Court Opinion

ID: 3189204
Source: CourtListenerOpinion
Date Created: 2016-03-28 19:00:49.831287+00
Date Added: 2024-06-11T14:35:40.253097
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 15-1385

DELL WEBB COMMUNITIES, INC.; PULTEGROUP, INC.,

                Petitioners - Appellants,

     v.

ROGER F. CARLSON; MARY JO CARLSON,

                Respondents - Appellees.

Appeal from the United States District Court for the District of
South Carolina, at Beaufort.       Solomon Blatt, Jr., Senior
District Judge. (9:14−cv−01877−SB)

Argued:   December 9, 2015                  Decided:   March 28, 2016

Before TRAXLER, Chief Judge, GREGORY and DIAZ, Circuit Judges.

Reversed, vacated, and remanded by published opinion. Judge Diaz
wrote the opinion, in which Chief Judge Traxler and Judge
Gregory joined.

ARGUED: Robert Leon Widener, MCNAIR LAW FIRM, P.A., Columbia,
South Carolina, for Appellants.     Michael S. Seekings, LEATH
BOUCH   &   SEEKINGS,  LLP,  Charleston,  South  Carolina,  for
Appellees.    ON BRIEF: A. Victor Rawl, Jr., Henry W. Frampton,
IV, MCNAIR LAW FIRM, P.A., Charleston, South Carolina, for
Appellants.     William Jefferson Leath, Jr., LEATH BOUCH &
SEEKINGS, LLP, Charleston, South Carolina; Phillip W. Segui,
Jr., Amanda Morgan Blundy, SEGUI LAW FIRM, PC, Mount Pleasant,
South Carolina, for Appellees.
DIAZ, Circuit Judge:

          Roger and Mary Jo Carlson signed a sales agreement with

PulteGroup, Inc. and its subsidiary Del Webb Communities, Inc.

(together, “Pulte”) for the purchase of a lot and construction

of    a    home     in    Hilton      Head,    South        Carolina.        The     agreement

contained an arbitration clause.                           This appeal stems from the

Carlsons’ attempt to arbitrate class-action claims against Pulte

under the agreement, and Pulte’s efforts to limit arbitration to

the claims between the three parties.                         The district court held

that the availability of class arbitration under an arbitration

agreement is a procedural question for the arbitrator to decide,

rather than a question for the court.

          Because       the   primary       goal      in    enforcing     an     arbitration

agreement is to discern and honor party intent, and because of

the       fundamental         differences          between      bilateral          and    class

arbitration—which change the nature of arbitration altogether—we

hold      that    whether      parties        agree    to     class    arbitration         is    a

gateway question for the court.                        Accordingly, we reverse the

district         court’s      order     denying       Pulte’s       motion     for       partial

summary       judgment,        vacate        the      judgment        dismissing         Pulte’s

petition,         and     remand      the    case     for     the     district       court      to

determine         whether       the         arbitration        clause     permits         class

arbitration.

                                                2
                                       I.

    The relevant facts are not in dispute.            The Carlsons signed

the sales agreement at issue in March of 2002.            Section 4.3 of

the agreement contains an arbitration clause that, in relevant

part, states:

            Any controversy or claim arising out of or
            relating to this Agreement or Your purchase
            of the Property shall be finally settled by
            arbitration . . . .

            After Closing, every controversy or claim
            arising   out   of   or  relating   to   this
            Agreement, or the breach thereof shall be
            settled by binding arbitration as provided
            by the South Carolina Uniform Arbitration
            Act. . . .   The   rules  of   the   American
            Arbitration Association (AAA), published for
            construction industry arbitrations, shall
            govern the arbitration proceeding and the
            method of appointment of the arbitrator.

            . . . .

            Any party to this Agreement may bring
            action . . . to compel arbitration . . . .

J.A. 34–35.

     In     September   2008,   the    Carlsons   filed   suit    in    South

Carolina state court against Pulte and two other parties.                  The

complaint     raised    several       claims,   all   regarding        alleged

construction defects.      The Carlsons later moved to amend their

complaint to add class-action allegations because their lawsuit

was one of approximately 140 like cases pending against Pulte.

The state court granted the motion over Pulte’s objection.

                                       3
      Pulte then moved to dismiss the amended complaint, or in

the     alternative,    to   compel    bilateral    arbitration      of     the

Carlsons’ claims.      The state court denied both motions, but the

South Carolina Court of Appeals reversed, finding the Carlsons’

claims subject to arbitration under the sales agreement with

Pulte.     Carlson v. S.C. State Plastering, LLC, 743 S.E.2d 868,

875 (S.C. Ct. App. 2013).

      The Carlsons subsequently filed a demand for arbitration

with the American Arbitration Association (AAA).               Their demand

sought class arbitration and class certification, and set the

claim    amount   at   $75,000    “until   such   time   as   the   Class   is

certified.”       J.A. 86.       The class size, as identified in the

demand for arbitration and attached amended complaint, accounts

for approximately 2,000 homes—significantly more than the 140 or

so similar claims pending against Pulte when the Carlsons moved

to proceed as a class.

      On May 6, 2014, the AAA manager held a conference call with

the Carlsons and Pulte.          During the call, the manager notified

the parties that the arbitrator would decide whether the sales

agreement permits class arbitration.

      Three days later, Pulte filed in federal court a Petition

and Complaint to Compel Bilateral Arbitration (“Petition”) under

§ 4 of the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.

As relevant here, Pulte argued that whether the sales agreement

                                      4
authorizes class arbitration is a question of arbitrability for

the   court      to    determine—not             a    procedural         question          for   the

arbitrator.           Pulte     sought       a       declaratory        judgment         that    the

parties did not agree to class arbitration.

      Between May 2014 and March 2015, the parties filed several

motions    in    the    district          court,      including         Pulte’s       motion     for

partial summary judgment that is the subject of this appeal.                                      In

the   meantime,        the    arbitrator         ruled      that       the   sales       agreement

authorized class arbitration, but he stayed the matter for the

resolution of the federal litigation.                        Subsequent motions in the

district    court       and    this       court       resulted         in    a    stay      of   the

arbitration proceedings pending this appeal.

      The district court denied Pulte’s partial summary judgment

motion    and    dismissed          the    Petition.             Relying     on    the      Supreme

Court’s    plurality          decision       in       Greentree        Financial         Corp.    v.

Bazzle,    539    U.S.        444    (2003),          and    this      court’s        unpublished

decision in Davis v. ECPI College of Technology, L.C., 227 F.

App’x 250 (4th Cir. 2007), the court reasoned that whether the

arbitration       clause       permits       class          arbitration          is    a     simple

contract      interpretation              issue,       and       because         the       question

“concerns the procedural arbitration mechanisms available to the

Carlsons,”       the     threshold          inquiry         is     a    question         for     the

arbitrator rather than for the court.                         Del Webb Cmtys., Inc. v.

Carlson, No. 9:14-cv-01877-SB, at 7 (D.S.C. Mar. 25, 2015).

                                                  5
       This appeal followed.

                                                  II.

       We review a district court’s grant of summary judgment de

novo.       Thompson v. Aluminum Co. of Am., 276 F.3d 651, 656 (4th

Cir. 2002).

                                                  A.

       We turn first to the Carlsons’ contention that we should

dismiss         the    appeal—and      that       the    district      court   should    have

dismissed the Petition—for lack of subject-matter jurisdiction.

        The Carlsons first challenge Pulte’s assertion of diversity

jurisdiction,               contending           that     the        amount-in-controversy

requirement            is     not     met     and       that    the     parties    are    not

geographically diverse.                     We, however, are satisfied that the

district court had diversity jurisdiction. 1                            “In considering a

suit       to    compel       arbitration,        the     question      of   jurisdictional

amount      may       be    determined      by    reference     to    the    possible    award

resulting from the requested arbitration.”                            Delta Fin. Corp. v.

Paul D. Comanduras & Assocs., 973 F.2d 301, 304 (4th Cir. 1992).

The    Carlsons’            amended   complaint         and    demand    for   arbitration,

together, provide that the value of their individual claim is

       1
       The Carlsons complain (incorrectly) that the district
court never explained why it had jurisdiction over the Petition.
During a hearing on July 8, 2014, the district court denied the
Carlsons’ motion to dismiss for lack of jurisdiction and
explained the grounds for its ruling.

                                                   6
$75,000,    plus     treble     damages       and    attorneys’      fees,    which

satisfies the statutory floor.            See 28 U.S.C. § 1332(a); Francis

v. Allstate Ins. Co., 709 F.3d 362, 368 (4th Cir. 2013) (stating

that   attorneys’     fees    count   towards        the   amount-in-controversy

calculation    when    the     contract       provides     for    them);   J.A.    40

(providing in sales agreement that award of attorneys’ fees goes

to the prevailing party).          Moreover, the parties are completely

diverse, as the Carlsons are South Carolina citizens, and the

Pulte parties are Michigan and Arizona citizens.                    See 28 U.S.C.

§ 1332(a)(1); Home Buyers Warranty Corp. v. Hanna, 750 F.3d 427,

433 (4th Cir. 2014).

       The Carlsons, however, resist this conclusion on the ground

that South Carolina State Plastering, LLC (“SCSP”), a defendant

named in the original state court complaint, is a South Carolina

citizen.    But SCSP is not a party to the federal proceedings,

and its citizenship is therefore irrelevant.                     Further, SCSP did

not agree to arbitrate with the Carlsons and is not a party to

the underlying arbitration.           See Moses H. Cone Mem’l Hosp. v.

Mercury    Constr.    Corp.,    460   U.S.      1,    20   (1983)    (calling     for

piecemeal resolution in different forums of a dispute when the

plaintiff has an arbitration agreement with some defendants and

not others because “an arbitration agreement must be enforced

notwithstanding the presence of other persons who are parties to

the underlying dispute but not to the arbitration agreement”).

                                          7
     We also conclude that the district court had jurisdiction

under    the    Class     Action    Fairness     Act     of    2005     (CAFA),         which

provides that a district court has original jurisdiction over

class     actions     with    an    amount      in   controversy        greater         than

$5,000,000 and in which “any member of a class of plaintiffs is

a citizen of a State different from any defendant.”                              28 U.S.C.

§ 1332(d)(2)(A).          To determine federal jurisdiction over an FAA

§ 4 petition, the court “may ‘look through’ [the] petition to

determine whether it is predicated on an action that ‘arises

under’ federal law.”              Vaden v. Discover Bank, 556 U.S. 49, 62

(2009)    (determining        jurisdiction       over    a     petition          to   compel

arbitration      of    class-action     claims);        see    also     9    U.S.C.      § 4

(providing that a petition to compel arbitration is proper in

federal    court      when   the    court    “would     have    jurisdiction            under

title 28 . . . of a suit arising out of the controversy between

the parties”).

     Jurisdiction under CAFA, then, depends on the underlying

substantive controversy—here, the putative class action.                              And in

“looking       through”      Pulte’s    FAA      petition,       we     find          federal

jurisdiction      would      be   proper.       Vaden,    556    U.S.       at    62.      As

discussed, Pulte and the Carlsons are completely diverse, and

the Carlsons have made class-action allegations. 2                    Although Pulte

     2 Again relying on SCSP’s South Carolina citizenship, the
Carlsons urge that the district court should have dismissed the
Petition under an exception to CAFA, which requires district

                                            8
seeks     only    bilateral       arbitration,        the     substantive        matter

currently in arbitration has an amount in controversy exceeding

$5,000,000:      the   amended     complaint       attached    to    the   Carlsons’

demand for arbitration alleged claims “encompass[ing] thousands

of houses,” and the demand for arbitration valued the Carlsons’

claim alone at $75,000, J.A. 4.

      Next, the Carlsons assert that the Rooker–Feldman doctrine

precludes    federal     jurisdiction          over   the   matter    because       the

issues presented in the Petition and on appeal were decided by

the state courts.         Under Rooker–Feldman, only the U.S. Supreme

Court may review state court final judgments; a federal district

court has no such authority.            D.C. Ct. of App. v. Feldman, 460

U.S. 462, 482 (1983); Rooker v. Fid. Trust Co., 263 U.S. 413,

416 (1923).      But the Supreme Court has since clarified—after we

and   several    of    our   sister   circuits        interpreted     the    Rooker–

Feldman doctrine broadly—that the doctrine “applies only when

the loser in state court files suit in federal district court

seeking    redress     for   an   injury       allegedly    caused   by    the   state

court’s decision itself.”           Davani v. Va. Dep’t of Transp., 434

F.3d 712, 713 (4th Cir. 2006) (citing Exxon Mobil Corp. v. Saudi

Basic Indus. Corp., 544 U.S. 280 (2005)).                     Here, Pulte is not

courts to decline to exercise jurisdiction over a class action
“in which . . . at least [one] defendant is a defendant . . .
who is a citizen of the State in which the action was originally
filed     [i.e.,     South     Carolina].”         28     U.S.C.
§ 1332(d)(4)(A)(i)(II)(cc). As discussed, SCSP’s citizenship is
immaterial to the underlying arbitration.

                                           9
the state-court loser; when Pulte moved to compel arbitration in

state court, the motion was ultimately granted.                             Moreover, the

Petition does not challenge the state court decision.                                 Rather,

it    disputes     the   availability         of    class       arbitration       under    the

sales agreement and the proper forum for deciding that issue,

questions that were never litigated in the state court. 3

       Last,     the     Carlsons     argue        that    Pulte       cannot       establish

federal     subject-matter         jurisdiction          through      the   FAA.       Pulte,

however, has never contended that the district court had federal

question jurisdiction based on the FAA, acknowledging, as it

must, that the FAA “does not create any independent federal-

question       jurisdiction”       but     rather        only    permits      the     federal

district court to compel arbitration when the court “would have

jurisdiction over a suit on the underlying dispute,” through

“diversity       of    citizenship       or   some       other       independent     basis.”

Moses H. Cone, 460 U.S. at 25 n.32.

       At   oral       argument,     the      Carlsons      pressed         the     purported

jurisdictional defect, arguing for the first time that Pulte is

not    an   aggrieved      party     under         the    FAA    because      the    statute

provides     a   remedy     only    where      a    party       is    “aggrieved      by   the

alleged failure, neglect, or refusal of another to arbitrate

       3
       We reject the Carlsons’ assertion that these questions
were decided by the South Carolina Court of Appeals. That court
found that the claims alleged by the Carlsons in their complaint
should be arbitrated, but it said nothing about the issue of
class-wide arbitration.

                                              10
under a written agreement for arbitration.”                  9 U.S.C. § 4.         The

Carlsons’ contention, however, does not implicate the district

court’s subject-matter jurisdiction.                Rather, it is a question

of statutory standing, Discover Bank v. Vaden, 489 F.3d 594, 607

n.20 (4th Cir. 2007), overruled on other grounds by 556 U.S. 49

(2009), which the Carlsons waived by failing to raise the point

in the district court, see, e.g., Merrimon v. Unum Life Ins. Co.

of Am., 758 F.3d 46, 53 n.3 (1st Cir. 2014) (“[A]rguments based

on statutory standing, unlike arguments based on constitutional

standing, are waivable.”).

      In any case, Pulte has statutory standing.                   The “central or

‘primary’       purpose   of    the   FAA      is   to    ensure        that   ‘private

agreements to arbitrate are enforced according to their terms,’”

and a party may not be forced to submit to class arbitration

absent    express      agreement.     Stolt-Nielsen        S.A.     v.     AnimalFeeds

Int’l Corp., 559 U.S. 662, 682, 684 (2010) (quoting Volt Info.

Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ.,

489     U.S.    468,   479     (1989)).        Here,     Pulte     is     sufficiently

aggrieved under § 4 by the alleged refusal of the Carlsons to

arbitrate bilaterally, as required under the written agreement.

Cf. Puleo v. Chase Bank USA, N.A., 605 F.3d 172, 181 (3d Cir.

2010)     (en     banc)      (rejecting        appellants’       non-arbitrability

argument that they “are amenable to arbitration in the abstract”

because “a district court does not issue an order compelling

                                          11
arbitration      in    the    abstract[;        r]ather, . . .         § 4    of   the    FAA

‘confers     only     the     right     to    obtain     an    order    directing        that

“arbitration        proceed      in     the     manner    provided       for       in    [the

parties’] agreement”’” (alteration in original) (quoting Volt,

489 U.S. at 475)).

       Accordingly, we deny the Carlsons’ request that we dismiss

the appeal for lack of subject matter jurisdiction.

                                              B.

       The     district      court     denied       Pulte’s     motion       for    partial

summary      judgment,        concluding        that     the     inquiry—whether          an

arbitration clause permits class arbitration—is procedural and

therefore for the arbitrator.                 We disagree and hold that whether

an arbitration clause permits class arbitration is a gateway

question of arbitrability for the court.

       Under     the      FAA,        arbitration        agreements          are    “valid,

irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.”                              9 U.S.C.

§ 2.      Despite      this    “liberal . . . .          federal       policy      favoring

arbitration,” Moses H. Cone, 460 U.S. at 24, the FAA seeks to

enforce arbitration agreements “in the manner provided for in

such agreement,” § 4; see Stolt-Nielsen, 559 U.S. at 682.

       The Supreme Court has reiterated the contractual nature of

arbitration      agreements,          careful      to   avoid    forcing      parties     to

resolve their disputes through means not intended at the time of

                                              12
contract       formation.         E.g.,     Stolt-Nielsen,          559    U.S.    at    681

(“[T]he    FAA       imposes    certain     rules       of   fundamental     importance,

including the basic precept that arbitration ‘is a matter of

consent,       not     coercion.’”       (quoting       Volt,   489   U.S.    at   479));

Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)

(“[A]rbitration 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.” (quoting United Steelworkers of Am. v.

Warrior    &     Gulf    Nav.   Co.,     363    U.S.     574,   582   (1960)));         First

Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 945 (1995) (“[A]

party     can     be     forced     to     arbitrate         only   those    issues       it

specifically has agreed to submit to arbitration . . . .”).

     Advancing the prioritization of party intent in arbitration

agreements, the Supreme Court has identified two categories of

threshold questions—procedural questions for the arbitrator, and

questions of arbitrability for the court.                       See Howsam, 537 U.S.

at 83–84.         Procedural questions arise once the obligation to

arbitrate a matter is established, and may include such issues

as   the        application        of     statutes        of    limitations,        notice

requirements, laches, and estoppel.                       See id. at 85; see also

John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964)

(“Once it is determined . . . that the parties are obligated to

submit     the       subject      matter    of      a    dispute      to    arbitration,

‘procedural’ questions which grow out of the dispute and bear on

                                               13
its final disposition should be left to the arbitrator.”).                                     The

Court has explained that these are questions for the arbitrator

not   only    because          the      “parties      would     likely    expect        that   an

arbitrator would decide [them],” Howsam, 537 U.S. at 84, but

also because the questions do not present any legal challenge to

the   arbitrator’s            underlying        power,    see    AT&T     Techs.,       Inc.    v.

Commc’ns Workers of Am., 475 U.S. 643, 648–49 (1986); United

Steelworkers, 363 U.S. at 582–83.

      Questions          of        arbitrability,        on     the     other     hand,        are

something     else        entirely.             When     the    answer     to     a     question

“determine[s] whether the underlying controversy will proceed to

arbitration        on    the       merits,”      that    question       necessarily         falls

within the “narrow circumstance[s]” of arbitrable issues for the

court to decide.                Howsam, 537 U.S. at 83; see also Rent-A-

Center,      W.,        Inc.       v.    Jackson,        561     U.S.     63,     78        (2010)

(“‘[Q]uestion[s]              of     arbitrability’            thus     include        questions

regarding     the        existence         of     a     legally       binding     and       valid

arbitration agreement, as well as questions regarding the scope

of a concededly binding arbitration agreement.” (alterations in

original)).

      The Supreme Court has not conclusively told us who gets to

decide    whether        an        arbitration        agreement       provides        for   class

arbitration, but the Court has provided some guidance.                                      First,

although a plurality of the Court in Green Tree Financial Corp.

                                                 14
v. Bazzle found that the issue was a procedural one for the

arbitrator, 539 U.S. at 452–53, the Court’s treatment of Bazzle

in   subsequent       decisions        has      effectively       disavowed      that

rationale, see Oxford Health Plans LLC v. Sutter, 133 S. Ct.

2064, 2068 & n.2 (2013) (explaining the high bar for overturning

an arbitrator’s decision on the grounds that he exceeded his

powers, but stating, “We would face a different issue if [the

petitioner]    had   argued     below      that   the    availability      of   class

arbitration is a so-called ‘question of arbitrability.’                         Those

questions . . .      are     presumptively        for    courts    to    decide.”);

Stolt-Nielsen, 559 U.S. at 680 (“Unfortunately, the opinions in

Bazzle appear to have baffled the parties in this case . . . .

[T]he   parties     appear    to    have     believed    that   the     judgment   in

Bazzle requires an arbitrator, not a court, to decide whether a

contract permits class arbitration.                In fact, however, only the

plurality    decided    that       question.”     (emphasis     added)    (citation

omitted)).

     Second, the Court over several decades has crafted legal

rules regarding      the     interpretation       of    arbitration     agreements,

which, together, demonstrate that the issue presented here is

one of arbitrability.          To begin with, it is well established

that whether the parties have submitted a particular dispute to

arbitration is “undeniably an issue for judicial determination[]

[u]nless      the    parties        clearly       and    unmistakably       provide

                                           15
otherwise.”        AT&T Techs., 475 U.S. at 649; see also John Wiley,

376 U.S. at 547 (“[W]hether or not [a party] [i]s bound to

arbitrate, as well as what issues it must arbitrate, is a matter

to be determined by the Court on the basis of the contract

entered into by the parties.” (quoting Atkinson v. Sinclair Ref.

Co., 370 U.S. 238, 241 (1962))).

     In    First     Options   of     Chicago,      Inc.     v.    Kaplan,      the   Court

extended this rule to the determination of who has the primary

power—the arbitrator or the court—to decide whether the parties

delegated a question of arbitrability to arbitration, stating

that “[c]ourts        should   not     assume      that     the    parties      agreed   to

arbitrate    arbitrability”          absent      “‘clea[r]        and    unmistakabl[e]’

evidence.”        514 U.S. at 944 (alterations in original) (quoting

AT&T Techs., 475 U.S. at 649).

     The         Court   in     Stolt-Nielsen              S.A.         v.     AnimalFeeds

International       Corp.     took    its        refusal    to     “‘force       unwilling

parties to arbitrate’ contrary to their expectations” one step

further.     559 U.S. at 686 (quoting First Options, 514 U.S. at

945).      There, it announced a rule for determining whether an

arbitration       agreement    permits       class    arbitration.              The   Court

found     that    “class-action       arbitration          changes       the   nature    of

arbitration to such a degree that it cannot be presumed the

parties    consented     to    it    by    simply     agreeing          to   submit   their

disputes to an arbitrator.”               Id. at 685.       Rather, the Court held

                                            16
that parties cannot be forced to arbitrate on a class-wide basis

absent “a contractual basis for concluding that the party agreed

to do so.”    Id. at 684.

       The evolution of the Court’s cases are but a short step

away from the conclusion that whether an arbitration agreement

authorizes    class    arbitration     presents        a   question       as    to   the

arbitrator’s inherent power, which requires judicial review.                          In

that    regard,    the   Court     has      highlighted        the        significant

distinctions between class and bilateral arbitration, and these

fundamental    differences       confirm       that     whether      an    agreement

authorizes the former is a question of arbitrability.

       When parties agree to forgo their right to litigate in the

courts and in favor of private dispute resolution, they expect

the    benefits    flowing      from     that    decision:        less         rigorous

procedural        formalities,         lower          costs,      privacy            and

confidentiality,      greater    efficiency,      specialized        adjudicators,

and—for the most part—finality.             These benefits, however, are

dramatically upended in class arbitration, which brings with it

higher risks for defendants.             See Stolt-Nielsen, 559 U.S. at

686–87 (contrasting the high stakes of class-action arbitration

with its limited scope of judicial review).

       In litigation, certification decisions may be appealed on

both an interlocutory basis and after a final judgment, and the

appellate court reviews questions of law de novo and factual

                                       17
findings for clear error.                   E.g., Teamsters Local 445 Freight

Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 201 (2d Cir.

2008).      The       FAA,   however,       provides       very    limited       grounds      for

vacating an arbitration award.                      See 9 U.S.C. § 10 (providing

grounds, such as: an award “procured by corruption, fraud, or

undue means;” and when the arbitrator evidences “partiality or

corruption,” is “guilty of misconduct” or “other misbehavior”

that prejudices the party’s rights, or “exceed[s] [his or her]

powers”).        A reviewing court’s ability to modify or correct an

award is similarly cabined.                 See 9 U.S.C. § 11.             And the FAA has

been     interpreted         to      prohibit        parties        from     contractually

expanding the scope of judicial review.                           See Hall St. Assocs.,

L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008).

       As   a    result,     “[t]he     absence       of     multilayered         review”      in

arbitration        “makes       it     more        likely     that    errors           will    go

uncorrected.”           AT&T Mobility LLC v. Concepcion, 563 U.S. 333,

350 (2011).           This is a cost that “[d]efendants are willing to

accept” in bilateral arbitration “since [the errors’] impact is

limited     to    the    size     of    individual          disputes,      and    presumably

outweighed       by    savings       from   avoiding        the    courts.”        Id.        But

“bet[ting] the company” without effective judicial review is a

cost   of   class       arbitration         that    defendants       would       not    lightly

accept.     Id. at 351.

                                              18
       Moreover, in bilateral arbitration, the lack of rigorous

procedural rules greatly increases the speed and lowers the cost

of the dispute resolution, but in class arbitration, procedural

formality is required, reducing—or eliminating altogether—these

advantages.        This    is    because    the    arbitrator      must     determine,

before    ruling    on    the    merits,    whether       to    certify    the   class,

whether    the     named     parties       satisfy       mandatory       standards    of

representation and commonality, how discovery will function, and

how to bind absent class members.                 Concepcion, 563 U.S. at 348–

49.     In turn, costs and time increase.                    See id. (finding that

the    average   bilateral       arbitration       begun       between    January     and

August 2007 reached a final disposition in four-to-six months,

whereas none of the class arbitrations initiated as of September

2009 had resulted in a final merits award, and the average time

from    filing   to   resolution—through           settlement,       withdrawal,      or

dismissal, not judgment on the merits—was 630 days).

       It is not surprising then that those circuit courts to have

considered the question have concluded that, “unless the parties

clearly    and      unmistakably        provide        otherwise,”        whether      an

arbitration agreement permits class arbitration is a question of

arbitrability       for    the   court.         Reed   Elsevier,      Inc.    ex     rel.

LexisNexis    Div.    v.    Crockett,      734    F.3d    594,    597–99     (6th    Cir.

2013)    (quoting     Howsam,     537   U.S.      at   83)     (reasoning    that     the

Supreme Court “has given every indication, short of an outright

                                           19
holding, that classwide arbitrability is a gateway question” for

the    court,    and       focusing      on        Stolt-Nielsen          and    Concepcion’s

observations         of   the   fundamental          differences      between         bilateral

and class arbitration); see also Opalinski v. Robert Half Int’l

Inc., 761 F.3d 326, 331–34, 335-36 (3d Cir. 2014) (finding that

the Supreme Court had “cast doubt” on the Bazzle plurality, and

that     an     agreement’s           authorization            of    class        arbitration

implicates      both      whose      claims    and    the   type     of     controversy       an

arbitrator may resolve).

       Leaving the question of class arbitration for the court

also   flows     logically        from       our    own   cases.          In    Central    West

Virginia Energy, Inc. v. Bayer Cropscience LP, for example, we

stated (albeit in dicta) that “consent to class arbitration did

not fall within [the] category of ‘procedural’ questions . . . .

because the class-action construct wreaks ‘fundamental changes’

on the ‘nature of arbitration.’”                     645 F.3d 267, 274–75 (4th Cir.

2011) (quoting Stolt-Nielsen, 559 U.S. at 685–86).                                Since then,

at least two district judges in this circuit have held that

whether an agreement permits class arbitration is a question of

arbitrability for the court.                  See Chesapeake Appalachia, LLC v.

Suppa,    91    F.    Supp.     3d    853,     861    (N.D.W.       Va.    2015);      Bird   v.

Turner,   No.    5:14CV97,           slip.    op.    at   *7    (N.D.W.         Va.   Sept.   1,

2015).

                                               20
     A review of the kinds of disputes we have found to be

procedural in nature shows that our decision today aligns with

circuit precedent.         E.g., Bayer Cropscience, 645 F.3d at 274

(whether    an   arbitration      panel   in    Richmond,         Virginia,    or    in

Charleston, West Virginia, should resolve the dispute); Dockser

v. Schwartzberg, 433 F.3d 421 (4th Cir. 2006) (the question of

the number of arbitrators); Durham Cty. v. Richards & Assocs.,

742 F.2d 811 (4th Cir. 1984) (limitations period expressed in

arbitration agreement raised as defense to arbitration); In re

Mercury Constr. Corp., 656 F.2d 933 (4th Cir. 1981) (en banc)

(whether untimeliness, waiver, or laches were for the arbitrator

or court’s determination), aff’d sub nom. Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1.

     Most     notably,     these    decisions         do    not     challenge       the

underlying agreement to submit the dispute to arbitration.                          See

Marrowbone Dev. Co. v. Dist. 17, United Mine Workers of Am., 147

F.3d 296, 300 (4th Cir. 1998) (“[T]he court decides, as issues

of contract law, the threshold questions of whether a party is

contractually bound to arbitrate and whether, if so bound, the

arbitration      provision’s      scope      makes    the    issue     in     dispute

arbitrable.”).      Further, we have made clear that the scope of

arbitrability     itself    is    not   an    issue    presumptively        for     the

arbitrator to decide.            See Va. Carolina Tools, Inc. v. Int’l

Tool Supply, Inc., 984 F.2d 113, 117 (4th Cir. 1993) (finding

                                        21
both that “except as clearly and unmistakably indicated in their

contract, the parties d[o] not intend to commit the very issue

of the scope of arbitrability itself to arbitration,” and that

“the    typical,       broad     arbitration       clause”    does    not    meet       that

standard).

       In reaching its contrary result, the district court relied

on     our    unpublished        decision    in     Davis     v.    ECPI    College       of

Technology, L.C., 227 F. App’x 250 (4th Cir. 2007).                              There, we

found        that    “[t]he      question    of     ‘what    kind    of     arbitration

proceedings’ are required under the arbitration clause is not a

gateway issue for a court to decide.”                       Id. at 253.          But Davis

was decided before Stolt-Nielsen, Concepcion, and Oxford Health

Plans, and relied exclusively on the plurality in Bazzle.                            Given

the thin reed that is now Bazzle, we decline to follow our

unpublished precedent.

                                            III.

       In this case, the parties did not unmistakably provide that

the arbitrator would decide whether their agreement authorizes

class arbitration.            In fact, the sales agreement says nothing at

all about the subject.             Accordingly, the district court erred in

concluding          that   the   question     was    a   procedural        one    for   the

arbitrator.           We therefore reverse the district court’s order

denying Pulte’s motion for partial summary judgment, vacate the

                                             22
judgment   dismissing   the    Petition,       and    remand    for    further

proceedings.    On   remand,   the    district       court   shall    determine

whether the parties agreed to class arbitration.

                                          REVERSED, VACATED, AND REMANDED

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