                                                                             [PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                               FOR THE ELEVENTH CIRCUIT
                                ________________________           FILED
                                                          U.S. COURT OF APPEALS
                                       No. 10-11651         ELEVENTH CIRCUIT
                                 ________________________     AUGUST 10, 2011
                                                                 JOHN LEY
                                                                  CLERK
                             D.C. Docket No. 4:06-cv-00042-WLS

BARBARA ELIZABETH LAWSON,
Individually and on behalf of a class of
all persons similarly situated,
JERRY LAWSON,
Individually and on behalf of a class of
all persons similarly situated,

lllllllllllllllllllll                                             Plaintiffs - Appellees,

                                          versus

LIFE OF THE SOUTH INSURANCE COMPANY,
a corporation,

lllllllllllllllllllll                                            Defendant - Appellant.

                                ________________________

                          Appeal from the United States District Court
                              for the Middle District of Georgia
                                ________________________

                                      (August 10, 2011)
Before CARNES, PRYOR, and COX, Circuit Judges.

CARNES, Circuit Judge:

      A rule of contract law is that one who is not a party to an agreement cannot

enforce its terms against one who is a party. See Walsh v. Columbus, H.V. & A.R.

Co., 176 U.S. 469, 479, 20 S.Ct. 393, 397 (1900); Cooper v. Meridian Yachts,

Ltd., 575 F.3d 1151, 1169 (11th Cir. 2009); United States v. Puentes, 50 F.3d

1567, 1574 (11th Cir. 1995); 13 Samuel Williston & Richard A. Lord, A Treatise

on the Law of Contracts § 37:1 (4th ed. 1999) (“As a general rule, strangers to a

contract acquire no rights under such a contract.” (quotation marks omitted)). The

right of enforcement generally belongs to those who have purchased it by agreeing

to be bound by the terms of the contract themselves. Most legal rules have

exceptions, however, and this rule is no exception to that rule of exceptions. In

Arthur Anderson LLP v. Carlisle, ___ U.S. ___, 129 S.Ct. 1896 (2009), the

Supreme Court noted that a nonparty to a contract may have the legal right to

enforce its provisions “through assumption, piercing the corporate veil, alter ego,

incorporation by reference, third-party beneficiary theories, waiver and estoppel.”

Id. at 1902 (quotation marks omitted).

      Life of the South Insurance Company contends that two of those

exceptions—the third-party beneficiary doctrine and equitable estoppel—allow it


                                         2
to compel Barbara and Jerry Lawson to arbitrate their disagreement with it under

the terms of an arbitration clause in a contract to which the Lawsons were parties

but Life of the South was not. The Lawsons do not want to arbitrate, preferring

instead to proceed with the nationwide class action lawsuit they have pending

against Life of the South arising out of the credit life insurance policy they

purchased from it. They contend that Life of the South has no right to enforce

against them the arbitration clause in the loan agreement, even though that

agreement did lead them to enter into a separate credit life insurance contract with

it. We agree with the Lawsons. This is a case where the general rule applies and

the exceptions to it do not.

                                          I.

      In December 2002 the Lawsons purchased a used 2000 Chevrolet Blazer

from a car dealership in Morrow, Georgia. To finance the purchase they entered

into a loan agreement with the dealership. The dealership assigned the loan

agreement to Chase Manhattan Bank.

      The loan agreement required the Lawsons to pay monthly installments on

the car for 60 months, but it granted them the right to pay off the loan early. It

also contained a clause titled “Agreement to Arbitrate Disputes,” which provided:

      A Dispute means any controversy or claim . . . arising from or relating
      to [the loan agreement]. The term Dispute includes, but is not limited

                                          3
      to, the negotiation or breach of [the loan agreement], or any aspect of the
      sale of the vehicle involving any Buyer, Co-Buyer, Seller or assignee,
      agent, employee, surety bonding company or insurer of any of these
      persons. . . . If any Dispute arises, either you or we may choose to have
      the Dispute resolved by binding arbitration . . . .

(emphasis added). The loan agreement defined “you” as “the Buyer” (Barbara

Lawson) and “Co-Buyer” (Jerry Lawson) and “we” as “the creditor named above”

(the car dealership), “after assignment, the creditor’s assignee” (Chase

Manhattan), and “any other assignee” (there were no other assignees). The

arbitration clause also provided (gratuitously) “that this Agreement to Arbitrate

Disputes shall be subject to and governed by the Federal Arbitration Act, 9 U.S.C.

[§§] 1–10, as amended.”

      The loan agreement gave the Lawsons the option to purchase credit life

insurance. The premium for the insurance was a one-time, up-front payment of

$530.08, and that premium would be included in the total amount financed under

the loan agreement for the purchase of the car. Opting to purchase the insurance,

the Lawsons checked the appropriate box on the loan agreement.

      In addition to checking that box on the form loan agreement with the car

dealership, the Lawsons executed a separate credit life insurance policy agreement

with Life of the South. The insurance policy provided that Life of the South would

pay the balance the Lawsons owed on the car loan if either of the Lawsons died


                                          4
before the loan was paid off. The total coverage at the time of execution was the

original loan balance of $15,706.20, which included the insurance premium, but

coverage would decrease each month to reflect the payments that the Lawsons

made on the loan. Unlike the loan agreement between the Lawsons and the car

dealership, the insurance policy agreement between the Lawsons and Life of the

South did not contain an arbitration clause.1

       The insurance policy provided that if the Lawsons paid off the loan early,

they would be eligible for a refund of any remaining premium, which the policy

referred to as the “unearned premium.” The refund would be prorated based on the

amount of time left on the original loan term. The Lawsons paid off the loan in

April 2005, more than two-and-a-half years early. Life of the South made no

effort to refund the unearned amount of the prepaid premium to the Lawsons.

       In March of 2006, without having requested a refund from Life of the South

or notifying it that they had paid off the loan, the Lawsons filed a nationwide

consumer class action in Georgia state court against Life of the South. On behalf

of themselves and the purported class, the Lawsons sought a refund of the

unearned premium due under the insurance policy because of the early termination


       1
        The reason it did not is worth mentioning. Under Georgia law, arbitration agreements in
contracts of insurance, including credit insurance policies, are unenforceable. See Ga. Code Ann.
§ 9-9-2(c)(3), see also McCarran-Ferguson Act, 15 U.S.C. § 1012(b).

                                               5
of the loan, as well as damages under several contract and tort theories, injunctive

relief requiring Life of the South “to ensure that in the future insureds . . . receive

[their] refunds,” and attorney’s fees. The purported class included all United

States residents “who have been or will be insured under a Life of the South credit

insurance policy” and “whose underlying loan stopped or could stop” before the

end of the loan term, and “who were not paid or might not be paid a refund.” The

class allegedly numbers in the “hundreds of thousands.”

       Life of the South filed a motion to compel arbitration based on the

arbitration clause in the loan agreement, which provided Chase Manhattan, the car

dealership, and the Lawsons the right to force arbitration of any dispute arising

from or relating to that agreement. The arbitration clause in the loan agreement

provided that “[n]o class action arbitration may be ordered under this Agreement

to Arbitrate Disputes,” cf. AT&T Mobility LLC v. Concepcion, ___ U.S. ___, 131

S.Ct. 1740, 1747 (2011), which, given the class action settlements in cases against

other credit insurers involving this same issue, makes the arbitration issue a high

stakes one.2


       2
         According to Life of the South, the law firm representing the Lawsons has been quite
successful in bringing claims like these in class action lawsuits. See Reply Brief of Appellant at
1 & n.3. The firm’s website boasts that in similar class actions it has filed against other credit
insurers it has obtained settlements of $49 million, $45 million, and $27.5 million. See
http://www.butlerwooten.com/Results/Class-Action-Cases.shtml (last visited July 18, 2011); see
also Joint Motion for Final Certification of a Settlement Class, Final Approval of Class

                                                6
       Life of the South removed the lawsuit to a federal district court under the

Class Action Fairness Act, 28 U.S.C. §§ 1711 et seq. and 28 U.S.C. § 1332(d),

bringing with it the motion to compel arbitration. The district court eventually

denied the motion to compel arbitration. This is Life of the South’s appeal from

the denial of that motion. See 9 U.S.C. § 16(a)(1)(B) (“An appeal may be taken

from an order . . . denying a petition [under the FAA] to order arbitration to

proceed . . . .”).

                                                  II.

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

arbitration. MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 946 (11th Cir.

1999).3 To determine which disputes between the parties to an enforceable

arbitration agreement are covered by the language of the arbitration clause, we




Settlement, and Request for Permanent Injunction and Final Dismissal at 4 n.2, Perkins v.
American Nat’l Ins. Co., No. 3:05-CV-100-CDL (M.D. Ga. Jan. 7, 2009). The results of those
other class action lawsuits explain why Life of the South favors arbitration, but they are
irrelevant to the issue of whether it has the legal right to force the Lawsons to arbitrate, which is
all that is before us.
       3
         Because our review is de novo, we need not decide the arbitration issue on the same
basis that the district court did, and we don’t. The district court concluded that Life of the South
could not force the Lawsons to arbitrate because it found that the McCarran-Ferguson Act, 15
U.S.C. § 1012(b), reverse preempted the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and under
Georgia law, arbitration clauses between insurers and insureds are unenforceable. Without
reaching that theory or implying any view about it, we reach the same result on another ground.
See Lucas v. W.W. Grainger, Inc., 257 F.3d 1249, 1256 (11th Cir. 2001) (noting that we may
affirm the district court’s judgment on any ground that finds support in the record).

                                                  7
“apply[] the federal substantive law of arbitrability,” which is “applicable to any

arbitration agreement within the coverage of the FAA.” Klay v. All Defendants,

389 F.3d 1191, 1200 (11th Cir. 2004) (quoting Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 3353, (1985)). That

inquiry “must be addressed with a healthy regard for the federal policy favoring

arbitration,” Picard v. Credit Solutions, Inc., 564 F.3d 1249, 1253 (11th Cir. 2009)

(quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 111 S.Ct.

1647, 1652 (1991)), and we must “rigorously enforce agreements to arbitrate,”

Klay, 389 F.3d at 1200 (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.

213, 221, 105 S.Ct. 1238, 1242 (1985)).

      Still, “arbitration is a matter of contract [and] the FAA’s strong

proarbitration policy only applies to disputes that the parties have agreed to

arbitrate.” Klay, 389 F.3d at 1200. An exception to that rule is that a nonparty

may force arbitration “if the relevant state contract law allows him to enforce the

agreement” to arbitrate. Arthur Anderson LLP v. Carlisle, ___ U.S. ___, 129 S.Ct.

1896, 1903 (2009); cf. Bd. of Trs. v. Citigroup Global Mkts., Inc., 622 F.3d 1335,

1342–43 (11th Cir. 2010) (applying state contract law to determine if a

nonsignatory to an arbitration clause could be compelled to arbitrate under agency

principles).


                                          8
      As we have already mentioned, “traditional principles of state law” may

allow “a contract to be enforced by or against nonparties to the contract through

assumption, piercing the corporate veil, alter ego, incorporation by reference,

third-party beneficiary theories, waiver and estoppel.” Carlisle, 556 U.S. at ___,

129 S.Ct. at 1902 (quotation marks omitted). Many of this Court’s decisions

involving the question of whether a non-party can enforce an arbitration clause

against a party have not made clear that the applicable state law provides the rule

of decision for that question. See, e.g., Becker v. Davis, 491 F.3d 1292, 1299

(11th Cir. 2007); Blinco v. Green Tree Servicing LLC, 400 F.3d 1308, 1312 (11th

Cir. 2005); In re Humana, Inc. Managed Care Lit., 285 F.3d 971, 976 (11th Cir.

2002), rev’d on other grounds, PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401,

123 S.Ct. 1531 (2003); MS Dealer Service Corp. v. Franklin, 177 F.3d 942, 947

(11th Cir. 1999); Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753,

757 (11th Cir. 1993); McBro Planning and Dev’t Co. v. Triangle Elec. Constr.

Co., 741 F.2d 342, 344 (11th Cir. 1984). However, the Supreme Court’s 2009

decision in Carlisle, which postdates all of those decisions of this Court, clarifies

that state law governs that question, and to the extent any of our earlier decisions

indicate to the contrary, those indications are overruled or at least undermined to

the point of abrogation by Carlisle. See United States v. Sneed, 600 F.3d 1326,


                                           9
1332 (11th Cir. 2010) (“[A] prior panel’s holding is binding on all subsequent

panels unless and until it is overruled or undermined to the point of abrogation by

the Supreme Court or by this court sitting en banc.” (emphasis omitted)).

      In this case, Life of the South contends that it can enforce the arbitration

clause in the loan agreement, to which it was not a party, against the Lawsons who

were parties, under two traditional state-law principles. Life of the South

essentially argues that it can compel the Lawsons to arbitrate under their loan

agreement with the car dealership because it is a third party beneficiary to that

agreement’s arbitration clause, or that it can do so under the doctrine of equitable

estoppel. We disagree.

                                         A.

      Georgia law applies in this case. See World Harvest Church, Inc. v.

Guideone Mut. Ins. Co., 586 F.3d 950, 956 (11th Cir. 2009). Under it “[t]he

beneficiary of a contract made between other parties for his benefit may maintain

an action against the promisor on the contract.” Ga. Code Ann. § 9-2-20(b); U.S.

Foodservice, Inc. v. Bartow Cnty. Bank, 685 S.E.2d 777, 779 (Ga. Ct. App. 2009).

Third-party beneficiaries have standing to enforce contracts intended for their

benefit. U.S. Foodservice, 685 S.E.2d at 779. “There must be a promise by the

promisor to the promisee to render some performance to a third person,” Danjor,


                                         10
Inc. v. Corporate Constr., Inc., 613 S.E.2d 218, 221 (Ga. Ct. App. 2005), and “the

contracting parties’ intention to benefit the third party must be shown on the face

of the contract.” Donnalley v. Sterling, 618 S.E.2d 639, 641 (Ga. Ct. App. 2005).

      The scope of the arbitration clause in the loan agreement between the car

dealership and the Lawsons is broad, even expressly referring to disputes

involving the Lawsons’ “insurer,” but the right to enforce that clause is clearly

limited to the Lawsons, the car dealership, Chase Manhattan, and any assignees of

the car dealership or Chase Manhattan. (Life of the South does not contend that it

is an assignee.) The arbitration clause in the loan agreement is not mandatory; it

does not require that every dispute falling within its scope be arbitrated. Instead,

the clause provides that “[i]f any Dispute arises, either you or we may choose to

have the Dispute resolved by binding arbitration.” On its face, the loan agreement

grants only “you” (defined as the Lawsons) and “we” (defined as the car

dealership, Chase Manhattan, and their assignees) the right to elect to arbitrate.

Life of the South is neither a “you” nor a “we.” Instead, in pronoun terms, Life of

the South is an unmentioned “it,” and the face of the arbitration clause does not

show an intent to give “it” the right to compel arbitration. The loan agreement

does not show, on its face or elsewhere, an intent to allow anyone other than the

Lawsons, the car dealership, Chase Manhattan, and the assignees of the dealership


                                         11
or Chase Manhattan to compel arbitration of a dispute, and Life of the South is

none of those.

                                           B.

      Life of the South also contends that it can compel the Lawsons to arbitrate

under the doctrine of equitable estoppel, which Georgia law also recognizes as an

exception to the general rule that only the parties who agree to be bound by a

contract’s terms can enforce them. See Helms v. Franklin Builders, Inc, 700

S.E.2d 609, 612 (Ga. Ct. App. 2010). Equitable estoppel allows a nonsignatory to

an arbitration agreement to compel or to be compelled by a signatory to arbitrate

under certain circumstances in which fairness requires doing so. See Order

Homes, LLC v. Iverson, 685 S.E.2d 304, 310 (Ga. Ct. App. 2009) (applying

equitable estoppel where the plaintiffs were bringing claims arising out of the

contract against nonsignatories, while attempting to avoid the contract’s

arbitration clause); see also In re Humana, 285 F.3d at 976 (“In all cases, the

lynchpin for equitable estoppel is equity, and the point of applying it to compel

arbitration is to prevent a situation that would fly in the face of fairness.”

(quotation marks and citations omitted)). Georgia courts have applied equitable

estoppel in cases in which “the signatory to a written agreement . . . must rely on

the terms of the written agreement in asserting its claims against the


                                           12
nonsignatory.” Autonation Fin. Servs. Corp. v. Arain, 592 S.E.2d 96, 100 (Ga. Ct.

App. 2003) (quotation marks and alteration omitted) (quoting MS Dealer, 177

F.3d at 947).4

       Life of the South argues that the equitable estoppel exception fits because

the Lawsons’ claims arising from their credit life insurance policy agreement with

it “make reference to” and “presume the existence of” the loan agreement

containing the arbitration clause. See Arain, 592 S.E.2d at 100 (quoting MS

Dealer, 177 F.3d at 947). The Lawsons’ complaint does refer to the loan

agreement several times and the claims depend on the existence of that agreement

because without it, and the Lawson’s obligation under it to pay off the loan, there

would be no credit life insurance policy with Life of the South and no premium

refund due because the loan was paid off early. It follows, Life of the South

argues, that the Lawsons’ claims against it “arise out of” the loan agreement,

which they must rely on to assert those claims.

       That is not a bad argument, but it is not a good enough one to prevail.

Under Georgia law, a plaintiff’s claims must directly, not just indirectly, be based



       4
         Georgia courts have also applied equitable estoppel to situations in which a signatory to
a contract asserts a claim against a nonsignatory that includes “allegations of substantially
interdependent and concerted misconduct by both the nonsignatory and one or more of the
signatories to the contract.” Arain, 592 S.E.2d at 100 (quotation marks and alteration omitted)
(quoting MS Dealer, 177 F.3d at 947). That is not the situation here.

                                                13
on the contract containing the arbitration clause in order for equitable estoppel to

compel arbitration of those claims. See Arain, 592 S.E.2d at 101 (holding that

equitable estoppel is justified because the plaintiff “asserts only one . . . claim, and

the allegations supporting that claim are tied directly to the [contract containing

the arbitration clause]”). What is required is illustrated in LaSonde v.

CitiFinancial Mortg. Co., 614 S.E.2d 224 (Ga. Ct. App. 2005). In that case there

were two plaintiffs, Mary and Jack LaSonde, who were suing CitiFinancial over a

promissory note that Jack had signed but Mary had not. See id. 113–14. The two

of them alleged that CitiFinancial had breached the terms of the promissory note

and a related security deed on their house. Id. at 114. The promissory note

contained an arbitration clause that incorporated an arbitration agreement. Id. at

113. Mary argued that she could not be compelled to arbitrate because she had not

signed the promissory note or the arbitration agreement that it incorporated. Id. at

114. Her argument was rejected and she was required to arbitrate because she,

along with her husband, claimed: “that CitiFinancial’s foreclosure proceedings

breached the promissory note and security deed. They further claim[ed] that

Jack’s default under the promissory note, as well as the resulting foreclosure

authorized by the note and security deed, are void. All of these allegations [arose]

at least in part from the promissory note Jack signed.” Id. at 115. Having staked


                                           14
her claims on the promissory note, Mary was bound by the doctrine of equitable

estoppel to abide by the arbitration agreement that was part of that note. See id.

      By contrast, in this case the loan agreement is not the legal basis for the

Lawsons’ claims against Life of the South. Their complaint does refer to the loan

or indebtedness twelve times but only because it is factually significant. Its

factual significance, however, is simply that it establishes that the Lawsons had a

loan and that they paid it off early. The legal basis of their claims, on the other

hand, is the obligation that the credit life insurance policy, a separate agreement,

places on Life of the South to refund any unearned premium amount due to the

Lawsons because they repaid the loan early. So far as we can tell, there is no legal

dispute about whether the loan agreement permitted the Lawsons to repay their

loans early, nor is there any genuine factual dispute about whether they did so.

The dispute instead arises from Life of the South’s legal obligations under the

credit life insurance policy to refund the unearned premium amount. The claims

are that it did not discharge those legal obligations. And contrary to Life of the

South’s argument, the fact that the Lawsons’ complaint makes reference to and

presumes the existence of the loan agreement does not mean that the Lawson’s

loan agreement with the dealership, or their obligations under that agreement, are

the legal basis for their claims.


                                          15
      While there is language in the Arain opinion supporting Life of the South’s

“make reference to” argument, that language in the opinion, when read against the

facts and result in that case, is not the holding. The Georgia appellate court did

not hold in Arain that equitable estoppel applies whenever a claim makes

reference to and presumes the existence of an agreement that contains an

arbitration clause. Arain was a car buyer suing the dealership and a theft

protection service company for misrepresentations that the dealership had made in

connection with Arain’s purchase of a “Theft Protection Program,” which he had

financed through the dealership along with the purchase of his car. Arain, 592

S.E.2d at 97. The complaint asserted a Georgia RICO claim against both the

dealership and the theft protection company for misrepresentations the dealership

had made about the theft protection program. Id. Of critical importance, the

complaint sought to recover the finance charges on the amount of the loan Arain

had used to purchase the theft protection program, and Arain had paid those

finance charges directly to the dealership under the terms of his loan agreement

with it. Id.

      Both the dealership and the theft protection company moved to compel

arbitration. Id. The loan agreement with the dealership contained an arbitration

clause, but the separate agreement Arain had signed with the theft protection


                                         16
company did not. Id. Apparently to avoid the arbitration clause, Arain voluntarily

dismissed the dealership as a defendant. Id. Because his separate agreement with

the theft protection company, the only remaining defendant, did not contain an

arbitration clause, the trial court denied the company’s motion to compel

arbitration. Id.

      In reviewing the denial of the motion to compel arbitration, the Georgia

Court of Appeals concluded that “Arain’s claims are sufficiently related to the

[loan agreement with the dealership] to justify equitable estoppel.” Id. at 101. It

based that conclusion on the fact that “the allegations supporting that claim are

tied directly to the [loan agreement with the dealership].” Id. (emphasis added).

The court pointed out that Arain claimed that the amount he had paid for the theft

protection program was excessive and that the allegedly excessive amount was

financed as part of his loan agreement with the dealership. Id. Not only that, but

“Arain [was] seeking to recover the finance charges he paid under [the loan

agreement with the dealership].” Id. Only then, and only in that context, did the

court state that “Arain’s claim ‘makes reference to and presumes the existence of’

the [theft protection program] charge contained in the [loan agreement with the

dealership] and ‘depends entirely upon [his] contractual obligation to pay’ the

fee.” Id. (emphasis added) (quoting MS Dealer, 177 F.3d at 947–48). That


                                         17
contractual obligation, of course, was contained in the same contract that

contained the arbitration clause: Arain’s loan agreement with the dealership.

      In the present case, by contrast, the allegations supporting the Lawsons’

claims are not “tied directly” to the loan agreement, which is the contract

containing the arbitration clause. The claims for refund of the unearned premium

are not based on any misrepresentations made by the dealership or any other

conduct that occurred during the purchase of the vehicle or the execution of the

loan agreement by the dealership and the Lawsons. Nothing in the Lawsons’

complaint alleges that the credit insurance premiums financed as part of the car

purchase were excessive or otherwise unlawful. And perhaps most importantly,

the Lawsons, unlike Arain, do not seek to recover finance charges or interest they

paid under the loan agreement on their credit life premium. What they complain

about—that Life of the South improperly failed to refund the unearned premium

that was due under the credit insurance policy— happened only after the loan and

any interest on it had been paid in its entirety; the loan agreement was no longer in

the picture. While the Lawson’s claims do make reference to and presume the

existence of the loan agreement, there is nothing in their complaint to suggest that

their claims “depend[] entirely” on any of their obligations under the loan




                                         18
agreement, as the claim in Arain did. Because of that, Arain does not support Life

of the South’s equitable estoppel argument.

       There is, to be sure, a “but-for” relationship between the loan agreement,

which created the debt obligation, and the credit life insurance policy that gave

rise to the Lawsons’ claims against Life of the South. But that alone is not enough

to warrant equitable estoppel. If it were, every credit insurer could use an

arbitration clause in the underlying credit agreement to compel its insureds to

arbitrate disputes arising from their credit life insurance contracts, despite the

absence of an arbitration clause in those contracts, and even though state law

prohibited an insurer from including an arbitration clause in any of its insurance

contracts. See, e.g., Ga. Code Ann. § 9-9-2(c)(3); Kan. Stat. Ann. § 5-401; Mo.

Ann. Stat. § 435.350.

       In sum, the Lawsons, in seeking relief from Life of the South, did not assert

any claims based on the terms of their loan agreement with the car dealership,

which contained an arbitration clause. Because the only claims they asserted were

based on the terms of their credit life insurance policy with Life of the South,

which did not contain an arbitration clause, equitable estoppel does not allow Life

of the South to compel the Lawsons to arbitrate.5

       5
        Although not applying Georgia law and not binding on this Court, the decisions of a
couple of other circuits that have addressed this issue are in accord with our conclusion that

                                                19
       AFFIRMED.




equitable estoppel does not apply where a credit life insurer is attempting to compel arbitration of
a dispute over the terms of the insurance policy under an arbitration clause contained in the
underlying credit agreement. See Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042, 1047 (9th
Cir. 2009) (holding equitable estoppel did not apply because the claim was neither “intertwined
with” the credit agreement that provided for arbitration, nor did it “arise out of or relate directly
to” the credit agreement (quotation marks and alterations omitted)); Brantley v. Republic Mortg.
Ins. Co., 424 F.3d 392, 396 (4th Cir. 2005) (holding equitable estoppel did not apply because
“the mere existence of a loan transaction requiring plaintiffs to obtain [credit] insurance cannot
be the basis for finding their . . . claims, which are wholly unrelated to the underlying [credit]
agreement, to be intertwined with that contract,” and “the plaintiffs never attempted to rely on the
[credit] contract to establish their claims” (quotation marks and alteration omitted)).


                                                 20
PRYOR, Circuit Judge, concurring:

      I concur in the result, but for a different reason. I agree with the majority

that in Arthur Andersen LLP v. Carlisle, 556 U.S. --, 129 S. Ct. 1896 (2009), the

Supreme Court clarified that state law, not federal law, governs whether a

nonparty can enforce an arbitration clause against a party, but I doubt the

conclusion of the majority that, under Georgia law, equitable estoppel does not

apply. I would resolve this appeal on the same ground as the district court: that

the Georgia Arbitration Act bars enforcement of the arbitration clause in this

dispute about insurance.

      The majority opinion concludes that “a plaintiff’s claims must directly, not

just indirectly, be based on the contract containing the arbitration clause in order

for equitable estoppel to compel arbitration of those claims,” Maj. Op. at 14, but I

am less confident that the Georgia courts apply that rule, regardless of its logical

appeal. Georgia courts have applied several times a rule articulated by this Court

in MS Dealer Service Corp. v. Franklin: “When each of a signatory’s claims

against a nonsignatory ‘makes reference to’ or ‘presumes the existence of’ the

written agreement, the signatory’s claims ‘arise[] out of and relate[] directly to the

[written] agreement,’ and arbitration is appropriate.” 177 F.3d 942, 947 (11th Cir.

1999) (alterations in original) (quoting Sunkist Soft Drinks, Inc. v. Sunkist


                                          21
Growers, Inc., 10 F.3d 753, 758 (11th Cir. 1993)). See Order Homes, LLC v.

Iverson, 685 S.E.2d 304, 310 (Ga. Ct. App. 2009); Price v. Ernst & Young, LLP,

617 S.E.2d 156, 159–60 (Ga. Ct. App. 2005); LaSonde v. CitiFinancial Mortg.

Co., 614 S.E.2d 224, 226 (Ga. Ct. App. 2005); Lankford v. Orkin Exterminating

Co., 597 S.E.2d 470, 474 (Ga. Ct. App. 2004); Autonation Fin. Servs. Corp. v.

Arain, 592 S.E.2d 96, 99–101 (Ga. Ct. App. 2003). Life of the South bases its

argument on this rule.

      The Court of Appeals of Georgia applied equitable estoppel in Arain, 592

S.E.2d at 99–101, and held that a seller of a theft protection program could compel

arbitration even though it was not a signatory to the contract containing the

arbitration provision. The plaintiff in Arain bought a car and financed both the car

and the theft protection program through an installment sales contract containing

an arbitration provision. Id. at 97. The court looked to factors also present in this

appeal: “The complaint asserts that [Arain’s] purchase of the [theft protection

program] occurred ‘[i]n the course of’ [the] sale of the car to him,” id. at 101 (third

alteration in original), and “[t]hat charge was financed through the installment

contract, which, in effect, facilitated the [theft protection program] purchase by

allowing Arain to pay in installments. And Arain is seeking to recover the finance

charges he paid under that contract,” id. The court explained that “Arain’s claims


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are sufficiently related to the arbitration contract in this case to justify equitable

estoppel,” id., because the claims “‘make[] reference to and presume[] the

existence of’ the [theft protection program] charge contained in the installment

contract,” id. (quoting MS Dealer, 177 F.3d at 947–48); see also Price, 617 S.E.2d

at 160.

      Arain suggests that Georgia courts might conclude that the Lawsons are

equitably estopped from asserting the nonsignatory status of Life of the South to

avoid arbitration. The Lawsons’ complaint “makes reference to” and “presumes

the existence of” the loan agreement. As the majority opinion correctly observes,

the Lawsons’ complaint refers to the loan agreement several times and their claims

depend on the existence of that agreement. The Lawsons allege that their damages

include the “unearned premium that was not refunded,” and that premium was

financed under the loan agreement. Besides the references to the loan agreement

in the complaint, several other facts establish a connection between the two

agreements: the loan agreement contains a section entitled “Optional Credit

Insurance,” which the Lawsons signed to purchase a credit life insurance policy

“under this Contract”; the loan agreement lists the amount of the premium paid by

the Lawsons to purchase the insurance; the loan financed the payment of the

premium; and the arbitration provision of the loan agreement states that it covers


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“any controversy or claim . . . arising from or relating to this Contract,” including

claims related to “any aspect of the sale of the vehicle involving any Buyer, Co-

Buyer, Seller, or . . . insurer of any of these persons.”

      It is true, as the majority explains, that Arain sought to recover finance

charges paid under his loan agreement, but the Lawsons’ complaint might be read

that way too. In their requests for tort remedies, the Lawsons complain that they

“have suffered special damages in the amount of the unearned premium that was

not refunded, plus the interest on those sums.” It is not clear from the face of their

complaint whether the phrase “the interest on those sums” refers to the interest

charged under the loan agreement or some form of prejudgment interest under

Georgia law.

      It is also true, as the majority explains, that the alleged liability of Life of

the South arose after the Lawsons had paid the amounts owed under the loan

agreement, but Arain likewise sued the nonsignatory after Arain had paid the

charges for the theft protection program that he alleged were excessive. Arain did

not allege a breach of the loan agreement, and his complaint for damages against

the nonsignatory accrued after he had made the payments required by that

agreement.




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      Even if the majority is correct that the relationship between the complaint

and the contract containing the arbitration clause was more direct in Arain than the

relationship between the Lawsons’ complaint and the loan agreement, that fact

does not establish that Georgia courts would refuse to apply equitable estoppel in

this appeal. The majority has not cited a Georgia precedent that held that the

relationship between a complaint and an arbitration agreement was too indirect to

allow a nonsignatory to enforce the arbitration agreement. The majority dismisses

the language in Arain that supports the argument of Life of the South as dicta, but

without a decision from a Georgia court that is directly on point, the dicta of Arain

tells us more about how a Georgia court would decide this appeal than our

supposition.

      The majority concedes that the Lawsons’ complaint makes reference to and

presumes the existence of the loan agreement, Maj. Op. at 13, but the majority

concludes that the Lawsons’ complaint is nevertheless not tied directly to that

agreement. The problem with that conclusion is that the decisions of the Georgia

courts state that, when a complaint makes reference to and presumes the existence

of an agreement with an arbitration clause, then the complaint is related to the

agreement. The Georgia precedents do not describe “directly related” issue as a

separate element of equitable estoppel. The Georgia precedents instead describe


                                         25
the test of direct relation as being satisfied by the formulation from MS Dealer

about referring to and presuming the existence of the arbitration agreement: that is,

the complaint “arise[s] out of and relate[s] directly to the [written] agreement,”

when the complaint “make[s] reference to or presume[s] the existence of the

written agreement,” with the arbitration clause, 177 F.3d at 947 (third alteration in

original). See Iverson, 685 S.E.2d at 310; Price, 617 S.E.2d at 160; LaSonde, 614

S.E.2d at 226; Arain, 592 S.E.2d at 99-101.

      Regardless of whether Georgia courts would apply equitable estoppel in this

circumstance, Life of the South cannot compel arbitration for a different reason.

Although the Federal Arbitration Act provides that agreements to arbitrate are

ordinarily enforceable, 9 U.S.C. § 1 et seq., the Georgia Arbitration Act excepts

from enforcement agreements to arbitrate disputes involving “contract[s] of

insurance,” Ga. Code Ann. § 9-9-2(c)(3). Because that state law “relates to the

business of insurance,” the McCarran-Ferguson Act, 15 U.S.C. § 1012(b), makes it

enforceable. In a decision where we addressed the intersection of these three

statutes, we ruled that “the McCarran-Ferguson Act excepts § 9-9-2(c)(3) from

preemption by the Federal Arbitration Act.” McKnight v. Chi. Title Ins. Co., 358

F.3d 854, 859 (11th Cir. 2004). Since McKnight, the Supreme Court of Georgia

also has ruled that “the [McCarran-Ferguson Act] precludes the [Federal


                                          26
Arbitration Act] from requiring the arbitration of disputes involving insurance” in

Georgia. Love v. Money Tree, Inc., 614 S.E.2d 47, 50 (Ga. 2005).

      Life of the South contends that the Georgia Arbitration Act applies only to

arbitration provisions that appear in contracts for insurance, but the Georgia

Supreme Court has not applied the Georgia Arbitration Act that narrowly. The

arbitration agreement in Love appeared in a loan agreement and not in a separate

“Voluntary Insurance Election Form,” id. at 48, but the Georgia Supreme Court

ruled that the Georgia Arbitration Act applied. The court explained that the

Georgia Arbitration Act “provides that agreements to arbitrate disputes regarding

‘contracts of insurance’ are invalid in Georgia,” id. at 49, and the Act applies to

“arbitration of disputes involving insurance,” id. at 50. Like Love, this dispute too

involves insurance, and Georgia courts would apply the Georgia Arbitration Act

even though the arbitration provision does not appear in the contract of insurance.

      Life of the South also argues that the arbitration agreement has a choice-of-

law provision that states that the Federal Arbitration Act will govern arbitration of

any disputes, but no court has ever held that a choice-of-law provision can

override a state law barring arbitration that is enforceable under the McCarran-

Ferguson Act. The choice of law in an unenforceable agreement to arbitrate is

irrelevant. Life of the South cannot have its cake in the form of the arbitration


                                          27
agreement and eat it too by avoiding application of the McCarran-Ferguson Act. I

agree with the district court that Georgia law prohibits arbitration of this dispute

involving insurance.




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