12-1223-cv
Emilio v. Sprint Spectrum L.P.


                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.

        At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 18th day of January, two thousand thirteen.

PRESENT: RALPH K. WINTER,
                 REENA RAGGI,
                 GERARD E. LYNCH,
                                 Circuit Judges.
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VINCENT EMILIO, Individually and on behalf of all others
similarly situated,
                                 Petitioner-Appellant,

                                 v.                                       No. 12-1223-cv

SPRINT SPECTRUM L.P., d.b.a. Sprint PCS,
                                 Respondent-Appellee.
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APPEARING FOR APPELLANT:                          WILLIAM ROBERT WEINSTEIN, Esq., White
                                                  Plains, New York.

APPEARING FOR APPELLEE:                           JOSEPH A. BOYLE (Lauri A. Mazzuchetti,
                                                  Vincent Paul Rao, II, on the brief), Kelley Drye &
                                                  Warren LLP, Parsippany, New Jersey.

          Appeal from a judgment of the United States District Court for the Southern District

of New York (Barbara S. Jones, Judge).
       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment entered on March 16, 2012, is AFFIRMED IN PART,

VACATED IN PART, and REMANDED.

       Petitioner Vincent Emilio appeals from the part of the judgment that denied his

petition to confirm and granted respondent Sprint Spectrum L.P.’s (“Sprint”) cross-petition

to vacate a partial final arbitral award. In considering a challenge to a district court’s partial

vacatur of an arbitration award, we review the court’s legal rulings de novo and its findings

of fact for clear error. See Jock v. Sterling Jewelers Inc., 646 F.3d 113, 118 (2d Cir. 2011),

cert. denied, 132 S. Ct. 1742 (2012). We assume the parties’ familiarity with the facts and

record of prior proceedings, which we reference only as necessary to explain our decision

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

proceedings.

       The arbitrator concluded that a provision of the Kansas Consumer Protection Act

permitting consumers to bring class actions to enforce the Act, see Kan. Stat. Ann.

§ 50-634(d), combined with a provision prohibiting consumers from waiving their rights

under the Act, see id. § 50-625(a), rendered the arbitration clause’s class action waiver

unenforceable. Petitioner challenges the district court’s determination that the arbitrator

exceeded her authority in deciding the enforceability of the arbitration clause’s class action

waiver.

       A district court may vacate an arbitral award under § 10(a)(4) of the Federal

Arbitration Act (“FAA”) if “the arbitrator[] exceeded [her] powers,” 9 U.S.C. § 10(a)(4),


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which may be evidenced by (1) consideration of issues beyond those submitted by the

parties, or (2) resolution of issues “clearly prohibited by law or by the terms of the parties’

agreement,” Jock v. Sterling Jewelers Inc., 646 F.3d at 122. As the district court correctly

observed, the enforceability of a class action waiver in an arbitration clause is a question of

arbitrability that is ordinarily for a court, and not the arbitrator, to decide. See In re Am.

Express Merchants’ Litig., 554 F.3d 300, 311 (2d Cir. 2009) (“Amex I”) (holding challenge

to enforceability of class action waiver to be “a gateway dispute,” raising question of

arbritrability for court to decide), vacated on other grounds sub nom., Am. Express Co. v.

Italian Colors Rest., 130 S. Ct. 2401 (2010); see also In re Am. Express Merchants’ Litig.,

667 F.3d 204, 210 (2d Cir. 2012) (“Amex III”) (concluding that Amex I’s holding survived

intervening Supreme Court decisions). Thus, the district court concluded that the arbitrator

had exceeded her authority in deciding the issue.

       Although “[t]he question whether the parties have submitted a particular dispute to

arbitration, i.e., the question of arbitrability,” is presumptively “an issue for judicial

determination,” the matter may be committed to the arbitrator if “the parties clearly and

unmistakably [so] provide.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)

(emphasis in original; internal quotation marks and brackets omitted). Amex I did not

purport to change this rule; rather, in that case, the parties did not dispute that the district

court had erred in holding that the question of the class action waiver’s enforceability was

a matter for the arbitrator. See Amex I, 554 F.3d at 310–11 (noting that plaintiffs argued that




                                               3
question of arbitrability was one for court and that defendant did not “posit[] any argument

to the contrary”).

       In this case, however, Emilio argues that the parties clearly and unmistakably

delegated questions of arbitrability to the arbitrator. We agree. The arbitration clause in the

parties’ agreement states that “the then-applicable rules of JAMS will apply,”1 specifically

JAMS’s “expedited procedures.” Sprint PCS Terms & Conditions, Mandatory Arbitration

of Disputes. With respect to the delegation of questions of arbitrability to the arbitrator,

JAMS Comprehensive and Streamlined Arbitration Rules & Procedures state as follows:

       Jurisdictional and arbitrability disputes, including disputes over the existence,
       validity, interpretation or scope of the agreement under which Arbitration is
       sought, and who are proper Parties to the Arbitration, shall be submitted to and
       ruled on by the Arbitrator. The Arbitrator has the authority to determine
       jurisdiction and arbitrability issues as a preliminary matter.

2003 JAMS Comprehensive Arb. R. & P. 11(c); 2003 JAMS Streamlined Arb. R. & P. 8(c).

“[W]hen, as here, parties explicitly incorporate rules that empower an arbitrator to decide

issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the

parties’ intent to delegate such issues to an arbitrator.” Contec Corp. v. Remote Solution Co.,

398 F.3d 205, 208 (2d Cir. 2005) (holding that arbitration rule providing arbitrator “power

to rule on his or her own jurisdiction, including any objections with respect to the existence,

scope or validity of the arbitration agreement” delegated arbitrability questions to arbitrator

(internal quotation marks omitted)); see also T.Co Metals, LLC v. Dempsey Pipe & Supply,

Inc., 592 F.3d 329, 344–45 (2d Cir. 2010) (same).


       1
           “JAMS” references JAMS, The Resolution Experts.

                                              4
       Indeed, in our 2009 decision affirming the district court’s order compelling Sprint to

arbitrate Emilio’s claim, we relied specifically on this JAMS rule to conclude that the parties

had clearly committed gateway questions of arbitrability to the arbitrator. Rejecting Sprint’s

argument that a court, instead of an arbitrator, should decide the preclusive effect of a state

court order on the arbitration, we noted that the parties had “agreed to ‘arbitrate any and all

claims, controversies or disputes . . . arising out of or relating to’ its agreement with Emilio,”

and we observed that the parties’ “agreement incorporated by reference JAMS rules, which

further provided that ‘[j]urisdictional and arbitrability disputes . . . shall be submitted to and

ruled on by the Arbitrator.’” Emilio v. Sprint Spectrum, L.P., 315 F. App’x 322, 324 (2d Cir.

2009). Accordingly, we held that “the parties clearly intended for the arbitrator to decide a

defense of res judicata.” Id. (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. at

83–84).

       Sprint does not dispute Emilio’s argument that the parties clearly and unmistakably

delegated questions of arbitrability to the arbitrator. Rather, Sprint argues that the district

court did not decide a question of arbitrability at all. Relying on a district court decision,

Schatz v. Cellco P’ship, 842 F. Supp. 2d 594 (S.D.N.Y. 2012), Sprint contends that the

district court in this case decided the “‘adequacy of the arbitral forum’” in resolving the

enforceability of the class action waiver, an issue that Sprint contends is different from the

question of arbitrability. Appellee’s Br. at 16 (quoting Schatz v. Cellco P’ship, 842 F. Supp.

2d at 607 n.11). Schatz drew no such distinction. To the contrary, Schatz opined, in dicta,

that the enforceability of a class action waiver clause always presents a question of


                                                5
arbitrability because it necessarily implicates the question whether the arbitral forum is

adequate to permit a plaintiff to vindicate substantive rights. See Schatz v. Cellco P’ship,

842 F. Supp. 2d at 607 n.11.2 Moreover, Schatz simply does not speak to the issue in this

case because the parties in Schatz never argued that they had clearly and unmistakably

delegated the question of arbitrability to the arbitrator.

       In any event, it is plain from the challenged order that the district court did decide a

question of arbitrability. Correctly recognizing that Amex I decided that the enforceability

of a class action waiver “‘rais[ed] a question of arbitrability,’” the district court proceeded

to conclude that the “class action preclusion provision in the instant action presents an

identical issue to the class action waiver in Amex I.” Emilio v. Sprint Spectrum L.P., No.

11 Civ. 3041 (BSJ), 2012 WL 917535, at *3 (S.D.N.Y. Mar. 16, 2012) (quoting Amex I, 554

F.3d at 311). In short, the district court’s error was not in recognizing that the enforceability

of a class action waiver is a question of arbitrability; it was in concluding that the issue in this

case arose in the same context as it had in Amex I when, in fact, the parties in this case

specifically delegated questions of arbitrability to the arbitrator. Because the parties clearly

and unmistakably intended for the arbitrator to decide the gateway issue of the enforceability

of the class action waiver, the district court was not free to decide that question for itself.

Accordingly, the district court erred in vacating that portion of the arbitration award as ultra

vires and deciding the class action waiver’s enforceability de novo. Because the district



       2
        We express no opinion on the merits of Schatz’s view of the law. We note only that
Schatz does not say what Sprint thinks it says.

                                                 6
court did not address Sprint’s other arguments for vacatur of the arbitral award, we not only

vacate so much of the judgment as vacated the arbitral award in part, but also remand the

case to the district court to address Sprint’s other arguments in the first instance.

       No party challenges the judgment confirming so much of the arbitral award as held

“that Sprint cannot be compelled to proceed with class-wide arbitration,” Emilio v. Sprint

Spectrum L.P., 2012 WL 917535, at *4, therefore, that portion of the judgment is affirmed.

       Accordingly, the judgment is AFFIRMED IN PART, VACATED IN PART, and

REMANDED for further proceedings consistent with this order.

                                    FOR THE COURT:
                                    CATHERINE O’HAGAN WOLFE, Clerk of Court




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