                                    PUBLISHED

                     UNITED STATES COURT OF APPEALS
                         FOR THE FOURTH CIRCUIT


                                     No. 16-1511


MINNIELAND PRIVATE DAY SCHOOL, INC., a Virginia corporation,

                   Plaintiff - Appellee,

             v.

APPLIED UNDERWRITERS CAPTIVE RISK ASSURANCE COMPANY, INC.,

                   Defendant - Appellant.



Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. Anthony J. Trenga, District Judge. (1:15−cv−01695–AJT-IDD)


Argued: May 10, 2017                                       Decided: August 11, 2017


Before GREGORY, Chief Judge, and SHEDD and WYNN, Circuit Judges.


Affirmed in part, reversed in part, and remanded by published opinion. Judge Wynn
wrote the opinion, in which Chief Judge Gregory and Judge Shedd joined.


ARGUED: Daniel William Olivas, LEWIS, THOMASON, KING, KRIEG &
WALDROP, Nashville, Tennessee, for Appellant. James Scott Krein, KREIN LAW
FIRM, Prince William, Virginia, for Appellee. ON BRIEF: R. Dale Bay, Emily H.
Mack, LEWIS, THOMASON, KING, KRIEG & WALDROP, Nashville, Tennessee, for
Appellant.
WYNN, Circuit Judge:

      Defendant Applied Underwriters Captive Risk Assurance Company, Inc.

(“Applied Underwriters”), a subsidiary of Berkshire Hathaway, Inc., appeals an order of

the U.S. District Court for the Eastern District of Virginia (1) denying Applied

Underwriters’ motion to compel arbitration and (2) holding that Applied Underwriters

was judicially estopped from arguing that an agreement between Applied Underwriters

and Plaintiff Minnieland Private Day School, Inc. (“Minnieland”) did not constitute an

insurance contract for purposes of Virginia law. For the reasons that follow, we conclude

that the district court correctly denied Applied Underwriters’ motion to compel

arbitration. But the district court reversibly erred in applying the doctrine of judicial

estoppel to hold that the agreement constituted an insurance contract. Accordingly, we

affirm in part, reverse in part, and remand the case to the district court for further

proceedings consistent with this opinion.

                                            I.

                                            A.

      Minnieland, a provider of child daycare, is required under Virginia law to provide

workers’ compensation insurance to its employees. In 2013, Minnieland entered into a

“Reinsurance Participation Agreement” (“RPA”) with Applied Underwriters, as part of

Minnieland’s purchase of Applied Underwriters’ “Equity Comp” program, which

Applied Underwriters held out to be a “Worker’s Compensation Program.” J.A. 9.

Under the RPA, which had a three-year term, one or more “Issuing Insurers”—all of

which were affiliates of Applied Underwriters and subsidiaries of Berkshire Hathaway—


                                            2
would issue workers’ compensation insurance policies to Minnieland. Also pursuant to

the RPA, Applied Underwriters would establish a “segregated protected cell” through

which Minnieland would share in the Issuing Insurers’ profits and losses attributable to

Minnieland’s policies. Following execution of the RPA, Applied Underwriters’ affiliate,

and Berkshire Hathaway subsidiary, Continental Indemnity Company (“Continental”)

issued a workers’ compensation policy to Minnieland. The RPA appointed another

Berkshire Hathaway subsidiary as the billing agent for Applied Underwriters and the

Issuing Insurers. Throughout the term of the agreement, Minnieland paid premiums on

the policy to Applied Underwriters.

       The RPA included an arbitration provision mandating resolution of “any disputes

arising under this Agreement” through binding arbitration in the British Virgin Islands

and under the provisions of the American Arbitration Association. J.A. 29–30. In

particular, the arbitration agreement provided that “[a]ll disputes between the parties

relating in any way to (1) the execution and delivery, construction or enforceability of

this Agreement, (2) the management or operations of the Company, or (3) any other

breach or claimed breach of this Agreement” were subject to mandatory binding

arbitration. J.A. 30.

       For the first 33 months of the 36-month term, Minnieland’s monthly premiums

averaged $58,810. But on November 9, 2015, Applied Underwriters billed Minnieland

$471,213, a 1,167% increase from the October 2015 premium and an 801% increase from

the average premium Minnieland had paid over the first 33 months of the policy. Though

Applied Underwriters refused to disclose the basis for the premium increase, Minnieland


                                           3
nevertheless paid the November premium. After Minnieland failed to pay a second

similarly large billed premium in December 2015, Applied Underwriters terminated the

EquityComp program—and the Continental workers’ compensation policy, in

particular—and informed Minnieland that it had a significant outstanding balance on the

policy.

                                           B.

          On December 24, 2015, Minnieland filed suit against Applied Underwriters in

federal district court, alleging that Applied Underwriters engaged in the business of

insurance in Virginia without complying with Virginia insurance and workers’

compensation laws. In particular, Minnieland alleged that the RPA amounted to an

“insurance contract,” not a “reinsurance” agreement, and therefore constituted an

unlawful “attempt to circumvent” various Virginia laws related to insurance and workers’

compensation. J.A. 12–13. The complaint also alleged that the arbitration provisions in

the RPA violated Virginia insurance law. Minnieland sought a declaration (1) that the

RPA constituted an insurance contract and was void due to Applied Underwriters’ failure

to comply with Virginia law; (2) as to what amount, if any, Minnieland owed Applied

Underwriters under the RPA; and (3) that the premiums, deposits, and charges assessed

by Applied Underwriters were excessive. Minnieland also sought damages for fraud and

breach of contract.

          On January 21, 2016, Applied Underwriters moved to compel arbitration. In

response, Minnieland argued that under Virginia law “no provision of any insurance

contract can . . . deprive ‘the courts of this Commonwealth of jurisdiction in actions


                                           4
against the insurer,’” rendering any arbitration provision in the RPA “‘void.’” J.A. 85, 88

(quoting Va. Code Ann. § 38.2–312). Applied Underwriters replied that, because the

RPA delegated questions of arbitrability to the arbitrator, the arbitrator had exclusive

authority to decide whether the RPA constituted an “insurance contract” subject to

Section 38.2–312’s prohibition on mandatory arbitration of disputes involving such

contracts. The district court initially granted Applied Underwriters’ motion, holding that

“the arbitration provision in the [RPA] requires that an arbitrator decide whether the

parties’ contract is subject to Va. Code § 38.2–312.” Minnieland Private Day School,

Inc. v. Applied Underwriters Captive Risk Assurance Co., No. 1:15–cv–1695, 2016 WL

7199729, at *1 (E.D. Va. Mar. 17, 2016). The district court’s initial order included the

following note:

       In order to avoid unnecessary and unwarranted delay and expense, the
       Court urges Applied to consider whether, given the underlying merits of the
       issue to be arbitrated, the rulings already obtained in arbitration concerning
       whether the RPA is a “contract of reinsurance” (as advocated for by
       Applied), and the positions Applied has taken in other proceedings
       concerning whether the RPA is a “contract of reinsurance,” Applied can
       continue to advocate in good faith before an arbitrator and without running
       afoul of 28 U.S.C. § 1927 that the RPA is a “contract of reinsurance” and
       therefore not a “contract of insurance” subject to Va. Code § 38.2–312.

Id. at *3 n.6

       Minnieland moved for reconsideration, again arguing that Section 38.2–312

rendered void “any” arbitration provision in the RPA and, therefore, that “[t]he court

must resolve the validity of the arbitration provision.” J.A. 208-09. Minnieland also

attached to its motion additional materials from other regulatory and legal proceedings in

which Applied Underwriters or its affiliates had either refused to dispute or conceded that


                                             5
the RPA constituted an insurance contract for purposes of various other state laws. The

district court orally granted Minnieland’s motion, concluding that Applied Underwriters

was judicially estopped from arguing that the RPA did not constitute a “contract of

insurance.” J.A. 465. As a result, the court observed that there was no “arbitrable issue

to be submitted to the arbitrator under the RPA.” J.A. 465. The district court further

concluded that “Applied’s assertion in this action that the RPA is not a contract of

insurance but rather a contract of reinsurance must be viewed as an attempt to gain an

unfair advantage in this proceeding by delaying what ultimately must be addressed by the

Court and diverting this case procedurally to an arbitrable forum that is to play no role

under the applicable Virginia law in deciding the merits of plaintiff’s claims.” J.A. 466.

       Applied Underwriters timely appealed, arguing that the district court (1) reversibly

erred in denying Applied Underwriters’ motion to compel arbitration and (2) incorrectly

held that the doctrine of judicial estoppel barred Applied Underwriters from asserting that

the RPA does not constitute a “contract of insurance” for purposes of Virginia law. We

hold that the district court correctly denied Applied Underwriters’ motion to compel

arbitration, but incorrectly applied the doctrine of judicial estoppel in holding that the

RPA constitutes an “insurance contract” for purposes of Section 38.2–312.

                                            II.

       This Court reviews de novo a district court’s order denying a motion to compel

arbitration under the Federal Arbitration Act. See Noohi v. Toll Bros., 708 F.3d 599, 605

(4th Cir. 2013).   That statute provides that “[a] written provision in . . . a contract

evidencing a transaction involving commerce to settle by arbitration a controversy


                                             6
thereafter arising out of such contract . . . 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. The Federal Arbitration Act generally preempts state laws limiting the

enforceability of arbitration agreements. See, e.g., Preston v. Ferrer, 552 U.S. 346, 352–

53 (2008).

       However, the federal McCarran-Ferguson Act endows states with plenary

authority over the regulation of insurance and provides that “[n]o Act of Congress shall

be construed to invalidate, impair, or supersede any law enacted by any State for the

purpose of regulating the business of insurance.” 15 U.S.C. § 1012. “Thus, McCarran-

Ferguson authorizes ‘reverse preemption’ of generally applicable federal statutes by state

laws enacted for the purpose of regulating the business of insurance.” ESAB Grp., Inc. v.

Zurich Ins. PLC, 685 F.3d 376, 380 (4th Cir. 2012).           In other words, state laws

invalidating arbitration agreements in insurance policies “reverse preempt[]” the Federal

Arbitration Act. E.g., Am. Bankers Ins. Co. of Fla. v. Inman, 436 F.3d 490, 494 (5th Cir.

2006) (holding that Mississippi statute prohibiting required arbitration of disputes

stemming from uninsured and underinsured motorist coverage provisions of personal

automobile insurance policies reverse preempts Federal Arbitration Act); Am. Health &

Life Ins. Co. v. Heyward, 272 F. Supp. 2d 578, 582 (D.S.C. 2003) (holding that South

Carolina law prohibiting mandatory arbitration provisions in insurance contracts reverse

preempts the Federal Arbitration Act).

       Virginia law, which the parties agree governs the present dispute, provides that

“[n]o insurance contract delivered or issued for delivery in this Commonwealth and


                                            7
covering subjects which are located or residing in this Commonwealth . . . shall contain

any condition, stipulation or agreement . . . [d]epriving the courts of this Commonwealth

of jurisdiction in actions against the insurer,” and that “[a]ny such condition, stipulation

or agreement shall be void.” Va. Code Ann. § 38.2–312. The district court concluded—

and we agree—that Section 38.2–312 renders void mandatory arbitration provisions in

“insurance contracts” governed by Virginia law.          Minnieland, 2016 WL 7199729,

at *1, *3.

       On appeal, Applied Underwriters does not contend that Section 38.2–312 does not

generally reverse preempt the Federal Arbitration Act. Rather, Applied Underwriters

argues that the district court improperly determined that Section 38.2–312 reverse

preempts the arbitration provisions in the RPA because the RPA included a so-called

“delegation provision,” which expressly delegated the authority to resolve questions of

arbitrability to the arbitrator. In particular, Applied Underwriters asserts that the district

court improperly concluded that the RPA constituted an “insurance contract” for

purposes of Section 38.2–312, when the RPA left that question of arbitrability to the

arbitrator.

       Applied Underwriters arbitrability argument principally rests on the Supreme

Court’s opinion in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010). There, the

arbitration agreement between the defendant, Rent-A-Center, and the plaintiff, Jackson,

provided that “[t]he Arbitrator, and not any federal, state, or local court or agency, shall

have exclusive authority to resolve any dispute relating to the interpretation, applicability,

enforceability or formation of this Agreement.” 561 U.S. at 66 (alteration in original)


                                              8
(internal quotation marks omitted). Jackson sought to avoid the arbitration agreement on

grounds of unconscionability, arguing that the mandatory arbitration provision was one-

sided and involved unfair procedures limiting discovery and requiring fee-splitting. Id. at

73–74. Below, the Ninth Circuit concluded that the agreement unambiguously gave the

arbitrator exclusive authority to resolve questions of arbitrability. Jackson v. Rent-A-

Center West, Inc., 581 F.3d 912, 917 (9th Cir. 2009), rev’d, 561 U.S. 63 (2010).

Nonetheless, the Ninth Circuit held that when “a party challenges an arbitration

agreement as unconscionable, and thus asserts that he could not meaningfully assent to

the agreement, the threshold question of unconscionability is for the court.” Id.

       The Supreme Court reversed, holding that the Ninth Circuit’s analysis improperly

focused on the unconscionability of the arbitration agreement and not the delegation

provision, which provided the arbitrator exclusive authority to resolve questions of

arbitrability.   See Rent-A-Center, 561 U.S. at 72–74.      “An agreement to arbitrate a

gateway issue is simply an additional, antecedent agreement the party seeking arbitration

asks the federal court to enforce, and the FAA operates on this additional arbitration

agreement just as it does on any other,” the Court explained.         Id. at 70.    Because

Jackson’s unconscionability arguments focused on “the entire arbitration agreement”—

and not the delegation provision, in particular—the unchallenged delegation provision

granted the arbitrator exclusive authority to determine whether the arbitration agreement

was unconscionable. Id. at 72–74.




                                             9
       Rent-A-Center makes clear, however, that “[i]f a party challenges the validity

under § 2 of the precise agreement to arbitrate at issue, the federal court must consider

the challenge before ordering compliance with that agreement under § 4.” Id. at 71.

Accordingly, because delegation provisions constitute “an additional, antecedent

agreement” to arbitrate, such provisions are “valid under § 2 ‘save upon such grounds as

exist at law or in equity for the revocation of any contract.’” Id. at 69–70 (quoting 9

U.S.C. § 2).    Federal courts, therefore, “must consider” challenges to delegation

provisions “before ordering compliance with [such provisions].” Id. at 71. To that end,

Rent-A-Center provides an illustration of how Jackson could have argued that the

delegation provision, as opposed to the arbitration agreement as a whole, was

“unconscionable”—and therefore unenforceable—because of the limitations on arbitral

discovery and the fee-splitting procedures:

       To make such a claim based on the discovery procedures, Jackson would
       have had to argue that the limitation upon the number of depositions causes
       the arbitration of his claim that the [arbitration] Agreement is unenforceable
       to be unconscionable. That would be, of course, a much more difficult
       argument to sustain than the argument that the same limitation renders
       arbitration of his factbound employment-discrimination claim
       unconscionable. Likewise, the unfairness of the fee-splitting arrangement
       may be more difficult to establish for the arbitration of enforceability than
       for arbitration of more complex and fact-related aspects of the alleged
       employment discrimination.

Id. at 74.

        Accordingly, under Rent-A-Center, we first must decide whether Minnieland

lodged a challenge against the delegation provision in the RPA, in particular. Second, if

we conclude that Minnieland specifically challenged the enforceability of the delegation



                                              10
provision, we then must decide whether the delegation provision is unenforceable “upon

such grounds as exist at law or in equity.” 9 U.S.C. § 2.

       Regarding the first question, Applied Underwriters argues that Minnieland, like

the plaintiff in Rent-A-Center, failed to specifically challenge the delegation provision in

the RPA. But before the district court, Minnieland argued that Section 38.2-312 rendered

void “any” arbitration provision in the RPA, J.A. 208-09 (emphasis added), necessarily

including the delegation provision, which is simply “an additional, antecedent

agreement” to arbitrate, Rent-A-Center, 561 U.S. at 70; see also J.A. at 85, 88 (arguing

that under Virginia law “no provision of any insurance contract can . . . deprive ‘the

courts of this Commonwealth of jurisdiction in actions against the insurer,’” rendering

any arbitration provision in the RPA “‘void’” (quoting Va. Code Ann. § 38.2–312)

(emphasis added)). And to avoid any doubt that its challenge to the enforceability of the

arbitration agreements in the RPA extended to the delegation provision, Minnieland

expressly asserted that, under Section 38.2–312, “[t]he court must resolve the validity of

the arbitration provision,” an argument relevant only to the enforceability of the

delegation provision.     J.A. 208-09 (emphasis added).          Accordingly, Minnieland

“challenged the validity of that delegation with sufficient force and specificity” to satisfy

Rent-A-Center. Hayes v. Delbert Servs. Corp., 811 F.3d 666, 671 n.1 (4th Cir. 2016).

       Applied Underwriters nevertheless argues that Minnieland failed to adequately

contest the enforceability of the delegation provision because its complaint did not

“specifically challenge” the delegation provision. Appellant’s Br. at 5; Appellant’s Reply

Br. at 7–8.    But a defendant who seeks to compel arbitration under the Federal


                                             11
Arbitration Act bears the burden of establishing the existence of a binding contract to

arbitrate the dispute. See Adkins v. Labor Ready, Inc., 303 F.3d 496, 500–01 (4th Cir.

2002). And until a defendant moves to compel arbitration, there is no reason for a

plaintiff to assert any grounds for disregarding an arbitration agreement. Accordingly,

the absence of allegations in Minnieland’s complaint challenging the enforceability of the

delegation provision has no bearing on whether the district court properly denied Applied

Underwriters’ motion to compel arbitration.

       Having concluded that Minnieland challenged the enforceability of the delegation

provision, we now determine whether the delegation provision is unenforceable “upon

such grounds as exist at law or in equity.” 9 U.S.C. § 2. For several reasons, we

conclude that Section 38.2–312 renders invalid delegation provisions in putative

insurance contracts governed by Virginia law, at least to the extent such delegation

provisions endow an arbitrator, as opposed to a court, with exclusive authority to

determine whether the contract at issue constitutes an “insurance contract” for purposes

of Virginia law. 1




       1
         In reaching this conclusion, we express no opinion as to whether Section 38.2–
312 renders invalid a putative insurance contract’s delegation of other gateway issues to
arbitrators. Likewise, we express no opinion as to whether questions, gateway or
otherwise, of judicial estoppel—a doctrine applied “to protect the integrity of the judicial
process” and “to prevent improper use of judicial machinery”—are ever delegable to
arbitrators. New Hampshire v. Maine, 532 U.S. 742, 749–50 (2001) (internal quotation
marks omitted); Allen v. Zurich Ins. Co., 667 F.2d 1162, 1166 (4th Cir. 1982) (holding
that judicial estoppel “protect[s] the essential integrity of the judicial process”).



                                            12
       To begin, we find it significant that Virginia chose to treat arbitration provisions in

insurance contracts as “void.” Va. Code § 38.2–312. Under Virginia law, when a

provision in an insurance contract is “void,” it is “unenforceable from its inception.”

Liverpool & London & Globe Ins. Co. v. Bolling, 10 S.E.2d 518, 522 (Va. 1940); see also

Joseph M. Perrillo, Calamari and Perrillo on Contracts § 1.8(b) (6th ed. 2009) (“A

contract is void, a contradiction in terms, when it produces no legal obligation. . . . It

would be more exact to say that no contract was created.”). If an agreement including a

delegation provision constitutes an “insurance contract,” the delegation provision—an

“additional, antecedent agreement” to arbitrate, Rent-A-Center,         561 U.S. at 70—is

“unenforceable from its inception.”        Thus, Virginia’s decision to treat delegation

provisions in insurance contracts as void constitutes “grounds as exist at law . . . for the

revocation of any contract.” 9 U.S.C. § 2.

       We also reach this conclusion because Section 38.2–312 reflects a state policy

choice that insureds should have the option to seek enforcement of Virginia’s insurance

laws and regulations in court, rather than through arbitration. Enforcing contractual

provisions that provide arbitrators with exclusive authority to determine whether a

contract amounts to a “contract of insurance”—a term defined by Virginia law—would

undermine that purpose by giving the arbitrators exclusive authority over a core question

of Virginia insurance law. Indeed, were an arbitrator to incorrectly determine that a

contract was not an “insurance contract” for purposes of Virginia law and move forward

with arbitration of the underlying dispute—or to correctly conclude that a contract was an

insurance contract and then incorrectly move forward with arbitration of the underlying


                                             13
dispute—a Virginia insured would be deprived of recourse to the judiciary to resolve a

dispute over the interpretation of an insurance contract governed by Virginia law, the

precise outcome Virginia sought to prevent in enacting Section 38.2–312.

      Applied Underwriters argues that this conclusion places this Court in conflict with

the Third and Sixth Circuits, which have held that questions of arbitrability of RPAs

between Applied Underwriters and other Equity Comp customers—and governed by

different state laws—were for the arbitrator to resolve. See S. Jersey Sanitation Co. v.

Applied Underwriters Captive Risk Assurance Co., 840 F.3d 138, 146 (3d Cir. 2016);

Milan Express Co. v. Applied Underwriters Captive Risk Assurance Co., 590 Fed. App’x

482, 486 (6th Cir. 2014). We disagree. Neither South Jersey Sanitation nor Milan

Express considered—much less decided—whether the relevant state insurance laws

rendered unenforceable the delegation provision in the RPA—the question we resolve

here. Accordingly, South Jersey Sanitation and Milan Express are inapposite to whether

Section 38.2–312 renders void delegation provisions in putative insurance contracts

governed by Virginia law.

      In sum, because Section 38.2–312 renders void delegation provisions in putative

insurance contracts—at least to the extent such provisions authorize an arbitrator to

resolve whether the contract at issue constitutes an “insurance contract”—we conclude

that the district court did not reversibly err in denying Applied Underwriters’ motion to

compel arbitration.

                                           B.




                                           14
        Having concluded that the court, not an arbitrator, should determine whether the

RPA constitutes an insurance contract for purposes of Virginia law, we now must decide

whether the district court properly applied the doctrine of judicial estoppel to preclude

Applied Underwriters from taking the position that the RPA is not an insurance contract.

This Court reviews for abuse of discretion a district court’s application of the equitable

doctrine of judicial estoppel. See King v. Herbert J. Thomas Mem’l Hosp., 159 F.3d 192,

196 (4th Cir. 1998) (“As an equitable doctrine, judicial estoppel is invoked in the

discretion of the district court . . . .”).

        “Judicial estoppel precludes a party from adopting a position that is inconsistent

with a stance taken in prior litigation.” John S. Clark Co. v. Faggert & Frieden, P.C., 65

F.3d 26, 28 (4th Cir. 1995). “The purpose of the doctrine is to prevent a party from

playing fast and loose with the courts, and to protect the essential integrity of the judicial

process.” Id. at 29 (internal quotation marks omitted). “Even so, courts must apply the

doctrine with caution.” Id.

        To that end, this Court has identified four elements that must be met before a court

may apply judicial estoppel: (1) “the party sought to be estopped must be seeking to

adopt a position that is inconsistent with a stance taken in prior litigation;” (2) “the

position sought to be estopped must be one of fact rather than law or legal theory;”

(3) “the prior inconsistent position must have been accepted by the court;” and (4) “the

party sought to be estopped must have intentionally misled the court to gain unfair

advantage.” Lowery v. Stovall, 92 F.3d 219, 223–24 (4th Cir. 1996) (internal quotation

marks omitted). We have characterized the final element as “determinative.” Id. at 224


                                              15
(internal quotation marks omitted). Applying this test, we conclude that the district court

committed legal error in applying judicial estoppel and, therefore, abused its discretion.

See League of Women Voters of N.C. v. North Carolina, 769 F.3d 224, 235 (4th Cir.

2014) (“A district court abuses its discretion when it misapprehends or misapplies the

applicable law.”).

       With respect the first element, the district court concluded that Applied

Underwriters’ position that “the RPA is a contract of reinsurance and not a contract of

insurance” was “inconsistent with those [positions] asserted in other legal proceedings.”

J.A. 465. But none of the other proceedings in which Applied Underwriters allegedly

took an inconsistent position involved whether the RPA constituted an “insurance

contract” for purposes of Virginia law—the question at issue here. Therefore, Applied

Underwriters’ assertion that the RPA is not an insurance contract for purposes of Virginia

law is not inconsistent with its legal position in any of those cases. Additionally, in

several cases, Applied Underwriters has argued expressly that the RPA did not constitute

an insurance contract for purposes of the relevant state law. See S. Jersey Sanitation, 840

F.3d at 141 (stating that Applied Underwriters argued that, under Nebraska law, the RPA

“was not a workers’ compensation insurance policy, but rather an investment

instrument[,] . . . a contract relating [to] or concerning a reinsurance policy” (internal

quotation marks omitted)); Milan Express Co. v. Applied Underwriters Captive Risk

Assurance Co., 993 F. Supp. 2d 846, 856 (W.D. Tenn.) (noting that, “[a]ccording to

[Applied Underwriters], . . . the RPA does not concern or relate to a policy of insurance

and therefore is outside the scope of” the Nebraska state statute prohibiting mandatory


                                            16
arbitration provisions in insurance contracts (internal quotation marks omitted)), vacated

and remanded on other grounds, 590 Fed. App’x 482 (2014). Accordingly, Applied

Underwriters’ position in this case is entirely consistent with the position it has taken in

several other cases.

       The second element—that judicial estoppel may only be applied when the position

sought to be estopped is one of fact rather than law—also is not met in this case. Here,

Applied Underwriters’ position is that the RPA does not constitute an insurance contract

for purposes of Virginia law. Under Virginia law, the interpretation of a contract—and

an insurance contract, in particular—presents a question of law. See PBM Nutritionals,

LLC v. Lexington Ins. Co., 724 S.E.2d 707, 712–13 (Va. 2012). Likewise, the meaning

of “insurance contract” in Section 38.2–312 poses a question of law. See Conyers v.

Martial Arts World of Richmond, Inc., 639 S.E.2d 174, 178 (Va. 2007) (“[A]n issue of

statutory interpretation is a pure question of law . . . .”). Accordingly, the position at

issue is one of law, rather than fact.

       Regarding the third and fourth elements—judicial reliance and intent to mislead to

gain an unfair advantage—each of those elements necessarily contemplate that the

position at issue is inconsistent with a position taken by the party in earlier litigation.

Because Applied Underwriters’ assertion that the RPA does not constitute an “insurance

contract” for purposes of Section 38.2–312 is not inconsistent with any position taken by

Applied Underwriters in previous proceedings, see supra, the third and fourth elements

also do not support application of judicial estoppel.




                                             17
                                            III.

       In sum, the district court correctly denied Applied Underwriters’ motion to compel

arbitration, but incorrectly applied the doctrine of judicial estoppel in holding that the

RPA constitutes an “insurance contract” for purposes of Section 38.2–312. The parties

have not had the opportunity to fully brief and argue whether, if judicial estoppel does not

apply, the RPA is an insurance contract under Virginia law. As such, we remand for

consideration of that issue in the first instance and further proceedings consistent with

this opinion.

                                                                    AFFIRMED IN PART,
                                                                    REVERSED IN PART,
                                                                      AND REMANDED




                                            18
