Court Opinion

ID: 9410264
Source: CourtListenerOpinion
Date Created: 2023-07-20 17:01:27.83117+00
Date Added: 2024-06-11T17:20:56.369520
License: Public Domain

PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT

                     No. 22-2181

         KEVIN B. SAPP; JAMIE HOPPER,

                                             Appellants
                          v.

INDUSTRIAL ACTION SERVICES, LLC; RELADYNE,
                    LLC
        ________________

      Appeal from the United States District Court
                for the District of Delaware
         (D.C. Civil Action No. 1-19-cv-00912)
     District Judge: Honorable Richard G. Andrews
            ________________

                Argued April 13, 2023

Before: CHAGARES, Chief Judge, SCIRICA and AMBRO,
                  Circuit Judges

             (Opinion filed July 20, 2023)
Maureen Farrell (Argued)
Adam T. Muery
Muery & Farrell
6200 La Calma Drive
Suite 100
Austin, TX 78752

            Counsel for Appellants

David J. Baldwin
Berger Harris
1105 N. Market Street
11th Floor
Wilmington, DE 19801

Irving M. Geslewitz (Argued)
Edward D. Shapiro
Much Law
191 N. Wacker Drive
Suite 1800
Chicago, IL 60606

            Counsel for Appellees

                               2
                OPINION OF THIS COURT

AMBRO, Circuit Judge

       Arbitration is an ever-growing trend that many parties
prefer and courts routinely enforce. Yet that trend cannot
continue so far that arbitration is forced on parties who never
agreed to it.

        That is what happened here. The parties agreed in an
asset purchase agreement that certain narrow factual questions
about the preparation of two forms of financial statements be
sent to an accounting firm—i.e., an expert in preparing
financial statements. The accounting firm then had 30 days to
audit the statements and send back final drafts. The parties did
not label this process. They called it neither arbitration nor
expert determination (two common forms of alternative
dispute resolution). The accounting firm had limited authority,
a narrow scope of duty, a short deadline, and no procedures for
conducting discovery or accepting legal arguments. This
context calls for an expert determination; thus we part from the
District Court’s decision compelling arbitration, vacate its
entry of judgment, and remand for further proceedings
consistent with this opinion.

                               3
    I.     Background

         A. The Asset Purchase Agreement

       Appellants Kevin Sapp and Jamie Hopper owned two
companies, Industrial Action Services, Inc. and IAS Canada,
Inc., which provided “advanced oil flushing, chemical cleaning
and equipment cleaning for industrial equipment such as
turbines, compressors, hydraulic systems[,] and process
systems.” Sapp Br. at 3. In 2016, Sapp and Hopper sold the
companies to appellee Industrial Action Services LLC
(“IAS”), a subsidiary of RelaDyne LLC created for this
acquisition. An Asset Purchase Agreement (“Purchase
Agreement”) governed the sale.          It provided that, as
consideration for the sale, Sapp and Hopper would receive (1)
a $12 million payment at closing, (2) $1.5 million of RelaDyne
stock, (3) $3 million in deferred compensation, and (4) three
potential and variable payments, called Earn Out
Consideration, if IAS performed well enough over the next
three years.

       At issue here is the Earn Out. Per § 2.6 of the Purchase
Agreement, Sapp and Hopper could earn an additional $15
million—up to $5 million in each of three twelve-month Earn
Out Periods—if the post-merger company achieved certain
EBITDA1 benchmarks. The Purchase Agreement in § 2.6(c)
specifies that, within 90 days of the close of an Earn Out
Period, IAS had to provide Sapp and Hopper with an Earn Out

1
  EBITDA has a specific definition under the Purchase
Agreement, but generally it stands for earnings before interest,
taxes, depreciation, and amortization. See Earnings, Black’s
Law Dictionary (11th ed. 2019).

                               4
Statement of the EBITDA computation for that period. It
became final unless, within 30 days of delivery of the Earn Out
Statement, they submitted their challenges to it in writing in a
document known as a “notice of disagreement.”2 The contract
defines “Notice of Disagreement” elsewhere as including only
“disagreements which are based on the Statement not having
been prepared in accordance with this Section . . . or which are
based on mathematical errors.” App. 84.

       If Sapp and Hopper sent such a Notice to IAS, § 2.6(d)
provides that the disagreement would “be settled according to
the procedures set forth in Section 2.3(e)” of the Purchase
Agreement. App. 86. That provision states:

       If a Notice of Disagreement is received by Buyer
       in a timely manner, then the Statement (as
       revised in accordance with this sentence) will
       become final and binding upon Buyer and Sellers
       on the earlier of (A) the date Buyer and [Sellers]
       resolve in writing any differences they have with
       respect to the matters specified in the Notice of
       Disagreement, or (B) the date any disputed
       matters are finally resolved in writing by the
       Accounting Firm. During the 60-day period
       following the delivery of a Notice of
       Disagreement, Buyer and [Sellers] shall meet
       and work in good faith to resolve any differences
       that they may have with respect to the matters
       specified in the Notice of Disagreement. During

2
 The term “notice of disagreement” was not capitalized here.
To the District Court, this was significant; as noted below, to
us it is not.

                               5
      such period, the Sellers shall give Buyer and its
      auditors, accountants and advisors reasonable
      access to all working papers and other
      documents of the Sellers and . . . its auditors,
      accountants and advisors, to the extent used in
      connection with the preparation of the Notice of
      Disagreement. At the end of such 60-day period,
      Buyer and the Sellers shall submit to an
      independent accounting firm (the “Accounting
      Firm”) for resolution of any and all matters that
      remain in dispute and were properly included in
      the Notice of Disagreement.

      The Accounting Firm will be Ernst & Young or,
      if such firm is unable or unwilling to act, a
      nationally recognized independent public
      accounting firm as shall be agreed upon by the
      parties. Buyer and the Sellers agree to use
      commercially reasonable good faith efforts to
      cause the Accounting Firm to render a decision
      resolving the matters submitted to the
      Accounting Firm within 30 days. Judgment may
      be entered upon the determination of the
      Accounting Firm in any court set forth in Section
      11.6.

App. 84. Taken together, §§ 2.6(d) and 2.3(e) require that
certain disputes about an Earn Out Statement be resolved by an
Accounting Firm.

      But §§ 2.6(d) and 2.3(e) are not the only two provisions
on dispute resolution. Later in the Purchase Agreement,

                              6
§ 11.17 directs the parties generally to use non-binding
mediation, followed by litigation if mediation fails.

   B. The Claim

        IAS determined that the post-merger company did not
meet its EBITDA targets for any of the three Earn Out Periods.
Sapp and Hopper claim that IAS intentionally undermined the
business to prevent the company from hitting the EBITDA
targets, in violation of Purchase Agreement § 2.6(g), which
prohibits IAS from “taking any action designed to circumvent
payment of Earn Out Consideration.” App. 87. They raised
these concerns about potential bad-faith circumvention with
IAS personnel via letters, emails, and phone conversations.
Discussions to resolve the dispute failed, so Sapp and Hopper
filed a lawsuit in Texas state court for breach of contract,
tortious interference, and declaratory relief. IAS removed the
case to the District Court for the Southern District of Texas
based on diversity jurisdiction and then moved to transfer
venue to the District of Delaware in line with a forum-selection
provision in the Purchase Agreement. Four months after filing
the suit, Sapp and Hopper filed a Notice of Disagreement under
§ 2.6(d) to avoid waiving any rights and sought a declaratory
judgment that the claims in the lawsuit fall outside the scope of
the dispute-resolution process specified in §§ 2.3(e) and 2.6(d).

       IAS soon sought to compel arbitration under § 2.3(e)
and stay the District Court proceeding. The District Court
referred the dispute to Magistrate Judge Burke. He held oral
argument and issued a Report and Recommendation (“R&R”)
concluding that § 2.3(e) of the Purchase Agreement calls for
expert determination, not arbitration, under Delaware law.
Sapp v. Indus. Action Servs., LLC (“Sapp R&R”), 2020 WL

                               7
1450563, at *5-6 (D. Del. Mar. 25, 2020), objections sustained,
2020 WL 2813176 (D. Del. May 29, 2020). As a result, Judge
Burke recommended that the Court deny the motion to stay
pending arbitration. Id. IAS objected to the R&R. The District
Court granted IAS’s objections and, disagreeing with the R&R,
held that the Purchase Agreement contained a valid agreement
to arbitrate.

   C. The Arbitration

       After the District Court compelled arbitration, the
parties needed to agree on which Accounting Firm would
decide the dispute. Purchase Agreement § 2.3(e) designated
Ernst & Young as the default firm, but it had a conflict
preventing it from performing that service. The parties vetted
several other nationally recognized firms before selecting
EisnerAmper. They signed an engagement letter with the firm,
which specifically assigned two accountants, Nelson Luis and
James Agar, to work on the matter.

       In December 2021, Luis and Agar (now of Eisner
Advisory, following corporate restructuring at EisnerAmper)
issued a decision in IAS’s favor, determining that no
adjustments to the EBITDA calculation were required under
the Purchase Agreement and that Sapp and Hopper had no right
to any Earn Out Consideration. Sapp and Hopper moved to
vacate the arbitration award, and IAS opposed. The District
Court denied their motion to vacate and entered judgment for
IAS. They timely appealed.

                              8
II.    Jurisdiction and Standard of Review

        The District Court had jurisdiction under 28 U.S.C.
§ 1332. We have jurisdiction under 28 U.S.C. § 1291. Sapp
and Hopper ask us to review two orders of the District Court:
(1) its May 29, 2020, order staying proceedings and sending
the dispute to arbitration; and (2) its May 26, 2022, order
denying their motion to vacate the arbitration award and
entering judgment for the defendants. As to the latter, it was a
final order because it was a judgment on the merits, even
though there is an unresolved fee petition still pending in the
District Court. See Budinich v. Becton Dickinson & Co., 486
U.S. 196, 200 (1988) (“[A] claim for attorney’s fees is not part
of the merits of the action to which the fees pertain.”). As to
the former, it became appealable when it merged with the final
order. See R & C Oilfield Services LLC v. Am. Wind Transp.
Grp. LLC, 45 F.4th 655, 659 (3d Cir. 2022); see also Fed. R.
App. P. 3(c)(4).
        We review de novo the validity and enforceability of an
arbitration agreement. Puleo v. Chase Bank USA, N.A., 605
F.3d 172, 177 (3d Cir. 2010) (en banc). We apply the same
standard of review as a district court, which is either that for a
motion to dismiss or for summary judgment, depending on
whether the court considered evidence beyond the pleadings.
Guidotti v. Legal Helpers Debt Resol., L.L.C., 716 F.3d 764,
771-774 (3d Cir. 2013). The District Court here did not discuss
the standard it used, but because it declined to order discovery
and considered only the pleadings in determining whether the
parties agreed to arbitrate, we apply the motion-to-dismiss
standard. In the arbitrability context, this means “we look to
the complaint and the documents on which it relies and will
compel arbitration only if it is clear, when read in the light most
favorable to the respondents, that the parties agreed to

                                9
arbitrate.” Robert D. Mabe, Inc. v. OptumRX, 43 F.4th 307,
325 (3d Cir. 2022).

III.   Analysis

       A. Arbitration and expert determination                are
          different forms of dispute resolution.

       Arbitration and expert determination, in most states, are
two distinct forms of private alternative dispute resolution that
produce binding results. See John Kendall, Clive Freedman, &
James Farrell, Expert Determination 1.1 (5th ed. Apr. 2015).
They have similarities, leading some commentators to call
them “close cousins” and some courts struggling to apply the
differences between them. See Committee on International
Commercial Disputes of the Association of the Bar of the City
of New York, Purchase Price Adjustment Clauses and Expert
Determinations: Legal Issues, Practical Problems and
Suggested Improvements (“City of New York Bar Report”), at
14 (June 2013). Despite these similarities, “the fundamental
difference” between the two methods is “the type and scope of
authority that is being delegated by the parties to the decision
maker.” Id. at 4.

        On the one hand, arbitration occurs when “the
parties . . . intend[] to delegate to the decision maker authority
to decide all legal and factual issues necessary to resolve the
matter.” Id. at 15. The arbitrator functions like “a judge in a
judicial proceeding.” Id. For example, like a judge, the
arbitrator “cannot meet with either party alone” and must
afford parties the due process protections of adversarial
proceedings. See Practical Law Litigation, ADR Mechanisms
in the US: Overview (2023); City of New York Bar Report at

                               10
5. After resolving all factual and legal questions in a formal
process that mirrors a judicial proceeding, the arbitrator can
award a legal remedy, “such as damages or injunctive relief,”
that courts will enforce. City of New York Bar Report at 4.

        By contrast, experts decide narrower issues using a less
formal process. Under this method, the parties appoint a
person or entity with specialized knowledge, “usually of a
technical nature,” to determine a confined issue. Practical Law
Litigation, ADR Mechanisms in the US: Overview (2023). The
authority of an expert “is limited to its mandate to use its
specialized knowledge to resolve a specified issue of fact” and
does not extend to making “binding decisions on issues of law
or legal claims.” City of New York Bar Report at 4. It makes
its decision without following court-like procedures: there are
usually no pleadings, evidentiary hearings, or the taking of
witness testimony. Brian C. Willis, Resolving Disputes by
Expert Determination: What Happens When Parties Select
Appraisers, Accountants, or Other Technical Experts to Decide
Disputes, Fla. B.J., July/August 2017, at 34, 36. Rather than
rely only on evidence submitted by the parties, an expert will
often conduct its own investigation and request from the parties
the information it needs to resolve the factual issue. City of
New York Bar Report at 7. As relevant here, accounting firms
are commonly relied on as experts to resolve questions about
post-merger financial schedules. See id.

        With this understanding of the difference between
arbitration and expert determination, we now turn to
determining which type of dispute resolution the parties agreed
to in the Purchase Agreement.

                              11
       B. The Purchase Agreement contains an agreement
          to submit narrow disputes to an accounting firm
          for expert determination, not arbitration.

        Deciding whether a party may be compelled to arbitrate
is a two-step inquiry in which we consider (1) “whether there
is a valid agreement to arbitrate between the parties,” and if so,
(2) “whether the merits-based dispute in question falls within
the scope of that valid agreement.” Flintkote Co. v. Aviva PLC,
769 F.3d 215, 220 (3d Cir. 2014) (citation omitted). Although
there is a presumption in favor of arbitration at step two, it does
not apply at step one “when deciding whether a valid
agreement exists.” Id. at 220 n.3. We apply “ordinary state-
law principles of contract law” to determine whether parties
agreed to arbitrate.        Century Indem. Co. v. Certain
Underwriters at Lloyd’s, 584 F.3d 513, 532 (3d Cir. 2009).

       Here, Delaware contract law governs, as the parties
selected it to apply in § 11.5 of the Purchase Agreement.
Delaware black-letter contract law advises that “the role of a
court is to effect[] the parties’ intent.” Lorillard Tobacco Co.
v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006).3 We do

3
  The Delaware Supreme Court has also instructed that it “will
not enforce a contract that unclearly or ambiguously reflects
the intention to arbitrate.” Kuhn Constr. v. Diamond State Port
Corp., 990 A.2d 393, 396 (Del. 2010) (en banc). Ambiguity
exists when “the provisions in controversy are reasonably or
fairly susceptible to different interpretations.” Id. (citation
omitted). In a Federal Rule of Appellate Procedure 28(j) letter,
IAS challenges the applicability of this holding in Kuhn. ECF
No. 48 at 1. We need not decide whether this portion of Kuhn
applies because applying either standard—ordinary contract

                                12
this by interpreting “the four corners of the agreement.” GMG
Cap. Invs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d
776, 779 (Del. 2012). We read the contract as a whole and give
each provision effect “so as not to render any part of the
contract mere surplusage.” Kuhn Constr. v. Diamond State
Port Corp., 990 A.2d 393, 397 (Del. 2010) (en banc).

        Parties often make our job easy by explicitly defining
the role of the third-party decider. See, e.g., Penton Bus. Media
Holdings, LLC v. Informa PLC, 252 A.3d 445, 461 (Del. Ch.
2018) (the contract said that “the Accounting Firm shall be
acting as an accounting expert only and not as an arbitrator”);
James & Jackson, LLC v. Willie Gary, LLC, 906 A.2d 76, 79
(Del. 2006) (any claim stemming from the contract “shall be
settled by arbitration . . . in accordance with the then-existing
rules of the American Arbitration Association”). Parties need
not use a “magic word,” but because explicit language is the
best way for parties to memorialize their intent, there is a strong
“convention to include ‘arbitration’ terms to signal
arbitration.” Bus Air, LLC v. Woods, 2022 WL 2666001, at *3
(D. Del. July 11, 2022) (Andrews, J.).

        The parties here did not provide a label, using neither
the word “arbitration” nor, conversely, the phrase “expert, not
arbitrator.” To divine their intent in the absence of a clear
designation, we search elsewhere in the agreement. See
Penton, 252 A.3d at 462 (“If parties have not stated their
intention explicitly, then a court will have to examine other
aspects of the contract.”). Looking at the language and
structure of the Purchase Agreement, it becomes clear the

principles or Kuhn’s rule—yields the same result: the Purchase
Agreement does not reveal an intent to arbitrate.

                                13
parties intended to have the third-party Accounting Firm act
narrowly as an expert and not as an arbitrator.

        First, the narrow scope of authority granted to the
Accounting Firm points to an expert determination. “An
agreement for arbitration ordinarily encompasses the
disposition of the entire controversy between the
parties, . . . while the agreement for [expert determination]
extends merely to the resolution of the specific issues . . ., all
other issues being reserved for determination in a plenary
action.” Id. at 464 n.109 (citation omitted). Here, § 2.3(e) of
the Purchase Agreement states that the parties “shall submit to
an independent accounting firm . . . for resolution of any and
all matters that remain in dispute and were properly included
in the Notice of Disagreement.” App. 84. The phrase “any and
all matters” implies a broad grant of authority, but when read
along with the phrase “properly included in the Notice of
Disagreement,” it is considerably narrower. That is so because
a Notice of Disagreement can “only include disagreements
which are based on the Statement not having been prepared in
accordance with this Section 2.3 or which are based on
mathematical errors.” App. 84. The language in the contract
narrows the dispute procedure to only accounting-related
factual matters. This narrowing resembles an expert’s
determination more than arbitration.

       Moreover, expert-determination provisions typically
limit the “decision maker’s authority to deciding a specific
factual dispute within the decision maker’s expertise.” Ray
Beyond Corp. v. Trimaran Fund Mgmt., L.L.C., 2019 WL
366614, at *6 (Del. Ch. Jan. 29, 2019). Here, the Purchase
Agreement gives the Accounting Firm the authority to hear
specific challenges in each of three years to, inter alia, the Earn

                                14
Out Statement for the relevant year. Those challenges are
limited to whether the Statement was prepared in accord with
generally accepted accounting principles, whether the parties
had reasonable access to all working papers, and/or whether
there were mathematical errors. These are all factual disputes
within the normal expertise of an accountant, and that technical
expertise weighs in favor of expert determination.4
        Second, the Purchase Agreement provides only thirty
days for the Accounting Firm to make its decision assuming
the parties “use commercially reasonably good faith efforts.”
See App. 84. This is insufficient time for it to perform the
“broad-based investigation” that an arbitrator would undertake.
Sapp R&R, 2020 WL 1450563, at *5. Such a short turnaround
time suggests the independent decision maker is not an
arbitrator.   See Chicago Bridge & Iron Co. N.V. v.
Westinghouse Elec. Co. LLC, 166 A.3d 912, 930-31 (Del.
2017) (independent auditor “had thirty days to make its
conclusion,” which reflected the “limited role of the
adjudicator”); Ray Beyond Corp., 2019 WL 366614, at *8
(“The parties’ inclusion of a tight 20-day deadline [for
resolution of disputes by the accountant] reinforces the

4
   We note that an adjudicator lacking legal training or
experience is not per se ineligible from acting as an arbitrator.
TMIP Participants LLC v. DSW Grp. Holdings LLC, 2016 WL
490257, at *12 (Del. Ch. Feb. 4, 2016) (explaining that even
arbitrators “without legal training” can decide legal issues if
the parties contracted for such a resolution). Sophisticated
parties may bargain away their rights to any third-party
adjudicator they would like. Kuhn, 990 A.2d at 396. Here,
however, making the judgment call is an accounting firm
tasked with answering narrow accounting-related questions,
hence not a directional signal to arbitrate.

                               15
conclusion that the parties did not intend to vest [the
accountant] with authority over wide-ranging matters.”).

        Third, the provision includes no procedural rules that
would govern the alleged arbitration. It contains no reference
to a standard set of rules, like those of the American Arbitration
Association (“AAA”), nor does it outline its own rules for
selecting the decision maker, conducting discovery, submitting
briefing and evidence, or holding a merits hearing. Parties
typically show an intention to arbitrate when their contract
contains arbitration-like procedures. See James & Jackson,
LLC, 906 A.2d at 80 (explaining that “reference to the AAA
rules evidences a clear and unmistakable intent” to arbitrate).
Conversely, the lack of rules indicates an agreement to call in
an expert. See Ray Beyond, 2019 WL 366614, at *7-8 (noting
that the “provisions contain no reference to procedural rules,”
which confirms that the contract “call[s] for an expert
determination as opposed to an arbitration”).
        Fourth, § 11.17 of the Purchase Agreement says
disputes should “be submitted to non-binding mediation,” and
if it fails, “either party may initiate litigation.” App. 118.
Under Delaware law, courts must give each provision and term
effect “so as not to render any part of the contract mere
surplusage.” Kuhn, 990 A.2d at 396-97. Because arbitration
agreements generally govern all disputes stemming from a
contract, the inclusion of a mediation and litigation section in
the Purchase Agreement undermines the argument that § 2.3(e)
calls for arbitration.

      These four characteristics of the Purchase Agreement
show that the parties agreed to (1) expert determination by the
Accounting Firm of narrow accounting-related questions and
(2) mediation and litigation of all other disputes. Magistrate

                               16
Judge Burke, in his R&R, reached the same conclusion. Sapp
R&R, 2020 WL 1450563, at *4-6.

        The District Court departed from that recommendation,
held that the Purchase Agreement contains an arbitration
agreement, and granted IAS’s motion to compel arbitration. It
provided two justifications for its departure. First, it focused
on contract language stating that the Accounting Firm’s
resolution is “final and binding.” Arbitrators typically make
“final and binding rulings on issues of law”; experts do not.
Penton, 252 A.3d at 466 (emphasis added) (citation omitted).
The latter make final and binding factual decisions limited to
specific questions within their area of expertise. City of New
York Bar Report at 2. The Purchase Agreement does not state
that the Accounting Firm may make final and binding
decisions on legal issues. Instead, it says that the Earn Out
Statement becomes “final and binding” on the Accounting
Firm’s review. App. 84, 86. This language, limited to the
decision maker’s expertise, is evidence that the Purchase
Agreement calls for expert determination. See Ray Beyond,
2019 WL 366614, at *6 n.70; see also Kuhn, 990 A.2d at 394-
95 (contract provision called for expert determination, not
arbitration, despite its inclusion of “final and binding”
language). Although the calculation of IAS’s EBITDA
becomes final and binding after the expert completes its
accounting analysis, the authority to resolve the parties’ legal
questions—like whether IAS violated the duty of good faith—
remains with the courts.

       Second, the District Court interpreted the Purchase
Agreement as giving the Accounting Firm unlimited authority
relating to the Earn Out Statement because of a capitalization
discrepancy.      It explained that the term “notice of

                              17
disagreement” is not capitalized in § 2.6(d) but is capitalized
in § 2.3(e). As noted above, the Purchase Agreement defines
the capitalized term, limiting it only to “disagreements which
are based on the Statement not having been prepared in
accordance with this Section [] or which are based on
mathematical errors.” App. 84. The Court reasoned that
“when the same term appears in different sections of the
agreement and is capitalized in one section but not the other,
the non-capitalized term will have its ‘ordinary, plain
meaning’” rather than taking on the limitations of the
capitalized and defined term. App. 8 (citation omitted). Under
that assumption, the Court held that the uncapitalized “notice
of disagreement” in § 2.6(d)—which governed—was not
intended to limit the types of disputes the parties could raise.
Id.
       We perceive the lack of capital letters as a scrivener’s
oversight. While capitalization typically alters the meaning of
words, § 2.6(d) (which contains an uncapitalized “notice of
disagreement”) directs the parties back to § 2.3(e) (which
includes the capitalized “Notice of Disagreement”). The
“notice of disagreement” in § 2.6(d) and the “Notice of
Disagreement” in § 2.3(e) must have the same meaning for the
direction back to be given effect. The contrary conclusion—
that those two sections are governed by the same dispute
procedure, but disputes under one section are narrow and
disputes under the other may be expansive—does not track the
many other factors in the Purchase Agreement revealing that
these provisions, read together, call for narrow expert
determination.

       Overall, many features of the Purchase Agreement
indicate the parties intended the Accounting Firm to be an
expert, not an arbitrator. The reasons the District Court gave

                              18
to reach the opposite conclusion, perhaps correct in other
contexts, do not persuade us here. The parties are not
consigned to arbitrate and instead may continue to litigate their
claims in federal court.5
                            * * *

       We reverse the District Court’s May 29, 2020, order
compelling arbitration and vacate its May 26, 2022, order
entering judgment for IAS. We thus remand the case for
further proceedings consistent with this opinion.

5
  Because the parties did not agree to arbitrate, we must vacate
the Court’s order entering judgment for IAS based on the
Accounting Firm’s alleged arbitral award. But we do so
without addressing Sapp’s remaining argument that Eisner
Advisory was an improper adjudicator—based on its corporate
restructuring and alleged evident partiality—because those
arguments stem from the Federal Arbitration Act, 9 U.S.C.
§ 10, which applies to agreements to arbitrate but does not
necessarily apply to those for expert determination.

                               19