                             PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                            No. 15-1170


JAMES HAYES; DEBERA GRANT; HERBERT WHITE,      on   behalf   of
themselves and others similarly situated,

                Plaintiffs - Appellants,

           v.

DELBERT SERVICES CORPORATION,

                Defendant - Appellee.

--------------------------------

NATIONAL   CONSUMER LAW CENTER;     NATIONAL ASSOCIATION OF
CONSUMER   BANKRUPTCY  ATTORNEYS;    CENTER FOR  RESPONSIBLE
LENDING,

                Amici Supporting Appellants.



                            No. 15-1217


JAMES HAYES; DEBERA GRANT; HERBERT WHITE,

                Plaintiffs - Appellees,

           v.

DELBERT SERVICES CORPORATION,

                Defendant - Appellant.

--------------------------------
NATIONAL    CONSUMER LAW CENTER;      NATIONAL ASSOCIATION OF
CONSUMER    BANKRUPTCY  ATTORNEYS;     CENTER FOR  RESPONSIBLE
LENDING,

                 Amici Supporting Appellees.



Appeals from the United States District Court for the Eastern
District of Virginia, at Richmond.      John A. Gibney, Jr.,
District Judge. (3:14-cv-00258-JAG)


Argued:    December 9, 2015             Decided:   February 2, 2016


Before WILKINSON, KEENAN, and HARRIS, Circuit Judges.


Reversed and remanded by published       opinion. Judge Wilkinson
wrote the opinion, in which Judge        Keenan and Judge Harris
joined.


ARGUED: Matthew W.H. Wessler, GUPTA WESSLER PLLC, Washington,
D.C., for Appellants/Cross-Appellees.       Brian Jason Fischer,
JENNER & BLOCK LLP, New York, New York, for Appellee/Cross-
Appellant.   ON BRIEF: Deepak Gupta, Jonathan E. Taylor, GUPTA
BECK PLLC, Washington, D.C.; Jennifer D. Bennett, Leah M.
Nicholls, PUBLIC JUSTICE, P.C., Washington, D.C.; James W.
Speer, VIRGINIA POVERTY LAW CENTER, Richmond, Virginia; Dale W.
Pittman, THE LAW OFFICE OF DALE W. PITTMAN, P.C., Petersburg,
Virginia; Leonard A. Bennett, Susan M. Rotkis, CONSUMER
LITIGATION ASSOCIATES, P.C., Newport News, Virginia; Kristi C.
Kelly, Andrew J. Guzzo, KELLY & CRANDALL, PLC, Fairfax,
Virginia, for Appellants/Cross-Appellees.        Barry Levenstam,
Daniel T. Fenske, Chicago, Illinois, Katya Jestin, Neil M.
Barofsky, New York, New York, Julie M. Carpenter, R. Trent
McCotter,   JENNER   &    BLOCK   LLP,   Washington,   D.C.,  for
Appellee/Cross-Appellant.    Tara Twomey, NATIONAL ASSOCIATION OF
CONSUMER BANKRUPTCY ATTORNEYS, San Jose, California; Geoff
Walsh, NATIONAL CONSUMER LAW CENTER, Boston, Massachusetts;
Ellen Harnick, CENTER FOR RESPONSIBLE LENDING, Durham, North
Carolina, for Amici Curiae.




                                  2
WILKINSON, Circuit Judge:

       James       Hayes,    the    lead   plaintiff-appellant             in    this     case,

received       a    payday    loan       from        a   lender    called       Western    Sky

Financial, LLC. Defendant-appellee Delbert Services Corporation

later    became       the    servicing       agent       for   Hayes’s      loan.    Because

Delbert’s debt collection practices allegedly violated federal

law, Hayes initiated a putative class action against Delbert.

Claiming       that     Hayes      and     his       fellow    plaintiffs        agreed     to

arbitrate any disputes related to their loans, Delbert moved to

compel arbitration under the Federal Arbitration Act (“FAA”), 9

U.S.C. § 4. The district court granted Delbert’s motion.

       We both respect and appreciate the support of Congress and

the Supreme Court for an arbitration procedure that reduces the

costs and delays of civil litigation. Our review of the record

leads us to conclude, however, that the arbitration agreement in

this case is unenforceable. The agreement purportedly fashions a

system    of       alternative      dispute      resolution        while    simultaneously

rendering that system all but impotent through a categorical

rejection of the requirements of state and federal law. The FAA

does     not       protect    the     sort       of      arbitration       agreement      that

unambiguously         forbids       an   arbitrator         from    even     applying      the

applicable law. We therefore reverse the district court’s order

compelling arbitration and remand for further proceedings.



                                                 3
                                       I.

      This case originates with the lending practices of Western

Sky. Western Sky was an online lender owned by Martin Webb. Webb

was a member of the Cheyenne River Sioux Tribe, and Western

Sky’s      offices   were    located   on     the   Cheyenne       River    Indian

Reservation in South Dakota. From its base on the Reservation,

Western Sky issued payday loans to consumers across the country.

      Hayes’s loan typifies Western Sky’s lending scheme. Western

Sky issued Hayes a $2,600.00 loan, $75.00 of which consisted of

an   origination     fee.    Hayes   thus    received    $2,525.00     in   cash.

Western Sky charged interest on the $2,525.00 at an annual rate

of 139.12%. This rate compelled Hayes to make monthly payments

of $294.46 over the four-year life of the loan. All told, Hayes

was set to pay $14,093.12 for his $2,525.00. J.A. 152-53. The

other named plaintiffs in this case received loans with terms

that were just as bad or worse -- one of the loans came with an

annual interest rate of 233.84%. J.A. 159, 166.

      No    one   appears   to   seriously    dispute    that   Western      Sky’s

payday loans violated a host of state and federal lending laws.

Indeed, a quick glance at Western Sky’s loan agreement suggests

that Western Sky was keenly aware of the dubious nature of its

trade. The agreement provides that it is “subject solely to the

exclusive     laws   and    jurisdiction     of   the   Cheyenne    River    Sioux

Tribe.” J.A. 152 (emphasis in original). It later states that

                                       4
“no other state or federal law or regulation shall apply to this

Loan Agreement.” J.A. 152.

       Despite Western Sky’s best efforts, the law -- or at least

the threat of the law -- caught up with it. A stream of private

litigation    and   public     enforcement    actions    seems   to    have    led

Western Sky to stop issuing new loans in 2013.

       Unfortunately,     however,    the   financial   and    legal   problems

wrought by Western Sky persisted. After issuing a loan, Western

Sky’s practice was to transfer the loan to an assortment of

allied servicing and collection firms. In this case, Western Sky

transferred Hayes’s loan to WS Funding, LLC, which then named

its corporate parent, CashCall, Inc., as the servicing agent.

Sometime later, WS Funding transferred Hayes’s loan to an entity

called Consumer Loan Trust, which in turn named Delbert as the

servicing agent. The loans issued to the other named plaintiffs

in this case followed a similar path. While Western Sky was

owned by a tribal member, Delbert claimed no tribal ownership or

affiliation.

       Delbert’s debt-collection operation raised questions of its

own.   The   plaintiffs      claim   that   Delbert   sent    them    collection

notices without disclosing its identity as a debt collector or

the    identity   of   the   actual   creditor.   They    also   allege       that

Delbert used an automatic dialing system to make several calls a

week and sometimes multiple calls a day to their homes.

                                        5
      Hayes filed a putative class action in the Eastern District

of Virginia to obtain relief from Delbert’s allegedly unlawful

collection practices. Specifically, Hayes claimed that Delbert’s

notices      and   phone   calls     violated      the   Fair      Debt      Collection

Practices      Act,   15    U.S.C.      §§ 1692-1692p,       and     the      Telephone

Consumer     Protection     Act,   47     U.S.C.    § 227.     Hayes      also   sought

declaratory relief to the effect that the loan agreement’s forum

selection and arbitration provisions were unenforceable.

      The loan agreement contains a number of notable provisions.

Most pertinent to this case, the agreement names a tribal forum

and   then    purports     to   disavow    the     authority    of     all    state   or

federal law. As noted above, the agreement provides:

      This Loan Agreement is subject solely to the exclusive
      laws and jurisdiction of the Cheyenne River Sioux
      Tribe, Cheyenne River Indian Reservation. By executing
      this   Loan   Agreement, you,   the  borrower,  hereby
      acknowledge and consent to be bound to the terms of
      this Loan Agreement, consent to the sole subject
      matter and personal jurisdiction of the Cheyenne River
      Sioux Tribal Court, and that no other state or federal
      law or regulation shall apply to this Loan Agreement,
      its enforcement or interpretation. J.A. 152 (emphasis
      in original).

Another section confirms the disavowal of state and federal law.

That section, titled “GOVERNING LAW,” states in pertinent part:

      Neither this Agreement nor Lender is subject to the
      laws of any state of the United States of America. By
      executing this Agreement, you hereby expressly agree
      that this Agreement is executed and performed solely
      within the exterior boundaries of the Cheyenne River
      Indian Reservation, a sovereign Native American Tribal
      Nation. You also expressly agree that this Agreement
      shall be subject to and construed in accordance only
                                 6
       with the provisions of the laws of the Cheyenne River
       Sioux Tribe, and that no United States state or
       federal law applies to this Agreement. J.A. 154.

       Much    of    the     rest        of     the    loan       document        concerns       the

arbitration agreement between Western Sky, the loan servicer,

and the borrowers. The main provision of that agreement states

that   “any     dispute      [the    borrower]             ha[s]    with    Western        Sky    or

anyone   else       under    this        loan       agreement       will    be     resolved       by

binding arbitration.” J.A. 154. Another provision says that the

arbitration      will       be    “conducted          by    the     Cheyenne       River     Sioux

Tribal Nation by an authorized representative in accordance with

its consumer dispute rules and the terms of this Agreement.”

J.A. 155. Moreover, the arbitration agreement states that it

covers   “any       claim    based        upon       marketing       or    solicitations          to

obtain    the       loan     and     the        handling       or     servicing       of      [the

borrower’s] account whether such Dispute is based on a tribal,

federal or state constitution, statute, ordinance, regulation,

or common law, and including any issue concerning the validity,

enforceability,         or       scope     of       this    loan     or     the     Arbitration

agreement.” J.A. 155.

       Other    provisions          of        the     arbitration          agreement       mirror

portions of the underlying loan agreement in that they purport

to disavow the application of all state and federal law. One

provision      states      that     the       agreement       “IS    MADE    PURSUANT        TO    A

TRANSACTION         INVOLVING       THE        INDIAN       COMMERCE        CLAUSE     OF        THE

                                                 7
CONSTITUTION      OF    THE    UNITED       STATES         OF     AMERICA,   AND     SHALL    BE

GOVERNED   BY    THE    LAW     OF    THE    CHEYENNE           RIVER     SIOUX    TRIBE.    The

arbitrator      will    apply       the    laws       of    the    Cheyenne       River    Sioux

Tribal    Nation    and       the    terms       of    this       Agreement.”      J.A.     156.

Another provision of the arbitration agreement confirms that the

arbitrator will not apply “any law other than the law of the

Cheyenne River Sioux Tribe of Indians to this Agreement.” J.A.

155.

       A final noteworthy provision of the arbitration agreement

says that the borrower “shall have the right to select” the

American Arbitration Association (“AAA”), Judicial Arbitration

and    Mediation    Services         (“JAMS”),         or       another    organization       to

“administer the arbitration.” J.A. 155. This provision was not

present    in    earlier      versions       of       the       Western    Sky    arbitration

agreement. And although there is some dispute on this point,

Appellant’s Br. at 22, it seems as if the provision was added by

Western    Sky     to    compensate          for       the       fact     that    the     tribal

arbitration      mechanism          set    out        in    the     agreement      proved    in

practice to be illusory.

       Relying on these various terms, Delbert filed a motion to

dismiss,    claiming      that       the    loan       agreement’s         forum    selection

clause along with the doctrine of tribal exhaustion barred Hayes

and the other plaintiffs from suing Delbert in federal court.



                                              8
Delbert argued as well that the loan agreement’s arbitration

provisions required arbitration of the dispute.

      The district court ruled that Delbert could not enforce the

loan agreement’s forum selection clause, and that the doctrine

of tribal exhaustion did not apply to the parties’ controversy.

But the district court agreed with Delbert that it could enforce

the   arbitration       agreement.      The     court    acknowledged         that   the

tribal   arbitration         mechanism    established         by    the     arbitration

agreement    had     “proved        problematic,”       and   that        other   courts

involved     in     Western     Sky-related      litigation         had     accordingly

“voided the arbitration agreement.” J.A. 268. The court then

noted, however, that the agreements in those cases did not allow

the “parties to choose arbitrators and dispute rules” other than

those provided by the Tribe. J.A. 268. In contrast, the parties

in    this   case     had     “recourse    to    well-recognized            arbitration

organizations,” including AAA and JAMS, and this “save[d] the

arbitration agreement from meeting the same fate” as the earlier

Western Sky agreement. J.A. 268. The district court thus issued

an order compelling arbitration.

      Hayes and the other plaintiffs appeal the order compelling

arbitration. Delbert conditionally appeals the orders declining

to    enforce     the       forum    selection      clause         and    denying    the

applicability of tribal exhaustion. On appeal, and certainly at

oral argument, the parties focused heavily on the issue of the

                                          9
dispute’s arbitrability, and we too now address this central

question.

                                       II.

                                        A.

     We    review   de     novo   a   district   court’s   order     compelling

arbitration under the FAA. Seney v. Rent-A-Center, Inc., 738

F.3d 631, 633 (4th Cir. 2013). In undertaking this review, we

remain    cognizant   of    the   “strong    federal   policy   in    favor   of

enforcing arbitration agreements.” Dean Witter Reynolds, Inc. v.

Byrd, 470 U.S. 213, 217 (1985).

     The FAA confers near plenary authority on an arbitrator to

resolve a dispute given to him by an arbitration agreement. For

this authority to be validly exercised, however, any agreement

purporting to give a dispute over to arbitration must itself be

valid. The validity of an arbitration agreement is a “question

of arbitrability” and, in the normal course, it “is undeniably

an issue for judicial determination.” Peabody Holding Co. v.

United Mine Workers of Am., Int'l Union, 665 F.3d 96, 102 (4th

Cir. 2012) (quoting AT & T Techs., Inc. v. Commc'ns Workers of

Am., 475 U.S. 643, 649 (1986)). 1


     1 Consistent with arbitration’s contractual nature, parties
may give arbitrability questions to an arbitrator. This
practice, however, cuts against the normal rule that these
questions are for the court. Accordingly, a court must find by
“clea[r] and unmistakabl[e]” evidence that the parties have
chosen to give arbitrability questions to an arbitrator. Rent-A-
(Continued)
                               10
      The specific statutory basis for our review comes from the

FAA’s second section, which says that an agreement “to settle by

arbitration   a     controversy     thereafter    arising    .    .    .    shall    be

valid, irrevocable, and enforceable, save upon such grounds as

exist at law or in equity for the revocation of any contract.” 9

U.S.C. § 2. Importantly, any grounds given for revocation must

concern the validity of the arbitration agreement in particular,

not simply the validity of the underlying contract as a whole.

Rent-A-Ctr., 561 U.S. at 70 (citing Prima Paint Corp. v. Flood &

Conklin Mfg. Co., 388 U.S. 395, 403–404 (1967)). Hayes and his

co-plaintiffs       raise    several        related    challenges            to     the

arbitration agreement.

                                       B.

      The   first     challenge     involves     a    bit    of    history.         The

plaintiffs claim that the arbitration agreement is unenforceable

because it sets up a hollow arbitral mechanism. They note that

the agreement provides that arbitration “shall be conducted by

the   Cheyenne      River   Sioux     Tribal     Nation     by    an       authorized



Ctr., W., Inc. v. Jackson, 561 U.S. 63, 69 n.1 (2010)
(alterations in original) (quoting First Options of Chicago,
Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). Delbert argues that
the parties in this case clearly and unmistakably delegated
arbitrability questions, including questions regarding the
validity of the arbitration agreement, to arbitration. We find,
however, that Hayes and his co-plaintiffs have challenged the
validity   of  that   delegation   with   sufficient  force and
specificity to occasion our review. See id. at 71-72.

                                       11
representative in accordance with its consumer dispute rules.”

J.A.    155.    Other     courts    reviewing       a    Western    Sky     arbitration

agreement very similar to the one in this case have determined

that,     “[a]lthough        th[is]    contract         language     contemplates      a

process       conducted    under      the    watchful      eye     of   a    legitimate

governing tribal body, a proceeding subject to such oversight

simply is not a possibility.” Jackson v. Payday Financial, LLC,

764 F.3d 765, 779 (7th Cir. 2014), cert. denied, 135 S. Ct. 1894

(2015). The plaintiffs here take up this line of argument.

       Specifically, the plaintiffs claim that the Tribe has no

authorized      representatives       who     conduct     arbitrations,       and    that

the Tribe does not even possess a method through which it might

select and appoint such a person. In fact, one official from the

Tribe has acknowledged that the tribal “governing authority does

not    authorize      Arbitration”       and     the     tribal    court     “does    not

involve itself in the hiring of an arbitrator.” Id. at 770 n.10

(quoting letters from tribal magistrate Mona R. Demery). Delbert

does    not    appear     to   contest      these      points.     Indeed,    in    other

litigation involving another Western Sky arbitration agreement,

CashCall,      Inc.   (one     of   Western      Sky’s    allied    firms,    as    noted

above) “acknowledge[d] that the arbitral forum and associated

procedural rules set forth in [the plaintiff’s] loan agreement

are not available.” Williams v. CashCall, Inc., 92 F. Supp. 3d



                                            12
847, 851-52 (E.D. Wis. 2015), appeal docketed, No. 15-2699 (7th

Cir. Aug. 12, 2015).

      The plaintiffs are quick to point out, moreover, that in at

least one Western Sky dispute that made it to arbitration, the

appointed arbitrator was a Mr. Chasing Hawk. But Mr. Chasing

Hawk later admitted that Western Sky’s owner had asked him to

arbitrate      the    dispute.    Inetianbor     v.   CashCall,       Inc.,    962   F.

Supp.     2d   1303,     1308     (S.D.   Fla.    2013).       Evidence       in   that

litigation      was    also    put   forward   suggesting      that    Mr.     Chasing

Hawk’s daughter worked for Western Sky. Id. at 1306.

      Hayes     and     his     co-plaintiffs     argue    that       the     problems

stemming from the lack of a reputable arbitrator or arbitral

appointment authority are compounded by the total absence of the

“consumer      dispute        rules”    contemplated      by    the     arbitration

agreement. J.A. 155. The plaintiffs note that several federal

courts have found that the rules alluded to by the agreement “do

not exist.” Inetianbor v. CashCall, Inc., 768 F.3d 1346, 1354

(11th Cir. 2014), cert. denied, 135 S. Ct. 1735 (2015); see also

Heldt v. Payday Fin., LLC, 12 F. Supp. 3d 1170, 1190 (D.S.D.

2014). According to the plaintiffs, these grave infirmities in

the     arbitral      mechanism      collectively     render     the    arbitration

agreement “a sham from stem to stern,” Jackson, 764 F.3d at 779,

and thus unenforceable.



                                          13
       Delbert    counters   by   pointing    out   that   the    bulk   of   the

plaintiffs’ arguments (and the court decisions accepting those

arguments) are based on an older version of the Western Sky

arbitration agreement, one that is materially different from the

agreement entered into by Hayes and the other plaintiffs in this

case. And that material difference is the provision allowing the

borrower to select either AAA or JAMS -- both well respected

arbitral organizations -- to administer the arbitration. J.A.

155.    According    to   Delbert,   this     addition     to    the   agreement

resolves the problems resulting from the Tribe’s lack of a valid

arbitrator appointment process and consumer dispute rules. By

working within the AAA or JAMS systems, a potential claimant

would avoid the problems associated with the arbitral mechanism

set out in earlier versions of the agreement. As noted above,

the district court ultimately agreed with Delbert on this point,

and ordered arbitration on that basis. J.A. 268.

       The plaintiffs respond in turn that the simple addition of

the AAA or JAMS provision cannot save the agreement. It is, they

say, beyond patching up. Chief among the plaintiffs’ arguments

is that the AAA or JAMS provision merely allows AAA or JAMS to

“administer”       the    arbitration,       not    actually      conduct     it.

Therefore,       according   to    the     plaintiffs’     reading       of   the

agreement, some unknown “authorized representative” of the Tribe

still must conduct the arbitration, and that person may rely on

                                      14
AAA or JAMS rules only “to the extent that those rules and

procedures    do    not    contradict       either    the     law      of    the    Cheyenne

River Sioux Tribe or the express terms of this Agreement to

Arbitrate.” J.A. 155.

       Needless to say, how one might reconcile the lately added

AAA or JAMS provision with the rest of the arbitration agreement

presents a “conundrum.” Heldt, 12 F. Supp. 3d at 1191. It is not

immediately       clear,    for        instance,    whether       an    AAA-       or   JAMS-

appointed     arbitrator         would     still    need     to    be       an    authorized

representative of the Tribe, or when and how the Tribe’s law or

the    various     convoluted          provisions     in     the       agreement        would

override the AAA or JAMS default rules.

       But institutions like AAA and JAMS excel at solving these

sorts of conundrums, and once the court finds that the parties

agreed to assign their dispute to arbitration, it typically is

for the arbitral authority to sort out both the major and minor

details of how the arbitration will proceed. It is likely for

this   reason     that     the    FAA    largely     leaves       judicial         review    of

questions    concerning          the    basic     fairness    and       function        of   an

arbitral mechanism for the award enforcement stage. See 9 U.S.C.

10; Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 941 (4th

Cir. 1999). Nevertheless, given the present agreement’s outright

rejection    of    the     application       of    federal    law       to       resolve     the

plaintiffs’ federal claims, which we discuss below, we need not

                                            15
consider whether the agreement is invalid on the separate basis

that     the     dispute    resolution       mechanism        it     establishes      has

inconsistencies that are apparently contradictory in substance.

                                           C.

       This arbitration agreement fails for the fundamental reason

that it purports to renounce wholesale the application of any

federal law to the plaintiffs’ federal claims. We note at the

onset that, while Western Sky was a tribal-owned entity, Delbert

is   not.      Accordingly,   Delbert      does    not   attempt       to   ground    its

renunciation of federal law in any claim of tribal affiliation.

Both     in     its    briefing     and    during      oral        argument,     Delbert

understandably did not contend that it was a tribal entity and

therefore not subject to the authority of federal law on that

basis.

       Instead, Delbert seeks to avoid federal law through the

prospective       waiver    of     federal      law    provision       found     in   the

arbitration           agreement.     But        that     provision          is    simply

unenforceable. With one hand, the arbitration agreement offers

an alternative dispute resolution procedure in which aggrieved

persons may bring their claims, and with the other, it proceeds

to take those very claims away. The just and efficient system of

arbitration intended by Congress when it passed the FAA may not

play host to this sort of farce.



                                           16
       The    Supreme       Court       has     repeatedly        upheld        arbitration

agreements        that     give    an    arbitrator        authority       to     arbitrate

federal statutory rights. E.g., CompuCredit Corp. v. Greenwood,

132 S. Ct. 665, 673 (2012) (CROA claims arbitrable); Gilmer v.

Interstate/Johnson          Lane    Corp.,      500      U.S.   20,   35   (1991)      (ADEA

claims arbitrable); Mitsubishi Motors Corp. v. Soler–Chrysler–

Plymouth,     Inc.,       473    U.S.   614,       640   (1985)    (federal       antitrust

claims arbitrable); see also Santoro v. Accenture Fed. Servs.,

LLC,    748       F.3d    217,    224    (4th      Cir.    2014)      (various      federal

employment claims arbitrable). Absent a “contrary congressional

command,” causes of action involving statutory rights are every

bit as arbitrable as private contractual disputes. CompuCredit

Corp., 132 S. Ct. at 669 (quoting Shearson/Am. Exp. Inc. v.

McMahon, 482 U.S. 220, 226 (1987)).

       Relatedly, the Court has upheld arbitration agreements that

contain waivers providing that arbitration is to proceed on an

individual rather than a class action basis, and that impose

other procedural requirements on potential claimants. E.g., Am.

Exp. Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2312 (2013)

(waiver      of    class    arbitration         permissible);         Vimar     Seguros   y

Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 541 (1995)

(arbitration         in    foreign       countries         permissible);         see   also

Muriithi v. Shuttle Exp., Inc., 712 F.3d 173, 181-83 (4th Cir.

2013) (fee splitting between the parties to an arbitration may

                                              17
be     permissible).           These     decisions        flow        naturally    from     the

“overarching principle” of the FAA -- “that arbitration is a

matter      of     contract”           and,    therefore,             that    “courts      must

‘rigorously enforce’ arbitration agreements according to their

terms.” Am. Exp. Co., 133 S. Ct. at 2309 (quoting Dean Witter

Reynolds Inc., 470 U.S. at 221).

       Yet while the Court has affirmed that the FAA gives parties

the freedom to structure arbitration in the way they choose, it

has repeatedly cautioned that this freedom does not extend to a

“substantive waiver of federally protected civil rights” in an

arbitration agreement. 14 Penn Plaza LLC v. Pyett, 556 U.S. 247,

273 (2009). In its American Express decision, the Court first

acknowledged       that        the     prohibition        of    substantive       waivers    of

federal rights may prevent the imposition of “large arbitration

costs [that] could preclude a litigant . . . from effectively

vindicating her federal statutory rights.” Am. Exp. Co., 133 S.

Ct.    at   2311    (alteration           in    original)             (quoting    Green    Tree

Financial Corp.–Ala. v. Randolph, 531 U.S. 79, 90 (2000)); see

also    Muriithi,        712    F.3d     at    181   (noting          that   an   arbitration

clause      may     be     unenforceable             if        high     arbitration       costs

effectively prevent access to the arbitral forum). But the Court

then clarified that the substantive waiver prohibition does not

go so far as to guarantee a procedural path that would make

proving     a    federal       statutory       claim      in    arbitration       “worth    the

                                               18
expense involved” for all claimants under all circumstances. See

Am.    Exp.     Co.,      133    S.       Ct.    at     2311-12.         Rather,     the    Court

explained, the primary aim of the prohibition is to “prevent [a]

‘prospective        waiver      of     a    party's         right      to   pursue      statutory

remedies.’”        Id.     at     2310          (emphasis         in     original)       (quoting

Mitsubishi Motors Corp., 473 U.S. at 637 n.19). The Court thus

upheld the class arbitration waiver in American Express, because

the    waiver      only    reduced         the    economic         incentive       to    bring   a

federal     antitrust          claim.       It    did      not    prevent     a     party    from

pursuing      an   antitrust          claim      altogether.           In   fact,    the    Court

stated      that     the       rule        against         substantive       waivers       “would

certainly       cover      a     provision            in     an     arbitration         agreement

forbidding the assertion of certain statutory rights.” Id.

       That sort of outright prohibition is exactly what we have

here. It goes well beyond the more borderline cases involving

mere disincentives to pursue arbitral relief. As the plaintiffs

point out, the arbitration agreement here almost surreptitiously

waives a potential claimant’s federal rights through the guise

of a choice of law clause. 2 In the section entitled “Applicable

Law and Judicial Review” the arbitration agreement provides that

it    “IS   MADE    PURSUANT         TO     A    TRANSACTION           INVOLVING     THE    INDIAN

       2
       Delbert claims that the plaintiffs waived this argument by
not raising it before the district court. We disagree and find
that it was a “theory plainly encompassed by the submissions”
made below. Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co.,
Inc., 386 F.3d 581, 604 (4th Cir. 2004).

                                                 19
COMMERCE     CLAUSE    OF    THE       CONSTITUTION   OF   THE     UNITED    STATES    OF

AMERICA, AND SHALL BE GOVERNED BY THE LAW OF THE CHEYENNE RIVER

SIOUX TRIBE. The arbitrator will apply the laws of the Cheyenne

River Sioux Tribal Nation and the terms of this Agreement.” J.A.

156. Another section of the arbitration agreement confirms that,

no matter where the arbitration occurs, the arbitrator will not

apply “any law other than the law of the Cheyenne River Sioux

Tribe   of    Indians       to    this    Agreement.”      J.A.    155.     Instead   of

selecting     the     law    of    a    certain    jurisdiction      to     govern    the

agreement, as is normally done with a choice of law clause, this

arbitration     agreement         uses    its    “choice   of     law”    provision    to

waive all of a potential claimant’s federal rights.

      A party to an arbitration agreement may of course agree to

waive certain rights as part of that agreement. To give just one

example, the waiver of “the right to a jury trial is a necessary

and fairly obvious consequence of an agreement to arbitrate.”

Sydnor v. Conseco Fin. Servicing Corp., 252 F.3d 302, 307 (4th

Cir. 2001) (quoting Pierson v. Dean, Witter, Reynolds, Inc., 742

F.2d 334, 339 (7th Cir. 1984)). So long as such waivers pass the

applicable knowing and voluntary standard, they will typically

be   enforced.      See     id.    at    306-07.   Moreover,      parties     are    free

within bounds to use a choice of law clause in an arbitration

agreement to select which local law will govern the arbitration.

See Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690,

                                            20
697 n.7 (4th Cir. 2012). These provisions often bring a welcome

measure of predictability and thus efficiency to the dispute

resolution process. But a party may not underhandedly convert a

choice of law clause into a choice of no law clause -- it may

not   flatly   and   categorically         renounce        the      authority   of     the

federal statutes to which it is and must remain subject. See

Kristian v. Comcast Corp., 446 F.3d 25, 48 (1st Cir. 2006);

Hadnot v. Bay, Ltd., 344 F.3d 474, 478 n.14 (5th Cir. 2003);

Graham Oil Co. v. ARCO Products Co., a Div. of Atl. Richfield

Co., 43 F.3d 1244, 1248 (9th Cir. 1994), as amended (Mar. 13,

1995). Because the arbitration agreement in this case takes this

plainly forbidden step, we hold it invalid and unenforceable.

      Moreover,    we   do    not     believe   the    arbitration          agreement’s

errant   provisions     are      severable.     It   is    a     basic     principle    of

contract law that an unenforceable provision cannot be severed

when it goes the “essence” of the contract. 8 Samuel Williston &

Richard A. Lord, A Treatise on the Law of Contracts § 19:73 (4th

ed. 1993). Here, the offending provisions go to the core of the

arbitration agreement. It is clear that one of the animating

purposes of the arbitration agreement was to ensure that Western

Sky   and   its   allies      could    engage    in    lending        and    collection

practices free from the strictures of any federal law.

      And   although       our     focus    must      be       on    the    arbitration

agreement, not the underlying loan agreement, it is only natural

                                           21
for us to interpret the arbitration agreement in light of the

broader    contract          in   which      it     is    situated.          As    noted       above,

provisions       in    the     loan    agreement          starkly       proclaim             that    “no

United States state or federal law applies to this Agreement.”

J.A. 154. The brazen nature of such statements confirms that

Western    Sky’s       arbitration          agreement        is       little      more        than    an

attempt     “to       achieve     through         arbitration           what       Congress          has

expressly    forbidden.”          Graham      Oil        Co.,    43    F.3d       at       1249.    Good

authority counsels that severance should not be used when an

agreement represents an “integrated scheme to contravene public

policy.”     Id.       (quoting        E.    Allan        Farnsworth,             Farnsworth         on

Contracts § 5.8, at 70 (1990)). We thus decline to sever the

provisions here.

                                              III.

     We recognize that the FAA establishes a “liberal federal

policy    favoring          arbitration      agreements.”             Home    Buyers         Warranty

Corp. v. Hanna, 750 F.3d 427, 436 (4th Cir. 2014) (quoting Moses

H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24

(1983)).     But       rather      than       use        arbitration         as        a    just     and

efficient means of dispute resolution, Delbert seeks to deploy

it to avoid state and federal law and to game the entire system.

Perhaps     in        the     future        companies           will     craft             arbitration

agreements on the up-and-up and avoid the kind of mess that

Delbert is facing here. We reverse the order of the district

                                               22
court compelling arbitration and remand the case for further

proceedings consistent with this opinion. 3

                                              REVERSED AND REMANDED




     3 As noted, Delbert had argued that the controversy should
proceed solely in tribal court, and that the doctrine of tribal
exhaustion forbade plaintiffs from bringing their claims in
federal court in the first instance. The district court rejected
both of Delbert’s arguments on this score. It noted that the
forum selection clause could not be enforced by Delbert because
the “plain language of the forum selection clause does not reach
Delbert, a third party debt collector.” Mem. Op. at 4, J.A. 265.
And it determined that the doctrine of tribal exhaustion did not
apply because “the conduct at issue in this action did not
involve an Indian-owned entity, did not occur on the [Tribe’s]
reservation, and did not threaten the integrity of the [T]ribe.”
Mem. Op. at 6, J.A. 267. We find no fault with the court’s
ruling on these points and adopt the reasons set forth in the
district court’s opinion.

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