DISH NETWORK L.L.C. and ECHOSPHERE, L.L.C. Plaintiffs - Appellants,
MATTHEW RAY, on behalf of himself and all similarly situated persons, Defendant-Appellee.
from the United States District Court for the District of
Colorado (D.C. No. 1:16-CV-00314-LTB)
W. Martinez, Martinez Law Group, P.C., Denver, Colorado,
(Dayna L. Dowdy, Martinez Law Group, P.C., Denver, Colorado,
with her on the briefs) for Plaintiffs-Appellants.
D. Gonzales, The Law Offices of Brian D. Gonzales, PLLC, Fort
Collins, Colorado, (Ryan F. Stephan, Stephan Zouras, LLP,
Chicago, Illinois, with him on the brief) for
TYMKOVICH, Chief Judge, SEYMOUR, and McHUGH, Circuit Judges.
SEYMOUR, CIRCUIT JUDGE.
case involves an arbitration proceeding between DISH Network
L.L.C. ("DISH") and Matthew Ray, a former employee
who signed an arbitration agreement when he was employed. The
arbitrator determined that the Arbitration Agreement between
the two parties permitted classwide arbitration, and then
stayed the arbitration to permit DISH to contest the issue in
court. DISH filed a Petition to Vacate Clause Construction
Arbitration Award, which the district court denied. We
Ray worked as a sales associate for DISH until his
termination in 2015. When he was employed, Mr. Ray signed an
Arbitration Agreement drafted by DISH, which provided the
[T]he Employee and DISH agree that any claim, controversy
and/or dispute between them, arising out of and/or in any way
related to Employee's application for employment,
employment and/or termination of employment, whenever and
wherever brought, shall be resolved by arbitration. The
Employee agrees that this Agreement is governed by the
Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., and
is fully enforceable.
. . . The arbitration shall be governed by and construed in
accordance with the substantive law of the State in which the
Employee performs services for DISH as of the date of the
demand for arbitration, or in the event the Employee is no
longer employed by DISH, the substantive law of the State in
which the Employee last performed services for DISH. A single
arbitrator engaged in the practice of law from the American
Arbitration Association ("AAA") shall conduct the
arbitration under the then current procedures of the
AAA's National Rules for the Resolution of Employment
Aplt. App. at 51 (emphasis added).
his termination, Mr. Ray initially filed an action in the
federal district court alleging violations of the Fair Labor
Standards Act ("FLSA"), Colorado's Wage Claim
Act, Colorado's Minimum Wage Act, and a common law claim
for breach of contract. Dish moved to dismiss, demanding that
Mr. Ray arbitrate his claims pursuant to the Agreement. Mr.
Ray dismissed the lawsuit and filed with the American
Arbitration Association ("AAA"), asserting the same
four claims. In addition, and the focus of this case, Mr. Ray
attempted to pursue his claims as a class action under
Fed.R.Civ.P. 23 and a collective action under 29 U.S.C.
the issues presented to the arbitrator was whether the
Agreement permitted class arbitration. In his Clause
Construction Award, the arbitrator first determined that he
had jurisdiction to decide the issue. He reasoned that the
determination of whether an arbitration agreement permits
classwide arbitration was not a "gateway issue," an
issue that is normally decided by courts rather than
arbitrators. Gateway disputes include "whether the
parties have a valid arbitration agreement at all or whether
a concededly binding arbitration clause applies to a certain
type of controversy." Green Tree Fin. Corp. v.
Bazzle, 539 U.S. 444, 452 (2003) (plurality opinion)
(citing Howsam v. Dean Witter Reynolds, Inc., 537
U.S. 79, 83 (2002)); John Wiley & Sons, Inc. v.
Livingston, 376 U.S. 543, 546-47 (1964) (a court should
decide whether arbitration agreement survived corporate
merger and bound resulting corporation); AT&T Techs.,
Inc. v. Communication Workers of America, 475 U.S. 643,
651-52 (a court should decide whether labor-management layoff
controversy falls within arbitration clause of
collective-bargaining agreement). The arbitrator reasoned
that even if the issue presented was a "gateway
issue," the parties had clearly and unmistakably
expressed their intention in the Agreement that questions of
arbitrability be resolved by the arbitrator rather than the
concluding that he had jurisdiction to decide the issue, the
arbitrator analyzed the language of the Agreement to
determine the parties' intent as to classwide
arbitration. Examining six features relevant to that end, the
arbitrator ultimately concluded that the Agreement permitted
collective action covering Mr. Ray's FLSA and state law
filed with the district court a Petition to Vacate Clause
Construction Award, which the court denied. The court agreed
with the arbitrator that he had jurisdiction to decide the
issue. Although, unlike the arbitrator, the court concluded
that the determination of classwide arbitrability was a
"gateway issue" normally decided by the court, it
nevertheless held that the Agreement clearly and unmistakably
expressed the parties' intention to have the arbitrator
resolve such questions. The court also held that the
arbitrator did not manifestly disregard the law in
interpreting the Agreement. DISH appeals.
first contends that the arbitrator exceeded his powers in
determining the gateway issue of jurisdiction over the
arbitrability of class and collective claims. It therefore
asserts that the normal standard of review usually applicable
to an arbitrator's decision, which is extremely
deferential, does not apply to the arbitrator's ultimate
conclusion here that the Agreement permits classwide
arbitrations. DISH also argues that even if the arbitrator
did not exceed his powers, his decision manifestly
disregarded the applicable law and must therefore be vacated.
We address each argument in turn.
A. Class Arbitration as a Gateway Issue
review a district court's order to vacate or enforce an
arbitration award de novo. U.S. Energy Corp. v. Nukem,
Inc., 400 F.3d 822, 830 (10th Cir. 2005). "In doing
so, however, we give 'great deference' to an
arbitrator's decision." Chevron Mining Inc. v.
United Mine Workers of America, Local 1307, 648 F.3d
1151, 1154 (10th Cir. 2011) (quoting U.S. Energy,
400 F.3d at 830). Under the Federal Arbitration Act
("FAA"), vacation of an award is only proper in a
few instances that include fraud, corruption, arbitrator
misconduct, and arbitrator overreach. 9 U.S.C. § 10(a).
Various courts have determined that vacation is also
appropriate when the arbitration award violates public
policy, when the arbitrator did not conduct a fundamentally
fair hearing, or when an arbitrator's decision is
"based on a 'manifest disregard' of the law,
defined as 'willful inattentiveness to the governing
law.'" Chevron Mining, 648 F.3d at 1154
(quoting U.S. Energy, 400 F.3d at 830); see also
Denver & Rio Grande W. R.R. v. Union Pac. R.R., 119
F.3d 847, 849 (10th Cir. 1997) (citing cases). Our powers of
review have been described as "among the narrowest known
to the law." Litvak Packing Co. v. United Food and
Commercial Workers, Local Union No. 7, 886 F.2d 275, 276
(10th Cir. 1989). In fact, "[e]rrors in either the
arbitrator's factual findings or his interpretation of
the law (unless that interpretation shows a manifest
disregard of controlling law) do not justify review or
reversal on the merits of the controversy." Chevron
Mining, 648 F.3d at 1154 (quoting Denver & Rio
Grande, 119 F.3d at 849).
this level of deference only applies to disputes that the
parties agreed to submit to arbitration. The Supreme Court
has recognized that "arbitration is a matter of contract
and a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit."
Howsam, 537 U.S. at 83 (2002) (quoting United
Steelworkers of America v. Warrior & Gulf Nav. Co.,
363 U.S. 574, 582 (1960)). "Accordingly, the first task
of a court asked to compel arbitration of a dispute is to
determine whether the parties agreed to arbitrate that
dispute." Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). In
making this determination, the Court has "long
recognized and enforced a 'liberal federal policy
favoring arbitration agreements.'" Howsam,
537 U.S. at 83 (quoting Moses H. Cone Mem'l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). But
the Court "has made clear that there is an exception to
this policy: The question whether the parties have submitted
a particular dispute to arbitration, i.e., the
'question of arbitrability, ' is 'an
issue for judicial determination [u]nless the parties clearly
and unmistakably provide otherwise.'" Id.
(quoting AT&T, 475 U.S. at 649).
Court has distinguished "questions of
arbitrability" from what it refers to as mere
"procedural questions," "which grow out of the
dispute and bear on its final disposition." Id.
at 84 (quoting John Wiley, 376 U.S. at 557).
"They include, for example, issues related to
'waiver, delay,' or 'whether a condition
precedent to arbitrability has been fulfilled.'"
Reed Elsevier, Inc. ex rel. LexisNexis Div. v.
Crockett, 734 F.3d 594, 597 (6th Cir. 2013) (quoting
Howsam, 537 U.S. at 84-85). This distinction is not
always easy to discern, however, and the question of whether
an arbitration clause permits classwide arbitration is a
gateway dispute for the courts to decide or a procedural
question for an arbitrator is an especially baffling one.
Bazzle, a plurality of the Court stated that whether
an agreement permits class arbitration was a procedural
question for an arbitrator because "it concerns neither
the validity of the arbitration clause nor its applicability
to the underlying dispute between the parties." 539 U.S.
at 452. But the Court subsequently noted the non-binding
nature of Bazzle in Stolt-Nielsen S.A. v.
AnimalFeeds Int'l Corp., 559 U.S. 662, 680 (2010)
("In fact, however, only the plurality decided [the
classwide arbitrability] question."). As the Court
described in Stolt-Nielsen, bilateral arbitration
allows "parties [to] forgo the procedural rigor and
appellate review of the courts in order to realize"
benefits like "lower costs, greater efficiency and
speed, and the ability to choose expert adjudicators to
resolve specialized disputes." Id. at 685. But
these benefits are not realized in classwide arbitration,
which gives "reason to doubt the parties' mutual
consent to resolve disputes through [it]." Id.;
see also AT&T Mobility L.L.C. v. Concepcion, 563
U.S. 333, 348 (2011) ("[T]he switch from bilateral to
class arbitration sacrifices the principal advantage of
arbitration-its informality-and makes the process slower,
more costly, and more likely to generate procedural morass
than final judgment.").
"[u]nder the Class Rules, 'the presumption of
privacy and confidentiality' that applies in many
bilateral arbitrations 'shall not apply in class
arbitrations,' thus potentially frustrating the
parties' assumptions when they agreed to arbitrate."
Stolt-Nielsen, 559 U.S. at 686 (citations omitted).
The Court also pointed out that the "commercial stakes
of class-action arbitration are comparable to those of
class-action litigation," but "the scope of
judicial review is much more limited." Id. at
686-87 (citing Hall Street Assocs., L.L.C. v. Mattel,
Inc., 552 U.S. 576, 588 (2008)). As the Court emphasized
in Concepcion, 563 U.S. at 350:
The absence of multilayered review makes it more likely that
errors will go uncorrected. Defendants are willing to accept
the costs of these errors in arbitration, since their impact
is limited to the size of individual disputes, and presumably
outweighed by savings from avoiding the courts. But when
damages allegedly owed to tens of thousands of potential
claimants are aggregated and decided at once, the risk of an
error will often become unacceptable. Faced with even a small
chance of a devastating loss, defendants will be pressured
into settling questionable claims.
light of these Supreme Court cases, many circuits have
concluded that whether an arbitration clause permits
classwide arbitration is a gateway dispute for the courts to
decide. See, e.g., Catamaran Corp. v. Towncrest
Pharmacy, 864 F.3d 966, 972 (8th Cir. 2017) (holding
classwide arbitration determination to be a gateway dispute);
Dell Webb Communities, Inc. v. Carlson, 817 F.3d
867, 873 (4th Cir. 2016) (same); Opalinski v. Robert Half
Int'l Inc., 761 F.3d 326, 334-35 (3d Cir. 2014)
(same); Reed Elsevier, 734 F.3d at 598 (stating
"the Court has given every indication, short of an
outright holding, that classwide arbitrability is a gateway
question rather than a subsidiary one.")
this issue certainly appears to be advancing in the opposite
direction of the concurrence's well-reasoned opinion, we
need not resolve it today. Because we conclude below that the
parties showed clear and unmistakable evidence of their
intention to delegate questions of arbitrability to the
arbitrator, "we assume without deciding that one of
these gateway matters is whether an arbitration clause
authorizes class arbitration." Wells Fargo Advisors,
L.L.C. v. Sappington, 884 F.3d 392, 395 (2d Cir. 2018).
Clear and Unmistakable Evidence of Delegation
therefore turn to whether Mr. Ray has shown by clear and
unmistakable evidence that the parties intended to delegate
this question to an arbitrator. See Howsam, 537 U.S.
at 83 ("The question whether the parties have submitted
a particular dispute to arbitration, i.e., the
'question of arbitrability,' is 'an
issue for judicial determination [u]nless the parties
clearly and unmistakably provide otherwise.'"
(alteration in original) (emphasis added) (quoting
AT&T, 475 U.S. at 649). "Because
'arbitration is simply a matter of contract,'
'[j]ust 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 agreed
about that matter.'" Belnap v. Iasis
Healthcare, 844 F.3d 1272, 1280 (10th Cir. 2017)
(alteration in original) (quoting First Options of Chi.,
Inc. v. Kaplan, 514 U.S. 938, 943 (1995) (citations
omitted)). For the reasons set out below, we conclude that
there was clear and unmistakable evidence of delegation here.
the parties' broad Agreement, which DISH drafted and
required its employees to sign,
any claim, controversy and/or dispute
between them, arising out of and/or in any way related to
Employee's application for employment, employment
and/or termination of employment, whenever and
wherever brought, shall be resolved by arbitration.
. . . A single arbitrator engaged in the practice of
law from the American Arbitration Association
("AAA") shall conduct the arbitration under the
then current procedures of the ...