HomeServices - Petition For Writ of Certiorari

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No.

IN THE
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HOMESERVICES OF AMERICA, INC.,
BHH AFFILIATES, LLC, AND HSF AFFILIATES, LLC,
Petitioners,
v.
SCOTT BURNETT ET AL.,
Respondents.

On Petition For A Writ Of Certiorari


To The United States Court Of Appeals
For The Eighth Circuit

PETITION FOR A WRIT OF CERTIORARI

CYNTHIA RICHMAN THEODORE J. BOUTROUS, JR.


AMIR C. TAYRANI Counsel of Record
DAVID W. CASAZZA CHRISTOPHER D. DUSSEAULT
BRIAN C. MCCARTY GIBSON, DUNN & CRUTCHER LLP
M. CHRISTIAN TALLEY 333 South Grand Avenue
GIBSON, DUNN & CRUTCHER LLP Los Angeles, CA 90071
1050 Connecticut Ave., N.W. (213) 229-7000
Washington, D.C. 20036 tboutrous@gibsondunn.com

ROBERT D. MACGILL
MATTHEW T. CIULLA
MACGILL PC
156 E. Market St.
Suite 1200
Indianapolis, IN 46204
Counsel for Petitioners
QUESTION PRESENTED
The signatories to a contract agreed to arbitrate
any claim or dispute arising out of the contract and
delegated to the arbitrator the power to determine
whether a dispute is subject to arbitration. The plain-
tiffs, who signed the contract, sued a nonsignatory
parent company asserting liability based on the non-
signatory’s relationship with its subsidiary, a signa-
tory. The nonsignatory defendant sought to compel
arbitration to determine whether the plaintiffs’ claims
are arbitrable.
The question presented is:
Whether the court must leave the question of ar-
bitrability to the arbitrator, as the First, Second,
Third, and Sixth Circuits have held, or whether the
court may decide the question of arbitrability for it-
self, notwithstanding the contract’s delegation of that
issue to the arbitrator, as the Fourth, Fifth, Eighth,
and Ninth Circuits have held.
ii

PARTIES TO THE PROCEEDING AND


RULE 29.6 DISCLOSURE STATEMENT
1. Petitioners, and defendants-appellants below,
are HomeServices of America, Inc.; BHH Affiliates,
LLC; and HSF Affiliates, LLC.
2. Respondents include other defendants below—
the National Association of Realtors; Keller Williams
Realty, Inc.; Realogy Holdings Corp.; and RE/MAX,
LLC—as well as plaintiffs-appellees below, including
named plaintiffs Scott Burnett, Ryan Hendrickson,
Jerod Breit, Scott Trupiano, Jeremy Keel, Frances
Harvey, Hollee Ellis, Shelly Dreyer, and Rhonda Bur-
nett, and unnamed class members of three classes:
a. “All persons who, from April 29, 2015 through
the present, used a listing broker affiliated with Home
Services of America, Inc., Keller Williams Realty, Inc.,
Realogy Holdings Corp., RE/MAX, LLC, HSF Affili-
ates, LLC, or BHH Affiliates, LLC, in the sale of a
home listed on the Heartland MLS, Columbia Board
of Realtors, Mid America Regional Information Sys-
tem, or the Southern Missouri Regional MLS, and
who paid a commission to the buyer’s broker in con-
nection with the sale of the home”;
b. “All persons who, from April 29, 2015 through
the present, used a listing broker affiliated with Home
Services of America, Inc., Keller Williams Realty, Inc.,
Realogy Holdings Corp., RE/MAX, LLC, HSF Affili-
ates, LLC, or BHH Affiliates, LLC, in the sale of a
home in Missouri listed on the Heartland MLS, Co-
lumbia Board of Realtors, Mid America Regional In-
formation System, or the Southern Missouri Regional
MLS, and who paid a commission to the buyer’s bro-
ker in connection with the sale of the home”; and
iii

c. “All persons who, from April 29, 2014 through


the present, used a listing broker affiliated with Home
Services of America, Inc., Keller Williams Realty, Inc.,
Realogy Holdings Corp., RE/MAX, LLC, HSF Affili-
ates, LLC, or BHH Affiliates, LLC, in the sale of a res-
idential home in Missouri listed on the Heartland
MLS, Columbia Board of Realtors, Mid America Re-
gional Information System, or the Southern Missouri
Regional MLS, and who paid a commission to the
buyer’s broker in connection with the sale of the
home.”
3. BHH Affiliates, LLC, is a subsidiary of HSF Af-
filiates, LLC, which is a subsidiary of HS Franchise
Holding, LLC, which is a subsidiary of HomeServices
of America, Inc., which is a subsidiary of Berkshire
Hathaway Energy Company, which is a subsidiary of
Berkshire Hathaway Inc. Berkshire Hathaway Inc. is
a publicly traded company, and the Vanguard Group,
Inc., owns 10% or more of Berkshire Hathaway Inc.’s
stock.
iv

RELATED PROCEEDINGS
United States District Court (W.D. Mo.):
Sitzer et al. v. National Association of Realtors et
al.,
No. 4:19-cv-332-SRB (July 19, 2022)
(order denying second motion to compel arbi-
tration)
United States Court of Appeals (8th Cir.):
Burnett et al. v. National Association of Realtors
et al.,
No. 22-2664 (Aug. 2, 2023)
(judgment affirming denial of second motion
to compel arbitration)
Burnett et al. v. National Association of Realtors
et al.,
No. 22-8009 (June 2, 2022) (judgment deny-
ing permission to appeal from class-certifica-
tion decision)
Sitzer et al. v. National Association of Realtors et
al.,
No. 20-1779 (Sept. 10, 2021) (judgment af-
firming denial of first motion to compel arbi-
tration)
v

TABLE OF CONTENTS
Page
QUESTION PRESENTED...........................................i
PARTIES TO THE PROCEEDING AND
RULE 29.6 DISCLOSURE STATEMENT ........... ii
RELATED PROCEEDINGS ...................................... iv
TABLE OF AUTHORITIES ......................................vii
TABLE OF APPENDICES .......................................xii
PETITION FOR A WRIT OF CERTIORARI .............. 1
OPINIONS BELOW .................................................... 1
JURISDICTION .......................................................... 1
STATUTORY PROVISIONS INVOLVED ................. 1
STATEMENT .............................................................. 2
REASONS FOR GRANTING THE PETITION ....... 11
I. The Decision Below Exacerbates A Deep,
Acknowledged Conflict About Who Decides
Whether Nonsignatories May Enforce
Arbitration Agreements ....................................... 11
A. The First, Second, Third, and Sixth
Circuits correctly hold that the
arbitrator must decide .................................... 12
B. By contrast, the Fourth, Fifth, and Ninth
Circuits incorrectly usurp issues
delegated to the arbitrator ............................. 17
C. State courts are also divided .......................... 21
D. The conflict among the circuits is
outcome determinative ................................... 23
vi

II. The Decision Below Violates The Federal


Arbitration Act And This Court’s Precedents ..... 25
III. This Case Is An Appropriate Vehicle To
Resolve This Important And Recurring
Question ............................................................... 30
A. This petition raises an important and
recurring issue ................................................ 30
B. This case is an appropriate vehicle for
review of this important issue ........................ 34
CONCLUSION .......................................................... 36
vii

TABLE OF AUTHORITIES
Page(s)
Cases
Anderton v. Practice-Monroeville, P.C.,
164 So. 3d 1094 (Ala. 2014) ................................. 22
Apollo Computer, Inc. v. Berg,
886 F.2d 469 (1st Cir. 1989) ............................ 3, 16
Arthur Andersen LLP v. Carlisle,
556 U.S. 624 (2009) .................................... 7, 29, 34
Becker v. Delek US Energy, Inc.,
39 F.4th 351 (6th Cir. 2022) ................................ 13
Bigge Crane & Rigging Co. v.
Entergy Arkansas, Inc.,
457 S.W.3d 265 (Ark. 2015) ................................. 22
Blanton v. Domino’s Pizza Franchising LLC,
962 F.3d 842 (6th Cir. 2020) .................. 3, 7, 13, 28
Boys Market, Inc. v.
Retail Clerks Union, Local 770,
398 U.S. 235 (1970) ................................................ 4
Brittania-U Nigeria, Ltd. v. Chevron USA, Inc.,
866 F.3d 709 (5th Cir. 2017) ................................ 20
Britton v. Co-op Banking Group,
916 F.3d 1405 (9th Cir. 1990) .............................. 35
Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006) .............................................. 27
Carroll v. Castellanos,
281 So. 3d 365 (Ala. 2019) ................................... 22
viii

Casa Arena Blanca LLC v.


Rainwater ex rel. Estate of Green,
2022 WL 839800 (10th Cir. Mar. 22, 2022) ........ 17
Coinbase, Inc. v. Bielski,
599 U.S. 736 (2023) ........................................ 34, 35
Contec Corp. v. Remote Solution, Co.,
398 F.3d 205 (2d Cir. 2005) ........... 3, 15, 16, 19, 24
Eckert/Wordwell Architects, Inc. v.
FJM Properties of Willmar, LLC,
756 F.3d 1098 (8th Cir. 2014) ........................ 20, 27
EEOC v. Waffle House, Inc.,
534 U.S. 279 (2002) .............................................. 29
Epic Systems Corp. v. Lewis,
138 S. Ct. 1612 (2018) ............................................ 5
Evanston Insurance Co. v.
Cogswell Properties, LLC,
683 F.3d 684 (6th Cir. 2012) ................................ 31
First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938 (1995) ......................................... 6, 29
Ford Motor Co. v.
Montana Eighth Judicial
District Court,
141 S. Ct. 1017 (2021) .......................................... 33
GE Energy Power Conversion France
SAS, Corp. v. Outokumpu Stainless
USA, LLC,
140 S. Ct. 1637 (2020) .......................................... 29
Harvey ex rel. Gladden v.
Cumberland Trust & Investment Co.,
532 S.W.3d 243 (Tenn. 2017) ............................... 22
ix

Gutierrez v. Wells Fargo Bank, NA,


889 F.3d 1230 (11th Cir. 2018) ............................ 34
H&T Fair Hills, Ltd. v. Alliance Pipeline L.P.,
76 F.4th 1093 (8th Cir. 2023) .............................. 34
Henry Schein, Inc. v.
Archer & White Sales, Inc.,
139 S. Ct. 524 (2019) ........ 2, 6, 7, 15, 25, 26, 30, 34
Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79 (2002) ...................................... 7, 26, 30
Jim Burke Automotive, Inc. v. McGrue,
826 So. 2d 122 (Ala. 2002) ................................... 22
Kramer v. Toyota Motor Corp.,
705 F.3d 1122 (9th Cir. 2013) .................... 4, 17, 18
In re Labatt Food Service, L.P.,
279 S.W.3d 640 (Tex. 2009) ................................. 23
Laborers’ Local Union Nos. 472 & 172 v.
Interstate Curb & Sidewalk,
448 A.2d 980 (N.J. 1982)...................................... 23
Lamps Plus, Inc. v. Varela,
139 S. Ct. 1407 (2019) .......................................... 28
Moses H. Cone Memorial Hospital v.
Mercury Construction Corp.,
460 U.S. 1 (1983) .............................................. 6, 30
Mussat v. IQVIA, Inc.,
953 F.3d 441 (7th Cir. 2020) ................................ 33
New Prime Inc. v. Oliveira,
139 S. Ct. 532 (2019) ............................................ 35
Newman v. Plains All American Pipeline, L.P.,
44 F.4th 251 (5th Cir. 2022) .......... 3, 12, 19, 20, 24
x

Newman v. Plains All American Pipeline, L.P.,


23 F.4th 393 (5th Cir. 2022) ...................... 4, 18, 19
Rent-A-Center, West, Inc. v. Jackson,
561 U.S. 63 (2010) .................................... 2, 6, 7, 25
Rogers v. Tug Hill Operating, LLC,
76 F.4th 279 (4th Cir. 2023) ...................... 4, 20, 21
RUAG Ammotec GmbH v.
Archon Firearms, Inc.,
538 P.3d 428 (Nev. 2023) ............................. 3, 4, 22
Southland Corp. v. Keating,
465 U.S. 1 (1984) .................................................. 32
Southwest Airlines Co. v. Saxon,
596 U.S. 450 (2022) .............................................. 34
Zirpoli v. Midland Funding, LLC,
48 F.4th 136 (3d Cir. 2022) ................. 3, 13, 14, 23,
24, 27, 28, 31
Statutes
9 U.S.C. § 1 .................................................................. 5
9 U.S.C. § 2 .............................................................. 1, 5
9 U.S.C. § 4 .................................................................. 5
9 U.S.C. § 16............................................................... 34
28 U.S.C. § 1254 .......................................................... 1
28 U.S.C. § 1391 ........................................................ 33
Rule
Fed. R. Civ. P. 4(k) .................................................... 33
xi

Other Authorities
Katie Arcieri, Real Estate Verdict Spurs
‘Race to Courthouse’ Over Collusion,
Bloomberg Law (Nov. 8, 2023),
http://tinyurl.com/4ey2fa3m ................................ 32
Katherine H. Flynn, Not Open for Business:
A Review of South Carolina’s Arbitration
Venue Statute, and a Proposal for Reform,
66 S.C. L. Rev. 727 (2015).................................... 32
David Horton, Arbitration About Arbitration,
70 Stan. L. Rev. 363 (2018).................................. 31
Tamar Meshel, “A Doughnut Hole in the
Doughnut’s Hole”: The Henry Schein
Saga and Who Decides Arbitrability,
73 Rutgers L. Rev. 83 (2020) ............................... 12
Tamar Meshel, Closing the Enforcement Gap:
Third-Party Discovery Under the FAA and
the Federal Rules of Civil Procedure,
70 U. Kan. L. Rev. 1 (2021) .................................. 32
xii

TABLE OF APPENDICES
Page
APPENDIX A: Opinion of the U.S. Court of
Appeals for the Eighth Circuit (Aug. 2, 2023) .... 1a
APPENDIX B: Order of the U.S. District
Court for the Western District of Missouri
(July 19, 2022) .................................................... 17a
APPENDIX C: Order of the U.S. Court of
Appeals for the Eighth Circuit Denying
Rehearing (Sept. 7, 2023) .................................. 37a
PETITION FOR A WRIT OF CERTIORARI

Petitioners HomeServices of America, Inc.; BHH


Affiliates, LLC; and HSF Affiliates, LLC (collectively,
“HomeServices”) respectfully petition for a writ of cer-
tiorari to review the judgment of the United States
Court of Appeals for the Eighth Circuit.
OPINIONS BELOW
The opinion of the court of appeals (App. 1a-16a)
is reported at 75 F.4th 975. The order of the district
court on petitioners’ motion to compel arbitration
(App. 17a-36a) is reported at 615 F. Supp. 3d 948.
JURISDICTION
The judgment of the court of appeals was entered
on August 2, 2023. A petition for rehearing was de-
nied on September 7, 2023 (App. 37a-38a). On No-
vember 28, 2023, Justice Kavanaugh granted peti-
tioners’ application to extend the time to file this peti-
tion to February 2, 2024. This Court’s jurisdiction is
invoked under 28 U.S.C. § 1254(1).
STATUTORY PROVISIONS INVOLVED
Section 2 of the Federal Arbitration Act, 9 U.S.C.
§ 2, provides that:
A written provision in * * * a contract evidenc-
ing a transaction involving commerce to settle
by arbitration a controversy thereafter aris-
ing out of such contract or transaction * * *
shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in
equity for the revocation of any contract or as
otherwise provided * * * .
2

STATEMENT
The Federal Arbitration Act (“FAA”) requires
courts to enforce arbitration agreements “according to
their terms,” including agreements that require arbi-
tration of “‘gateway’ questions” concerning whether a
particular claim must be arbitrated. Rent-A-Center,
West, Inc. v. Jackson, 561 U.S. 63, 67-69 (2010). “[I]f
a valid agreement exists, and if the agreement dele-
gates the arbitrability issue to an arbitrator, a court
may not decide the arbitrability issue.” Henry Schein,
Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 530
(2019).
In the decision below, the Eighth Circuit violated
that principle when it decided for itself whether the
plaintiffs’ antitrust claims against HomeServices are
subject to arbitration. There is no dispute that the
plaintiffs agreed to contracts that include mandatory
arbitration provisions.1 Those contracts require the
arbitrator, not the court, to resolve disputes about the
“interpretation” and “enforcement” of the contracts.
App. 3a-5a. But rather than enforce those provisions
by ordering arbitration, the Eighth Circuit inter-
preted the terms of the contracts under state law and
concluded that the contracts did not require the plain-
tiffs to arbitrate claims against HomeServices, the in-
direct parent of the real-estate brokerages that signed
arbitration agreements with the plaintiffs.

1
Because arbitrability as to the named plaintiffs was resolved at
an earlier stage of the proceeding, the decision below (and this
petition) concern solely the arbitrability of the unnamed class
members’ claims. For convenience, the petition refers to the un-
named class members as “the plaintiffs” unless otherwise noted.
3

By arrogating to itself the power to decide arbitra-


bility, the Eighth Circuit erred and exacerbated a
deep and well-established conflict among the circuits.
Indeed, courts have repeatedly recognized that the
question of who decides whether a nonsignatory can
enforce an arbitration agreement is an issue on which
“[c]ourts appear split.” RUAG Ammotec GmbH v. Ar-
chon Firearms, Inc., 538 P.3d 428, 433 (Nev. 2023);
Newman v. Plains All American Pipeline, L.P., 44
F.4th 251, 254 (5th Cir. 2022) (Jones, J., dissenting
from denial of rehearing en banc) (panel opinion “puts
this court out of step with at least five (if not more) of
our sister circuits”).
The First, Second, Third, and Sixth Circuits all
hold that, when a nonsignatory’s capacity to compel
arbitration is challenged, “if the parties to [an arbitra-
tion agreement] clearly and unmistakably intended to
delegate the issue of enforceability of the contract (or
any other issue) to an arbitrator, the challenge to the
enforceability of the arbitration agreement must be
decided by the arbitrator, not by a court.” Zirpoli v.
Midland Funding, LLC, 48 F.4th 136, 145 (3d Cir.
2022); see also Apollo Computer, Inc. v. Berg, 886 F.2d
469, 473-74 (1st Cir. 1989) (nonsignatory’s capacity to
compel arbitration is “issu[e] relating to the continued
existence and validity of the agreement” and thus
“[t]he arbitrator should decide” the issue); Contec
Corp. v. Remote Solution Co., 398 F.3d 205, 211 (2d
Cir. 2005) (nonsignatory’s “purported right to enforce
the [arbitration agreement] is a matter of the Agree-
ment’s continued existence, validity and scope, and is
therefore subject to arbitration”); Blanton v. Domino’s
Pizza Franchising LLC, 962 F.3d 842, 852 (6th Cir.
2020) (“the arbitrator should decide for itself whether
4

[a nonsignatory] can enforce the arbitration agree-


ment”).
The decision below, by contrast, joined the Fourth,
Fifth, and Ninth Circuits on the other side of the di-
vide. These circuits hold that courts must decide
whether a nonsignatory may invoke an arbitration
agreement even when the agreement delegates gate-
way issues to the arbitrator. See, e.g., Rogers v. Tug
Hill Operating, LLC, 76 F.4th 279, 287 (4th Cir. 2023)
(“the district court must determine” whether a non-
signatory “is entitled to enforce the arbitration agree-
ment under state contract law”); Newman v. Plains
All American Pipeline, L.P., 23 F.4th 393, 398-99 (5th
Cir. 2022) (“It is up to us—not an arbitrator—to decide
whether [a nonsignatory] can enforce the * * * arbitra-
tion agreement”); Kramer v. Toyota Motor Corp., 705
F.3d 1122, 1127 (9th Cir. 2013) (where party seeking
arbitration was nonsignatory, “the district court had
the authority to decide whether the instant dispute is
arbitrable”); see also RUAG Ammotec, 538 P.3d at 433
(enforcement by nonsignatory presents issue “of con-
tract formation that must be decided by the courts”).
This Court should eliminate this conflict and re-
ject the Eighth Circuit’s misguided approach. Wrest-
ing interpretive authority from arbitrators in the face
of contracts delegating that issue to the arbitrator vi-
olates the FAA and this Court’s precedents. And the
circuit conflict on this vital and recurring issue
“greatly frustrate[s] any relative uniformity in the en-
forcement of arbitration agreements.” Boys Markets,
Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235,
246 (1970).
5

This case presents an ideal vehicle to resolve the


conflict. The parties vigorously litigated this issue be-
low, and the Eighth Circuit squarely addressed it with
flawed but outcome-determinative reasoning. That
erroneous ruling had enormous ramifications: Despite
waiving their right to pursue class litigation against
HomeServices, the plaintiffs obtained a $1.8 billion
verdict, which they are seeking to treble. The petition
should be granted, and the Eighth Circuit reversed.
1. In 1925, Congress enacted the Federal Arbitra-
tion Act, 9 U.S.C. § 1 et seq., “in response to a percep-
tion that courts were unduly hostile to arbitration”
and “routinely refused to enforce agreements to arbi-
trate disputes.” Epic Systems Corp. v. Lewis, 138 S.
Ct. 1612, 1621 (2018). Concluding that “arbitration
had more to offer than courts recognized—not least
the promise of quicker, more informal, and often
cheaper resolutions for everyone involved[,] * * * Con-
gress directed courts to abandon their hostility and in-
stead treat arbitration agreements as ‘valid, irrevoca-
ble, and enforceable.’” Ibid. (quoting 9 U.S.C. § 2).
The FAA permits “[a] party aggrieved by the al-
leged failure, neglect, or refusal of another to arbitrate
under a written agreement for arbitration” to petition
a district court that would otherwise have jurisdiction
over the dispute, “save for such agreement,” “for an
order directing that such arbitration proceed in the
manner provided for in such agreement.” 9 U.S.C. § 4.
The FAA establishes “a liberal federal policy favoring
arbitration agreements, notwithstanding any state
substantive or procedural policies to the contrary,” the
effect of which “is to create a body of federal substan-
tive law of arbitrability, applicable to any arbitration
agreement within the coverage of the Act.” Moses H.
6

Cone Memorial Hospital v. Mercury Construction


Corp., 460 U.S. 1, 24 (1983).
An extensive body of this Court’s caselaw deline-
ates the FAA’s division of authority between courts
and arbitrators. The initial question whether an ar-
bitration agreement was formed is a question for
courts to decide. Henry Schein, Inc., 139 S. Ct. at 530
(“[B]efore referring a dispute to an arbitrator, the
court determines whether a valid arbitration agree-
ment exists.”).
Other issues may be delegated to arbitrators, and
“any doubts concerning the scope of arbitrable issues
should be resolved in favor of arbitration.” Moses H.
Cone, 460 U.S. at 24-25. Delegable issues include
whether a particular dispute must be arbitrated—
that is, questions of the arbitrator’s own jurisdiction,
commonly called questions of arbitrability. Rent-A-
Center, West, Inc., 561 U.S. at 68-69. A party assert-
ing such a delegation must offer “‘clea[r] and unmis-
takabl[e]’ evidence” that an agreement delegates the
issue of arbitrability to the arbitrator. First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)
(alterations in original).
Courts applying that principle have typically
found clear and unmistakable delegations in two cir-
cumstances: when the parties’ arbitration agreement
expressly delegates arbitrability to the arbitrator by,
for example, requiring the arbitrator to “resolve any
dispute relating to the * * * enforceability * * * of this
Agreement,” e.g., Rent-A-Center, West, Inc., 561 U.S.
at 68–69, or when the agreement incorporates by ref-
erence a set of arbitral rules that provide for arbitra-
7

tors to decide gateway questions of arbitrability, see,


e.g., Blanton, 962 F.3d at 846 (collecting cases).
If an arbitration agreement delegates to the arbi-
trator the authority to decide threshold questions of
arbitrability, “a court may not override the contract”
and “possesses no power to decide the arbitrability is-
sue.” Henry Schein, 139 S. Ct. at 529. “That is true
even if the court thinks that the argument that the
arbitration agreement applies to a particular dispute
is wholly groundless” or “frivolous.” Ibid. Applying
that principle, this Court has repeatedly rejected de-
mands that a court decide arbitrability when an arbi-
tration agreement has delegated that question to the
arbitrator. See, e.g., id. at 530; Rent-A-Center, 561
U.S. at 75-76.
This Court has held that the FAA allows a litigant
to move to compel arbitration even if the movant did
not itself sign the arbitration agreement. Arthur An-
dersen LLP v. Carlisle, 556 U.S. 624, 631 (2009). This
“gateway dispute about whether the parties are bound
by a given arbitration clause raises a ‘question of ar-
bitrability.’” Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79, 84 (2002). That threshold question of
whether an arbitration agreement may be “enforced
by or against nonparties to the contract” is decided ac-
cording to the state law governing the contract. Ar-
thur Andersen, 556 U.S. at 631.
2. Respondents Rhonda Burnett, Scott Burnett,
Ryan Hendrickson, Jerod Breit, Scott Trupiano, and
Jeremy Keel (a group of home sellers) filed a putative
class action against brokerages including petitioners
HomeServices of America, Inc.; BHH Affiliates, LLC;
and HSF Affiliates, LLC (collectively, “HomeServ-
8

ices”). App. 2a. The named plaintiffs alleged that pe-


titioners enforced rules established by the National
Association of Realtors that required home sellers to
compensate the home buyer’s broker through anti-
competitive practices. App. 2a-3a.
HomeServices is a national, full-service real-es-
tate brokerage holding company that has brokerage
subsidiaries in various regions included within re-
gional real-estate Multiple Listing Services, data-
bases that real-estate brokers use to share infor-
mation about properties listed for sale. App. 2a. One
of HomeServices’ wholly owned regional subsidiaries,
HomeServices of MOKAN, LLC, in turn wholly owns
nonparties Reece & Nichols Realtors, Inc.
(“ReeceNichols”), and BHH KC Real Estate, LLC
(“BHH KC”). App. 3a.
Certain putative class members entered into
agreements with ReeceNichols and BHH KC to list
their homes for sale. App. 3a. Each of these agree-
ments contained an arbitration provision referring all
disputes arising under the agreements to binding ar-
bitration and waiving the right to litigate such dis-
putes in court. App. 3a-7a.
The wording of the arbitration agreements
changed slightly over the years. The 2014-2017 agree-
ments provide:
Any controversy or claim between the parties
to this Contract, its interpretation, enforce-
ment or breach (which includes tort claims
arising from fraud and fraud in the induce-
ment), will be settled by binding arbitration
pursuant to[,] administered by[,] and under
the rules of the American Arbitration Associ-
9

ation (AAA), or such other neutral arbitrator


agreed to by the parties.
App. 3a (alterations in original; emphases omitted).
The 2018 agreements provide:
Any dispute or claim between the parties to
this Agreement, its interpretation, enforce-
ment or breach (which includes tort claims
arising from fraud and fraud in the induce-
ment), will be settled by binding arbitration
pursuant to the rules of the American Arbi-
tration Association (AAA) and by a neutral ar-
bitrator agreed to by the parties.
App. 4a (emphases omitted).
And the 2019-2022 agreements provide:
Any dispute or claim between the parties to
this Agreement, its interpretation, enforce-
ment or breach (which includes tort claims
arising from fraud and fraud in the induce-
ment), will be settled by binding arbitration.
App. 5a (emphasis omitted).
Each of the agreements also included a class-ac-
tion waiver: “Neither party may, in any court proceed-
ing or dispute resolution process, bring any dispute as
a representative or member of a class, or to act in the
interest of the general public or in any private attor-
ney general capacity.” App. 5a-6a (emphasis omitted)
(2018-2022 agreements); App. 4a (“Neither party will
be entitled to join or consolidate disputes by or against
others in any arbitration, or to include in any arbitra-
tion any dispute as a representative or member of a
class, or to act in any arbitration in the interest of the
10

general public or in any private attorney general ca-


pacity.” (emphasis omitted) (2014-2017 agreements)).
After litigating through the pleading stage, Home-
Services moved to compel arbitration of the named
plaintiffs’ claims. App. 7a. The district court denied
the motion on the ground that HomeServices could not
invoke the arbitration agreements because it was not
a signatory to the agreements—only its wholly-owned
subsidiaries ReeceNichols and BHH KC were. App.
7a-8a. The Eighth Circuit affirmed on the ground that
HomeServices had waived its right to arbitrate the
named plaintiffs’ claims by litigating against them for
nearly a year. Ibid.
The district court then granted the plaintiffs’ mo-
tion for class certification, and HomeServices filed a
second motion to compel arbitration limited to the un-
named class members. App. 8a. The district court de-
nied this motion as well, concluding that HomeServ-
ices had waived its right to arbitration and could not
enforce the agreements as a nonsignatory to them.
App. 8a-10a.
The Eighth Circuit affirmed on the ground that
HomeServices could not enforce the arbitration agree-
ments because it was not a signatory. App. 10a. (The
Eighth Circuit did not consider the district court’s
waiver conclusion. Ibid.)
The Eighth Circuit acknowledged that arbitration
agreements may delegate threshold issues of arbitra-
bility to an arbitrator and that “[w]hether a particular
arbitration provision may be used to compel arbitra-
tion between a signatory and a nonsignatory is a
threshold question of arbitrability.” App. 13a. Rather
than honor the delegation clause and send that ques-
11

tion to the arbitrator, however, the Eighth Circuit in-


dependently decided the question for itself. App. 13a-
15a.
The court of appeals suggested that HomeServices
was required to establish that a contract existed be-
tween the plaintiffs and HomeServices for HomeServ-
ices to compel arbitration. App. 13a. It then looked
immediately to Missouri law to answer that question,
determining that HomeServices would not be treated
as a party entitled to enforce the agreements under
state law because the agreements “do not name Home-
Services as a party or third-party beneficiary.” App.
13a-14a (emphasis omitted). Based on this state-law
interpretation of the contract, the Eighth Circuit held
that the arbitration agreements do not “clearly and
unmistakably delegate to an arbitrator threshold is-
sues of arbitrability between nonparties.” App. 14a-
15a. The Eighth Circuit then denied HomeServices’
petition for rehearing en banc. App. 37a-38a.
After the Eighth Circuit issued its mandate in
September 2023, the case rapidly proceeded to trial
the next month. The jury returned a nearly $1.8 bil-
lion verdict against HomeServices and other defend-
ants—an amount the plaintiffs are seeking to treble.
Dist. Ct. Dkts. 1134, 1294. Post-trial proceedings re-
main pending in the district court.
REASONS FOR GRANTING THE PETITION
I. The Decision Below Exacerbates A Deep,
Acknowledged Conflict About Who
Decides Whether Nonsignatories May
Enforce Arbitration Agreements
This Court’s review is needed to resolve an
acknowledged and entrenched circuit conflict about a
12

recurring and important question in arbitration juris-


prudence: who decides whether a nonsignatory may
enforce an arbitration agreement when the agreement
delegates questions of arbitrability and enforcement
to the arbitrator.
That split has attracted both judicial and aca-
demic attention. Those circuits that, like the Eighth
Circuit below, usurp the arbitrator’s authority, are
“out of step” and in “conflict” with those circuits that
let the arbitrator decide. Newman v. Plains All Amer-
ican Pipeline, L.P., 44 F.4th 251, 254 (5th Cir. 2022)
(Jones, J., dissenting from denial of rehearing en banc
on vote of 8-8). The conflicting results in the courts of
appeals undermine the uniformity the FAA strives to
achieve and leave it “[p]articularly unclear” whether
enforcement by nonsignatories “relate[s] to the scope
of the arbitration agreement or to its existence.”
Tamar Meshel, “A Doughnut Hole in the Doughnut’s
Hole”: The Henry Schein Saga and Who Decides Arbi-
trability, 73 Rutgers L. Rev. 83, 114 n.181 (2020).
A. The First, Second, Third, and Sixth
Circuits correctly hold that the
arbitrator must decide
In circumstances very similar to those here, the
Sixth Circuit has held that the arbitrator decides
whether a nonsignatory can enforce an arbitration
agreement. In Blanton v. Domino’s Pizza Franchising
LLC, the court confronted whether, in a federal anti-
trust class action, a nonsignatory defendant (Dom-
ino’s) could enforce an arbitration agreement that the
plaintiff had signed with a Domino’s franchisee. 962
F.3d 842, 843-44 (6th Cir. 2020).
13

The Sixth Circuit properly framed the issue as


“whether there’s ‘clear and unmistakable’ evidence
that the parties agreed to arbitrate ‘arbitrability.’”
962 F.3d at 846. The court noted the confusion in
other decisions that “conflate the questions of contract
formation and interpretation (which generally involve
state law) with the question whether a particular
agreement satisfies the ‘clear and unmistakable’
standard (which seems to be one of federal law).” Ibid.
As to this latter federal-law question, the Sixth Cir-
cuit concluded that “the incorporation of the AAA
Rules provides ‘clear and unmistakable’ evidence that
the parties agreed to arbitrate ‘arbitrability.’” Ibid.
Thus, the Sixth Circuit affirmed the order compelling
arbitration of the gateway “question of arbitrability.”
Id. at 848. The court easily dismissed the suggestion
that the movant could not compel arbitration without
having signed the agreement—this argument didn’t
“challenge the existence of the arbitration agreement”
but only its scope. Id. at 849. And the signatory non-
movant could scarcely challenge the agreement’s ex-
istence “because he signed it.” Ibid.; see also Becker v.
Delek US Energy, Inc., 39 F.4th 351, 356 (6th Cir.
2022) (reaffirming that “[w]hether a non-signatory
can enforce a delegation clause is * * * a question of
enforceability, not existence,” of the contract).
A recent Third Circuit decision similarly adopts
the proper approach. Zirpoli v. Midland Funding,
LLC, 48 F.4th 136 (3d Cir. 2022). Zirpoli considered
whether a nonsignatory assignee could enforce a con-
tract’s arbitration clause. Id. at 138, 142-43. The
clause nominally limited its coverage. Id. at 139 (al-
lowing “You or We” to “demand arbitration”). Yet the
agreement also provided that the arbitrator would
14

settle issues about the “enforceability,” “arbitrability,”


and “scope of this Agreement.” Ibid.
While the nonmovant contested the validity of the
assignment, “determining whether Midland is a valid
assignee goes directly to whether it can enforce arbi-
tration as the agreement provides, not whether the
agreement exists.” 48 F.4th at 144. And because the
contract delegated “the arbitrability of any [c]laim” to
the arbitrator, the court correctly held that “an arbi-
trator shall resolve the arbitrability” of the dispute.
Id. at 145 (emphasis omitted).
The Third Circuit majority condemned any alter-
native approach as irreconcilable with the delegation
clause. Zirpoli, 48 F.4th at 142. Because there was
no question that a contract existed between the origi-
nal parties, the dispute over who could enforce that
agreement was a “merits” question. Id. at 142-43.
And the delegation clause plainly committed that
“merits” question to the arbitrator. Ibid. For the
court to effectively ignore the delegation and decide
for itself whether a nonsignatory could compel en-
forcement would render the “who decides” question
“pointless” and the delegation clause “meaningless.”
Id. at 143.
Earlier decisions from the First and Second Cir-
cuits reinforce the view that delegation clauses make
the question whether nonsignatories may enforce an
arbitration agreement one for the arbitrator to decide.
In Contec Corp. v. Remote Solution Co., the Second
Circuit considered whether an agreement that nomi-
nally extended only to the contract’s “parties,” but
that also delegated interpretive issues to the arbitra-
tor, could be enforced by a nonsignatory. 398 F.3d
15

205, 208 (2d Cir. 2005). The nonmovant signatory op-


posing arbitration argued that permitting enforce-
ment by the nonsignatory was improper because “the
contractual language [wa]s effective only between the
contracting parties.” Id. at 209.
But the Second Circuit disagreed. The court be-
gan by observing that the parties to the litigation had
“a sufficient relationship to each other and to the
rights created under the agreement” because “the is-
sues the non-signatory is seeking to resolve in arbitra-
tion are intertwined with the agreement that the [sig-
natory nonmovant] has signed.” 398 F.3d at 209.2
Then, because the nonmovant had signed a contract
giving the arbitrator the power to “determine her own
jurisdiction,” the court concluded that the nonmovant
could not “disown its agreed-to obligation to arbitrate
* * * the question of arbitrability.” Id. at 211.
Whether “the parties” should be construed to encom-
pass nonsignatories, thus, was an interpretive issue
for the arbitrator to decide. Ibid.

2
Contec’s preliminary “relational sufficiency” inquiry stands in
some tension with this Court’s later pronouncement that “a court
may not decide an arbitrability question that the parties have
delegated to an arbitrator” even when the demand for arbitration
is allegedly “frivolous” or “wholly groundless.” Henry Schein, Inc.
v. Archer & White Sales, Inc., 139 S. Ct. 524, 530 (2019). In any
event, that relational-sufficiency inquiry places the Eighth Cir-
cuit in conflict with the Second because here, just as in Contec,
“there is * * * an undisputed relationship between [the] corpo-
rate form[s]” of HomeServices and its signatory subsidiary, there
is no dispute that the plaintiffs “signed the [arbitration] Agree-
ment[s],” and the antitrust claims arise from the very same
transaction that was the basis for the arbitration agreement.
398 F.3d at 209.
16

Similarly, the First Circuit, in Apollo Computer,


Inc. v. Berg, held that a delegation clause required the
arbitrator to resolve nonsignatory enforcement. 886
F.2d 469, 473 (1st Cir. 1989). There, the purported
assignee of an arbitration agreement sought to compel
arbitration. Id. at 470. As in Zirpoli and Contec, the
party opposing arbitration—which concededly was a
party to the original agreement—contended that the
assignment to the nonsignatory was invalid, and thus
that the nonsignatory could not compel arbitration.
Id. at 472.
The First Circuit declined to resolve the validity
of the assignment because the “parties contracted to
submit issues of arbitrability to the arbitrator.” 886
F.2d at 472. The contract signed by the nonmovant
was undisputedly a “prima facie agreement to arbi-
trate.” Id. at 473. Whether the agreement was “val-
idly assigned” and “whether it can be enforced” by the
assignee were “issues relating to the continued exist-
ence and validity of the agreement.” Ibid. Given the
contract’s incorporation of the ICC rules, which give
the arbitrator power “to determine her own jurisdic-
tion,” the First Circuit held that “[t]he arbitrator
should decide whether a valid arbitration agreement
exists between Apollo and the defendants under the
terms of the contract.” Id. at 473-74.
The Tenth Circuit has also suggested its agree-
ment in a related context addressing whether a signa-
tory could compel a third-party beneficiary to arbi-
trate a claim. It held that when “there is an arbitra-
tion agreement between” the movant and a nonparty
that “contains a delegation [clause],” the district court
must “sen[d] the case to arbitration,” even when the
nonsignatory resisting arbitration disputes whether it
17

agreed to arbitrate. Casa Arena Blanca LLC v. Rain-


water ex rel. Estate of Green, 2022 WL 839800, at *5
(10th Cir. Mar. 22, 2022). “[T]he question of whether
the Agreement should be enforced against [a non-
signatory] as a third-party beneficiary of that contract
is one that should be decided by an arbitrator, not the
court,” because “there is no issue of contract for-
mation, only contract enforcement.” Ibid.
B. By contrast, the Fourth, Fifth, and
Ninth Circuits incorrectly usurp
issues delegated to the arbitrator
The Ninth Circuit laid out its competing view in
Kramer v. Toyota Motor Corp., 705 F.3d 1122 (9th Cir.
2013). The contract at issue there—between various
Toyota dealerships and car buyers—delegated dis-
putes “about the interpretation and scope” of its arbi-
tration clause to the arbitrator. Id. at 1125. Yet it
also was nominally an agreement between just those
parties; “either you or we” could compel arbitration
under the contract’s terms. Id. at 1124.
When the buyers sued Toyota for alleged defects
in the vehicles’ braking systems, Toyota sought to
compel arbitration. 705 F.3d at 1124-25. Though
Toyota was a nonsignatory to the agreements, Toyota
argued the agreements’ delegation of issues about the
agreements’ interpretation and scope meant “the ar-
bitrator should decide the issue of whether a non-
signatory may compel Plaintiffs to arbitrate.” Id. at
1127.
The Ninth Circuit disagreed, treating the issue as
one of formation for the court. Noting that “the terms
of the arbitration clauses [we]re expressly limited” to
the plaintiffs and dealerships, it effectively decided
18

that though the agreement delegated interpretive is-


sues to the arbitrator, it did not clearly provide that
the plaintiffs agreed to arbitrate with nonsignatories.
705 F.3d at 1127. So the Ninth Circuit decided for it-
self the interpretive question whether the contract’s
references to “you” and “we” should extend to non-
signatories—concluding that it could not, and refus-
ing arbitration on that basis. Ibid.
More recently, the Fifth Circuit endorsed an anal-
ysis substantively identical to the Ninth’s. There, an
employee (Newman) signed an employment agree-
ment containing an arbitration provision with his em-
ployer (Cypress), and subsequently sued another com-
pany (Plains), for whom Newman performed work.
Newman v. Plains All American Pipeline, L.P., 23
F.4th 393, 397 (5th Cir. 2022). Plains, a nonsignatory
to the Newman-Cypress agreement, moved to compel
arbitration and argued that the agreement’s incorpo-
ration of the AAA rules required the arbitrator to re-
solve whether the agreement encompassed nonsigna-
tories. Ibid.
The Fifth Circuit, like the Ninth, rejected that ar-
gument. It broadly held that when a nonsignatory
seeks to enforce an arbitration agreement, there is no
difference between the agreement’s “enforceability”
on the one hand and its “existence” on the other. New-
man, 23 F.4th at 398. The court then believed that it
was bound to decide “the first-step, formation ques-
tion”—whether the nonsignatory and the original sig-
natory opposing arbitration themselves had a contract.
Id. at 399. And, finding no contract between Newman
and Plains, the Fifth Circuit refused arbitration. Ibid.
19

Illustrating lower courts’ confusion on the issue,


the Fifth Circuit purported to apply the Second Cir-
cuit’s analysis in Contec. Newman, 23 F.4th at 400.
The Fifth Circuit thought that Contec had “plainly
reasoned that enforceability goes to the first-step, for-
mation question that is determined by the courts.”
Ibid. (citing 398 F.3d at 209). Yet Contec held directly
the opposite. It never analyzed whether the nonsigna-
tory seeking arbitration and the signatory opposing it
had formed a contract, nor did it even mention the
word “formation.” Instead, it required that the non-
signatory show as a threshold matter that it had a
“sufficient relationship” with the original signatory
whose right to arbitration it was attempting to en-
force. Contec, 398 F.3d at 209; see supra n.2. But the
Second Circuit held that it was ultimately a question
for the arbitrator whether the nonsignatory in fact
could “claim rights under the” agreement—thus tak-
ing no position on whether any legal relationship ac-
tually existed between the nonsignatory and the sig-
natory opposing arbitration. Contec, 398 F.3d at 209.
The Second Circuit explained that a delegation clause
nominally extending only to the “parties” nonetheless
mandated arbitration of whether a nonsignatory could
compel enforcement. Id. at 211.
Newman demonstrates the deep division among
jurists on this issue. The panel decision escaped en
banc review by an equally divided vote, with eight
judges voting for rehearing and eight judges voting
against it. 44 F.4th 251. Dissenting from the denial,
Judge Jones pointed out that Newman placed the
Fifth Circuit “out-of-step” and in “conflict” with multi-
20

ple other circuits—and in tension even with the Fifth


Circuit’s own precedent. Id. at 251, 254.3
Mere months ago, the Fourth Circuit joined the
Fifth and Ninth Circuits in holding that courts decide
whether a nonsignatory may enforce an arbitration
agreement that commits determination of that issue
to the arbitrator. There, a plaintiff who worked for
Tug Hill sued under the Fair Labor Standards Act,
claiming that the company had unlawfully denied him
overtime pay. Rogers v. Tug Hill Operating, LLC, 76
F.4th 279, 282 (4th Cir. 2023). Tug Hill moved to com-
pel arbitration based on an agreement the plaintiff
had with a third party, RigUp, that had helped the
plaintiff find his position with Tug Hill. The agree-
ment required the plaintiff to arbitrate “every dispute
arising in connection with” the agreement and pro-
vided that “[t]he arbitrator has exclusive authority to
resolve any dispute relating to the interpretation, ap-
plicability, or enforceability of this binding arbitration
agreement.” Id. at 283-84 (emphasis omitted; altera-
tion in original).
The district court granted the motion to compel
arbitration, but the Fourth Circuit reversed. 76 F.4th

3
Newman and the decision of the Eighth Circuit below also cre-
ated intra-circuit conflicts in those courts. See Eckert/Wordell
Architects, Inc. v. FJM Properties of Willmar, LLC, 756 F.3d
1098, 1100 (8th Cir. 2014) (holding that “[w]hether a particular
arbitration provision may be used to compel arbitration between
a signatory and a nonsignatory is a threshold question of arbi-
trability” that is “for the arbitrator to decide”); Brittania-U Nige-
ria, Ltd. v. Chevron USA, Inc., 866 F.3d 709, 715 (5th Cir. 2017)
(holding that, “as in Contec, the language of the agreement
clearly and unmistakably delegates arbitrability, even with re-
gard to [the plaintiff’s] dispute with [nonsignatories]”).
21

at 282. That court held that when “the party seeking


to enforce an arbitration agreement is not itself a
party to that agreement, the district court must deter-
mine * * * whether that party is entitled to enforce the
arbitration agreement under state contract law.” Id.
at 287. The Fourth Circuit rejected Tug Hill’s argu-
ment that the plaintiff had agreed to delegate that is-
sue to the arbitrator based on the court’s independent
interpretation of the arbitration agreement: “When
the delegation provision is read in the context of the
arbitration clause as a whole, it is plain that [plaintiff]
agreed to arbitrate issues—including threshold is-
sues—arising between him and RigUp,” not “whether
a third party like Tug Hill has rights under the arbi-
tration agreement.” Id. at 288. The Fourth Circuit
thus widened the circuit split, joining the Fifth,
Eighth, and Ninth Circuits, and breaking with the
First, Second, Third, and Sixth Circuits.4
C. State courts are also divided
Just as the federal courts of appeals are in disar-
ray on this question, state supreme courts are simi-
larly divided.
The Alabama Supreme Court takes the view of the
First, Second, Third, and Sixth Circuits, holding that,
while “the question whether an arbitration provision
may be used to compel arbitration between a signa-
tory and a nonsignatory is a threshold question of ar-
bitrability usually decided by the court,” when “that
question has been delegated to the arbitrator,” “[t]he
arbitrator, not the court, must decide that threshold

4
Tug Hill’s petition asking this Court to resolve the split is pend-
ing as of the filing of this petition. See Tug Hill Operating, LLC
v. Rogers, No. 23-661 (U.S. filed Dec. 15, 2023).
22

issue.” Anderton v. Practice-Monroeville, P.C., 164 So.


3d 1094, 1102 (Ala. 2014); Carroll v. Castellanos, 281
So. 3d 365, 371 (Ala. 2019) (same). But see Jim Burke
Automotive, Inc. v. McGrue, 826 So. 2d 122, 131-32
(Ala. 2002) (earlier case appearing to share the Eighth
Circuit’s view).
The supreme courts of Nevada, Arkansas, and
Tennessee, on the other hand, adopt the position be-
low. The Nevada Supreme Court has held that “an
arbitration agreement’s enforceability as to a non-
signatory” is an issue of “contract formation that must
be decided by the courts in the first instance.” RUAG
Ammotec GmbH v. Archon Firearms, Inc., 538 P.3d
428, 433 (Nev. 2023). The Supreme Court of Arkansas
similarly held that a nonsignatory to an arbitration
agreement could not compel a signatory to arbitrate,
reasoning that “clear and unmistakable evidence in
the arbitration provisions that the parties * * * agreed
to arbitrate arbitrability” does not evidence an agree-
ment to arbitrate with nonsignatories. Bigge Crane &
Rigging Co. v. Entergy Arkansas, Inc., 457 S.W.3d
265, 270-71 (Ark. 2015). And the Tennessee Supreme
Court has described the question of “the extent to
which [a] nonsignatory third-party beneficiary may be
bound to [an] arbitration provision” as a “separate and
distinct” inquiry from deciding “which claims are ‘ar-
bitrable.’” Harvey ex rel. Gladden v. Cumberland
Trust & Investment Co., 532 S.W.3d 243, 273 n.41
(Tenn. 2017).
Other courts have taken more complicated ap-
proaches, declining to adopt either side taken in the
federal courts. The Texas Supreme Court, for exam-
ple, has explained that “whether nonsignatories are
bound by an arbitration agreement is a distinct issue
23

that may involve either or both” the questions of


(1) “whether a litigant agreed to arbitrate” and
(2) “the scope of the arbitration clause,” suggesting
that the court may treat the question as one of con-
tract formation, arbitrability, or both, depending on
the circumstances. In re Labatt Food Service, L.P.,
279 S.W.3d 640, 643 (Tex. 2009). And the New Jersey
Supreme Court has held that parties may delegate to
an arbitrator the determination of “whether an entity
other than a signatory party can be subject to * * *
binding arbitration provisions,” only if there is “an ex-
press contract provision conferring authority on the
arbitrator” to make that determination. Laborers’ Lo-
cal Union Nos. 472 & 172 v. Interstate Curb & Side-
walk, 448 A.2d 980, 984 (N.J. 1982).
D. The conflict among the circuits is out-
come determinative
Had HomeServices moved to compel arbitration in
the First, Second, Third, or Sixth Circuits (and likely
the Tenth), it would have prevailed and therefore
avoided a classwide antitrust trial. Those courts
would have recognized that the plaintiffs and the real-
estate brokerage companies (ReeceNichols and BHH
KC) had an undisputed contract to arbitrate disputes.
They then would have asked the federal-law question
whether those agreements clearly and unmistakably
delegate threshold questions of arbitrability. Given
the agreements’ adoption of the AAA rules and ex-
press provision that the arbitrator must decide dis-
putes about the agreements’ enforcement and inter-
pretation, these courts would have concluded they do
delegate those disputes. See, e.g., Zirpoli, 48 F.4th at
143. And the courts likewise would not have afforded
apparently dispositive weight to the agreements’ ref-
24

erence to “the parties.” See, e.g., id. at 139; Contec,


398 F.3d at 209-11. After all, whether “the parties”
should be construed to encompass nonsignatories is
precisely the sort of interpretive question the agree-
ments leave for the arbitrator. Applying state law, the
arbitrator ultimately might have ruled against Home-
Services on that question. But that is not the point;
what matters is who decides it. And those courts’ an-
swer is unambiguous: the arbitrator.
The Eighth Circuit got the question of whether a
nonsignatory may enforce an arbitration agreement
and the question of who decides that question back-
wards. Rather than treat nonsignatory enforcement
as an issue of contractual interpretation, it asked
whether the plaintiffs and HomeServices formed a
contract to arbitrate under state law. It inde-
pendently concluded that Missouri courts would not
understand the plaintiffs and HomeServices to have
signed “a valid and enforceable agreement.” App. 11a.
And it further asserted that the contract’s reference to
“the parties” precluded holding that the agreement
clearly and unmistakably delegated the question of
nonsignatory enforcement to the arbitrator—the very
question the majority approach treats as one for the
arbitrator to decide. App. 14a.
That arrogation of interpretive authority puts the
Eighth Circuit “out-of-step” and in “conflict” with the
majority approach. Newman, 44 F.4th at 251, 254
(Jones, J., dissenting from denial of rehearing en
banc).
25

II. The Decision Below Violates The Federal


Arbitration Act And This Court’s
Precedents
The Eighth Circuit paid lip service to the notion
that “[w]hether a particular arbitration provision may
be used to compel arbitration between a signatory and
a nonsignatory is a threshold question of arbitrabil-
ity.” App. 13a. But even though these contracts dele-
gate questions of interpretation and enforcement to
the arbitrator, the Eighth Circuit then answered the
arbitrability question for itself. App. 15a-16a.
The Eighth Circuit erred. It elided the distinction
between formation of the contract, which is for the
court, and interpretation of the contract, which must
be decided by the arbitrator when, as here, the agree-
ment so delegates. The consequences of that error are
severe. HomeServices was subjected to a class action
jury trial and $1.8 billion verdict in a case that should
have been resolved through arbitration, not litiga-
tion—much less through a class action, which the
plaintiffs waived in the agreements.
For decades, this Court has repeatedly intervened
to correct lower courts’ refusal to enforce arbitration
agreements “according to their terms.” Rent-A-Cen-
ter, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010). It
has likewise explained that courts may not “short-cir-
cuit the [arbitration] process” simply because they
consider arguments for arbitration weak or even
“wholly groundless.” Henry Schein, Inc., 139 S. Ct. at
527-28. The very point of delegating threshold arbi-
trability issues to an arbitrator is to let the arbitrator
decide them—not for a court to sidestep the arbitra-
tor’s prerogative and construe an agreement’s scope
26

for itself based on its own suppositions about the


agreement’s text and state contract law.
Those principles decide this case. Arbitrators—
not courts—must settle whether nonsignatories may
enforce an arbitration agreement when the agreement
delegates interpretive issues to the arbitrator. That
is because this “gateway dispute about whether the
parties are bound by a given arbitration clause raises
a ‘question of arbitrability.’” Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 84 (2002). And “if the
agreement delegates the arbitrability issue to an arbi-
trator, a court may not decide [it].” Henry Schein, 139
S. Ct. at 530.
Under the FAA, “arbitration is a matter of con-
tract, and courts must enforce arbitration contracts
according to their terms.” Henry Schein, 139 S. Ct. at
529. A natural consequence of that principle is that
“parties may agree to have an arbitrator decide not
only the merits of a particular dispute but also ‘“gate-
way” questions of “arbitrability,”’” including whether
the agreement “covers a particular controversy.” Ibid.
Despite purporting to apply these principles, the
Eighth Circuit’s analysis turns them on their head.
1. The Eighth Circuit’s initial error was to con-
flate the merits of whether a dispute is arbitrable with
the anterior question of who decides those merits. The
Eighth Circuit reasoned that because the relevant
agreements refer to arbitration between “the parties,”
the agreements must make nonsignatory enforcement
impermissible. App. 14a & 15a n.5. Whether this dis-
pute is ultimately subject to arbitration, however, is
not the point. The critical issue instead is who decides
27

whether the underlying dispute is subject to arbitra-


tion.
On that threshold point, the agreements clearly
and unmistakably provide that the arbitrator must re-
solve “any dispute,” “controversy,” or “claim” about
the agreements’ “interpretation” and “enforcement.”
App. 3a-5a. This Court has already held that agree-
ments requiring arbitration of “[a]ny * * * dispute”
about the “enforceability, or scope” of an arbitration
agreement delegate arbitrability questions to the ar-
bitrator. Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440, 442-43 (2006). Therefore, these agree-
ments, like the one in Buckeye, require the arbitrator,
not the court, to resolve disputes over arbitrability.
And the delegation here is of the belt-and-suspenders
variety, as these contracts also adopt the rules of the
AAA, which independently delegate arbitrability
questions to arbitrators. Eckert, 756 F.3d at 1100.5
By deciding that the agreements here preclude
nonsignatory enforcement, the Eighth Circuit neces-
sarily “reach[ed] the merits” of HomeServices’ claim
to arbitration. Zirpoli, 48 F.4th at 143. If the Eighth
Circuit had concluded that the contract did permit
nonsignatory enforcement, it then would have sent
“the arbitrability question of whether [nonsignatories
may enforce the agreement] to an arbitrator to de-
cide—even though [it] already decided” that very is-
sue. Ibid. That “performative” dance would be “anti-

5
The decision below recognized that adoption of these rules ef-
fected a delegation at least in some agreements, but nevertheless
applied the same improper gloss, cabining the delegation with
the court’s own interpretation of the contracts’ reference to “the
parties.” App. 12a, 14a.
28

thetical to the FAA’s purpose of unwanted judicial in-


terference” with the enforcement of arbitration con-
tracts. Ibid.
2. The Eighth Circuit attempted to justify its ar-
rogation of the “who decides” question by treating the
issue as one of contract formation—“whether the par-
ties formed a valid contract that binds them to arbi-
trate their dispute.” App. 11a. In other words, it
thought HomeServices needed to show that the plain-
tiffs and HomeServices had an arbitration contract for
HomeServices to compel arbitration—a conclusion
that it believed was compelled by Missouri law. That
is wrong for several reasons.
As an initial matter, state law never should have
entered into the Eighth Circuit’s calculus. State law
no doubt is relevant to whether an arbitration con-
tract exists. But it was undisputed that the plaintiffs
and the real-estate brokerage companies (ReeceNich-
ols and BHH KC) had formed valid contracts to arbi-
trate. Where an arbitration contract undisputedly ex-
ists, the relevant threshold question of delegation—
who decides whether a dispute is arbitrable—is not a
matter of state contract law, but of “federal [arbitra-
tion] law”: whether that contract “clearly and unmis-
takably” delegated arbitrability. See, e.g., Blanton,
962 F.3d at 846. Any state law that purported to con-
trol that distinct inquiry would be “preempted” by the
FAA and this Court’s decisions. Lamps Plus, Inc. v.
Varela, 139 S. Ct. 1407, 1431 n.4 (2019) (Kagan, J.,
dissenting.).
Accordingly, whatever Missouri law happens to
say about nonsignatory enforcement—a question
about the merits of the arbitrability dispute—does not
29

determine the threshold question of who applies that


state law to decide the arbitrability dispute. As to
that distinct federal-law question—who decides—
there is no requirement that HomeServices show it
had a contract with the plaintiffs. To the contrary,
this Court has repeatedly held that there is no “cate-
gorica[l] ba[r]” on nonsignatory enforcement under
the FAA. Arthur Andersen LLP v. Carlisle, 556 U.S.
624, 631 (2009); accord GE Energy Power Conversion
France SAS, Corp. v. Outokumpu Stainless USA,
LLC, 140 S. Ct. 1637, 1643-44 (2020).
3. Nor can the Eighth Circuit’s reasoning be jus-
tified by the principle that “one can[not] be forced into
arbitration by a contract to which one is a stranger.”
App. 12a. True, it may go “without saying that a con-
tract cannot bind a nonparty.” EEOC v. Waffle House,
Inc., 534 U.S. 279, 294 (2002); see also First Options
of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995)
(suggesting arbitration is proper to resolve “only those
disputes” “that the parties have agreed to submit to
arbitration”). But the plaintiffs are not strangers to
the arbitration agreements. It is undisputed that they
signed the agreements and agreed to arbitration. And
in holding that the FAA permits enforcement of arbi-
tration agreements by nonsignatories, this Court al-
ready rejected this very same argument, describing
those passages as “dicta” that “pertained to issues par-
ties agreed to arbitrate” and to “an entity * * * which
obviously had no third-party obligations under the
contract in question.” Arthur Andersen, 556 U.S. at
631-32. “Neither these nor any of our other cases have
presented for decision the question whether arbitra-
tion agreements that are otherwise enforceable by (or
against) third parties trigger protection under the
30

FAA.” Ibid. And, in Arthur Andersen, this Court an-


swered that question in the affirmative, expressly re-
solving that third parties may invoke the FAA to force
arbitration even when they are nonsignatories. Ibid.
This Court has also noted (in a parenthetical cit-
ing First Options) that courts generally “should decide
whether the arbitration contract [binds] parties who
did not sign the agreement.” Howsam, 537 U.S. at 84.
But that simply restated the general presumption
that courts are to decide “questions of arbitrability” in
the absence of a delegation. Ibid. Here, questions of
arbitrability are delegated to the arbitrator, and
“[w]hen the parties’ contract assigns a matter to arbi-
tration, a court may not resolve the merits of the dis-
pute.” Henry Schein, 139 S. Ct. at 530.
III. This Case Is An Appropriate Vehicle To
Resolve This Important And Recurring
Question
This case is an ideal vehicle for this Court to decide
an important and recurring question of federal arbitra-
tion law that frequently recurs. The conflict between
the courts of appeals undermines the uniformity in the
law of arbitration the FAA seeks to impose.
A. This petition raises an important and
recurring issue
The question raised in this petition has far-reach-
ing implications for the uniform “body of federal sub-
stantive law of arbitrability, applicable to any arbitra-
tion agreement within the coverage of the Act.” Moses
H. Cone Memorial Hospital v. Mercury Construction
Corp., 460 U.S. 1, 24 (1983). This is “a subject as to
which Congress has declared the need for national uni-
31

formity.” Evanston Insurance Co. v. Cogswell Proper-


ties, LLC, 683 F.3d 684, 693 (6th Cir. 2012).
As the recent conflicting decisions indicate, see su-
pra at 11-23, the question presented regularly recurs.
See, e.g., Zirpoli, 48 F.4th at 140 (“We are once again
confronted with the ‘mind-bending issue’ of arbitration
about arbitration.”). Indeed, this petition is one of two
pending before this Court on this issue. See Tug Hill
Operating, LLC, No. 23-661.6 One scholar has noted
that the arbitrability of gateway questions of arbitra-
bility “has become one of the most important and un-
settled areas on the docket,” with “more than two hun-
dred decisions dealing with delegation clauses” in 2016
alone. David Horton, Arbitration About Arbitration, 70
Stan. L. Rev. 363, 370 (2018). Lower-court decisions on
this issue “are a tangled mess,” and “[t]he mist de-
scends at the first step in the analysis, where courts
disagree about how to tell whether a contract assigns
gateway matters about the arbitration to the arbitra-
tor.” Ibid.
Indeed, this issue is already recurring for Home-
Services and the real-estate brokerage industry. The
$1.8 billion verdict in this case has “prompt[ed] a wave
of follow-on suits against the industry” in courts

6
This petition independently warrants this Court’s review and is
an appropriate vehicle for resolving this split because the plain-
tiffs do not dispute that they signed the agreements, because the
issue was squarely addressed below, because the issue was out-
come determinative, and because the court of appeals’ error re-
sulted in a $1.8 billion class verdict in a dispute that never
should have gone to litigation. If the Court grants the petition
in Tug Hill, petitioners request that the Court grant this case as
well or, in the alternative, hold this petition pending the outcome
in Tug Hill.
32

around the country. Katie Arcieri, Real Estate Verdict


Spurs ‘Race to Courthouse’ Over Collusion, Bloomberg
Law (Nov. 8, 2023), http://tinyurl.com/4ey2fa3m. And
this identical issue is currently before the district
court in Moehrl v. National Association of Realtors,
No. 19-cv-1610 (N.D. Ill.), a challenge involving
twenty multiple listing services in several states
around the country, where HomeServices’ motion to
compel arbitration has been pending for over nine
months.
The disuniformity among the courts of appeals on
the question presented is especially problematic be-
cause it makes the “right to enforce an arbitration con-
tract” conferred by the FAA “dependent for its enforce-
ment on the particular forum in which it is asserted.”
Southland Corp. v. Keating, 465 U.S. 1, 15 (1984).
Such a state of affairs undermines the “national uni-
formity in the treatment of arbitration agreements”
that the FAA “was designed to create,” Katherine H.
Flynn, Not Open for Business: A Review of South Caro-
lina’s Arbitration Venue Statute, and a Proposal for Re-
form, 66 S.C. L. Rev. 727, 730 (2015), and it “frus-
trat[es] the FAA’s goal of promoting a uniform, pro-ar-
bitration federal policy,” Tamar Meshel, Closing the
Enforcement Gap: Third-Party Discovery Under the
FAA and the Federal Rules of Civil Procedure, 70 U.
Kan. L. Rev. 1, 6 (2021).
If left unresolved, the division between the courts
of appeals will also “encourage and reward forum shop-
ping.” Southland, 465 U.S. at 15. Parties seeking an
order to compel arbitration are overwhelmingly likely
to be defendants haled into court against their will and
therefore subject to the plaintiff’s strategic choice of
venue. This is particularly true when, as here, a de-
33

fendant or its affiliates have entered into similar con-


tracts with potential plaintiffs across the country.
Accordingly, if this Court does not grant certiorari
to resolve the disagreement between the courts of ap-
peals, the plaintiffs will be able to destroy a contractual
agreement to have an arbitrator decide gateway issues
of arbitrability simply by filing their complaints in a
district within the Fourth, Fifth, Eighth, or Ninth Cir-
cuits, so long as venue is proper and personal jurisdic-
tion exists in one of those circuits, see 28 U.S.C. § 1391;
Fed. R. Civ. P. 4(k). That venue requirement will be
easy to meet in nationwide class actions, because “ab-
sent class members” are not “considered when a court
decides whether it is the proper venue,” Mussat v.
IQVIA, Inc., 953 F.3d 441, 447 (7th Cir. 2020). And
personal jurisdiction will exist whenever the named
plaintiffs can show “a defendant is ‘essentially at home’
in the State” or that the claims “arise out of or relate to
the defendant’s contacts with the forum.” Ford Motor
Co. v. Montana Eighth Judicial District Court, 141 S.
Ct. 1017, 1024, 1026 (2021) (emphasis omitted). Thus,
class counsel need only recruit named plaintiffs from
favored fora to evade arbitration agreements and class
waivers. Such gamesmanship is intolerable in a com-
mercial field where the need for a consistent and uni-
form federal rule of decision is paramount.
34

B. This case is an appropriate vehicle for


review of this important issue
The question presented is outcome determinative
and squarely developed below. There is no barrier to
this Court’s review.7
To be sure, this appeal arises in an interlocutory
posture. But that is typical in appeals of the denial of
a motion to compel arbitration because Congress, in
Section 16(a) of the FAA, “create[d] a rare statutory ex-
ception to the usual rule that parties may not appeal
before final judgment.” Coinbase, Inc. v. Bielski, 599
U.S. 736, 740 (2023); 9 U.S.C. § 16(a). That is why this
Court has regularly reviewed arbitration cases in an
interlocutory posture on appeal from orders resolving
a motion to compel arbitration. See, e.g., Coinbase, Inc.
v. Suski, No. 23-3 (U.S. granted Nov. 3, 2023); South-
west Airlines Co. v. Saxon, 596 U.S. 450, 455 (2022)
(reviewing circuit court judgment denying arbitration
and remanding); Henry Schein, 139 S. Ct. at 528 (ap-

7
The district court’s conclusion that HomeServices waived its
right to arbitrate the unnamed class members’ claims poses no
bar to this Court’s review. App. 28a. The Eighth Circuit did not
endorse the district court’s waiver rationale when it affirmed,
and for good reason. A party does not waive its right to arbitrate
claims of unnamed class members by moving to compel arbitra-
tion shortly after class certification because it is “impossible in
practice to compel arbitration against speculative plaintiffs and
jurisdictionally impossible for [a] District Court to rule on those
motions before the class [is] certified.” Gutierrez v. Wells Fargo
Bank, NA, 889 F.3d 1230, 1238 (11th Cir. 2018). Indeed, shortly
after the Eighth Circuit issued its decision below, it held that “a
motion to bind parties who [are] not yet part of the case” is prem-
ature, so a party does not waive its right to arbitrate the claims
of unnamed class members when it moves to compel arbitration
“quickly after the class [is] certified.” H&T Fair Hills, Ltd. v.
Alliance Pipeline L.P., 76 F.4th 1093, 1099-1100 (8th Cir. 2023).
35

peal from denial of motion to compel); New Prime Inc.


v. Oliveira, 139 S. Ct. 532, 537 (2019) (same); Arthur
Andersen, 556 U.S. at 627 (same).
Granting review now, in addition to being author-
ized by Congress and consonant with this Court’s prac-
tice, is particularly appropriate because resolving the
preliminary issue of arbitrability will avoid a further
waste of judicial and party resources on post-trial pro-
ceedings and an appeal from the post-trial judgment.
Rejecting this appeal simply because the case pro-
ceeded to trial, arguably in violation of this Court’s de-
cision in Coinbase, would simply compound “the worst
possible outcome for parties and the courts: [further]
litigating a dispute in the district [and circuit] court
only for” a higher court “to reverse and order the dis-
pute arbitrated.” 599 U.S. at 743 (quotation marks
omitted).
Denying this petition to await an appeal from the
final judgment would serve no purpose because further
proceedings in the district court and court of appeals
will not change anything about the question presented.
To the contrary, as Coinbase makes clear, if this dis-
pute must “ultimately head to arbitration in any
event,” that outcome will vacate the trial judgment and
verdict, rendering those further proceedings a “waste
[of] scarce judicial resources.” 599 U.S. at 743; see also
Britton v. Co-op Banking Group, 916 F.2d 1405, 1410
n.6 (9th Cir. 1990) (“If [the appellant] were to prevail
in his claim to a right to arbitration, the district court
judgment would be vacated and the parties could pro-
ceed to arbitration.”).
The question presented by this petition is therefore
appropriate for review. The stakes of resolving the
36

question presented could hardly be more stark. The


Eighth Circuit’s erroneous decision to usurp the arbi-
trator’s authority subjected HomeServices to an un-
warranted class trial and a resulting jury verdict of
$1.8 billion. That trial should never have occurred be-
cause the plaintiffs are required to arbitrate their
claims—and their arguments opposing arbitration
must be resolved by the arbitrator, not a court.
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted.

CYNTHIA RICHMAN THEODORE J. BOUTROUS, JR.


AMIR C. TAYRANI Counsel of Record
DAVID W. CASAZZA CHRISTOPHER D. DUSSEAULT
BRIAN C. MCCARTY GIBSON, DUNN & CRUTCHER LLP
M. CHRISTIAN TALLEY 333 South Grand Avenue
GIBSON, DUNN & CRUTCHER LLP Los Angeles, CA 90071
1050 Connecticut Ave., N.W. (213) 229-7000
Washington, D.C. 20036 tboutrous@gibsondunn.com

ROBERT D. MACGILL
MATTHEW T. CIULLA
MACGILL PC
156 E. Market St.
Suite 1200
Indianapolis, IN 46204
Counsel for Petitioners
February 2, 2024

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