Court Opinion

ID: 9496350
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:24:12.042807+00
Date Added: 2024-06-11T17:57:31.038544
License: Public Domain

ROTH, Circuit Judge,
concurring in part, dissenting in part.
I agree with the majority that the District Court should be reversed because the provisions of the arbitration agreement relating to notice, remedies, attorney’s fees and costs, and the arbitrator’s costs and fees are unreasonable. However, I respectfully disagree with the majority’s decision to strike the entire arbitration agreement. I would remand to the District Court to determine if the unenforceable provisions are severable. Having concluded that the challenged provisions were enforceable, the District Court did not have an opportunity to rule on whether to strike the entire arbitration agreement, or to sever the unenforceable provisions.
The majority concludes that, under Spinetti v. Service Corporation International, 824 F.3d 212 (3d Cir.2003), the four unenforceable provisions in the arbitration agreement at issue in the present case cannot be severed from the rest of the arbitration agreement. In Spinetti, we held that unenforceable provisions regarding the costs and fees of arbitrators and attorneys are severable because these provisions cannot “be considered the essential part of the bargain,” which is “to provide a mechanism to resolve employment-related disputes_” Id. at 219.1 Contrary to the majority’s conclusion, it is not clear from the record before us that the unenforceable provisions at issue in the present case constitute the central part of the bargain, such that they cannot be severed under Spinetti.
The majority fails to explain how the statute of limitations and damages available are any more related to the central purpose of choosing a forum in which to resolve disputes than the provisions relating to the allocation of costs and fees for attorneys and arbitrators that the Spinetti Court found are severable. Apparently the majority believes that Spinetti is distinguishable because the arbitration agreement in Spinetti only involved two unenforceable provisions, while the arbitration agreement in the present case involves four unenforceable provisions (two of which were similar to the unenforceable provisions in Spinetti). However, the issue for purposes of severability analysis is not the number of unenforceable provisions, but rather whether those provisions go to the central purpose of the agreement. To continue the analogy that the majority draws from Spinetti, it does not matter whether two or four branches are *273sick, the issue in determining whether to chop down the tree is whether the trunk can survive.
The majority also relies on the extent to which the four provisions are unfair in deciding not to sever them from the rest of the contract. This analysis improperly blurs the issue whether the four provisions are unenforceable and the issue whether the provisions are severable if they are unenforceable. The degree to which the unenforceable provisions are unfair is not relevant to the decision whether to sever them or strike the entire agreement because, in either case, the plaintiffs will not be subject to the unfair provisions. To draw further upon the majority’s analogy, since the sickly branches will be removed, it does not matter how sick the branches are, so long as they have not infected the trunk.
While it may turn out that the unenforceable provisions, taken together, are an essential part of the bargain struck between the parties, the majority’s reasoning does not adequately support this conclusion. Rather than attempting to resolve this issue at this time, the more appropriate course of action would be to give the District Court the opportunity to determine, in the first instance, whether severing the unenforceable provisions would defeat the parties’ central purpose in entering into the arbitration agreement. Id.; Restatement (First) of Contacts § 603; Restatement (Second) of Contracts § 184. This approach would allow for the development of a more extensive record on the issue, which in turn would give us more to work with on appeal. In particular, it would permit the District Court to make the factual determination of what the inclusion of a severability clause, which was not part of the arbitration agreement at issue in Spinetti, reveals about the relationship between the struck provisions and the parties’ intentions in entering into the agreement. Accordingly, I respectfully concur in part and dissent in part.

. In Spinetti, this Court applied Pennsylvania law to determine whether to sever the unenforceable provisions. See 324 F.3d at 219. However, the law of the Virgin Islands does not differ materially in this respect. Both Pennsylvania and Virgin Islands law rely on the Restatement (First) of Contracts and the Restatement (Second) of Contracts, which recognize that an unenforceable provision may be severed if the unenforceable provisions are not an essential part of the agreement. See id. (quoting Restatement (First) of Contracts § 603 (1932); Restatement (Second) of Contracts § 194 (1981)).