Tug Hill Operating, LLC v. Lastephen Rogers
Arbitration
Whether a court or an arbitrator must initially decide whether a non-signatory can enforce an arbitration agreement containing a delegation clause
No question identified. : can enforce an agreement to arbitrate when the agreement contains a delegation clause. 9 U.S.C. §§ 2, 4. The district court held that the question was for the arbitrator and compelled arbitration. Rogers v. Tug Hill Operating, LLC, 598 F. Supp. 3d 404 (N.D.W.Va. 2022). The Fourth Circuit, however, reversed. It instead held that “a court, not an arbitrator, [ ] must initially decide whether a nonparty to an arbitration agreement is entitled to enforce it.” Rogers v. Tug Hill Operating, LLC, 76 F.Ath 279, 286 (4th Cir. 2028). 3. The Fourth Circuit’s decision deepens a widening split of authority among the circuits. On one side of the split are circuits holding that courts must always decide whether a non-signatory can enforce an arbitration agreement, despite the existence of a delegation clause. Those courts now include at least the Fourth and Fifth Circuits. See Rogers, 76 F.4th at 286; Newman v. Plains All Am. Pipeline, L.P., 23 F.4th 393, 398-99 (5th Cir. 2022). Notably, however, the Fifth Circuit split directly down the middle (with an 8-8 vote) on its en banc poll, with a vigorous dissent identifying the panel decision’s conflict with precedent. See Newman v. Plains All Am. Pipeline, L.P., 44 F.4th 251 (5th Cir. 2022); see id. at 251-55 (Jones, J., dissenting from the denial of rehearing en banc). On the other side of the split are circuits holding (correctly) that the arbitrator must decide in the first instance whether a nonsignatory may enforce the agreement when there is a delegation clause. Those courts include at least the Sixth, Eighth, and Tenth Circuits, with the First and Second reaching the same conclusion in the context of disputed assignments of agreements containing an arbitration provision. See Swiger v. Rosette, 989 F.3d 501, 507 (6th Cir. 2021); Eckert/Wordell Architects, Inc. v. FJM Props. of Willmar, LLC, 756 F.3d 1098, 1099 (8th Cir. 2014); Casa Arena Blanca LLC v. Rainwater, 2022 WL 839800, *5 (10th Cir. Mar, 22, 2022); see also Apollo Comput., Inc. v. Berg, 886 F.2d 469, 472-74 (1st Cir. 1989); Contec Corp. v. Remote Sol. Co., 398 F.3d 205, 210-11 (2d Cir. 2005). 4, The Fourth Circuit’s decision is also in clear conflict with the wellestablished precedent of this Court, which instructs that a party to an arbitration agreement may agree to have all disputes about arbitrability relating to that agreement decided by an arbitrator and that courts are bound to honor that decision. See Rent-A-Cir., W., Inc. v. Jackson, 130 8S. Ct. 2772, 2777-78 (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.”); First Options of Chicago, Inc. v. Kaplan, 115 8. Ct. 1920, 1928 (1995) (“Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question ‘who has the primary power to decide arbitrability’ turns upon what the parties [to the arbitration agreement] agreed about that matter.” (internal citations omitted)). And it contravenes this Court’s recent that settled precedent—that “if a valid [arbitration] agreement exists, and if the agreement delegates the arbitrability issue to an arbitrator, a court may not decide the arbitrability issue.” Henry Schein, Inc. v. Archer & White Sales, Inc., 189 S. Ct. 524, 530 (2019) (emphasis added). As this Court has held, that is true even when the party resisting arbitration asserts that “the argument that the arbitration agreement applies to the particular dispute is ‘wholly groundless.” Jd. at 528. There is no basis in law or logic to treat differently disputes over whether or not the party seeking to compel arbitration is entitled to do so under the asserted agreement-—an exception that would swallow the rule. 5. This Court's intervention would serve to reconcile a split among the cou