Int'l  Union v. Nonotuck Resource  Assocs. Inc., 64
            ______________________    _______________________________
            F.3d  735, 739-40  (1st  Cir.  1995).  The  CBA  in  Nonotuck
                                                                 ________
            required grievances  to be  presented within fifteen  days of
            the occurrence, and provided that "[t]he time limits provided
            in  this article are conditions precedent  for the filing and
            processing  of grievances under  this Article."   Id. at 739.
                                                              ___
            The employer argued that late-filed grievances were expressly
            excluded from arbitration,  and that under AT&T,  450 U.S. at
                                                       ____
            650,  the arbitrability of the grievance was a matter for the
            court, not the arbitrator.  Nonotuck,  64 F.3d at 739-40.  We
                                        ________
            rejected   that  argument,   explaining  that   the  employer
            "misapprehend[ed]  the  distinction  between substantive  and
            procedural arbitrability."   Id.   We stated  that "the  fact
                                         ___
            that something  is a condition precedent  to arbitration does
            not  make it any less a procedural question" to be determined
            by the arbitrator.  Id. (internal quotation marks omitted).
                                ___
                      The Wiley  and Nonotuck decisions  could be  neatly
                          _____      ________
            applied  to this appeal,  but we think  that simply labelling
            timeliness   issues  as   "procedural,"  and  thus   for  the
            arbitrator,  does  not  give   due  regard  to  the  parties'
            contractual  intent.    If  the parties  expressly  intend  a
            timeliness  issue  (or  other  procedural  issue)  to  be  an
            "arbitrability" issue that the arbitrator cannot decide, then
            we  must respect that contractual intent.  Thus, we think our
            analysis better reflects the primacy of the parties' intent.

                                         -32-
                                          32

            procedures, rather  than a rule that  is somehow "off-limits"

            for arbitrators to apply.

                      Third, the NASD rules only come into play after the

            NASD has been  chosen as  the arbitral forum.   Although  the

            other potential  forums specified in the parties' arbitration

            clause  appear to have a nearly  identical six-year time bar,

            they might,  in theory,  have very different  time-bar rules,

            with different time  periods, or different language  (perhaps

            phrased in  terms  of "eligibility  for submission,"  perhaps

            not).  If  other forums did  have differently phrased  rules,

            the question whether timeliness presented  an "arbitrability"

            issue would depend on which  of the potential arbitral forums

            was chosen.   If the parties  intended to make  a time bar  a

            threshold  issue   for   judicial,  rather   than   arbitral,

            determination,  it  seems  unlikely  that they  would  do  so

            through such potentially unreliable means.

                                         III.
                                         III.
                                         ____

                                      Conclusion
                                      Conclusion
                                      __________

                      Because   the  parties  agreed  to  arbitrate  "all

            controversies" concerning investment transactions, as well as

            controversies concerning the  construction, performance,  and

            breach  of the  arbitration agreement,  we presume  that they

            intended  to arbitrate  the timeliness  of the  submission of

            this dispute about investments.   Finding no clear expression

            of  an intent contrary to  our presumption, we  hold that the

                                         -33-
                                          33

            interpretation and  application of  the six-year time  bar of

            section  15 is a matter for the arbitrator.  Accordingly, the

            judgment  of  the  district  court is  affirmed.    Costs  to
                                                   affirmed     Costs  to
                                                   ________     _________

            appellees.
            appellees.
            __________

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                                          34