Add the Fifth Circuit to the growing list of Federal Circuit Courts that have decided that "class arbitrability" is a gateway question for a court, rather than an arbitrator, to decide in the first instance, absent the parties' "clear and unmistakable" manifestation of an agreement otherwise. See, 20/20 Communications, Inc. v. Crawford, 2019 U.S. App. LEXIS 21765 (5th Cir. Jul. 22, 2019). (It thus joined the 3rd, 4th, 6th, 7th, 8th, 9th and 11th Circuits in this regard. The U.S. Supreme Court ("SCOTUS") has noted, but not decided, the issue. See, Lamps Plus, Inc. v. Varela, 139 S.Ct. 1407, 1417n.4 (2019).) However, while that decision may have been correct, the court's ultimate holding in this particular case was arguably not.
The first part of the court's analysis was more or less easy. Consistent with SCOTUS's recent opinions, the Fifth Circuit relied on the considerable differences between bilateral arbitration, as envisioned in the Federal Arbitration Act, and the notion of "class arbitration," in deciding that "class arbitrability" is a gateway issue. The procedural differences, and the likelihood that a "class arbitration" would greatly increase the complexity, cost and duration of an arbitral proceeding, as well as its unresolved inherent due process issues, all weighed in the court's thinking. See 2019 U.S. App. LEXIS 21765 at *6-*7. The court had little difficulty in deciding that whether "class arbitration" had been agreed by the contracting parties was as much a gateway issue as whether arbitration had been agreed at all.
On the other hand, there was more of a struggle in deciding whether the parties in 20/20 had delegated the class arbitrability issue to an arbitrator, which they could do by "clear and unmistakable" language in the arbitration agreement. Id. at *5. The tension was seemingly due to inconsistent provisions in that agreement, but the resolution ultimately relied on a legal analysis that arguably went off the rails at a critical point.
In favor of delegation, the employee cited the following provisions of the agreement in question:
 "If Employer and Employee disagree over issues concerning the formation or meaning of this Agreement, the arbitrator will hear and resolve those arbitrability issues."
 "The arbitrator . . . will administer the arbitration according to the National Rules for the Resolution of Employment Disputes (or Successor Rules) of the American Arbitration Association ("AAA") except where such Rules are inconsistent with this Agreement, in which case the terms of this Agreement will govern." (Emphasis added.)
 "Except as provided below, Employee and Employer . . . agree that all disputes and claims between them . . . shall be determined exclusively by final and binding arbitration." (Emphasis added.) Id. at *9-*10.
In opposition, the employer cited the following text in that agreement:
 "[T]he parties agree that this Agreement prohibits the arbitrator from consolidating the claims of others into one proceeding, to the maximum extent permitted by law. This means that an arbitrator will hear only individual claims and does not have the authority to fashion a proceeding as a class or collective action or to award relief to a group of employees in one proceeding, to the maximum extent permitted by law." Id. at *8.
The Court of Appeals acknowledged that the three provisions cited by the employee, seen in isolation, "could arguably be construed to authorize arbitrators to decide gateway issues of arbitrability such as class arbitration." Id. at *10. However, it pointed out, two of those three provisions contained exceptions that subordinated them to inconsistent terms of the agreement, including, it maintained, the parties' express prohibition of class and collective arbitration. The first of those two provisions (i.e., #2 above) incorporates by reference a set of the AAA arbitration rules concerning employment disputes that delegate arbitrability questions to the arbitrator. The arbitration agreement in question expressly does the same. (See provision #1 above.)
But was it correct that the express bar of class arbitration was irreconcilable with, and therefore superseded, the aforesaid delegation provisions? The contractual prohibition of class arbitration is relevant to the eventual class arbitrability question ("what is decided"), but not to "who decides" that question. If the "who decides" issue is treated as distinct from the "what is decided" issue, as it must be, then arbitration provision #2 above is not inconsistent with the rest the agreement in question; indeed, it is quite consistent with the only cited provision of the agreement (#1 above) that directly addresses the delegation issue.
Second, the court reasoned, in contrast with the express prohibition of class or collective arbitration in the agreement, none of the three provisions cited by the employee spoke specifically to class arbitration. Id. at *11-*12. And "it is a fundamental axiom of contract interpretation that specific provisions control general provisions." Id. at *12, citing Baton Rouge Oil & Chem. Workers Union v. Exxon Mobil Corp., 289 F.3d 373, 377 (5th Cir. 2002), citing Restatement (2d) of Contracts § 203(c). All well and good, but that analysis too mixes apples and aardvarks. It goes to the "what is decided" decision, and says nothing about "who decides."
Now, the court may have thought that when an agreement contains an express prohibition of class arbitration the answer to the "what is decided" question was so obvious that it is not worth wasting time and effort by sending the matter to an arbitrator to decide in the first instance, or even considering the "who decides" question. But SCOTUS has already said that courts must enforce arbitration agreements according to their terms, including the parties' agreement to have an arbitrator decide "not only the merits of a particular dispute, but also 'gateway' questions of 'arbitrability'. . . ." Henry Schein Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524, 586 U.S. ___ (2019). See Judicial "Wholly Groundless" Doctrine Regarding Delegation of Arbitrability Issues is Wholly Groundless Under the FAA (Mintz ADR Blog). According to SCOTUS, an agreement to arbitrate arbitrability is merely an antecedent agreement of the sort that the FAA compels a federal court to enforce, just as it would any other arbitration agreement. Therefore, when the parties delegate the arbitrability question to an arbitrator, "a court possesses no power to decide the arbitrability issue," whatever the court's views are regarding the arbitrability question ultimately to be decided.
Ultimately, the Fifth Circuit relied most heavily on its inability to reconcile the express prohibition of class arbitration with the notion of a delegation of the class arbitrability issue to an arbitrator. Hence, the Court concluded that "this class arbitration bar operates not only to bar class arbitrations . ., but also to foreclose any suggestion that the parties meant to disrupt the presumption that questions of class arbitration are decided by courts rather than arbitrators." Id. *8. (As we said, apples and aardvarks.) The Court thus determined that the parties had not clearly and unmistakably agreed to delegate the class arbitrability question to an arbitrator, leaving the matter for a court to decide.
On that basis, the Court reversed two District Court decisions inconsistent with that holding, and remanded for further proceedings consistent with Fifth Circuit's decision. Perhaps, then, the Fifth Circuit will get an opportunity to straighten things out sometime down the road.
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