JPay, Inc. v. Cynthia Kobel

              Case: 17-13611   Date Filed: 09/19/2018   Page: 1 of 52


                                                                         [PUBLISH]



               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                No. 17-13611
                          ________________________

                      D.C. Docket No. 1:16-cv-20121-DPG



JPAY, INC.,

                                                 Plaintiff - Appellee,

versus

CYNTHIA KOBEL,
SHALANDA HOUSTON,

                                                 Defendants - Appellants.

                          ________________________

                   Appeal from the United States District Court
                       for the Southern District of Florida
                         ________________________

                               (September 19, 2018)
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Before MARCUS and WILSON, Circuit Judges, and GRAHAM, ∗ District Judge.

MARCUS, Circuit Judge:

       At issue today is a question at the intersection of arbitration and class action

jurisprudence, a question that has been expressly left open by the Supreme Court

and which comes to this Circuit as a matter of first impression. The parties agree

that their disputes will be settled in arbitration, but disagree as to whether that

arbitration can proceed on a class basis. Further, they disagree about who -- a

court or an arbitrator -- should decide whether the arbitration can proceed on a

class basis. We must decide as a matter of first impression whether the availability

of a class is a “question of arbitrability” that presumptively goes to a court. If we

hold that it is -- and we do so today -- we must then decide whether the terms of

the parties’ agreement evince a clear and unmistakable intent to overcome that

presumption.

       Cynthia Kobel and Shalanda Houston sought to compel arbitration on a class

basis with JPay, Inc., a Miami-based company that provides fee-for-service

amenities in prisons in more than thirty states. JPay asked a district court to put a

stop to the class proceeding and to force Kobel and Houston to arbitrate only their

own claims. The district court granted summary judgment in JPay’s favor, holding


       ∗
          Honorable James L. Graham, United States District Judge for the Southern District of
Ohio, sitting by designation.


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that the availability of class arbitration was a “question of arbitrability,” which

meant that it was presumptively for the court to decide; that nothing in the terms of

this agreement rebutted that presumption; and finally that class arbitration was not

available under the terms of the agreement. Thus, a court, not an arbitrator, would

resolve, and the district court did resolve, whether the arbitration could proceed on

a class basis.

      After careful review, we are satisfied that the district court correctly

determined that the availability of class arbitration is a “question of arbitrability,”

presumptively for the court to decide, because it is the kind of gateway question

that determines the type of dispute that will be arbitrated. Courts cannot assume

that parties would want these kinds of questions to be arbitrated unless an

agreement evinces a clear and unmistakable intent to send them to arbitration.

However, we also conclude that the language these parties used in their contract

expressed their clear intent to overcome the default presumption and to arbitrate

gateway questions of arbitrability, including the availability of class arbitration.

      Accordingly, we vacate the grant of summary judgment to JPay, reverse the

denial of Kobel and Houston’s motion to compel arbitration, and remand for

proceedings consistent with this opinion. See Parnell v. CashCall, Inc., 

804 F.3d 1142, 1149

 (11th Cir. 2015). The parties agreed, and we are required to give




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meaning to their agreement and to enforce their will. Thus, an arbitrator will

decide whether the arbitration can proceed on a class basis.

                                         I.

      JPay’s services allow friends and family of inmates around the country to

purchase various goods and services on inmates’ behalf. These include video

chats, music downloads, and, most relevant here, money transfers to inmates’

accounts. Cynthia Kobel and Shalanda Houston each used JPay services to send

electronic money transfers to inmates. Like all JPay users, they agreed to JPay’s

Terms of Service, including to the following language, which requires that any

dispute that might arise between the company and its users be resolved through

arbitration:

      In the event of any dispute, claim or controversy among the parties
      arising out of or relating to this Agreement that involves a claim by
      the User for less than $10,000, exclusive of interest, arbitration fees
      and costs, shall be resolved by and through arbitration administered
      by the American Arbitration Association (“AAA”) under its
      Arbitration Rules for the Resolution of Consumer Related Disputes.
      Any other dispute, claim or controversy among the parties arising out
      of or relating to this Agreement shall be resolved by and through
      arbitration administered by the AAA under its Commercial
      Arbitration Rules. The ability to arbitrate the dispute, claim or
      controversy shall likewise be determined in the arbitration. The
      arbitration proceeding shall be conducted in as expedited a manner as
      is then permitted by the rules of the American Arbitration
      Association. Both the foregoing Agreement of the parties to arbitrate
      any and all such disputes, claims and controversies, and the results,
      determinations, findings, judgments and/or awards rendered through
      any such arbitration shall be final and binding on the parties and may


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      be specifically enforced by legal proceedings in any court of
      competent jurisdiction.

(emphasis added).

      On October 16, 2015, Kobel and Houston filed a Demand for Arbitration

against JPay with the AAA. They alleged contractual violations and violation of a

Florida consumer protection statute. They said that JPay charged “exorbitant

transfer fees” for money-transfers, and used these fees to fund kickbacks to

corrections departments. Further, they alleged that JPay dissuaded users from

sending money through paper money orders -- a free alternative to JPay transfers --

by intentionally making the money order process slow and complicated and by

deceptively marketing money orders as unreliable. Kobel and Houston sought to

represent a class consisting of “[a]ll natural persons who paid a fee to JPay for

electronic money-transfer services and who agreed to arbitrate their claims with

[JPay].”

      JPay responded by filing a complaint in Florida state court (the Eleventh

Judicial Circuit in Miami-Dade County) seeking declaratory relief specifying the

parties’ rights and duties under the arbitration provision, seeking to stay class

arbitration, and seeking to compel bilateral arbitration of the underlying claims.

Kobel and Houston removed the case to federal court in the Southern District of

Florida, invoking diversity jurisdiction under the Class Action Fairness Act of



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2005, 

Pub. L. No. 109-2, 119

 Stat. 4. 

28 U.S.C. § 1332

(d).1 Kobel and Houston

then moved to compel arbitration on the question of whether class arbitration was

available under JPay’s Terms of Service. Their view was that the parties had

expressly agreed to arbitrate whether they were entitled to class relief, and

therefore that the district court was required to leave that question to the arbitrator.

The appellants also sought to stay the federal court proceedings pending the

outcome of that arbitration. JPay, in turn, asked the district court for summary

judgment, arguing that while it had agreed to arbitrate with its users on a bilateral

basis, it had never consented to arbitrate on a class basis. Further, JPay said that a

federal court -- not an arbitrator -- should determine whether class arbitration was

available.

       The district court denied the motion to compel arbitration, finding that the

availability of class arbitration was a substantive “question of arbitrability,”

presumptively for the court to decide, and that the Terms of Service did not clearly

and unmistakably evince an intent to overcome this presumption and to send the

question to arbitration. Kobel and Houston appealed that determination to this

Court, but we dismissed the interlocutory appeal for lack of jurisdiction. JPay, Inc.

v. Kobel, No. 16-12917-EE (11th Cir. Jan. 23, 2017). The district court then
1
  In relevant part, and subject to certain exceptions, 

28 U.S.C. § 1332

 gives federal district courts
jurisdiction over class actions in which the amount in controversy (aggregating the class
members’ claims) exceeds $5 million, the class includes 100 or more individuals, and at least
one member of the class is diverse from any defendant. 

28 U.S.C. § 1332

(d).


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granted JPay’s motion for summary judgment. It determined that class arbitration

was not available under the parties’ agreement because the agreement was silent on

the availability of class arbitration and the availability of class arbitration could not

be implied from the agreement.

      Kobel and Houston timely appealed to this Court.

                                           II.

      “We review de novo both the district court’s denial of a motion to compel

arbitration and the district court’s interpretation of an arbitration clause.” Jones v.

Waffle House, Inc., 

866 F.3d 1257, 1263

 (11th Cir. 2017) (citations omitted).

      Arbitration is a matter of contract and of consent. “[A]rbitrators derive their

authority to resolve disputes only because the parties have agreed in advance to

submit such grievances to arbitration.” AT&T Techs., Inc. v. Commc’ns Workers

of Am., 

475 U.S. 643

, 648–49 (1986). The Federal Arbitration Act (“FAA”), 

Pub. L. No. 68-401, 43

 Stat. 883 (1925) (codified as amended at 

9 U.S.C. § 1

 et seq.),

treats contractual agreements to arbitrate “on an equal footing with other

contracts,” Rent-A-Ctr., W., Inc. v. Jackson, 

561 U.S. 63

, 67 (2010), and “imposes

certain rules of fundamental importance, including the basic precept that arbitration

is a matter of consent, not coercion.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l

Corp., 

559 U.S. 662, 681

 (2010) (quotation omitted). The FAA “reflect[s] both a

liberal federal policy favoring arbitration and the fundamental principle that


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arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 

563 U.S. 333

, 339 (2011) (quotations and citation omitted). Where the parties have agreed

to arbitrate their dispute, the job of the courts -- indeed, the obligation -- is to

enforce that agreement. See, e.g., Stolt-Nielsen, 

559 U.S. at 682

 (“[T]he central or

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

enforced according to their terms.” (quotation omitted)). At the same time, courts

may not require arbitration beyond the scope of the contractual agreement, because

“a party cannot be required to submit to arbitration any dispute which he has not

agreed so to submit.” United Steelworkers of Am. v. Warrior & Gulf Navigation

Co., 

363 U.S. 574, 582

 (1960).

       When, despite our best interpretive efforts, a contract is ambiguous or silent

on the parties’ intent to arbitrate a particular question, we work from a set of

default presumptions, laid out by the Supreme Court, which help us determine

what the contracting parties intended. See, e.g., Howsam v. Dean Witter Reynolds,

Inc., 

537 U.S. 79, 83

 (2002) (describing the inquiry into whether a question should

be sent to arbitration as an attempt to identify whether “contracting parties would

likely have expected a court to have decided”). “[A]ny doubts concerning the

scope of arbitrable issues” -- that is, doubts over whether an issue falls within the

ambit of what the parties agreed to arbitrate -- “should be resolved in favor of

arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 

460 U.S. 1

,


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24–25 (1983). This is because parties whose contract “provides for arbitration of

some issues . . . likely gave at least some thought to the scope of arbitration.” First

Options of Chi., Inc. v. Kaplan, 

514 U.S. 938, 945

 (1995). In these circumstances,

we apply “the law’s permissive policies in respect to arbitration” and send to

arbitration the question that is arguably within the agreement’s scope. 

Id.

 The

reasoning behind this rule is that if the parties thought about what they wanted to

arbitrate, we can safely assume they thought about and articulated what they didn’t

want to arbitrate. We assume their intent to arbitrate anything not specifically

excluded.

      Notably, this presumption is reversed, however, when the contract presents

ambiguity on the assignment of a “question of arbitrability” -- when it is unclear

“whether a party has agreed that arbitrators should decide arbitrability.” 

Id. at 944

(emphasis added). Questions of arbitrability, often described as “gateway”

questions, e.g., Rent-A-Ctr., 561 U.S at 68–69, are higher-order questions. They

are presumptively for the courts because, as the Supreme Court put it, they are

“rather arcane,” and because we cannot presume they crossed the parties’ minds.

First Options, 

514 U.S. at 945

. “A party often might not focus . . . upon the

significance of having arbitrators decide the scope of their own powers,” 

id.,

 and

so, “[c]ourts should not assume that the parties agreed to arbitrate arbitrability,”

but instead should presume that the question remains with the court. 

Id. at 944

;


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AT&T Techs., 

475 U.S. at 649

 (“[T]he question of arbitrability . . . is undeniably

an issue for 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.”). Assuming that the parties agreed to

arbitrate arbitrability “might too often force unwilling parties to arbitrate a matter

they reasonably would have thought a judge, not an arbitrator, would decide.”

First Options, 

514 U.S. at 945

. Thus, we require “clear and unmistakable

evidence” of intent before we send questions of arbitrability to arbitration. 

Id. at 944

 (alterations omitted) (quoting AT&T Techs., 

475 U.S. at 649

); Waffle House,

866 F.3d at 1267

.

      To summarize, then, when faced with “silence or ambiguity about the

question whether a particular merits-related dispute is arbitrable,” we presume that

an arbitrator will decide the merits-related dispute. First Options, 

514 U.S. at 944

(quotations omitted). But, when faced with “silence or ambiguity about the

question ‘who (primarily) should decide arbitrability,’” we presume that a court

will decide arbitrability. 

Id.

 Questions of arbitrability, then, stay with the court

“unless there is ‘clear and unmistakable evidence’ that the parties intended to

submit such questions to an arbitrator.” Dean Witter Reynolds, Inc. v. Fleury, 

138 F.3d 1339

, 1342–43 (11th Cir. 1998) (emphasis added); see also Howsam, 

537 U.S. at 83

.


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      We start, then with our first question: whether the availability of class

arbitration is a question of arbitrability, presumptively for the courts to decide.

Because we answer the question affirmatively and hold that this question is

presumptively for the courts and not the arbitrator, we must answer the second

question in this case: whether the words the parties used in their agreement “clearly

and unmistakably provide” that the parties intended to overcome the default

presumption and delegate the question to arbitration. Howsam, 

537 U.S. at 83

.

After close review of the words these parties used in their agreement, we hold that

they clearly intended to send the matter to arbitration for decision.

                                          A.

      A question of arbitrability is one of a narrow range of “potentially

dispositive gateway question[s],” specifically one that “contracting parties would

likely have expected a court to . . . decide[].” Howsam 

537 U.S. at 83

. These are

fundamental questions that will determine whether a claim will be brought before

an arbitrator, and include questions about whether particular parties are bound by

an arbitration clause and questions about whether a clause “applies to a particular

type of controversy.” 

Id. at 84

. Because we will not compel anyone to arbitrate if

we aren’t confident they have agreed to do so, we presume that parties would have

expected a court to answer questions of arbitrability. First Options, 

514 U.S. at 945

; see John Wiley & Sons, Inc. v. Livingston, 

376 U.S. 543

, 546–47 (1963)


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(“Under our decisions, whether or not the [party] was 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.”).

      As we see it, questions of arbitrability are better understood as substantive

questions, rather than as “procedural” issues “which grow out of the dispute and

bear on its final disposition.” Howsam, 

537 U.S. at 84

; see also 

id.

 at 85 (quoting

approvingly a uniform law describing that “in the absence of an agreement to the

contrary, issues of substantive arbitrability are for a court to decide and issues of

procedural arbitrability . . . are for the arbitrators to decide” (alteration omitted)

(quoting Revised Unif. Arbitration Act § 6 cmt. 2 (Nat’l Conference of Comm’rs

on Unif. State Laws 2000))). “Procedural” questions are presumptively for the

arbitrator to decide. They include whether the parties have fulfilled “prerequisites

to arbitration,” like time limits or notice requirements, as well as defenses like

waiver and delay. Id. at 84–85.

      We have no binding precedent on whether the availability of class arbitration

is a fundamental question of arbitrability for the courts. Fifteen years ago, a

Supreme Court plurality held that it was not a question of arbitrability for the

courts to decide, in Green Tree Financial Corp. v. Bazzle, 

539 U.S. 444

 (2003).

There, four justices reasoned that the availability of class arbitration “concern[ed]

neither the validity of the arbitration clause nor its applicability to the underlying


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dispute,” but rather “concern[ed] contract interpretation and arbitration

procedures” which arbitrators were “well situated” to analyze. 

Id.

 at 452–53

(plurality opinion). Kobel and Houston urge that we follow Bazzle and hold that

class availability is a “procedural” question. Unfortunately for them, the Court has

since emphasized on two occasions that the Bazzle plurality’s holding is

nonbinding and that the question remains an open one. First, in Stolt-Nielsen S. A.

v. AnimalFeeds International Corp., 

559 U.S. 662

 (2010), the Court noted that in

Bazzle, “no single rationale commanded a majority,” 

id. at 678

, and thus, that

“Bazzle did not yield a majority decision” on the question of who, by default,

decides whether class arbitration is available, 

id. at 679

. Again, and unanimously,

in Oxford Health Plans LLC v. Sutter, 

569 U.S. 564

 (2013), the Justices told us

that “this Court has not yet decided whether the availability of class arbitration is a

question of arbitrability.” 

Id.

 at 569–70 n.2. Although neither case states

explicitly that the Bazzle plurality was incorrect, the Court has repeated that we are

not bound by it. This necessarily would lead us to proceed cautiously even if we

found Bazzle’s reasoning persuasive. Without an answer from the Supreme Court

or from our own precedents, we are required to conduct our own analysis. See S.

Commc’ns Servs., Inc. v. Thomas, 

720 F.3d 1352

, 1359 n.6 (11th Cir. 2013)

(“Like the Supreme Court, we also have not decided whether the availability of

class arbitration is a question of arbitrability.”); see also Spirit Airlines v. Maizes,


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No. 17-14415, 

2018 WL 3866335

 at *4 n.5 (Aug. 15, 2018). Lacking any

controlling precedent, we conclude for the first time in this Circuit that the

availability of class arbitration is a question of arbitrability, presumptively for the

courts to decide.

      The availability of class arbitration is a “potentially dispositive gateway

question.” Howsam, 

537 U.S. at 83

. The availability of class arbitration is a

gateway or threshold question, both formally and functionally. Formally, the

question whether class arbitration is available will determine the scope of the

arbitration proceedings. In class arbitration, like in a class action, representative

plaintiffs make their case before the adjudicator on behalf of a host of similarly

situated plaintiffs who will have the opportunity to collect damages if the class

wins. Procedures like notice requirements and opt-out opportunities protect the

interests of these absent class members, but, nonetheless, allowing a class

proceeding means determining the rights of many parties who are not actively

involved, not represented by their own counsel, and, in all likelihood, not paying

attention. Class availability opens a “gateway” to the arbitration proceedings,

through which thousands of these absent class members might pass if a class is

available. If, on the other hand, a class is not available, the representative

plaintiffs, here, Kobel and Houston, will argue only for themselves. From a

defendant’s perspective the size of the “gateway” is important because class


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arbitration is much more time consuming and complex -- it requires different

allocations of resources and attention, and possibly different counsel, as compared

with the alternative of hundreds of individual arbitrations, each of which would be

a fairly simple proceeding.

      Functionally, too, this is a gateway question. Many, if not most, putative

class proceedings, are for relatively small-dollar claims. If claimants must act on

an individual basis, the cost of arbitrating any single claim would certainly

outweigh their expected recovery. No single bilateral arbitration would be rational.

Only by joining together as a class do they make arbitration efficient. Essentially,

the plaintiffs pool their resources, paying one filing fee, and paying one team of

attorneys to argue on behalf of the whole class. Each plaintiff still stands to

recover only a small dollar amount, but they won’t have to spend as much to

prosecute their claim. In many cases, they won’t end up paying anything because

the parties will reach a settlement whereby the defendant pays attorney’s fees.

This increases liability for defendants like JPay because many consumer plaintiffs

who would never have dreamed of taking the time to pursue claims on their own

will be perfectly happy to collect their share of the recovery earned in class

proceedings conducted on their behalf but without their knowledge. Class

proceedings will thus remove the economic barrier blocking the “gateway” to

arbitration for many plaintiffs.


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       Identifying class availability as a potentially dispositive gateway question

does not conclude our analysis, though, because “the phrase ‘question of

arbitrability’ has a far more limited scope.” Howsam, 

537 U.S. at 83

. Plenty of

gateway matters could dispose of a case, but questions of arbitrability only arise in

the “narrow circumstance where contracting parties would likely have expected a

court to decide the gateway matter.” 

Id.

 The Court has been perfectly comfortable

assuming that parties to an agreement implicitly agreed to arbitrate “procedural”

matters like whether prerequisites to arbitration were fulfilled, whether waiver or

delay defenses are available, or whether plaintiffs have run into trouble with “time

limits, notice, laches, estoppel,” and the like. 

Id.

 at 84–85. If the parties agreed to

arbitrate something, but were silent on these sorts of “procedural” questions, the

Court hasn’t thought it unfair to throw these to arbitration as well, even if the

case’s disposition might depend on the answer. See 

id.

 at 83–84. The Court has

identified, in Howsam v. Dean Witter Reynolds, Inc., 

537 U.S. 79

 (2002), only two

categories presenting the “narrow circumstance” in which we presume that the

question remains with the courts. See 

id.

 at 83–84. These two categories of

questions of arbitrability -- presumptively for the courts to decide -- are questions

“about whether the parties are bound by a given arbitration clause”2 and questions


2
  Because we are confident that the availability of class arbitration falls in the second category
identified in Howsam, we need not decide the more difficult question whether it falls in this first


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“about whether an arbitration clause in a concededly binding contract applies to a

particular type of controversy.” 

Id. at 84

.

       The availability of class arbitration fits squarely in the second category

because it relates to “whether an arbitration clause in a concededly binding

contract applies to a particular type of controversy.” Howsam, 

537 U.S. at 84

. A

class-based proceeding yields “fundamental changes” in the arbitration process, as

the Supreme Court has emphasized in related contexts. Stolt-Nielsen, 

559 U.S. at 686

 (“[C]lass-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

.). Class arbitration is very different from

bilateral arbitration in several important ways identified by the Court: Bilateral

arbitration is designed to be more efficient than litigation in court, but class

arbitration is complex, forfeiting some of the efficiency that parties likely hoped to

achieve by agreeing to arbitrate. See 

id.

 at 685–86. Similarly, class arbitration,

involving more parties, is less confidential than bilateral arbitration, undermining

another key advantage of arbitration. See 

id. at 686

. Class arbitration, like a class

one. The Third Circuit has said that class availability does relate to “whether the parties are
bound by a given arbitration clause” because the inclusion or exclusion of absent class members
concerns “whose claims an arbitrator may decide.” Opalinski v. Robert Half Int’l, Inc., 

761 F.3d 326, 332

 (3d Cir. 2014). On the other hand, class availability does not relate to whether any
particular party is bound to arbitrate its claims, but only to whether they may be arbitrated
together. So the availability of a class could be seen as lacking any effect on whose claims the
arbitrator may decide and as only influencing whose claims the arbitrator will decide in a given
proceeding.


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action, can bind absent parties in a way that bilateral proceedings would not. See

id.

 Class arbitration also entails a significant increase in a defendant’s potential

liability, while retaining the relatively limited scope of judicial review available

following an arbitration decision. See 

id.

 at 686–87; see also Hall St. Assocs.,

LLC v. Mattel, Inc., 

552 U.S. 576, 588

 (2008) (holding that the FAA permits “just

the limited review [of arbitration decisions] needed to maintain arbitration’s

essential virtue of resolving disputes straightaway” and not “full-bore legal and

evidentiary appeals”). Class arbitration is, therefore, a different “type” of

proceeding, and we should assume that parties contracting to arbitrate their

disputes would still typically have wanted a court to decide whether it was

available.

      The Supreme Court’s analysis in Stolt-Nielsen, and Sutter supports our

conclusion. Thus, for example, in Sutter, the Supreme Court observed that “Stolt-

Nielsen flagged that [class availability] might be a question of arbitrability.”

Sutter, 

569 U.S. at 570

 n.2. In Stolt-Nielsen, the parties agreed that they had

“expressly assigned . . . to the arbitration panel” the question whether a class was

available. Stolt-Nielsen, 

559 U.S. at 680

. Unlike in our case, the Court did not

have occasion to consider whether class availability was a question of arbitrability

presumptively for the court to decide, or a question for the arbitrators, because the

express assignment overcame any presumption otherwise. See 

id.

 With the “who


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decides” question settled, the Court only faced and only decided the underlying

merits question of whether class arbitration was available, and held that class

arbitration could not be compelled absent a “contractual basis” on which the

parties could be said to have agreed to class proceedings. 

Id. at 684

. Class

proceedings were simply too different, for the reasons we have stated -- less

efficiency, less confidentiality, impact on absent parties, and increased liability, yet

with only the weak judicial review given to arbitral decisions. See 

id.

 at 686–87.

The following term, in AT&T Mobility LLC v. Concepcion, 

563 U.S. 333

 (2011),

the Court reiterated and expanded on these differences. Id. at 346–51. Again,

unlike in our case, the question of “who decides” was not at issue; these

differences were discussed in the context of evaluating whether a California

Supreme Court doctrine that would have forced parties into class arbitration

without their explicit consent was preempted by the FAA (it was). See id. at 348.

      Neither Stolt-Nielsen nor Concepcion considered whether class arbitration is

the same “type” of controversy as bilateral arbitration, but, because the Court has

been so clear that these distinctions are highly significant, we find these cases

relevant to our consideration of that question. If class proceedings are available,

the arbitration is fundamentally changed. Thus, we cannot read consent to

arbitration and silence on the class availability question as necessarily implying




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consent to an arbitrator’s deciding whether a very different “type” of proceeding is

available. As a result, class availability is a question of arbitrability.

      Our view is confirmed because the availability of class arbitration does not

present a “procedural” question of the sort that is presumptively for the arbitrator

to decide. See Howsam, 537 U.S. at 84–85 (identifying such questions as

“presumptively not for the judge, but for an arbitrator,” id. at 84). Stolt-Nielsen is

again instructive. There, the Supreme Court rejected the idea that class arbitration

was “merely [a] ‘procedural mode.’” Stolt-Nielsen, 

559 U.S. at 687

. If the

question were merely one of procedure, “there would be no need to consider the

parties’ intent with respect to class arbitration.” 

Id.

 (citing Howsam, 

537 U.S. at 84

). Consistent with “the consensual basis of arbitration,” we must ask “whether

the parties agreed to authorize class arbitration.” 

Id.

 Framing the question as

merely a “procedural” matter elides the real differences between bilateral and class

arbitration, and undermines the parties’ freedom to shape their own agreement.

      The availability of class arbitration is dissimilar from those questions that

courts have identified as “procedural” in this context. In an older case, the

Supreme Court was faced with the questions whether an arbitration clause between

an employer and a union survived the employer’s merger with another corporation,

and whether a court or arbitrator should make determinations about prerequisites to

arbitration. John Wiley & Sons, Inc. v. Livingston, 

376 U.S. 543, 544

 (1964).


                                            20
             Case: 17-13611      Date Filed: 09/19/2018    Page: 21 of 52


These determinations included “whether grievance procedures . . . ha[d] been

followed or excused, [and] whether the unexcused failure to follow them avoid[ed]

the duty to arbitrate.” 

Id. at 557

. These were “procedural” questions, not

questions of arbitrability, because they presented “intertwined issues of ‘substance’

and ‘procedure’ growing out of a single dispute.” 

Id.

 And, the Court added, it

would be strange to “carve[] up [the intertwined issues] between two different

forums,” because the answers “depend[ed] to a large extent on how one answers

questions bearing on the basic issue” to be arbitrated, which related to the effect of

the merger on the parties’ contract. 

Id.

 Since the underlying dispute would be

arbitrated, questions about whether the prerequisites had been met were

“procedural” and did not call into question the arbitrability of the dispute.

      The availability of class arbitration is not the same kind of question.

Whether class proceedings are available does not depend on how one views the

“basic issue” -- the merits of the case -- but is a separate matter of contract

interpretation. Here, a court could review JPay’s Terms of Service for intent to

arbitrate on a class basis without considering JPay’s business practices in the least.

Nor is class availability the kind of obviously “procedural” prerequisite that

derives from the terms of the contract. See, e.g., Howsam, 

537 U.S. at 85

(identifying as “procedural” questions “whether prerequisites such as time limits,




                                           21
              Case: 17-13611     Date Filed: 09/19/2018     Page: 22 of 52


notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate

have been met” (emphasis removed)).

      Our conclusion that the availability of class arbitration is a fundamental

question of arbitrability that should presumptively be decided by a court is

consistent with the views of four circuits that have considered the same question

since Stolt-Nielsen. The first such case was Reed Elsevier, Inc. v. Crockett, 

734 F.3d 594

 (6th Cir. 2013), in which the Sixth Circuit considered the concerns raised

in Stolt-Nielsen and Concepcion as it analyzed the differences between bilateral

and class arbitration. 

Id. at 598

. The Sixth Circuit reviewed the now-familiar

concerns that these cases raise: class arbitration is less efficient and less

confidential than bilateral arbitration. 

Id.

 Class proceedings also raise the stakes

of arbitration for defendants and adjudicate the rights of absent parties, who must

then be afforded notice, opportunities to be heard, and opt-out rights. 

Id.

 The

Sixth Circuit discerned the same message we did from these cases, and found that

they amounted to “the Court [having] given every indication, short of an outright

holding, that classwide arbitrability is a gateway question.” 

Id.

 It concluded that

“whether the parties arbitrate one claim or 1,000 in a single proceeding is no mere

detail” but rather presents a “gateway question” for the courts. 

Id.

 at 598–99. For

the Sixth Circuit, the availability of class arbitration was even more consequential




                                           22
             Case: 17-13611     Date Filed: 09/19/2018     Page: 23 of 52


than the availability of arbitration in and of itself, and thus there was even more

reason to be careful not to force it on an unwilling party. 

Id. at 599

.

      Other circuits followed, beginning with the Third Circuit in Opalinski v.

Robert Half International, Inc., 

761 F.3d 326

, 333–35 (3d Cir. 2014). The Fourth

and Eighth Circuits reached the same conclusion, also relying heavily on Stolt-

Nielsen and Concepcion. Catamaran Corp. v. Towncrest Pharmacy, 

864 F.3d 966

,

971–72 (8th Cir. 2017); Dell Webb Cmtys., Inc. v. Carlson, 

817 F.3d 867

, 874–77

(4th Cir. 2016). Against these circuits, the California Supreme Court has

expressed a contrary view, Sandquist v. Lebo Auto. Inc., 

376 P.3d 506

, 522–23

(Cal. 2016), and the Fifth Circuit has stood by an earlier circuit precedent that had

followed the Bazzle plurality. Robinson v. J & K Admin. Mgmt. Servs., Inc., 

817 F.3d 193, 197

 (5th Cir. 2016) (following Pedcor Mgmt. Co. v. Nations Pers. of

Tex., Inc., 

343 F.3d 355

 (5th Cir. 2003)). Still, every federal court of appeals to

have considered the question anew since Stolt-Nielsen has determined that class

availability is a fundamental question of arbitrability.

      We do the same today. We hold that the availability of class arbitration is a

question of arbitrability, presumptively for a court to decide, because it is a

gateway question that determines what type of proceeding will determine the

parties’ rights and obligations. The differences between class and bilateral

arbitration are substantial, and have been repeatedly emphasized by the Supreme


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              Case: 17-13611     Date Filed: 09/19/2018    Page: 24 of 52


Court. In light of these differences, we think it likely that contracting parties

would expect a court to decide whether they will arbitrate bilaterally or on a class

basis. We leave the question of class availability presumptively with the court

because we do not want to force parties to arbitrate so serious a question in the

absence of a clear and unmistakable indication that they wanted to do so.

      We note in passing that although we hold the question of class arbitration

availability is properly categorized as a question of arbitrability, the question in

this case would be headed for arbitration either way. This is so because we find

that JPay and its users expressly delegated questions of arbitrability, and we

therefore instruct the district court to compel arbitration on class availability. If,

instead, we had held that class arbitration availability was a “procedural” question

presumptively for the arbitrator, we would still instruct the district court to compel

arbitration on class availability.

                                           B.

      Having concluded that the availability of class arbitration is a question of

arbitrability, we presume that it is a question for courts to decide, and we turn to

the language in the parties’ agreement to determine whether anything in it clearly

and unmistakably evinces a shared intent to overcome that presumption. The

Supreme Court has made clear that “parties can agree to arbitrate ‘gateway’

questions of ‘arbitrability’” because “arbitration is a matter of contract.” Rent-A-


                                           24
             Case: 17-13611      Date Filed: 09/19/2018    Page: 25 of 52


Ctr., W., Inc. v. Jackson, 

561 U.S. 63

, 68–69 (2010). “An agreement to arbitrate a

gateway issue is simply an additional, antecedent agreement the party seeking

arbitration asks the federal court to enforce, and the FAA operates on this

additional arbitration agreement just as it does on any other.” Id. at 70. Since the

parties plainly have it in their power to agree that an arbitrator should decide

whether class arbitration is available, we turn to the language of JPay’s Terms of

Service and the question becomes a textual one.

                                           1.

      We find a clear and unmistakable intent to delegate questions of arbitrability

to the arbitrator throughout the arbitration provision in JPay’s Terms of Service.

First, it references AAA rules three times. It states that any and all disputes,

claims, or controversies will be resolved “by and through arbitration administered

by the [AAA]” either “under its Arbitration Rules for the Resolution of Consumer

Related Disputes” or “under its Commercial Arbitration Rules,” and later that

“[t]he arbitration proceeding shall be conducted in as expedited a manner as is then

permitted by the rules of the [AAA].” Under controlling Circuit precedent, this

alone serves as a clear and unmistakable delegation of questions of arbitrability to

an arbitrator, a conclusion confirmed by the agreement’s subsequent reference to

“the rules of the [AAA]” in general terms. Second, and quite independently, the

parties expressly agreed that “[t]he ability to arbitrate the dispute, claim or


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              Case: 17-13611     Date Filed: 09/19/2018     Page: 26 of 52


controversy shall likewise be determined in the arbitration.” Finally, the

agreement is written in unmistakably broad terms, as the parties agreed “to

arbitrate any and all such disputes, claims and controversies.” (emphasis added).

Either of the first two of these statements would amount to a clear and

unmistakable delegation of questions of arbitrability to the arbitrator. Together,

and with the addition of the third, their expression of intent is unequivocal. We

address each in turn.

      We begin with our case precedent -- Terminix International Co. v. Palmer

Ranch Ltd. Partnership, 

432 F.3d 1327

 (11th Cir. 2005); U.S. Nutraceuticals, LLC

v. Cyanotech Corp., 

769 F.3d 1308

 (11th Cir. 2014); and, most recently, Spirit

Airlines, Inc. v. Maizes, No. 17-14415, 

2018 WL 3866335

 (Aug. 15, 2018).

Collectively, these cases dictate that by incorporating AAA rules into an agreement

parties clearly and unmistakably evince an intent to delegate questions of

arbitrability. In Terminix, this Court considered an arbitration agreement that the

claimant said was unenforceable because it improperly limited remedies and rights.

Terminix, 

432 F.3d at 1329

. This question “ultimately [went] to the validity of the

parties’ agreement to arbitrate” -- that is, it was a question of arbitrability. 

Id. at 1331

; see 

id.

 at 1331–32. We explained that questions like these “ordinarily”

would be reviewed by a court. 

Id. at 1331

. That default rule was overcome in

Terminix, though, because the arbitration agreement at issue there provided that


                                            26
              Case: 17-13611     Date Filed: 09/19/2018    Page: 27 of 52


“arbitration shall be conducted in accordance with the Commercial Arbitration

Rules then in force of the [AAA].” 

Id. at 1332

. Those rules, in turn, gave the

arbitrator “the power to rule on his or her own jurisdiction, including any

objections with respect to the existence, scope or validity of the arbitration

agreement.” 

Id.

 In agreeing to arbitrate according to rules that granted this power

to the arbitrator, we reasoned, the parties in Terminix clearly and unmistakably

agreed that the arbitrator would have this power. 

Id.

 Citing comparable rulings

drawn from other circuit courts, we held that incorporating such rules into their

agreement meant that “the parties clearly and unmistakably agreed that the

arbitrator should decide whether the arbitration clause is valid.” Id.; see, e.g.,

Contec Corp. v. Remote Sol. Co., 

398 F.3d 205, 208

 (2d Cir. 2005) (“[T]he

incorporation [of rules that empower an arbitrator to decide issues of arbitrability]

serves as clear and unmistakable evidence of the parties’ intent to delegate such

issues to the arbitrator.”).

       More recently, in U.S. Nutraceuticals, we clarified the scope of Terminix’s

holding, and put it in the more familiar terms of questions of arbitrability. In U.S.

Nutraceuticals, the parties’ agreement did not reference any particular AAA rules,

but contained an agreement to arbitrate “under the auspices and rules of the

[AAA].” 

Id.

 at 1309–10. Unlike in Terminix, this language referenced and




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               Case: 17-13611       Date Filed: 09/19/2018       Page: 28 of 52


incorporated AAA rules in general, not any specific set of AAA rules.3 In U.S.

Nutraceuticals, class arbitrability was not at issue, but the parties disagreed as to

whether they were bound by their arbitration agreement. See U.S. Nutraceuticals,

769 F.3d at 1310

. Citing Terminix, we held that “[w]hen the parties

incorporated . . . the [AAA Rules], they clearly and unmistakably contracted to

submit questions of arbitrability to an arbitrator.” 

Id.

 at 1311 (citing Terminix, 

432 F.3d at 1332

). Incorporating relevant AAA rules, we said, is a clear and

unmistakable indication of the parties’ intent for the arbitrator to decide not just

whether the arbitration clause is valid, but whether it applies. 

Id.

 We did not

interrogate which specific AAA rules were incorporated through the contract’s

general incorporation language, but simply followed the rule of Terminix.

       By expressly incorporating two sets of AAA rules, JPay’s Terms of Service

clearly and unmistakably give the arbitrator power to rule on his own jurisdiction,

thus delegating questions of arbitrability to the arbitrator. JPay’s Terms of Service

mention two sets of AAA rules, the Arbitration Rules for the Resolution of

Consumer Related Disputes and the Commercial Arbitration Rules. Each uses the

same language as the AAA rules that were incorporated in Terminix, providing

that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction,

3
  The AAA maintains over fifty different sets of rules that it designates as “active,” and which
might be employed in a given arbitration proceeding. See Active Rules, Am. Arbitration Ass’n
(2018), https://www.adr.org/active-rules.


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               Case: 17-13611        Date Filed: 09/19/2018       Page: 29 of 52


including any objections with respect to the existence, scope, or validity of the

arbitration agreement.” Am. Arbitration Ass’n, Consumer Arbitration Rules R-

14(a) (2016), https://www.adr.org/sites/default/

files/Consumer%20Rules.pdf; Am. Arbitration Ass’n, Commercial Arbitration

Rules and Mediation Procedures R-7(a) (2013), https://www.adr.org/sites/default/

files/CommercialRules_Web.pdf; see also Terminix, 

432 F.3d at 1332

 (quoting

identical language). Terminix is squarely on point because the AAA rules

incorporated by the Terminix agreement -- a prior version of the AAA commercial

rules -- used precisely the same language as the rules incorporated by the JPay

Terms of Service. Each set of rules gives the arbitrator “the power to rule on his or

her own jurisdiction.”

       Terminix does not require that a particular question of arbitrability be

addressed in the incorporated AAA rules. JPay notes, accurately, that neither set

of rules incorporated into their Terms of Service either mentions class arbitration

or expressly incorporates the AAA Supplementary Rules on Class Arbitration,

which do, of course, discuss class arbitration.4 But Terminix dictates, without any


4
  The supplementary rules, for their part, purport to reverse-incorporate themselves into all other
AAA rules by stating that they “shall apply to any dispute arising out of an agreement that
provides for arbitration pursuant to any of the rules of the [AAA].” Am. Arbitration Ass’n,
Supplementary Rules for Class Arbitrations at 1(a) (2010), https://www.adr.org/sites/default/
files/Supplementary%20Rules%20for%20Class%20Arbitrations.pdf. JPay suggests we follow
those courts that have refused to credit the “daisy-chain of cross-references” required for the
supplemental rules to apply when a contract mentions only a set of AAA rules that neither refer


                                                29
               Case: 17-13611       Date Filed: 09/19/2018       Page: 30 of 52


caveat, that we read an arbitration agreement incorporating AAA rules containing

this language as clear and unmistakable evidence that the parties contracted around

the default rule and intended to delegate questions of arbitrability to the arbitrator.

Terminix, 532 F.3d at 1332. After Terminix, and certainly after U.S.

Nutraceuticals, in this Circuit, JPay need not have consented to rules specifically

contemplating class proceedings in order to have delegated the question of class

availability via incorporation of AAA rules. The incorporation of the AAA

consumer and commercial rules are enough because they grant the arbitrator “the

power to rule on his or her own jurisdiction, including any objections with respect

to the existence, scope or validity of the arbitration agreement.” Id.

       Spirit Airlines reinforces our decision. It addressed delegation of the precise

question of arbitrability that concerns us today. In Spirit Airlines, as here, the

parties disagreed as to whether class arbitration was available. See Spirit Airlines,

2018 WL 3866335

 at *1. In their agreement, the parties in Spirit Airlines had

agreed that “[a]ny dispute . . . will be resolved by submission to arbitration . . . in

accordance with the rules of the [AAA] then in effect.” 

Id.

 The agreement made

no specific mention of class arbitration. We held again that we were bound by the


to class proceedings nor incorporate the supplementary rules. E.g., Chesapeake Appalachia,
LLC v. Scout Petrol., LLC, 

809 F.3d 746, 761

 (3d Cir. 2016). Because we are bound to follow
the more straightforward result dictated by Terminix, U.S. Nutraceuticals, and Spirit Airlines, we
need not and do not evaluate what the supplementary rules accomplish through this attempt at
reverse-incorporation.


                                               30
              Case: 17-13611     Date Filed: 09/19/2018    Page: 31 of 52


reasoning of Terminix. Id. at *3. We explained that by incorporating AAA rules

in general terms, the parties had incorporated the Supplementary Rules for Class

Arbitrations. Id. Rule 3 of the Supplementary Rules explains that class

availability will be decided by the arbitrator. Id. Just like in Terminix, the

agreement was read as evincing a clear and unmistakable intent to arbitrate

according to the incorporated AAA rules. Id. We thus concluded that

incorporating the Supplementary Rules constituted “clear and unmistakable

evidence that the parties chose to have an arbitrator decide whether their agreement

provided for class arbitration.” Id.

      The long and short of it is that our case precedent compels that we read the

JPay agreement as clearly and unmistakably evincing an intent to delegate

questions of arbitrability.

      Moreover, and altogether independent of incorporating the AAA rules, the

language these parties employed in this agreement evinces the clearest possible

intent to delegate questions of arbitrability to the arbitrator. The Terms of Service

provide that “[t]he ability to arbitrate the dispute, claim or controversy shall

likewise be determined in the arbitration” and later refer to “the foregoing

Agreement of the parties to arbitrate any and all such disputes” (emphasis added).

Even if we were to assume that the incorporation of AAA Rules failed, in some

way, to delegate questions of arbitrability -- and our case law has plainly rejected


                                          31
              Case: 17-13611     Date Filed: 09/19/2018    Page: 32 of 52


that view -- we would still find that this language sufficed to do so. Unlike

incorporating AAA Rules, which are separate documents that parties to the

agreement might not have read, this delegation clause has an express meaning that

would be obvious and comprehensible to any careful reader of the agreement. At

the absolute least, its significance would have been obvious to the JPay attorneys

who drafted the Terms of Service.

      In fact, in the past, we have found that comparable language expressed a

clear and unmistakable intent to delegate questions of arbitrability in general. E.g.,

Jones v. Waffle House, Inc., 

866 F.3d 1257, 1267

 (11th Cir. 2017) (interpreting a

contract stating that “the Arbitrator . . . shall have authority to resolve any dispute

relating to the interpretation, applicability, enforceability or formation of this

Agreement”); Martinez v. Carnival Corp., 

744 F.3d 1240

, 1245–46 (11th Cir.

2014) (interpreting a delegation of “any and all disputes arising out of or in

connection with this Agreement, including any question regarding its existence,

validity, or termination,” 

id. at 1245

). Other circuits have also specifically found

that comparable language delegated the precise question of class arbitrability.

Wells Fargo Advisors, Inc. v. Sappington, 

884 F.3d 392, 395

 (2d Cir. 2018)

(interpreting a contract stating that “[a]ny controversy relating to your duty to

arbitrate hereunder, or to the validity or enforceability of this arbitration clause, or

to any defense to arbitration, shall also be arbitrated”); Robinson v. J & K Admin.


                                           32
                Case: 17-13611   Date Filed: 09/19/2018     Page: 33 of 52


Mgmt. Servs., Inc., 

817 F.3d 193, 198

 (5th Cir. 2016) (“The agreement required

arbitration of . . . ‘claims challenging the validity or enforceability of this

Agreement . . . or challenging the applicability of the Agreement to a particular

dispute or claim.’” 

Id. at 194

.). Put succinctly, an express delegation clause like

this one delegates questions of arbitrability, one of which is the question of class

availability.

       The Second Circuit reached the same conclusion in Wells Fargo v.

Sappington, 

884 F.3d 392

 (2d Cir. 2018), when it rejected the same argument JPay

makes today -- that an arbitration agreement delegating questions of arbitrability

nonetheless does not delegate the question of class availability if written using

“bilateral terminology.” 

Id. at 397

; see 

id.

 at 397–98. There, the Second Circuit

was reading a contract in light of a Terminix-equivalent precedent dictating that

incorporating “[AAA] rules that empower an arbitrator to decide issues of

arbitrability . . . serves as clear and unmistakable evidence of the parties’ intent to

delegate such issues to an arbitrator.” 

Id.

 at 396 (quoting Contec Corp. v. Remote

Sol. Co., 

398 F.3d 205, 208

 (2d Cir. 2005)). The defendant, Wells Fargo, argued

that “the ‘bilateral terminology’ of the contracts -- ‘you and Wells Fargo,’” meant

that “the parties did not intend to let an arbitrator decide the class arbitration

availability question in particular.” Id. at 397. The Second Circuit thought that

bilateral terminology was “to be expected in an employment contract” and pointed


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             Case: 17-13611     Date Filed: 09/19/2018    Page: 34 of 52


out that “even an express contractual statement concerning class arbitration could

easily be phrased in bilateral terms.” Id. at 397–98 (considering the hypothetical

language “[y]ou and Wells Fargo agree that the availability of class arbitration . . .

shall be determined by an arbitrator,” id. at 398). Similarly here, the fact that

JPay’s Terms of Service are written in bilateral terms should not be read for more

than it is worth and does not change the fact that questions of arbitrability have

unmistakably been delegated.

      We add that the breadth of the delegation achieved by the language found in

this agreement is as extensive as possible. Even if, after reviewing the express

delegation clause, we were somehow still not sure whether the agreement to

delegate “[t]he ability to arbitrate the dispute, claim or controversy” truly

expressed an intent to delegate any and all such disputes, claims, or controversies,

our uncertainty would be settled by the concluding sentence of the agreement’s

arbitration provision, which references “the foregoing Agreement of the parties to

arbitrate any and all such disputes, claims and controversies.” This phrase cannot

refer to anything but the disputes previously mentioned in the arbitration clause,

including disputes about arbitrability. The language cries out with express intent

and emphasizes that a broad reading of the foregoing express delegation clause is

warranted and is, in fact, what the parties intended when they contracted. In the

past we have held that the delegation of “any” gateway questions entails the


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             Case: 17-13611        Date Filed: 09/19/2018   Page: 35 of 52


delegation of “all” such questions, Waffle House, 

866 F.3d at 1267

, but this

agreement helpfully includes both words already. The use of such sweeping

language serves to reaffirm our reading of the foregoing delegation, and confirms

that the parties intended to delegate questions of arbitrability and that our inquiry is

thus at an end. See 

id. at 1271

.

                                            2.

      Throughout its argument, JPay points to and relies on three cases drawn

from outside our Circuit: Reed Elsevier, Inc. v. Crockett, 

734 F.3d 594

 (6th Cir.

2013), Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 

809 F.3d 746

 (3d

Cir. 2016), and Catamaran Corp. v. Towncrest Pharmacy, 

864 F.3d 966

 (8th Cir.

2017). We are unpersuaded by JPay’s invocation of these cases for three reasons.

In the first place, we are bound to follow our own Circuit precedent. Just recently,

Spirit Airlines declined to follow any of these cases, finding no basis for their

holdings in Supreme Court precedent. Spirit Airlines, 

2018 WL 3866335

 at *4.

What’s more, Terminix and U.S. Nutraceuticals foreclose their reasoning. The

Third, Sixth, and Eighth Circuits held that incorporation of AAA Rules by

reference served to delegate questions of arbitrability generally, but that this did

not delegate the specific question of class action availability. Catamaran, 

864 F.3d at 973

; Chesapeake Appalachia, 809 F.3d at 761–62; Reed Elsevier, 

734 F.3d at 599

. Unlike the Eleventh Circuit, the Third and Sixth Circuits did not have


                                            35
               Case: 17-13611       Date Filed: 09/19/2018       Page: 36 of 52


precedents dictating that the incorporation of AAA rules giving an arbitrator the

power to rule on his or her own jurisdiction constitutes a clear and unmistakable

delegation of questions of arbitrability. 5 Terminix, 

432 F.3d at 1332

; see also U.S.

Nutraceuticals, 

769 F.3d at 1311

 (applying the holding of Terminix). Much of the

reasoning and analysis JPay would have us follow is foreclosed to us because of

our obligation to follow our own binding precedents.

       In the second place, those cases are factually different in at least one critical

way. The parties to those agreements used different language from the words JPay

used. Notably, none of those cases included an express delegation of questions of

arbitrability. The Third, Sixth, and Eighth Circuits were reviewing contracts that

accomplished delegation only by incorporation of the AAA rules. Catamaran, 

864 F.3d at 969

 (quoting the relevant contractual language); Chesapeake Appalachia,

809 F.3d at 749

 (same); Reed Elsevier, 

734 F.3d at 599

 (same). None faced the

language we have here: the incorporation of AAA rules and an express delegation

clause. As we have held, either JPay’s incorporation of AAA rules or its express

delegation clause would have been enough, on its own, to delegate the question of

class availability. The combination of the two confirms our reading of each half in

isolation. As compared with the contracts reviewed by these other circuits, the
5
 The Eighth Circuit did have a Terminix-equivalent precedent but read it as applying only to
bilateral arbitration. See Catamaran, 

864 F.3d at 973

 (citing Fallo v. High-Tech Inst., 

559 F.3d 874

 (8th Cir. 2009)). As we have explained, we do not agree that the question of class
availability ought to be treated separately from other questions of arbitrability in this way.


                                               36
             Case: 17-13611      Date Filed: 09/19/2018    Page: 37 of 52


express delegation clause not only provides a second, independent ground on

which to hold as we do, but also confirms our holding on the first ground. No

other circuit analyzed a contract with two such mutually reinforcing methods of

delegation. And, indeed, the Third Circuit recognized that an express delegation

clause in addition to an incorporation of AAA rules would probably have been

enough for it to find clear and unmistakable delegation of the class availability

question. See Chesapeake Appalachia, 

809 F.3d at 758

. So even if we could

follow the guidance of at least that circuit, we would still be obliged to find that the

contractual language in this case accomplishes the delegation of the class

availability question.

      Finally, as we see it, each of these cases conflates the “who decides”

question with the “clause construction” question of class availability by analyzing

the former question with reasoning developed in the context of the latter. The

questions are conceptually related, but require a distinct analysis. By default, a

court presumptively decides whether the parties consented to class arbitration. As

we have explained, at this stage, in considering whether JPay, specifically rebutted

the application of the default rule, we are asking who decides in this instance. We

are not investigating whether JPay consented to class arbitration. That is for the

arbitrator to decide. In Stolt-Nielsen and Concepcion the Court made only merits

determinations of whether class arbitration was available. These cases raised


                                          37
                   Case: 17-13611   Date Filed: 09/19/2018   Page: 38 of 52


important concerns about why we should not force parties to class arbitration

without a contractual basis to do so, but considering these concerns at the higher-

order “who decides” stage conflates that stage with the merits.

        The concerns raised in Stolt-Nielsen do not apply, as a doctrinal matter, to

the “who decides” question of contractual intent to delegate. We alluded to this

confusion in Spirit Airlines. Spirit Airlines, 

2018 WL 3866335

 at *4. Our earlier

analysis of the default rule -- who decides when a contract is silent -- depended on

policy judgments. But the “who decides” question at this stage is a matter of

contract interpretation, and we answered it by conducting a close reading of JPay’s

Terms of Service. Stolt-Nielsen’s concerns about the differences between bilateral

and class arbitration have precious little bearing on the textual analysis required to

determine “who decides” under this specific contract. Here we ask only whether

the parties intended to delegate the question of class availability. Having found

that the parties intended to delegate, we have no reason -- and, indeed, no power --

to evaluate whether a class proceeding is available or what consequences might

result if it is.

        The content of the concerns raised in Stolt-Nielsen reaffirms our view.

Textual analysis of the agreement to determine the parties’ intent does not

implicate the fact that class arbitration is less efficient, less confidential, and

higher-stakes. See Stolt-Nielsen, 559 U.S. at 686–87 (raising these concerns). We


                                             38
             Case: 17-13611     Date Filed: 09/19/2018    Page: 39 of 52


have done nothing more than decide (because the parties have agreed) that an

arbitrator, not a court, will determine whether a class is available. The arbitrator’s

decision whether a class is available will be more efficient and more confidential

than a court’s would be. The determination of class availability has the same

stakes and involves the same parties whether it is decided in a court or in

arbitration. The arbitrator’s decision is somewhat less reviewable than a court’s

will be, but in isolation this doesn’t count for much -- it will be no less reviewable

than any other decision made in arbitration, and the law generally favors arbitration

of many high-stakes questions. See First Options, 

514 U.S. at 945

. In Stolt-

Nielsen, reduced judicial review was a matter of concern only because of the

increased liability of class proceedings. See Stolt-Nielsen, 

559 U.S. at 687

. Quite

simply, the concerns raised in Stolt-Nielsen and Concepcion are not implicated by

our decision today.

      Against our conclusion that the class availability question must go to an

arbitrator, JPay argues that the particular question of class availability ought to be

treated differently from questions of arbitrability in general -- that “consent to

arbitrate class arbitrability cannot be presumed ‘by simply agreeing to submit’

disputes over ‘arbitrability’ to an arbitrator.” (quoting Stolt-Nielsen, 

559 U.S. at 685

). “[T]he particular question of class arbitration,” JPay says, quoting the Eighth

Circuit, “demand[s] a more particular delegation of the issue [to the arbitrator] than


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we may otherwise deem sufficient.” (quoting Catamaran, 

864 F.3d at 973

). JPay

suggests that we ought to look for some more specific indicia that class arbitration

was contemplated, something like “express reference to class arbitration, the

availability of class arbitration, the Supplementary Rules, or who decides whether

the arbitration agreement permits class arbitration.” (quoting Chesapeake

Appalachia, 

809 F.3d at 759

).

      For starters, JPay’s preferred rule is foreclosed by Spirit Airlines, which

rejected just this argument, and by Terminix, which gave no indication that

questions of arbitrability are treated as anything but a unitary category. In Spirit

Airlines, the defendant argued “that we should demand a higher showing for

questions of class arbitrability than for other questions of arbitrability,” but we

rejected this, “find[ing] no basis for that higher burden in Supreme Court

precedent.” Spirit Airlines, 

2018 WL 3866335

 at *3–4. Altogether consistent with

Spirit Airlines, Terminix never required that the AAA rules that the parties say

anything about any particular question of arbitrability in order for that question to

be delegated. In Terminix, the defendant challenged the validity of the arbitration

agreement, arguing that the parties’ contracts were unenforceable because they

limited remedies illegally. Terminix, 

432 F.3d at 1329

. The court did not look for

an express contractual reference to the evaluation of the validity of an agreement.

Rather, it treated this question of arbitrability as part of a unitary category of


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questions of arbitrability. This category is not broken down into individual

questions, and we need not look for a specific reference to the class availability

question any more than we needed to look for a specific reference to “validity” or

evaluation of remedial limitations in Terminix.

      Moreover, a consistent body of case law has spoken of questions of

arbitrability as a unitary category. There is no reason to consider whether any

particular question of arbitrability is specifically delegated because the questions

are typically delegated or preserved as a group. The Supreme Court has looked for

delegation of arbitrability in general, rather than for an intent to delegate precise

questions of arbitrability. E.g., Rent-A-Ctr., W., Inc. v. Jackson, 

561 U.S. 63

, 68–

69 (2010) (“The delegation provision is an agreement to arbitrate threshold

issues . . . . [P]arties can agree to arbitrate ‘gateway’ questions of ‘arbitrability.’”

(emphases added)); First Options of Chi. Inc. v. Kaplan, 

514 U.S. 938, 944

 (1994)

(“Courts should not assume the parties agreed to arbitrate arbitrability unless there

is ‘clear and unmistakable’ evidence that they did so.” (alterations omitted)

(emphasis added)). This Court has spoken of questions of arbitrability as a group

as well. E.g., Spirit Airlines, 

2018 WL 3866335

 at *5 (“Florida’s Arbitration Code

reserves questions of arbitrability for courts.”); Waffle House, 

866 F.3d at 1267

(“The language clearly and unmistakably evinces the parties’ intent to arbitrate all

gateway issues.” (emphasis added)).


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      Indeed, if we were to follow the logic of JPay’s argument -- and our case

precedent forbids us from travelling down that road -- and require something more

than a general delegation of questions of arbitrability in order to delegate the

question of class availability, contract-drafting would be made needlessly, if not

impossibly, complex. If questions of arbitrability are not delegated as a group by

default, we would need to distinguish which questions of arbitrability require

special additional indicia of delegation, and which, if any, would be delegated

through language delegating questions of arbitrability only in general. JPay might

respond that class availability raises unique concerns, but we anticipate that other

important considerations could be raised about any number of fundamental

gateway questions of arbitrability. We agree that these are important questions,

but their importance is accounted for by the default rule that they presumptively

stay in the courts in the absence of a clear and unmistakable delegation. If, after

finding a general delegation of questions of arbitrability, we were to require

additional specific indicia of the delegation of particular questions of arbitrability,

contracting parties hoping to delegate as much as possible would be burdened with

explicitly listing and delegating as many questions of arbitrability as they could

think of. Even then, if an unforeseen question of arbitrability later arose, parties

who had hoped to arbitrate all questions of arbitrability might be forced into court

against their will if a court, perhaps applying the canon of expressio unius est


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exclusio alterius, reasoned that the explicit delegation of other questions implied

that this new question was reserved for the court. We avoid any complications and

unpleasant results by treating questions of arbitrability as a group unless an

agreement gives us a reason to do otherwise. Finally, we reiterate that our aim in

this analysis is only to give meaning to the parties’ expressed will by applying the

words they used, and remind future parties that they are free to draft using

language as specifically or generally as they want.

                                          III.

      To return to basics as we conclude, arbitration is a matter of contract and of

consent. See Am. Express Co. v. Italian Colors Rest., 

570 U.S. 228, 233

 (2013);

Stolt-Nielsen, 

559 U.S. at 681

 (2010). JPay and its users contracted and consented

to arbitrate “any and all . . . disputes, claims and controversies” arising out of or

relating to JPay’s Terms of Service, and they agreed to arbitrate the arbitrability of

those claims. When parties ask whether an arbitration may be conducted on a class

basis, they are asking whether a class-based claim -- a unique type of claim -- is

arbitrable. Thus, the instant dispute poses a question of arbitrability, and JPay has

agreed that this is a question to be answered in arbitration.

      The district court lacked the power to decide whether or not the parties

would arbitrate on a class basis. Although JPay says otherwise today, it agreed

when drafting its Terms of Service that an arbitrator would decide this question.


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The district court should have sent the dispute to arbitration and should not have

passed on whether or not class proceedings were available. We, therefore,

VACATE the district court’s order granting JPay’s Cross Motion for Summary

Judgment, REVERSE the order denying Kobel and Houston’s Motion to Compel

Arbitration, and REMAND with instructions that the Demand be referred to

arbitration.

      VACATED in part, REVERSED in part, and REMANDED




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GRAHAM, District Judge, concurring in part and dissenting in part:

      I agree wholeheartedly with the majority holding that the availability of class

arbitration is a question of arbitrability, presumptively for a court to decide, and

that courts cannot assume that parties would want these kinds of questions to be

arbitrated unless an agreement evinces a clear and unmistakable intent to send

them to arbitration. I also agree with the majority’s finding that the arbitration

agreement in this case expressly and by incorporation of specific rules of the

American Arbitration Association (the “AAA”) delegated issues of arbitrability to

the arbitrator. But I disagree with the majority’s conclusion that the language these

parties used in their contract expressed a clear intent to permit the arbitrator to

decide the question of the availability of class arbitration.

      I believe that a general delegation to arbitrate issues of arbitrability is not

enough and that without a specific reference to class arbitration the court should

presume that the parties did not intend to delegate to an arbitrator an issue of such

great consequence.

      The arbitration agreement in this case makes no express reference to class

arbitration or any other procedure for combining or consolidating multiple claims.

It does contain a general delegation of the power to decide matters of arbitrability:

“The ability to arbitrate the dispute, claim or controversy shall likewise be

determined in the arbitration.” And it refers to two specific rules of the AAA—the


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Arbitration Rules for the Resolution of Consumer Related Disputes and the

Commercial Arbitration Rules—each of which includes a general delegation of the

power to decide issues of arbitrability: “The arbitrator shall have the power to rule

on his or her own jurisdiction, including any objections with respect to the

existence, scope, or validity of the arbitration agreement or to the arbitrability of

any claim or counterclaim.”

      Neither the express delegation clause nor the AAA rules make any reference

to class arbitration. In the absence of a reference to class claims it should be

presumed that the delegation of the power to determine arbitrability is limited to

the arbitrability of bilateral claims and controversies arising out of the contractual

relationship between the parties.

      In Terminix, this Court construed an arbitration agreement that said, “the

arbitration shall be conducted in accordance with the Commercial Arbitration

Rules then in force of the [AAA].” Terminix Int’l Co., LP v. Palmer Ranch Ltd.

P’ship, 

432 F.3d 1327, 1332

 (11th Cir. 2005). Those rules included this provision:

“[t]he arbitrator shall have the power to rule on his or her own jurisdiction,

including any objections with respect to the existence, scope or validity of the

arbitration agreement.” 

Id.

 This Court held that this language was enough to give

the arbitrator the authority to determine the validity of the arbitration clause. 

Id.

The case involved a single plaintiff, Palmer Ranch, which claimed that Terminix


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failed to properly perform termite protection services for its apartment complex. 

Id. at 1330

. Terminix, unlike the present case, involved the authority of the arbitrator

to determine his or her jurisdiction to decide the merits of a bilateral dispute arising

out of the parties’ commercial relationship.

      A similar case from this Court likewise involved a dispute between two

parties to an arbitration agreement, which provided that almost any dispute that

arose between them under their commercial agreement would be arbitrated “under

the rules of the [AAA].” U.S. Nutraceuticals, LLC v. Cyanotech Corp., 

769 F.3d 1308, 1309

 (11th Cir. 2014). Adhering to its holding in Terminix, the Court held

that the arbitrator had the authority to determine arbitrability of that bilateral

dispute. 

769 F.3d at 1312

.

      In Spirit Airlines, this Court addressed for the first time the issue of the

authority of an arbitrator to decide whether an arbitration agreement permitted

class arbitration, finding that the arbitration agreement in that case did confer such

authority upon the arbitrator. Spirit Airlines, Inc. v. Maizes, No. 17-14415, 

2018 WL 3866335

 (11th Cir. Aug. 15, 2018). The arbitration agreement in Spirit

Airlines referred in general to “the Rules of the American Arbitration Association.”

Id. at *4

. The Court in Spirit Airlines relied on one of those sets of rules, to wit, the

Supplementary Rules for Class Arbitrations, which include Supplementary Rule 3




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which “provides that an arbitrator shall decide whether an arbitration clause

permits class arbitration.” 

Id. at *3

.

      In contrast, the arbitration agreement in this case refers to two very specific

rules of the AAA that will govern the parties’ disputes: the “Arbitration Rules for

the Resolution of Consumer Related Disputes” and “Commercial Arbitration

Rules.” Significantly, absent in either of these two sets of rules is any reference to

the Supplementary Rules for Class Arbitrations. There is one general reference to

the rules of the AAA in JPay’s arbitration agreement, but its context is quite unlike

the all-inclusive language in Spirit Airlines. JPay’s arbitration agreement says,

“The arbitration proceedings shall be conducted in as expedited a manner as is then

permitted by the rules of the [AAA].” Any suggestion that this general reference

was intended to adopt by reference the Supplemental Rules for Class Arbitration

would be absurd—class arbitration could hardly be considered expeditious. The

lack of a general reference to the rules of the AAA that could be reasonably

construed to reference class arbitration makes JPay’s arbitration agreement

factually distinguishable from the agreement in Spirit Airlines.

      I conclude that none of the Eleventh Circuit cases cited by the majority are

controlling here. In Spirit Airlines the Court relied on a specific reference to class

arbitration in the AAA Supplemental Rules for Class Arbitrations. Without such

specificity, a court should presume that a general delegation of the power to decide


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questions of arbitrability does not include the power to construe an arbitration

agreement to permit class arbitration.

       My conclusions are driven by the immense differences between adjudication

of bilateral disputes and the conduct of class action proceedings. Other courts,

including the Supreme Court of the United States, have enumerated some of these

significant differences, including the duration, complexity, inefficiency, and

expense of class proceedings, vastly increased potential liability, lack of

confidentiality, and limited scope of judicial review.1

       The majority relies heavily on these considerations in deciding that the

availability of class arbitration is a question of arbitrability for a court to decide.

But it refuses to consider them when deciding whether the parties in this case

intended to let the arbitrator decide if their agreement permits him or her make that

call. That is puzzling because that inquiry is an inquiry into the parties’ intent and

ordinarily a court considers consequences in determining what the parties intended.

I believe the court should consider the consequences in deciding whether the


1
 Another factor a court might want to consider in deciding whether the parties intended to let the
arbitrator make the call is the stake the arbitrator has in the outcome. Arbitration is no longer a
cottage industry; it is big business. Deborah Rothman, Trends in Arbitrator Compensation,
Dispute Resolution Magazine, Spring 2017, at 8 (noting rates for arbitrators may exceed $1,000
an hour), available at
https://www.americanbar.org/content/dam/aba/publications/dispute_resolution_magazine/spring
2017/3_rothman_trends_in_arbitrator.authcheckdam.pdf. Arbitrators charge substantial fees and
vigorously compete for business. Transforming a simple bilateral dispute into a class action,
which may require months or years of full-time work, might tax an arbitrator’s impartiality.


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parties’ general delegation of the authority to decide arbitrability was intended to

include the important issue of the arbitrability of class claims. The consequences of

transforming a bilateral arbitration into a fundamentally different type of

proceeding supports the proposition that the arbitrator’s power to do so should not

be inferred from a general delegation to decide issues of arbitrability. The

principles of Howsam should likewise apply here. See Howsam v. Dean Witter

Reynolds, Inc., 

537 U.S. 79, 84

 (2002) (“[A] disagreement about whether an

arbitration clause in a concededly binding contract applies to a particular type of

controversy is for the court.”).2

       I find some support for my views in several other circuit court decisions.

See, e.g., Catamaran Corp. v. Towncrest Pharmacy, 

864 F.3d 966, 973

 (8th Cir.

2017) (“The risks incurred by defendants in class arbitration . . . and the difficulties

presented by class arbitration . . . all demand a more particular delegation of the


2
  The majority also holds that the significance of the delegation clause, “[a]t the absolute least . .
. would have been obvious to the JPay attorneys who drafted the Terms of Service.” Ante at 32. I
disagree. The implication here is that the majority would hold ambiguity against the drafters. It’s
true that many states have adopted the rule of construing ambiguous terms in a contract against
the drafter. But our context demands “clear and unmistakable” language, Howsam, 

537 U.S. at 83

, a standard stood on its head if a court applies the construe-ambiguity-against-the-drafter
canon, see Chesapeake Appalachia, 

809 F.3d at 763

 (refusing to construe ambiguity against the
drafter because of the clear-and-unmistakable standard). The Supreme Court is set to resolve this
question: “Whether the Federal Arbitration Act forecloses a state-law interpretation of an
arbitration agreement that would authorize class arbitration based solely on general language
commonly used in arbitration agreements.” Lamps Plus, Inc. v. Varela, 

2018 WL 389119

 (U.S.)
(cert. petition); see Varela v. Lamps Plus, Inc., 

701 F. App’x 670, 673

 (9th Cir. 2017), cert.
granted, 

138 S. Ct. 1697

, 

200 L. Ed. 2d 948

 (2018).


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issue than we may otherwise deem sufficient in bilateral disputes.”); Chesapeake

Appalachia, LLC v. Scout Petroleum, LLC, 

809 F.3d 746

, 764–65 (3d Cir. 2016)

(“Given these considerations, it is conceivable that [the parties] may have agreed to

the Leases because they intended to delegate questions of bilateral arbitrability to

the arbitrators—as opposed to the distinctive question of whether they thereby

agreed to a fundamentally different type of arbitration not originally envisioned by

the FAA itself.”); Reed Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 

734 F.3d 594, 599

 (6th Cir. 2013) (“But given the total absence of any reference to

classwide arbitration in this clause, the agreement here can just as easily be read to

speak only to issues related to bilateral arbitration. Thus, at best, the agreement is

silent or ambiguous as to whether an arbitrator should determine the question of

classwide arbitrability; and that is not enough to wrest that decision from the

courts.”).

      I would also note that in Oxford Health the arbitration agreement

incorporated the rules of the AAA, and nevertheless at least two of the Justices felt

that was not sufficient to authorize the arbitrator to decide whether to conduct class

arbitration. See Oxford Health Plans LLC v. Sutter, 

569 U.S. 564, 574

 (Alito, J.,

concurring) (joined by Justice Thomas) (“But unlike petitioner, absent members of

the plaintiff class never conceded that the contract authorizes the arbitrator to

decide whether to conduct class arbitration. It doesn’t.”).


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      I would affirm the district court’s decision that the arbitration agreement in

this case does not permit the arbitrator to decide whether the agreement permits

class arbitration.




                                         52