Totalenergies E&P USA, Inc. v. Mp Gulf of Mexico, LLC

Supreme Court of Texas

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No. 21-0028

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TotalEnergies E&P USA, Inc.,

Petitioner,

v.

MP Gulf of Mexico, LLC,

Respondent

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On Petition for Review from the

Court of Appeals for the Twelfth District of Texas

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Argued September 20, 2022

JUSTICE BOYD delivered the opinion of the Court, in which Chief Justice

Hecht, Justice Lehrmann, Justice Devine, Justice Blacklock, and

Justice Bland joined.

JUSTICE BLAND filed a concurring opinion.

JUSTICE BUSBY filed a dissenting opinion.

Justice Huddle and Justice Young did not participate in the

decision.

The parties in this case dispute whether their contracts require

them to resolve their controversies through arbitration, but they also

clash over whether they agreed that an arbitrator, rather than the

courts, must resolve that dispute. We hold that (1) the parties clearly

and unmistakably delegated arbitrability issues to the arbitrator by

agreeing to arbitrate their controversies in accordance with the AAA

Commercial Rules; (2) the fact that the parties may have agreed to

arbitrate only some controversies while carving out others does not

affect the clear and unmistakable delegation of the arbitrability decision

to the arbitrator; and (3) in accordance with these parties’ agreements,

the courts must defer to the arbitrator to decide whether this

controversy falls within the arbitration agreement’s scope. Based on

these holdings, we affirm the court of appeals’ judgment.

I.

Background

MP Gulf of Mexico owns a two-thirds interest in a group of

oil-and-gas leases in the Gulf of Mexico known as the Chinook Unit, and

TotalEnergies E&P USA owns the remaining one-third.1 A written

contract referred to as the Chinook Operating Agreement governs the

parties’ relationship as the Unit’s co-owners. MP Gulf also owns all of

the interest in a nearby group of leases known as the Cascade Unit. To

reduce costs and promote efficiency, MP Gulf and Total E&P agreed to

construct a Common System to jointly process, store, and transport

1 Although both parties’ predecessors-in-interest were involved in some

of these transactions, we refer solely to MP Gulf and Total E&P for simplicity’s

sake. And although ownership interests have changed since the events giving

rise to this dispute, we describe the facts as they existed when the relevant

events occurred.

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production from all the leases in both Units. MP Gulf serves as the

operator of both Units and of the Common System.

To establish the Common System, the parties entered into two

separate written contracts. The first, called the System Operating

Agreement, “govern[s] the operation of the Common System,” but it does

so “subject to the requirements of” the second, called the Cost Sharing

Agreement. The System Operating Agreement requires MP Gulf, as the

system operator, to advance all costs of operating the Common System

and then collect those costs from the interest owners “as provided in the

Cost Sharing Agreement.” If the Cost Sharing Agreement does not

allocate particular costs, the System Operating Agreement requires

each party to “pay those Costs in proportion to its Equity Interest” in

the Common System. As the owner of a one-third interest in one of the

two Units that equally owned the Common System, Total E&P’s Equity

Interest in the Common System was 16.665 percent.

Ten years after the parties created the Common System, MP Gulf

proposed to re-enter the Chinook No. 6 well, which had previously been

shut in. Exercising their respective rights under the Chinook Operating

Agreement, Total E&P elected not to participate in that project, and MP

Gulf elected to re-enter the well without Total E&P’s participation.

Later, MP Gulf demanded that Total E&P pay about $41 million,

representing 16.665 percent of the Common System costs related to the

Chinook No. 6 well.

Total E&P refused to pay the $41 million, contending that the

Cost Sharing Agreement specifically allocates the disputed costs and

thus does not require the owners to cover the costs based on their equity

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interests. Specifically, Total E&P asserted that the costs qualify as

either “Fixed Operating Expenses” or “Variable Operating Expenses,”

both of which the Cost Sharing Agreement expressly allocates “to each

Unit” equally, so the Chinook Unit and the Cascade Unit each owe fifty

percent of the costs. As to the Chinook Unit’s share, Total E&P argued

the Chinook Operating Agreement relieves it of any obligation to pay

any portion of the expenses because it elected not to participate in the

project. Instead, according to Total E&P, the Chinook Operating

Agreement required MP Gulf to cover all of the Chinook Unit’s share of

the Common System costs and recover those expenses from the returns

Total E&P would have received had it elected to participate in the

re-entry of the well.

MP Gulf disagreed and demanded that Total E&P participate in

negotiations and mediation as required under the System Operating

Agreement. Total E&P objected, arguing that the System Operating

Agreement’s dispute-resolution provisions did not apply to this

controversy because the Chinook Operating Agreement governs its

obligations to pay costs allocated to the Chinook Unit. It nevertheless

agreed to participate in the negotiations and mediation while reserving

that objection.

After the negotiations and mediation were unsuccessful, Total

E&P filed this suit in a Harris County district court, seeking a

declaration construing the Cost Sharing Agreement. Specifically, Total

E&P sought the court’s confirmation that, because the Cost Sharing

Agreement allocates the disputed costs to “each Unit,” the Chinook

Operating Agreement governs any liability Total E&P may have as a

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co-owner of the Chinook Unit. To support its right to file this suit, Total

E&P noted that the Cost Sharing Agreement does not contain an

arbitration clause and instead grants exclusive jurisdiction over all legal

disputes to the courts in Harris County, Texas.

Although Total E&P asked the court to declare that the Cost

Sharing Agreement required MP Gulf to look to the Chinook Operating

Agreement (as opposed to the System Operating Agreement) to resolve

the parties’ controversy over the $41 million demand, it did not ask the

court to actually determine the parties’ rights under the Chinook

Operating Agreement. This is because the Chinook Operating

Agreement includes an arbitration clause requiring that “any dispute or

controversy [that] arises between the Parties out of this Agreement, the

alleged breach thereof, or any tort in connection therewith, or out of the

refusal to perform the whole or any part thereof” must “be submitted to

arbitration” before the International Institute for Conflict Prevention

and Resolution. So on the same day it filed this suit, Total E&P initiated

an arbitration proceeding with the International Institute, asking it to

determine the parties’ rights under the Chinook Operating Agreement.

Less than two weeks later, MP Gulf initiated an arbitration

proceeding before the American Arbitration Association, asserting that

Total E&P breached the System Operating Agreement by refusing to

pay the $41 million and seeking a declaration as to how the Cost Sharing

Agreement allocates those Common System expenses. MP Gulf initiated

the AAA arbitration because article 16.16.1 of the System Operating

Agreement provides that, “[i]f any dispute or controversy arises between

the Parties out of this Agreement, the alleged breach thereof, or any tort

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in connection therewith, or out of the refusal to perform the whole or

any part thereof,” and if the parties are unable to resolve that dispute

or controversy through negotiations or mediation, the dispute or

controversy “shall be submitted to arbitration . . . in accordance with the

rules of the AAA and the provisions in this Article 16.16.” And article

16.16.2 provides that the “procedure of the arbitration proceedings shall

be in accordance with the Commercial Rules of the AAA, as may be

modified by the panel of arbitrators.”

In summary, the parties’ controversy over whether Total E&P

owes MP Gulf $41 million resulted in three separate proceedings before

three separate tribunals, based on three different dispute-resolution

clauses in the parties’ three written agreements:

1. This suit by Total E&P, seeking a declaration that the Cost

Sharing Agreement—which requires controversies to be

resolved in the Harris County District Courts—requires the

parties to look to the Chinook Operating Agreement to resolve

the controversy over costs;

2. Total E&P’s arbitration proceeding to determine the parties’

obligations under the Chinook Operating Agreement, which

requires controversies to be resolved by arbitration before the

International Institute; and

3. MP Gulf’s arbitration proceeding asserting breach of the

System Operating Agreement, which requires controversies to

be resolved before the AAA.

MP Gulf argues that the System Operating Agreement’s

arbitration clause applies to the parties’ controversy because MP Gulf’s

authority to bill the costs and Total E&P’s obligation to pay them arise

from the System Operating Agreement, which is “integrated into” the

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Cost Sharing Agreement. According to MP Gulf, the two Agreements

“operate together as a single, unified instrument” to govern how the

Common System costs must be allocated among the parties. MP Gulf

specifically alleged that Total E&P’s “decision not to participate in the

re-entry phase of the Chinook No. 6 well had no bearing on its ownership

of the Common System or its obligation to pay its Equity Interest share

of Common System costs.” And because the dispute “arises . . . out of”

the System Operating Agreement and Total E&P’s failure to perform

under that Agreement, MP Gulf asserted that article 16.16 of the

System Operating Agreement required the parties to resolve their

controversy through AAA arbitration and in accordance with the AAA

rules and procedures.

Total E&P, however, filed a motion asking the trial court to stay

the AAA arbitration, asserting that the parties’ controversy over the cost

allocation does not arise out of the System Operating Agreement but

instead arises out of the Cost Sharing Agreement, which vests “exclusive

jurisdiction” in the Harris County courts and contains no arbitration

clause. Total E&P argued that the court should stay the AAA arbitration

because the AAA arbitrator cannot resolve MP Gulf’s claim for breach of

the System Operating Agreement until the court first determines the

proper cost allocation under the Cost Sharing Agreement. MP Gulf

opposed the stay and filed a motion to compel the AAA arbitration,

arguing that the court must read the System Operating Agreement and

the Cost Sharing Agreement together, making the mandatory AAA

arbitration clause applicable regardless of which agreement the dispute

arises out of.

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But MP Gulf did not contend only that the parties’ agreements

require them to arbitrate their controversy before the AAA. It also

argued that the System Operating Agreement requires the AAA

arbitrator, and not the court, to decide whether the parties agreed to

submit their controversy to arbitration before the AAA. For this

argument, MP Gulf relied on rule 7(a) of the AAA Commercial Rules,

which provides: “The arbitrator shall have the power to rule on his or

her own jurisdiction, including any objections with respect to the

existence, scope, or validity of the arbitration agreement or to the

arbitrability of any claim or counterclaim.”2 MP Gulf argued that, by

agreeing in the System Operating Agreement to submit all disputes

arising out of that Agreement to AAA arbitration “in accordance with”

the AAA Commercial Rules, the parties expressly delegated to the

arbitrator the power to decide whether the controversy must be resolved

through arbitration. Total E&P disagreed, arguing that an agreement

to arbitrate in accordance with the AAA rules does not create an

enforceable agreement to delegate arbitrability questions to the

arbitrator, and even if it could, it would not do so when the parties agree

only to arbitrate claims that “arise out of” their agreement.

The trial court agreed with Total E&P and entered orders

granting its motion to stay the AAA arbitration and denying MP Gulf’s

motion to compel that arbitration. The court of appeals reversed and

rendered judgment compelling AAA arbitration, agreeing with MP Gulf

2 AM. ARB. ASS’N, Commercial Arbitration Rules and Mediation

Procedures 13 (2013), https://adr.org/sites/default/files/CommercialRules_

Web-Final.pdf.

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that, by agreeing to arbitrate before the AAA and in accordance with its

rules, the parties delegated the arbitrability issue to the AAA arbitrator.

647 S.W.3d 96, 102 (Tex. App.—Tyler 2020). We granted Total E&P’s

petition for review.

II.

Arbitrability and the AAA Rules

A dispute over whether parties agreed to resolve their

controversies through arbitration—referred to as a dispute over the

controversies’ “arbitrability”—typically encompasses three distinct

disagreements: (1) the merits of the underlying controversy (here,

whether Total E&P must pay MP Gulf $41 million); (2) whether the

merits must be resolved through arbitration instead of in the courts; and

(3) who (a court or the arbitrator) decides the second question. RSL

Funding, LLC v. Newsome, 569 S.W.3d 116, 120 (Tex. 2018). The second

question must be answered before the first, but the third must be

answered before the second. So we begin with the third question, and

we conclude the parties here agreed to delegate the arbitrability issue

to the arbitrator.

A. Arbitration law

Basic contract law governs our resolution of the third question.3

Because arbitration is a matter of contract—“a matter of consent, not

coercion”—parties cannot be compelled to arbitrate any controversy

3 The Federal Arbitration Act, 9 U.S.C. §§ 1–16, and the Texas

Arbitration Act, TEX. CIV. PRAC. & REM. CODE §§ 171.001–.098, both honor

parties’ freedom to contractually agree to arbitrate disputes and require courts

to enforce those agreements in accordance with the law of contracts. The

parties here do not dispute or address which act applies in this case.

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unless they have contractually agreed to do so. Robinson v. Home

Owners Mgmt. Enters., Inc., 590 S.W.3d 518, 521 (Tex. 2019).

A contractual agreement to arbitrate controversies is severable

from a broader contract that contains it, and courts must consider the

two separately. Baby Dolls Topless Saloons, Inc. v. Sotero, 642 S.W.3d

583, 586 (Tex. 2022); see Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63,

70–71 (2010). When a party challenges the validity of the broader

contract but not of an arbitration agreement contained within that

contract, courts must enforce the arbitration agreement and require the

arbitrator to decide the challenge to the broader contract. Rent-A-Ctr.,

561 U.S. at 72.4 But when a party challenges the validity or scope of an

arbitration agreement contained within a broader contract, courts must

resolve that challenge to determine whether the parties agreed to

arbitrate their controversies regarding the contract. Id.5

But courts have recognized an important exception to this

severability rule. Because arbitration is a matter of contract, parties can

agree that arbitrators, rather than courts, must resolve disputes over

4 See Nitro-Lift Techs., L.L.C. v. Howard, 568 U.S. 17, 20–21 (2012);

Preston v. Ferrer, 552 U.S. 346, 349 (2008); Buckeye Check Cashing, Inc. v.

Cardegna, 546 U.S. 440, 445–46 (2006); Prima Paint Corp. v. Flood & Conklin

Mfg. Co., 388 U.S. 395, 403–04 (1967).

5 See RSL Funding, 569 S.W.3d at 120; Forest Oil Corp. v. McAllen, 268

S.W.3d 51, 61 (Tex. 2008); see also Henry Schein, Inc. v. Archer & White Sales,

Inc., 139 S. Ct. 524, 530 (2019); Nitro-Lift, 568 U.S. at 20–21; Rent-A-Ctr., 561

U.S. at 71; Buckeye Check Cashing, 546 U.S. at 445–46. Exceptions to this

default rule may apply when the challenge to the arbitration agreement

concerns “dispositive gateway questions,” Howsam v. Dean Witter Reynolds,

Inc., 537 U.S. 79, 84–85 (2002), or “particular procedural preconditions for the

use of arbitration,” BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 35

(2014).

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the validity and scope of their arbitration agreement. Jody James

Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624, 631 (Tex. 2018).6 If the

parties have contractually agreed to delegate arbitrability disputes to

the arbitrator, courts must enforce that agreement just as they must

enforce an agreement to delegate resolution of the underlying merits to

the arbitrator. RSL Funding, 569 S.W.3d at 120.7 “If, on the other hand,

the parties did not agree to submit the arbitrability question itself to

arbitration, then the court should decide that question just as it would

decide any other question the parties did not submit to arbitration,

namely, independently.” First Options, 514 U.S. at 943.

For the most part, the determination of whether parties have

agreed to delegate arbitrability to an arbitrator is governed by “ordinary

state-law principles that govern the formation of contracts.” Id. at 944.

But because parties often “might not focus [on] the significance of having

arbitrators decide the scope of their own powers,” and to avoid the risk

of requiring parties to arbitrate a dispute they have not agreed to

arbitrate, courts will only enforce an agreement to delegate arbitrability

to the arbitrator if that agreement is “clear and unmistakable.”

Robinson, 590 S.W.3d at 525, 532.8

6 See Henry Schein, 139 S. Ct. at 529; Rent-A-Ctr., 561 U.S. at 70.

7 See Henry Schein, 139 S. Ct. at 529; First Options of Chi., Inc. v.

Kaplan, 514 U.S. 938, 943 (1995).

8 See Jody James Farms, 547 S.W.3d at 631; see also Henry Schein, 139

S. Ct. at 530; Howsam, 537 U.S. at 83; First Options, 514 U.S. at 944; AT&T

Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649 (1986).

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B. Precedent on incorporation of arbitration rules

The System Operating Agreement on which MP Gulf relies to

compel arbitration—not only of the parties’ claims but also of the parties’

dispute over whether those claims must be arbitrated—does not

expressly delegate arbitrability to the arbitrator. But MP Gulf contends

the parties clearly and unmistakably agreed to that result by agreeing

to arbitrate their controversies “in accordance with the rules of the AAA”

and using “procedure[s] . . . in accordance with the Commercial Rules of

the AAA.” This is because, as we have noted, AAA Commercial Rule 7(a)

provides that the arbitrator “shall have the power to rule on his or her

own jurisdiction, including any objections with respect to the existence,

scope, or validity of the arbitration agreement or to the arbitrability of

any claim or counterclaim.”9 In deciding whether the parties clearly and

unmistakably delegated arbitrability issues to the arbitrator by

agreeing to arbitrate in accordance with this rule, we first consider

previous decisions addressing that issue.

9 As discussed below, the AAA recently amended rule 7(a) to add

language providing that the arbitrator shall have the power to rule on his or

her own jurisdiction and on any objection to the arbitrability of any claim or

counterclaim “without any need to refer such matters first to a court.” See AM.

ARB. ASS’N, Commercial Arbitration Rules and Mediation Procedures 14

(2022), https://adr.org/sites/default/files/Commercial_Rules-Web.pdf. Rule 1(a)

provides, however: “These Rules and any amendment to them shall apply in

the form in effect at the time the administrative requirements are met for a

Demand for Arbitration or Submission Agreement received by the AAA.” Id.

at 10. Because MP Gulf properly demanded arbitration before September 1,

2022, we apply the version in effect before the recent amendment.

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1. This Court

We have not previously decided whether an agreement to

arbitrate in accordance with the AAA rules establishes a clear and

unmistakable agreement to delegate arbitrability issues to the

arbitrator. We observed in Jody James Farms that such a result “may

be the consequence of incorporating the AAA rules in disputes between

signatories to an arbitration agreement,” but we did not decide the issue

because that case involved a signatory’s dispute with a non-signatory.

547 S.W.3d at 631–32 (emphases added).10 Similarly, we noted in

Robinson that the “effect of incorporating the AAA rules is subject to

some jurisprudential disagreement,” but we did not address the issue

because the agreement in that case did not incorporate or refer to the

AAA rules. 590 S.W.3d at 523 & n.8. And most recently, in San Antonio

River Authority v. Austin Bridge & Road, L.P., we noted a court of

appeals’ holding that an agreement’s “mere reference to the AAA’s rules

does not provide clear and unmistakable evidence of the parties’

delegation of issues of arbitrability to an arbitrator,” but we again did

not address the issue because that case involved the separate question

10 We held in Jody James Farms that an arbitration agreement’s

incorporation of the AAA rules did not clearly and unmistakably demonstrate

an agreement to delegate arbitrability of claims against a non-signatory to the

arbitrator because parties “cannot be forced to arbitrate absent a binding

agreement to do so.” 547 S.W.3d at 632. Courts in other jurisdictions have since

reached the opposite result in cases involving non-signatories. See, e.g.,

Blanton v. Domino’s Pizza Franchising LLC, 962 F.3d 842, 845 (6th Cir. 2020),

cert. denied sub nom. Piersing v. Domino’s Pizza Franchising LLC, 141 S. Ct.

1268 (2021); Wiggins v. Warren Averett, LLC, 307 So. 3d 519, 523 (Ala. 2020).

Because MP Gulf and Total E&P are both signatories to the agreements at

issue, neither party asks us to reconsider that holding here.

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of whether parties could agree to delegate governmental-immunity

issues to an arbitrator. 601 S.W.3d 616, 626–28 (Tex. 2020) (quoting

Burlington Res. Oil & Gas Co. v. San Juan Basin Royalty Tr., 249

S.W.3d 34, 41–42 (Tex. App.—Houston [1st Dist.] 2007, pet. denied)).

2. The United States Supreme Court

Nor has the United States Supreme Court decided the issue.

Henry Schein involved a dispute between signatories to an agreement

that required arbitration in accordance with the AAA rules, except for

certain claims including those seeking injunctive relief. 139 S. Ct. at

528. The plaintiff sued for both injunctive relief and damages, but the

defendant moved to compel arbitration and argued that—because the

parties incorporated the AAA rules—the arbitrator must decide whether

the claims were arbitrable. Id. The Fifth Circuit disagreed, holding that,

even if the parties delegated arbitrability issues to the arbitrator by

incorporating the AAA rules, the court could nevertheless resolve the

arbitrability issue because the defendant’s argument that the claims

were arbitrable was “wholly groundless.” Id. The Supreme Court

reversed, holding that courts must enforce an agreement to delegate

arbitrability issues to the arbitrator even if the court believes the

argument in favor of arbitrability is “wholly groundless.” Id. at 529. But

the Court remanded the case without deciding whether the parties in

fact delegated the arbitrability question to the arbitrator by

incorporating the AAA rules. Id. at 531.

On remand, the Fifth Circuit held that an agreement to arbitrate

only some claims under the AAA rules, while “carv[ing] out” other

claims, does not clearly and unmistakably delegate arbitrability issues

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to the arbitrator. Archer & White Sales, Inc. v. Henry Schein, Inc., 935

F.3d 274, 281–82 (5th Cir. 2019). The Supreme Court then granted the

defendant’s petition for writ of certiorari, agreeing to decide “[w]hether

a provision in an arbitration agreement that exempts certain claims

from arbitration negates an otherwise clear and unmistakable

delegation of questions of arbitrability to an arbitrator.” Petition for

Writ of Certiorari at (I), Henry Schein, Inc. v. Archer & White Sales, Inc.,

141 S. Ct. 107 (2020) (No. 19-963); see Henry Schein, 141 S. Ct. at 107

(granting certiorari). But the Court denied the plaintiff’s cross-petition,

declining to decide “[w]hether an arbitration agreement that identifies

a set of arbitration rules to apply if there is arbitration clearly and

unmistakably delegates to the arbitrator disputes about whether the

parties agreed to arbitrate in the first place.” Conditional Cross-Petition

for Writ of Certiorari at (I), Archer & White Sales, Inc v. Henry Schein,

Inc., 141 S. Ct. 113 (2020) (No. 19-1080); see Archer & White Sales, 141

S. Ct. at 113. After hearing oral argument, however, the Court dismissed

the defendant’s petition as improvidently granted and thus did not

decide either question. Henry Schein, Inc. v. Archer & White Sales, Inc.,

141 S. Ct. 656 (2021).

3. Other jurisdictions

Many courts in numerous other jurisdictions have addressed the

question of whether an agreement to arbitrate in accordance with the

AAA rules, or with similar arbitration rules that empower the arbitrator

to decide arbitrability issues, clearly and unmistakably delegates

arbitrability to the arbitrator. Beginning nearly forty years ago, every

federal circuit—except perhaps the Seventh Circuit—has held that it

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does.11 And ten of the fifteen state supreme courts that have addressed

the issue have agreed,12 while the remaining five have held that

11 The First Circuit held in 1981 that a contract delegated arbitrability

issues to the arbitrator by requiring arbitration in accordance with the

International Chamber of Commerce arbitration rules, which provided that

“any decision as to the arbitrator’s jurisdiction shall be taken by the arbitrator

himself.” Societe Generale de Surveillance, S.A. v. Raytheon Eur. Mgmt. & Sys.

Co., 643 F.2d 863, 869 (1st Cir. 1981). That court reaffirmed that decision

under the “clear and unmistakable” standard in 1989. See Apollo Comput., Inc.

v. Berg, 886 F.2d 469, 473 (1st Cir. 1989). For more recent examples from each

of the circuits, see Caremark, LLC v. Chickasaw Nation, 43 F.4th 1021, 1031

(9th Cir. 2022) (holding incorporation of the AAA rules constitutes clear and

unmistakable evidence that contracting parties agreed to arbitrate

arbitrability); Attix v. Carrington Mortg. Servs., LLC, 35 F.4th 1284, 1298

(11th Cir. 2022) (“By incorporating this AAA rule about the arbitrator’s ‘power

to rule on his or her own jurisdiction’ into their agreement, [the parties] clearly

and unmistakably agreed to arbitrate threshold arbitrability disputes.”);

Commc’ns Workers of Am. v. AT&T Inc., 6 F.4th 1344, 1347 (D.C. Cir. 2021)

(holding a bilateral contract incorporating the AAA rules clearly and

unmistakably delegated arbitrability to the arbitrator); ROHM Semiconductor

USA, LLC v. MaxPower Semiconductor, Inc., 17 F.4th 1377, 1383–84 (Fed. Cir.

2021) (holding a bilateral contract between sophisticated parties incorporating

the CCCP rules clearly and unmistakably delegated arbitrability to the

arbitrator); Goldgroup Res., Inc. v. DynaResource de Mex., S.A. de C.V., 994

F.3d 1181, 1191 (10th Cir. 2021) (holding incorporation of the AAA rules

“constitutes clear and unmistakable evidence that the parties agreed to

arbitrate arbitrability issues, including the issue of waiver”); Bosse v. N.Y. Life

Ins. Co., 992 F.3d 20, 29 (1st Cir. 2021) (“This Court is clear that incorporation

of the AAA arbitration rules constitutes clear and unmistakable evidence of

the parties’ intent to delegate arbitrability issues to the arbitrator.”); Ciccio v.

SmileDirectClub, LLC, 2 F.4th 577, 584 (6th Cir. 2021) (“The text of the

Agreement, including the AAA rules, shows that the parties intended to send

gateway questions of arbitrability exclusively to an arbitrator.”); Mendoza v.

Fred Haas Motors, Ltd., 825 F. App’x 200, 202–03 (5th Cir. 2020) (holding

incorporation of the AAA rules clearly and unmistakably delegates

arbitrability issues to the arbitrator); Richardson v. Coverall N. Am., Inc.,

811 F. App’x 100, 103–04 (3d Cir. 2020) (holding incorporation of the AAA

rules constitutes clear and unmistakable evidence that the parties agreed to

delegate arbitrability), cert. denied, 141 S. Ct. 1685 (2021); Simply Wireless,

Inc. v. T-Mobile US, Inc., 877 F.3d 522, 528 (4th Cir. 2017) (holding “that, in

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the context of a commercial contract between sophisticated parties, the explicit

incorporation of JAMS Rules serves as ‘clear and unmistakable’ evidence of the

parties’ intent to arbitrate arbitrability” and citing numerous cases including

those relying on the AAA rules); Eckert/Wordell Architects, Inc. v. FJM Props.

of Willmar, LLC, 756 F.3d 1098, 1100 (8th Cir. 2014) (“We have previously held

the incorporation of the AAA Rules into a contract requiring arbitration to be

a clear and unmistakable indication the parties intended for the arbitrator to

decide threshold questions of arbitrability.”); Emilio v. Sprint Spectrum L.P.,

508 F. App’x 3, 5 (2d Cir. 2013) (holding incorporation of the JAMS rules

“clearly and unmistakably delegated questions of arbitrability to the

arbitrator”).

The Seventh Circuit initially held that an arbitration agreement’s

incorporation of the NASD Code, which provided that the “arbitrators shall be

empowered to interpret and determine the applicability of all provisions under

this Code,” was not “a clear and unmistakable expression of the parties’ intent

to have the arbitrators, and not the court, determine which disputes the parties

have agreed to submit to arbitration.” Edward D. Jones & Co. v. Sorrells,

957 F.2d 509, 514 n.6 (7th Cir. 1992). After declining to revisit that holding in

Smith Barney Inc. v. Schell, 53 F.3d 807, 809 (7th Cir. 1995), and in Miller v.

Flume, 139 F.3d 1130, 1134 (7th Cir. 1998), the court reached a similar

conclusion regarding an agreement’s incorporation of the AAA rules in

Reliance Insurance Co. v. Raybestos Products Co., 382 F.3d 676, 678–79 (7th

Cir. 2004). Some district courts within the Circuit, however, have since held

that incorporation of the AAA rules does clearly and unmistakably delegate

arbitrability to the arbitrator, see, e.g., Ali v. Vehi-Ship, LLC, No. 17 CV 02688,

2017 WL 5890876, at *3–4 (N.D. Ill. Nov. 27, 2017) (“Rule 7(a) of the AAA Rules

could not be clearer about the power of the arbitrator to decide gateway

arbitrability issues.”); Bayer CropScience, Inc. v. Limagrain Genetics Corp., No.

04 C 5829, 2004 WL 2931284, at *4 (N.D. Ill. Dec. 9, 2004) (holding

incorporation of the AAA rules clearly and unmistakably delegated

arbitrability to the arbitrator), while others have held it does not, see, e.g.,

Taylor v. Samsung Elecs. Am., Inc., No. 19 C 4526, 2020 WL 1248655, at *4

(N.D. Ill. Mar. 16, 2020) (“[T]he Seventh Circuit has not addressed the point,

and this Court does not find [the contrary] decisions persuasive.”).

12 See, e.g., Uber Techs., Inc. v. Royz, 517 P.3d 905, 910 (Nev. 2022) (“[A]s

many courts have found, incorporating the AAA’s rules, even without more,

constitutes clear and unmistakable evidence of intent to submit the question

of arbitrability to the arbitrator.”); Airbnb, Inc. v. Doe, 336 So. 3d. 698, 701–03

(Fla. 2022) (holding incorporation of the AAA rules clearly and unmistakably

evidences parties’ intent to empower an arbitrator to resolve questions of

17

incorporation of the AAA rules may or may not delegate arbitrability,

depending on other circumstances. 13

arbitrability); Wiggins, 307 So. 3d at 523 (“When an arbitration provision

indicates that the AAA rules will apply to the arbitration proceedings, we have

held that it is ‘clear and unmistakable’ that substantive-arbitrability decisions

are to be made by the arbitrator . . . .”); Ally Align Health, Inc. v. Signature

Advantage, LLC, 574 S.W.3d 753, 758 (Ky. 2019) (holding incorporation of the

AAA rules delegates arbitrability to the arbitrator even when an agreement

includes a provision carving out claims for equitable relief); State ex rel.

Pinkerton v. Fahnestock, 531 S.W.3d 36, 44–45 (Mo. 2017) (holding

incorporation of the AAA rules delegates arbitrability to the arbitrator),

abrogated on other grounds by Theroff v. Dollar Tree Stores, Inc., 591 S.W.3d

432, 439 (Mo. 2020); Garthon Bus. Inc. v. Stein, 86 N.E.3d 514, 514 (N.Y. 2017)

(holding incorporation of the London Court of International Arbitration rules

clearly and unmistakably delegated arbitrability to the arbitrator); W. Va. CVS

Pharmacy, LLC v. McDowell Pharmacy, Inc., 796 S.E.2d 574, 588 (W. Va. 2017)

(applying Arizona law and holding “that incorporation of the AAA rules into

the arbitration agreements is sufficient evidence that the parties clearly and

unmistakably agreed to arbitrate arbitrability”); 26th St. Hosp., LLP v. Real

Builders, Inc., 879 N.W.2d 437, 446 (N.D. 2016) (“The incorporation of the AAA

Rules is clear and unmistakable evidence the parties agreed to arbitrate the

question of arbitrability.”); HPD, LLC v. TETRA Techs., Inc., 424 S.W.3d 304,

308, 310–11 (Ark. 2012) (holding clause incorporating the AAA rules and

requiring arbitration “to the exclusion of any court of law” clearly and

unmistakably delegated arbitrability to the arbitrator, despite severability

clause and default provision “allowing resort to all remedies at law or in

equity”); Smith Barney, Inc. v. Keeney, 570 N.W.2d 75, 78 (Iowa 1997) (holding

incorporation of the NASD Code “clearly and unambiguously commits the

interpretation and application of all of its provisions to the arbitrator”).

13 See Hoyle, Tanner & Assocs., Inc. v. 150 Realty, LLC, 215 A.3d 491,

498 (N.H. 2019) (holding incorporation of the AAA rules did not clearly and

unmistakably delegate arbitrability to the arbitrator when the arbitration

agreement gave both parties an option to file suit or initiate arbitration to

resolve disputes); Nethery v. CapitalSouth Partners Fund II, L.P., 257 So. 3d

270, 274–75 (Miss. 2018) (applying Delaware law and holding incorporation of

the AAA rules did not delegate arbitrability because the agreement carved out

claims for injunctive relief and specific performance); Glob. Client Sols., LLC

v. Ossello, 367 P.3d 361, 369 (Mont. 2016) (holding an agreement to resolve

disputes through arbitration administered by the AAA and “pursuant to its

18

In particular, courts have most often disagreed over whether the

parties’ agreement to arbitrate in accordance with the AAA or similar

rules clearly and unmistakably delegates arbitrability to the arbitrator

when (1) the agreement involves an unsophisticated party, 14 (2) a party

rules and procedures” did not clearly and unmistakably delegate arbitrability

to the arbitrator when the dispute involved a consumer and a debt-relief

organization, the AAA rules were not part of the record, and neither party

specified “which of the multiple sets of commercial or consumer AAA rules are

supposedly incorporated here”); James & Jackson, LLC v. Willie Gary, LLC,

906 A.2d 76, 80–81 (Del. 2006) (adopting “[a]s a matter of policy” the “majority

federal view that reference to the AAA rules evidences a clear and

unmistakable intent to submit arbitrability issues to an arbitrator,” but only

when the arbitration clause broadly requires arbitration of all disputes

between the parties); Flandreau Pub. Sch. Dist. #50-3 v. G.A. Johnson Constr.,

Inc., 701 N.W.2d 430, 437 n.6 (S.D. 2005) (rejecting “a per se finding of intent

to arbitrate arbitrability based solely upon the incorporation of AAA Rule 8 in

the agreement”).

14 Compare, e.g., In re Checking Acct. Overdraft Litig., 856 F. App’x 238,

244 (11th Cir. 2021) (holding incorporation of the AAA rules clearly and

unmistakably delegated arbitrability to the arbitrator even in a contract

involving unsophisticated parties), W. Va. CVS Pharmacy, 796 S.E.2d at 590

(same, applying Arizona law); Richardson, 811 F. App’x at 103–04 (holding

incorporation of the AAA rules constitutes clear and unmistakable evidence

that the parties agreed to delegate arbitrability, even for agreements involving

unsophisticated parties), Arnold v. Homeaway, Inc., 890 F.3d 546, 552–53 (5th

Cir. 2018) (same), Blanton, 962 F.3d at 851 (same, noting that “nothing in the

Federal Arbitration Act purports to distinguish between ‘sophisticated’ and

‘unsophisticated’ parties”), and Brennan v. Opus Bank, 796 F.3d 1125, 1130

(9th Cir. 2015) (explaining that its holding that sophisticated parties’

incorporation of the AAA rules clearly and unmistakably delegates

arbitrability to the arbitrator “does not foreclose the possibility that this rule

could also apply to unsophisticated parties or to consumer contracts”), with

Simply Wireless, 877 F.3d at 528 (holding that incorporation of the JAMS rules

delegates arbitrability to the arbitrator, but only “in the context of a

commercial contract between sophisticated parties”), Galilea, LLC v. AGCS

Marine Ins. Co., 879 F.3d 1052, 1061 (9th Cir. 2018) (“Because the parties here

are sophisticated, and because they incorporated AAA rules into their

arbitration agreement, they have clearly and unmistakably indicated their

19

relies on the agreement to compel arbitration of class-action claims, 15

and (3) the agreement to arbitrate applies only to some types of claims

and controversies and expressly carves out others. 16

intent to submit arbitrability questions to an arbitrator.”), Oracle Am., Inc. v.

Myriad Grp. A.G., 724 F.3d 1069, 1074–75 (9th Cir. 2013) (holding

incorporation of the UNCITRAL rules delegates arbitrability to the arbitrator,

at least “as long as an arbitration agreement is between sophisticated parties

to commercial contracts”), ROHM Semiconductor, 17 F.4th at 1383–84 (holding

that a contract between sophisticated parties incorporating the CCCP rules

clearly and unmistakably delegated arbitrability to the arbitrator), and Glob.

Client Sols., 367 P.3d at 369 (holding incorporation of the AAA rules did not

clearly and unmistakably delegate arbitrability to the arbitrator when the

dispute involved a consumer and a debt-relief organization, the AAA rules were

not part of the record, and neither party specified “which of the multiple sets

of commercial or consumer AAA rules are supposedly incorporated here”).

15 We recently held that the issue of whether an arbitration agreement

requires arbitration of class-wide claims “is more akin to what type of

controversy shall be arbitrated—a question for the courts—not a procedural

question presumptively for the arbitrator,” but the arbitration agreement in

that case did not require arbitration in accordance with the AAA or any similar

rules. Robinson, 590 S.W.3d at 523, 531. Some courts have held that the

incorporation of the AAA rules clearly and unmistakably delegates the issue of

arbitrability of class claims, see Jock v. Sterling Jewelers Inc., 942 F.3d 617,

623–24 (2d Cir. 2019); Dish Network L.L.C. v. Ray, 900 F.3d 1240, 1248 (10th

Cir. 2018); Spirit Airlines, Inc. v. Maizes, 899 F.3d 1230, 1233–34 (11th Cir.

2018); Wells Fargo Advisors, LLC v. Sappington, 884 F.3d 392, 398 (2d Cir.

2018), while others have held it does not, see Catamaran Corp. v. Towncrest

Pharmacy, 864 F.3d 966, 973 (8th Cir. 2017); Chesapeake Appalachia, LLC v.

Scout Petroleum, LLC, 809 F.3d 746, 762–63 (3d Cir. 2016); Del Webb Cmtys.,

Inc. v. Carlson, 817 F.3d 867, 877 (4th Cir. 2016); Reed Elsevier, Inc. ex rel.

LexisNexis Div. v. Crockett, 734 F.3d 594, 599 (6th Cir. 2013). Because this case

does not involve any class claims, we need not address that issue here.

16 We address this question further below.

20

4. Texas Courts of Appeals

The decisions of the Texas courts of appeals follow this same

pattern. Some have held that the parties’ incorporation of the AAA or

similar rules clearly and unmistakably delegates arbitrability to the

arbitrator,17 others have held it does not, at least for certain disputes, 18

and most have held it does so only when the arbitration agreement

17 See, e.g., Prestonwood Tradition, LP v. Jennings, 653 S.W.3d 436, 443

(Tex. App.—Dallas 2022, no pet.) (en banc) (holding incorporation of the AAA

rules clearly and unmistakably delegated arbitrability to the arbitrator);

HomeAdvisor, Inc. v. Waddell, No. 05-19-00669-CV, 2020 WL 2988565, at *5

(Tex. App.—Dallas June 4, 2020, no pet.) (mem. op.) (holding “a bilateral

agreement to arbitrate under the AAA rules constitutes clear and

unmistakable evidence of the parties’ intent to delegate the issue of

arbitrability to the arbitrator,” without discussing the agreement’s breadth);

Romero v. Herrera, No. 04-18-00845-CV, 2019 WL 2439107, at *4 (Tex. App.—

San Antonio June 12, 2019, no pet.) (“The AAA rules specifically empower the

arbitrator to decide issues of arbitrability and establish Romero and Herrera

‘agree[d] to arbitrate arbitrability.’”); Gilbert v. Rain & Hail Ins., No.

02-16-00277-CV, 2017 WL 710702, at *4 (Tex. App.—Fort Worth Feb. 23, 2017,

pet. denied) (mem. op.) (holding the arbitrator properly determined

arbitrability because the policy incorporated the AAA commercial arbitration

rules); Jody James Farms, JV v. The Altman Grp., Inc., 506 S.W.3d 595, 599–

600 (Tex. App.—Amarillo 2016) (holding incorporation of the AAA rules

constituted clear and unmistakable evidence that the parties to the policy

intended the arbitrator to decide arbitrability), rev’d on other grounds, 547

S.W.3d at 631–32; Schlumberger Tech. Corp. v. Baker Hughes Inc., 355 S.W.3d

791, 802 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (holding express

incorporation of the AAA rules is “clear and unmistakable evidence of the

parties’ intent to allow the arbitrator to decide such issues”).

18 See Haddock v. Quinn, 287 S.W.3d 158, 175 (Tex. App.—Fort Worth

2009, pet. denied) (holding incorporation of the AAA rules, “without more, does

not clearly and unmistakably manifest these parties’ intent to refer the issue

of waiver by litigation conduct to the arbitrator”).

21

applies broadly to all possible claims between the parties without

carving out any claims.19

19 See ALLCAPCORP, Ltd. Co. v. Sloan, No. 05-20-00200-CV, 2020 WL

6054339, at *5 (Tex. App.—Dallas Oct. 14, 2020, no pet.) (mem. op.) (holding

incorporation of the AAA rules did not clearly and unmistakably delegate

arbitrability to the arbitrator “when the parties agreed the arbitrator had

authority to decide only a limited subset of claims and also expressly negated

the arbitrator’s right to decide anything with respect to some claims”);

Lucchese Boot Co. v. Solano, 473 S.W.3d 404, 412–13 (Tex. App.—El Paso 2015,

no pet.) (same, because the agreement “placed substantive restraints on the

arbitrator’s power by limiting the scope of the arbitration agreement to include

only certain enumerated disputes and explicitly precluding submission of other

disputes to arbitration”); BossCorp, Inc. v. Donegal, Inc., 370 S.W.3d 68, 76

(Tex. App.—Houston [14th Dist.] 2012, no pet.) (“Where an arbitration

agreement contains carve-outs and exceptions providing judicial remedies for

disputes, something more than mere reference to the AAA Rules for the

conduct of the arbitration is needed to show that the parties clearly and

unmistakably intended to delegate arbitrability to the arbitrator instead of the

court.”); Burlington, 249 S.W.3d at 40–41 (same, when the agreement

“restricted the arbitrator’s reach only to specifically identified ‘audit disputes,’

and for specific amounts”).

Several other Texas courts have expressed the same limitation by

describing the rule as providing that incorporation of AAA or similar rules

delegates arbitrability to the arbitrator if the agreement includes a “broad”

arbitration clause or requires arbitration of “all claims between the parties.”

See Holifield v. Barclay Props., Ltd., No. 05-21-00239-CV, 2021 WL 4549498,

at *4 (Tex. App.—Dallas Oct. 5, 2021, pet. filed); Berry Y&V Fabricators, LLC

v. Bambace, 604 S.W.3d 482, 487 (Tex. App.—Houston [14th Dist.] 2020, no

pet.); Oxbow Calcining LLC v. Port Arthur Steam Energy, L.P., Nos. 09-18-

00359-CV, 09-18-00392-CV, 2018 WL 6542555, at *10 (Tex. App.—Beaumont

Dec. 13, 2018, no pet.); Kyani, Inc. v. HD Walz II Enters., Inc., No. 05-17-00486-

CV, 2018 WL 3545072, at *7 (Tex. App.—Dallas July 24, 2018, no pet.); Dow

Roofing Sys., LLC v. Great Comm’n Baptist Church, No. 02-16-00395-CV, 2017

WL 3298264, at *3 (Tex. App.—Fort Worth Aug. 3, 2017, pet. denied);

Trafigura Pte. Ltd. v. CNA Metals Ltd., 526 S.W.3d 612, 618 (Tex. App.—

Houston [14th Dist.] 2017, no pet.); Super Starr Int’l, LLC v. Fresh Tex

Produce, LLC, No. 13-17-00184-CV, 2017 WL 4054395, at *4 (Tex. App.—

Corpus Christi–Edinburg Sept. 14, 2017, no pet.) (mem. op.); Rent-A-Ctr. Tex.,

L.P. v. Bell, No. 09-16-00085-CV, 2016 WL 4499093, at *4 (Tex. App.—

22

C. General rule

We agree with the vast majority of courts that, as a general rule,

an agreement to arbitrate in accordance with the AAA or similar rules

constitutes a clear and unmistakable agreement that the arbitrator

must decide whether the parties’ disputes must be resolved through

arbitration.

To be sure, an agreement that merely refers to the AAA rules or

permits the parties to request assistance from the AAA does not bind

the parties to the AAA rules. See, e.g., Dist. No. 1, Pac. Coast Dist.,

Marine Eng’rs Beneficial Ass’n, AFL-CIO v. Liberty Mar. Corp.,

998 F.3d 449, 461–62 (D.C. Cir. 2021) (holding an agreement that

provided only that the parties may request the AAA to designate a

replacement arbitrator, without mentioning the AAA rules or stating

that arbitration must be conducted in accordance with them, did not

incorporate the rules by reference). But here, the System Operating

Agreement expressly states that arbitration must be conducted “in

accordance with the rules of the AAA,” and that the “procedure of the

arbitration proceedings shall be in accordance with the Commercial

Rules of the AAA.” [Emphases added.] By this language, the parties

incorporated the AAA rules into their arbitration agreement, and thus

the rules are binding, at least absent any conflict between the two. See

Beaumont Aug. 25, 2016, no pet.) (mem. op.); Aspri Invs., LLC v. Afeef, No.

04-10-00573-CV, 2011 WL 3849487, at *9 (Tex. App.—San Antonio Aug. 31,

2011, pet. dism’d), abrogated on other grounds by Hoskins v. Hoskins, 497

S.W.3d 490, 493 n.4, 496 (Tex. 2016); In re Rio Grande Xarin II, Ltd., Nos.

13-10-00115-CV, 13-10-00116-CV, 2010 WL 2697145, at *8 (Tex. App.—Corpus

Christi–Edinburg July 6, 2010, orig. proceeding) (mem. op.); Saxa Inc. v. DFD

Architecture Inc., 312 S.W.3d 224, 230 (Tex. App.—Dallas 2010, pet. denied).

23

Americo Life, Inc. v. Myer, 440 S.W.3d 18, 24 (Tex. 2014); see also

Commonwealth Edison Co. v. Gulf Oil Corp., 541 F.2d 1263, 1272–73

(7th Cir. 1976) (holding an agreement “to have any arbitration governed

by the rules of the AAA incorporated those rules into the agreement”).

As a result, the AAA rules are “part of” the parties’ agreement as if they

were set forth within the agreement itself. In re Bank One, N.A., 216

S.W.3d 825, 826 (Tex. 2007).

The AAA rules, in turn, provide that the arbitrator “shall have

the power to rule on his or her own jurisdiction, including any objections

with respect to the existence, scope, or validity of the arbitration

agreement or to the arbitrability of any claim or counterclaim.” A M. ARB.

ASS’N. R-7(a) (2013). Total E&P argues that this rule merely authorizes

an arbitrator to decide arbitrability when the parties have otherwise

agreed that the arbitrator should do so but does not independently grant

the arbitrator exclusive power to determine arbitrability or otherwise

deprive the courts of that power. Some courts have agreed with this

argument,20 as does today’s dissenting opinion. See post at ____ (BUSBY,

J., dissenting).

We do not, however, because it gives inadequate meaning to the

rule’s declaration that the arbitrator “shall have the power to rule on . . .

20 See, e.g., Taylor, 2020 WL 1248655, at *4 (holding the AAA rule does

not clearly and unmistakably delegate arbitrability to the arbitrator because

it “does not say that the arbitrator has the sole authority, the exclusive

authority, or anything like that”); Ajamian v. CantorCO2e, L.P., 137 Cal. Rptr.

3d 773, 787–90 (Cal. Ct. App. 2012) (same, reasoning that the AAA rule “tells

the reader almost nothing, since a court also has the power to decide such

issues, and nothing in the AAA rules states that the AAA arbitrator, as opposed

to the court, shall determine those threshold issues, or has exclusive authority

to do so”).

24

any objections with respect to the . . . arbitrability of any claim or

counterclaim.” Our conclusion might be different if the rule provided

that the arbitrator “may have the power,” or that the arbitrator “shall

have power,” but the rule in fact provides that the arbitrator “shall have

the power.” The verb “shall” in this sentence “evidences the mandatory

nature of the duty imposed.” Sw. Bell Tel., L.P. v. Emmett, 459 S.W.3d

578, 588 (Tex. 2015). And the use of the definite article “the” with the

singular noun “power” indicates exclusivity, limiting the delegation of

“the power” to the arbitrator. See, e.g., Phx. Network Techs. (Eur.) Ltd.

v. Neon Sys., Inc., 177 S.W.3d 605, 615 (Tex. App.—Houston [1st Dist.]

2005, no pet.) (holding that the “use of ‘shall’ generally indicates a

mandatory requirement,” and the use of the definite article “the” to

describe “the venue” instead of “a” venue “indicates that the parties

intended for the U.K. to be the exclusive venue”). 21

21 See also Del. Dep’t of Nat. Res. & Env’t Control v. Env’t Prot. Agency,

895 F.3d 90, 99 (D.C. Cir. 2018) (noting it “is ‘well established’ that ‘the’

‘particularizes the subject which it precedes’ and acts as a ‘word of limitation’”).

As many jurisdictions have agreed, it is “a rule of law well established that the

definite article ‘the’ particularizes the subject which it precedes” and “is a word

of limitation as opposed to the indefinite or generalizing force of ‘a’ or ‘an.’”

Brooks v. Zabka, 450 P.2d 653, 655 (Colo. 1969). The dissenting opinion

concedes that the word “can be a word of limitation,” but contends it is not a

word of “exclusion.” Post at ____ (BUSBY, J., dissenting). We agree with the

many court decisions holding otherwise. See, e.g., Dutcher v. Matheson,

840 F.3d 1183, 1197 (10th Cir. 2016) (holding a “statute’s use of the definite

article ‘the’ supports the idea of focusing the inquiry on the identification of

one state” (emphasis added)); Colorado v. Sunoco, Inc., 337 F.3d 1233, 1241

(10th Cir. 2003) (holding “use of this definite article suggests there will be but

a single ‘removal action’ and a single ‘remedial action’ per site” (emphases

added)); Am. Bus Ass’n v. Slater, 231 F.3d 1, 4 (D.C. Cir. 2000) (holding that,

by “preceding the words ‘remedies and procedures’ with the definite article

‘the,’ as opposed to the more general ‘a’ or ‘an,’ Congress made clear that it

25

As the Sixth Circuit explained when addressing this question, “in

law the expression of one thing often implies the exclusion of other

things.” Blanton, 962 F.3d at 845 (quoting Bruesewitz v. Wyeth LLC, 562

U.S. 223, 232–33 (2011)). In light of the rule’s mandatory and exclusive

language, we find that result to be more than merely implied here. The

understood [the statute’s] remedies to be exclusive” (emphasis added));

Astornet Techs. Inc. v. BAE Sys., Inc., 802 F.3d 1271, 1277 (Fed. Cir. 2015)

(holding a “statute’s use of the definite article in providing ‘the owner’s remedy’

and its statement that the remedy is for payment of the owner’s ‘entire

compensation’ . . . makes the remedy against the United States exclusive”

(second emphasis added)); Fairbrother v. Adams, 378 A.2d 102, 104 (Vt. 1977)

(holding a deed’s use of the definite article “the” “implies exclusivity” (emphasis

added)); see generally Builders Serv. Corp. v. Plan. & Zoning Comm’n, 545 A.2d

530, 539 (Conn. 1988) (“In statutory construction, unlike the definite article

‘the,’ which particularizes the words it precedes and is a word of limitation, the

indefinite article ‘a’ has an ‘indefinite or generalizing force.’”); Allstate Ins. Co.

v. Freeman, 443 N.W.2d 734, 754 (Mich. 1989) (holding “the word ‘a’ or ‘an’ in

front of the word ‘insured’ . . . unambiguously means ‘any insured’”); Nelson v.

McAlester Fuel Co., 891 N.W.2d 126, 132 (N.D. 2017) (holding that construing

the phrase “the address of the mineral interest owner . . . shown of record” to

“mean any address shown of record would render meaningless the legislature’s

use of ‘the’ before ‘address of the mineral interest owner’”); BP Am. Prod. Co.

v. Madsen, 53 P.3d 1088, 1091–92 (Wyo. 2002) (“Other courts agree that, in

construing statutes, the definite article ‘the’ is a word of limitation as opposed

to the indefinite or generalizing force of ‘a’ or ‘an.’”).

Of course, other language creating the context of the use of the definite

article “the” can alter this result. See, e.g., Green Valley Special Util. Dist. v.

City of Cibolo, 866 F.3d 339, 342 (5th Cir. 2017) (holding use of “the” in a

federal statute was “not decisive” in light of context), abrogated by Green Valley

Special Util. Dist. v. City of Schertz, 969 F.3d 460 (5th Cir. 2020). But as the

Pennsylvania Supreme Court held long ago, the “use of the definite article,

classed by modern grammarians as a limiting adjective, is presumptively

indicative of an intent different from, and therefore exclusive of, that which

would have been revealed by the use of an indefinite phrase.” Fry v. Pa. Tr.

Co., 46 A. 10, 10 (Pa. 1900) (emphasis added). Here, we have identified no

contextual language within the AAA rules or within the System Operating

Agreement that would rebut that presumption and require a different result.

26

AAA rule mandates that the arbitrator have “the power” to decide

arbitrability issues and—as the Florida Supreme Court recently

explained when it rejected this argument—“the power to decide is the

power to decide.” Airbnb, Inc. v. Doe, 336 So. 3d 698, 705 (Fla. 2022)

(quoting Doe v. Natt, 299 So. 3d 599, 611 (Fla. Dist. Ct. App. 2020)

(Villanti, J., dissenting), quashed and remanded sub nom. Airbnb,

336 So. 3d at 705). We conclude that, by providing that the arbitrator

“shall have the power” to determine the arbitrability of any claim, the

rule clearly and unmistakably delegates that decision exclusively to the

arbitrator.22

22 The dissenting opinion suggests that an agreement to delegate

arbitrability issues to an arbitrator merely grants the arbitrator “primary”

authority and does not deprive courts of “the ability to vacate an arbitration

award ‘where the arbitrators exceeded their powers.’” Post at ____ (BUSBY, J.,

dissenting) (first quoting First Options, 514 U.S. at 942; then 9 U.S.C.

§ 10(a)(4)). It is true, of course, that courts can ultimately review an arbitrator’s

arbitrability decision, but in doing so they “must defer to an arbitrator’s

arbitrability decision,” First Options, 514 U.S. at 943, and may “set that

decision aside only in very unusual circumstances,” id. at 942. When the

parties agree to delegate arbitrability issues to the arbitrator, “a court

possesses no power to decide the arbitrability issue” in the first instance. Henry

Schein, 139 S. Ct. at 529 (emphasis added).

The dissenting opinion also suggests that, by amending rule 7(a) last

year to add language providing that the arbitrator shall have the power to

decide arbitrability issues “without any need to refer such matters first to a

court,” the AAA somehow “confirms” that the rule only grants arbitrators

power to decide arbitrability issues “that may arise during an arbitration.” Post

at ____ (BUSBY, J., dissenting). Whether the amendment actually limits the

arbitrator’s power in that way (an issue we need not decide here), we must

apply the rule as it existed before the amendment, and the lack of any such

limiting language in the pre-amended rule further confirms that the rule

granted arbitrators the exclusive power to decide arbitrability issues without

any such limit.

27

An additional consideration helps confirm this result. As we have

explained, the vast majority of federal circuit courts and other state

supreme courts have reached this same conclusion. As the Delaware

Supreme Court recognized when it did so, “adopting a widely held

interpretation of the applicable rule” benefits our State’s jurisprudence

by promoting consistency and predictability, at least “as long as that

interpretation is not unreasonable.” James & Jackson, 906 A.2d at 80.23

That is not to say this Court should or will adopt incorrect

constructions of written language simply because all or most other

jurisdictions have done so. But when these parties entered into the

System Operating Agreement on January 1, 2007, numerous federal

circuits and other state supreme courts had already held that an

agreement to arbitrate in accordance with the AAA or similar rules

clearly and unmistakably delegates arbitrability issues to the

arbitrator.24 The only possible exceptions existed within the Seventh

23 After adopting the majority view as a general rule, the Delaware

Supreme Court nevertheless went on to hold that the agreement at issue there

did not clearly and unmistakably delegate arbitrability to the arbitrator

because it excluded claims for injunctive relief and specific performance from

the arbitration agreement. James & Jackson, 906 A.2d at 80–81. We discuss

the effect of such carve-out clauses below.

24 See, e.g., Apollo Comput., 886 F.2d at 473; Societe Generale de

Surveillance, 643 F.2d at 869; Contec Corp. v. Remote Sol. Co., 398 F.3d 205,

211 (2d Cir. 2005); Shaw Grp. Inc. v. Triplefine Int’l Corp., 322 F.3d 115, 120–

21 (2d Cir. 2003); PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1199–1200 (2d Cir.

1996); FSC Sec. Corp. v. Freel, 14 F.3d 1310, 1312–13 (8th Cir. 1994);

Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1373 (Fed. Cir. 2006); Keeney,

570 N.W.2d at 78; Morrell & Co. v. Lehr Constr. Corp., 287 A.D.2d 257, 257

(N.Y. 2001).

28

Circuit.25 Like the Sixth Circuit, we find the contemporaneous existence

of these clear authorities provides a strong indication of how parties

would have understood incorporation of the AAA rules when these

parties entered into the System Operating Agreement. See Blanton, 962

F.3d at 851 (noting that “at the time [the party] signed his arbitration

agreement, he not only had the benefit of the text of the agreement but

also judicial precedent from both his regional circuit and a local state

court telling him that the incorporation of arbitral rules can provide

‘clear and unmistakable’ evidence that the parties agreed to arbitrate

‘arbitrability’”).

We thus hold that, as a general rule, an agreement to arbitrate

disputes in accordance with rules providing that the arbitrator “shall

have the power” to determine “the arbitrability of any claim”

incorporates those rules into the agreement and clearly and

unmistakably demonstrates the parties’ intent to delegate arbitrability

issues to the arbitrator.

III.

Limited Arbitrability and Carve-Out Clauses

Total E&P argues that this general rule does not apply here

because the parties did not broadly agree to arbitrate any and all

possible controversies, but instead agreed to arbitrate only certain

controversies and carved out others. Specifically, Total E&P notes that

the System Operating Agreement requires arbitration of disputes that

“arise[] . . . out of” that Agreement, which Total E&P contends is a

25 See Reliance Ins., 382 F.3d at 678–79; Miller, 139 F.3d at 1134; Schell,

53 F.3d at 809; Sorrells, 957 F.2d at 514 n.6; but see Taylor, 2020 WL 1248655,

at *4 (concluding that “the Seventh Circuit has not addressed the point”).

29

narrower subset of all possible disputes “concerning,” “related,” or

“connected” to the Agreement. According to Total E&P, because the

parties agreed to arbitrate only a limited category of disputes “in

accordance with the AAA rules,” the rules only apply if the dispute falls

within that category. In other words, according to Total E&P, rule 7(a)

does not apply unless the dispute in fact “arises out of” the System

Operating Agreement, so courts must first make that determination

before the rule can apply and require the arbitrator to make it.

In response, MP Gulf argues that “arising out of” encompasses a

sufficiently broad array of disputes and, in any event, the System

Operating Agreement broadly expands the universe of arbitrable claims

far beyond those “arising out of” the Agreement by expressly including

disputes that arise out of “the alleged breach” of the Agreement, “any

tort in connection therewith,” or “the refusal to perform the whole or any

part thereof.” The court of appeals generally agreed with MP Gulf,

concluding that, “by its plain language, the arbitration provision is much

broader than Total claims.” 647 S.W.3d at 101.

We need not decide whether the arbitration agreement is

“sufficiently” broad, however, because we conclude that any limitation

contained within these parties’ arbitration agreement does not affect the

agreement’s clear and unmistakable delegation of arbitrability issues to

the arbitrator. Although we agree that parties can contractually limit

their delegation of arbitrability issues to only certain claims and

controversies, we do not agree that the arbitration clause contained

within the System Operating Agreement accomplishes that result.

30

As mentioned above, other courts have reached various

conclusions on this issue. Some have concluded that a broad agreement

to arbitrate any and all disputes, even without incorporating the AAA or

similar rules, clearly and unmistakably delegates arbitrability to the

arbitrator because “any and all” includes a dispute over whether a claim

is arbitrable.26

Others have held that an agreement clearly and unmistakably

delegates arbitrability issues to the arbitrator only if it both incorporates

the AAA or similar rules and broadly requires arbitration of any and all

disputes between the parties, without carving out any particular

disputes.27 These courts generally agree with Total E&P’s argument

26 See, e.g., Shaw Grp., 322 F.3d at 120–21 (stating that agreement to

submit “all disputes . . . concerning or arising out of” the agreement to

arbitration clearly and unmistakably delegated arbitrability to the arbitrator);

Bybyk, 81 F.3d at 1199 (“The words ‘any and all’ are elastic enough to

encompass disputes over whether a claim is timely and whether a claim is

within the scope of arbitration.”); but see McLaughlin Gormley King Co. v.

Terminix Int’l Co., 105 F.3d 1192, 1194 (8th Cir. 1997) (holding a “broadly

worded” arbitration clause did not delegate arbitrability to the arbitrator).

27 See Shaw Grp., 322 F.3d at 124–25 (“In sum, because the parties’

arbitration agreement is broadly worded to require the submission of ‘all

disputes’ concerning the Representation Agreement to arbitration, and

because it provides for arbitration to be conducted under the rules of the ICC,

which assign the arbitrator initial responsibility to determine issues of

arbitrability, we conclude that the agreement clearly and unmistakably

evidences the parties’ intent to arbitrate questions of arbitrability.”); James &

Jackson, 906 A.2d at 80–81 (holding that when an agreement “does not

generally refer all controversies to arbitration, . . . something other than the

incorporation of the AAA rules would be needed to establish that the parties

intended to submit arbitrability questions to an arbitrator”); Nethery, 257 So.

3d at 274–75 (holding incorporation of the AAA rules did not delegate

arbitrability because the agreement carved out claims for injunctive relief and

specific performance, even though the plaintiff did not assert such claims); see

also Texas cases cited supra note 19.

31

that the AAA rules only apply—and thus only require the arbitrator to

decide arbitrability—if the parties have in fact agreed to arbitrate their

dispute.

The Second Circuit, for example, reasoned that when an

agreement requires arbitration of only certain claims, while carving out

others, the issue of “whether the AAA Rules, including Rule 7(a), apply

turns on the conditional premise that the dispute falls within” that

category of claims. DDK Hotels, LLC v. Williams-Sonoma, Inc.,

6 F.4th 308, 320–21 (2d Cir. 2021). “If it does not, then the AAA Rules

do not govern and no delegation of authority to the arbitrator to resolve

questions of arbitrability arises.” Id. at 321. In that court’s view,

anything other than a broad, all-encompassing arbitration agreement

cannot clearly and unmistakably delegate arbitrability to the arbitrator

because the “narrow scope of the arbitration provision . . . obscures the

import of the incorporation of the AAA Rules and creates ambiguity as

to the parties’ intent to delegate arbitrability to the arbitrator.” Id.

As mentioned, the Fifth Circuit reached a similar result in Henry

Schein, concluding that because the agreement there excepted actions

seeking injunctive relief from the agreement to arbitrate, it also at least

potentially excepted such claims from the parties’ agreement to have the

arbitrator decide whether claims were subject to arbitration. 935 F.3d

at 281–82. And as explained, the Supreme Court agreed to review that

holding (while at the same time declining to review the question of

whether incorporation of the AAA rules delegates arbitrability to the

arbitrator in the first place), but later—after oral argument—dismissed

the petition as improvidently granted. See Henry Schein, 141 S. Ct. at

32

107 (granting certiorari); Archer & White Sales, 141 S. Ct. at 113

(denying conditional cross-petition); Henry Schein, 141 S. Ct. at 656

(dismissing petition as improvidently granted).

We reject this position for at least two reasons. First, as the

Florida Supreme Court recently explained, holding that rule 7(a) only

applies if a court first determines that the claim is subject to the

arbitration agreement would render the rule essentially meaningless.

Airbnb, 336 So. 3d at 705. Because “[t]he question of whether a claim is

arbitrable must, by necessity, be determined before the commencement

of arbitration,” a rule that requires the arbitrator to determine whether

the claim is arbitrable “can only apply at the outset of [the] claim, not

after the arbitration has already commenced.” Id. (quoting Natt,

299 So. 3d at 611 (Villanti, J., dissenting)). A rule that requires

arbitrators to determine arbitrability only after a court has already

determined arbitrability essentially has no effect at all.

But second, and more importantly, we reject Total E&P’s position

because it ignores the severability rule and conflates the parties’

agreement to arbitrate disputes with their agreement to delegate

arbitrability issues to the arbitrator. In reaching this conclusion, we are

persuaded by the reasoning of several other courts, including the United

States Supreme Court.

In Oracle, for example, the parties’ agreement provided that

(1) “any claim arising out of the Source License shall be settled by

arbitration,” but (2) the courts shall have exclusive jurisdiction over “any

dispute relating to [a] party’s Intellectual Property Rights or with

respect to [a party’s] compliance with the TCK license,” and

33

(3) arbitration “shall” be administered by the AAA and “in accordance

with” the UNCITRAL rules. 724 F.3d at 1075, 1077. Myriad argued that

the agreement delegated the arbitrability issue to the arbitrator because

the parties’ dispute arose out of the Source License, while Oracle argued

that the agreement required the court to decide the arbitrability issue

because the dispute related to intellectual-property rights and the TCK

License. Id. at 1075–76. Although both parties were technically correct

(that is, their dispute both arose out of the Source License and related

to the TCK License), the Ninth Circuit concluded that, by requiring

arbitration in accordance with the UNCITRAL rules, the agreement

clearly and unmistakably required the arbitrators to decide the

arbitrability issue. Id. at 1076. In the court’s view, Oracle’s argument

that the carve-out for disputes related to intellectual-property rights

and the TCK License prevented a clear and unmistakable delegation of

arbitrability issues to the arbitrator “conflates the scope of the

arbitration clause, i.e., which claims fall within the carve-out provision,

with the question of who decides arbitrability.” Id.

Similarly, in Ally Align Health, the parties’ agreement

(1) required arbitration of all disputes, and (2) required the arbitrator to

“adopt and follow” the AAA rules, but (3) provided that any party could

seek equitable relief in a court of competent jurisdiction. 574 S.W.3d at

755. When Signature Advantage filed suit seeking both legal and

equitable relief, Ally Align moved to compel arbitration of all claims. Id.

The trial court granted the motion as to the claims for legal relief but

denied it as to claims for equitable relief. Id. The Kentucky Supreme

Court reversed, holding that the trial court should have compelled

34

arbitration of all of the claims because the “carve-out provision for

certain claims to be decided by a court does not negate the clear and

unmistakable mandate of the AAA’s Rules that the initial arbitrability

of claims is to be determined by the arbitrator, not the courts.” Id. at

754–55. Relying in part on Oracle, the court held that the issue of

“whether Signature Advantage asserts a true claim for equitable relief

or such assertion is a facade to avoid arbitration is a determination to

be made by the arbitrator per the contract’s adoption of the AAA’s

Rules.” Id. at 757. Holding otherwise, the court explained, “would

conflate the two separate and distinct questions of (1) who decides what

claims are arbitrable with (2) what claims are arbitrable.” Id. at 758. In

the court’s view, the parties agreed (by incorporating the AAA rules)

that all disputes over arbitrability would be resolved by the arbitrators,

and “the effect of the carve-out provision is to state that if an arbitrator

determines that Signature Advantage has asserted a claim for equitable

relief that is exempted from arbitration by the carve-out provision in the

contract, then the arbitrator must refer that claim to a court if Signature

Advantage so desires.” Id.

The Sixth Circuit agreed with this reasoning in Blanton, which

involved an agreement to arbitrate “a wide array of issues related to [the

plaintiff’s] employment” and to do so “in accordance with” the AAA rules.

962 F.3d at 844–45. The employee argued that because the agreement

did not cover all possible claims between the parties, “a court must first

determine whether the agreement covers a particular claim before the

arbitrator has any authority to address its jurisdiction” because the

incorporation of the AAA rules grants the arbitrator “the power to

35

determine the scope of the agreement only as to claims that fall within

the scope of the agreement.” Id. at 847. The court rejected that argument

because it “would render the AAA’s jurisdictional rule superfluous.” Id.

The court reasoned that, by generally requiring arbitration in

accordance with the AAA rules, the agreement did not carve claims out

of “the provision that incorporates the AAA Rules.” Id. at 848. “So the

carveout goes to the scope of the agreement [to arbitrate]—a question

that the agreement otherwise delegates to the arbitrator—not the scope

of the arbitrator’s authority to decide questions of ‘arbitrability.’” Id.

Notably, the Supreme Court denied the employee’s petition for writ of

certiorari on January 25, 2021, the same day it dismissed the Henry

Schein petition as improvidently granted. See Piersing, 141 S. Ct. at

1268.

Most recently, the Eleventh Circuit also agreed with this

reasoning in WasteCare Corp. v. Harmony Enterprises, Inc.,

822 F. App’x 892 (11th Cir. 2020), cert. denied, 141 S. Ct. 1383 (2021).

The arbitration agreement at issue in WasteCare provided that “any

controversy or claim (excepting claims as to which party may be entitled

to equitable relief) . . . shall be settled by arbitration in accordance with

the then current commercial rules of arbitration of the [AAA].” Id. at

894. When WasteCare filed suit seeking equitable relief, Harmony

moved to compel arbitration on the ground that WasteCare’s claims

were actually breach-of-contract claims “mischaracterized” as equitable

claims. Id. The district court denied the motion, but the Eleventh Circuit

reversed, holding that by agreeing to arbitrate in accordance with the

AAA rules, the parties “clearly and unmistakably delegated questions of

36

arbitrability to an arbitrator.” Id. at 895–96. The court concluded that

the agreement’s “carve-out for equitable relief does not affect this

analysis” because, “[a]lthough WasteCare’s claims may indeed be

equitable ones, that ‘confuses the question of who decides arbitrability

with the separate question of who prevails on arbitrability.’” Id. at 896

(quoting Henry Schein, 139 S. Ct. at 531). Because “the parties expressly

delegated the arbitrability issue to an arbitrator,” the court concluded,

“the arbitrator must decide whether WasteCare can litigate its claims

in district court.” Id.

The Eleventh Circuit’s reliance on the Supreme Court’s decision

in Henry Schein is particularly instructive. The agreement in Henry

Schein provided: “Any dispute arising under or related to this

Agreement (except for actions seeking injunctive relief and disputes

related to trademarks, trade secrets, or other intellectual property of

[Henry Schein]), shall be resolved by binding arbitration in accordance

with the arbitration rules of the [AAA].” 139 S. Ct. at 528. When Archer

and White sued asserting antitrust violations and seeking both damages

and injunctive relief, Henry Schein moved to compel arbitration. Id.

Archer and White objected, “arguing that the dispute was not subject to

arbitration because Archer and White’s complaint sought injunctive

relief, at least in part.” Id.

Henry Schein argued that the agreement’s incorporation of the

AAA rules required the court to refer the case to arbitration so that the

arbitrators could resolve the arbitrability dispute, but Archer and White

countered by arguing that Henry Schein’s contention that the

agreement delegated arbitrability to the arbitrators was “wholly

37

groundless.” Id. The district court agreed, and the Fifth Circuit affirmed,

but the Supreme Court reversed, holding that a court must enforce an

agreement that delegates arbitrability to the arbitrator even if the court

believes that the arbitrability argument is wholly groundless. Id.

The Supreme Court made it clear in Henry Schein that it was

expressing “no view about” whether the agreement “in fact delegated the

arbitrability question to an arbitrator” because the Fifth Circuit had not

yet decided that issue. Id. at 531. But as the Eleventh Circuit observed

in WasteCare, the district court in Henry Schein thought the argument

that the claims were arbitrable was wholly groundless precisely because

the claims “clearly fit into the carve-out provision” and thus were not

subject to the arbitration agreement. WasteCare, 822 F. App’x at 896.

Relying on the wholly groundless exception, the district court decided

the arbitrability issue in Henry Schein based on the existence of the

carve-out provision. By doing so, the Supreme Court explained, the

district court “confuse[d] the question of who decides arbitrability with

the separate question of who prevails on arbitrability.” Henry Schein,

139 S. Ct. at 531.

We find these cases and others like them28 persuasive. As the

Supreme Court emphasized in Henry Schein, our analysis of this issue

28 See Arnold, 890 F.3d at 552–53 (holding incorporation of the AAA

rules clearly and unmistakably delegated arbitrability to the arbitrator even

though the agreement excluded claims that qualified for disposition in

small-claims court, at least when the party did not contend that his claims fit

within that exclusion); TETRA Techs., Inc., 424 S.W.3d at 308, 310–11 (holding

a broad clause incorporating the AAA rules and requiring arbitration “to the

exclusion of any court of law” clearly and unmistakably delegated arbitrability

to the arbitrator, despite a severability clause and default provision “allowing

resort to all remedies at law or in equity”).

38

must carefully distinguish between “the question of who decides

arbitrability” and “the separate question of who prevails on

arbitrability”—that is, the question of whether the claims must be

arbitrated. Id. As explained above, because an agreement to arbitrate is

severable from a broader contract that contains it, courts must require

arbitration of challenges to the broader contract but must themselves

decide challenges to the arbitration agreement unless the parties clearly

and unmistakably agreed otherwise. See Rent-A-Ctr., 561 U.S. at 70–71;

Baby Dolls, 642 S.W.3d at 586. But as the Supreme Court confirmed in

Rent-A-Center, this severability rule applies not only to a broader

contract and an arbitration agreement contained within it, but also to

an arbitration agreement and a provision contained within it that

delegates arbitrability issues to the arbitrators. Rent-A-Cntr., 561 U.S.

at 71–72.

The parties in Rent-A-Center entered into a stand-alone

agreement to arbitrate all disputes arising out of an employment

relationship. Id. at 65–66. That agreement included a delegation

provision requiring the arbitrator to resolve any dispute over the

arbitration agreement. Id. at 66. When the employee later sued to

challenge the arbitration agreement, asserting that it was

unconscionable and therefore unenforceable, the district court held that

only the arbitrator could hear that claim, but the Ninth Circuit reversed,

holding that the district court had to decide the unconscionability claim

as a threshold issue because, if the agreement was in fact

unconscionable, the employee could not have “meaningfully assent[ed]”

to it or to the delegation provision contained within it. Id. at 67.

39

The Supreme Court reversed, holding that because the provision

delegating the arbitrability issue to the arbitrator was severable from

the broader arbitration agreement, and because the employee did not

challenge the validity of the delegation provision itself, the court was

required to enforce the delegation provision and require the arbitrator

to decide whether the parties had agreed to arbitrate the

unconscionability claim. Id. at 71–72. The Court explained that the fact

that the broader contract was itself an arbitration agreement “makes no

difference” in the proper application of the severability rule because the

application of that rule “does not depend on the substance of” the

broader contract. Id. at 72. Because the employee challenged only the

broader arbitration agreement and not the delegation provision itself,

the court was required to enforce the delegation provision and leave it

to the arbitrator to decide whether the unconscionability claim rendered

the arbitration agreement unenforceable. Id.

As applied here, Rent-A-Center teaches that, under the

severability rule, not only is the broader contract (the System Operating

Agreement) severable from the provision within it requiring arbitration

of claims arising out of that Agreement (article 16.16), but that

arbitration provision is in turn severable from the provision within it

that delegates arbitrability issues to the arbitrators (the provision

incorporating the AAA rules). So we must carefully distinguish between

the parties’ disputes over (1) the scope of the arbitration provision (what

40

it includes and carves out) and (2) the delegation provision (who decides

the scope of the arbitration provision).29

29 The dissenting opinion contends that Rent-A-Center provides no

guidance here because the agreement in that case did not reference or

incorporate the AAA rules and the parties here challenge only the scope—as

opposed to the validity—of their arbitration agreement. Post at ___, ____

(BUSBY, J., dissenting). But the incorporation of the AAA rules, as we have

explained, merely constitutes a means by which parties can clearly and

unmistakably agree to delegate arbitrability issues to the arbitrator. Whether

they agree to such a delegation by incorporating the AAA rules (as here) or by

expressly stating that agreement within their contract (as in Rent-A-Center)

does not affect the severability of the delegation agreement from the

arbitration agreement that contains it. Nor does the fact that Total E&P

challenges the scope, as opposed to the validity, of the arbitration agreement

affect the analysis because “[a]pplication of the severability rule does not

depend on the substance of the remainder of the contract.” Rent-A-Ctr., 561

U.S. at 72. Arbitrability issues include both “questions regarding the existence

of a legally binding and valid arbitration agreement, as well as questions

regarding the scope of a concededly binding arbitration agreement,” and courts

must decide both types of questions unless the parties have agreed to delegate

arbitrability issues to the arbitrator. Id. at 78 (Stevens, J., dissenting). But

both types of issues are questions of arbitrability, which Rent-A-Center teaches

are severable from the question of whether the parties delegated those

arbitrability issues to the arbitrator.

The dissenting opinion also asserts that this case meaningfully differs

from Rent-A-Center and the other cases we follow because the agreement here

contains expressly conditional “If” language that creates a “condition precedent

to arbitrators acquiring the power to decide anything at all.” Post at ____

(BUSBY, J., dissenting). We disagree for two reasons. First, the “If” language in

the System Operating Agreement is not as expressly conditional as the

dissenting opinion suggests. In article 16.16, the agreement first provides,

without using any conditional language, that “[a]ny dispute between the

Parties concerning this Agreement . . . shall be resolved under the mediation

and binding arbitration procedures of this Article 16.16.” [Emphasis added.]

Article 16.16 then requires the parties to attempt to resolve any dispute

through negotiations and, “[i]f any Party believes further negotiations are

futile,” then through mediation. Article 16.16 then ends by providing: “If the

dispute has not been resolved pursuant to mediation within sixty (60) days

after initiating the mediation process, the dispute shall be resolved through

41

binding arbitration, as follows.” What “follows” first is article 16.16.1, which

provides, “If any dispute or controversy arises between the Parties out of this

Agreement, the alleged breach thereof, or any tort in connection therewith, or

out of the refusal to perform the whole or any part thereof, and the Parties are

unable to agree with respect to the matter or matters in dispute or controversy,

the same shall be submitted to arbitration before a panel of three

(3) arbitrators in accordance with the rules of the AAA and the provisions in

this Article 16.16.” And then article 16.16.2 provides, without including any

conditional language, that “[t]he procedure of the arbitration proceedings shall

be in accordance with the Commercial Rules of the AAA.” Reading articles

16.16, 16.16.1, and 16.16.2 together in context reveals the parties’ agreement

that “any” unresolved controversy concerning or arising out of the System

Operating Agreement would be resolved through arbitration in accordance

with the AAA rules and procedures.

Second, and more importantly, even if we focus on the “If” language

contained only within article 16.16.1, that language is no more or less

conditional than the language contained within the agreements at issue in the

decisions we follow here. In Oracle, for example, the effect of the parties’

agreement to arbitrate “any claim arising out of the Source License” and to

grant courts exclusive jurisdiction over any “dispute relating to . . . Intellectual

Property Rights” was that courts would have jurisdiction only “if” the dispute

involved Intellectual Property Rights. 724 F.3d at 1076. Similarly, in Ally

Align, the agreement requiring arbitration of all disputes but permitting the

parties to seek equitable relief in court could only be construed to mean that a

party could sue in court only “if” it sought equitable relief. 574 S.W.3d at 757.

In Blanton, the agreement to arbitrate only certain issues meant that the

parties did not have to arbitrate “if” the dispute involved other issues. 962 F.3d

at 848. And in WasteCare, the agreement to arbitrate any claim “excepting

claims as to which party may be entitled to equitable relief” meant that the

parties did not have to arbitrate “if” the claim could support equitable relief.

822 F. App’x at 894. As here, those agreements required any arbitration to be

conducted in accordance with the AAA or similar rules, yet the courts rejected

the argument that those rules applied only “if” the claims at issue fell within

the scope of the arbitration agreement. Instead, they agreed with the Supreme

Court’s explanation in Henry Schein that applying the scope of the limited or

conditional arbitration agreement to the delegation agreement would violate

the severability rule and thereby “conflate” or “confuse” the question of which

claims are arbitrable with the separate question of who decides arbitrability.

See Oracle, 724 F.3d at 1076; Ally Align, 574 S.W.3d at 758; WasteCare, 822 F.

App’x at 896 (quoting Henry Schein, 139 S. Ct. at 531).

42

Here, the delegation provision is the clause that incorporates the

AAA rules, and nothing in that provision or in those rules limits the

scope of the delegation. Total E&P contends that the arbitration clause

limits the scope of the delegation by limiting the claims that must be

arbitrated to those “arising out of” the Agreement. But under the

severability rule, our conclusion that the delegation provision (the

incorporation of the AAA rules) clearly and unmistakably delegates

arbitrability issues to the arbitrator requires that we enforce that

provision as written and allow the arbitrator to decide the scope of the

arbitration provision. Rent-A-Ctr., 561 U.S. at 71–72. As the Sixth

Circuit explained in Blanton:

[T]o the extent that [the] arbitration

agreement carves out certain claims from

arbitration, it does so from the [arbitration]

agreement in general, not from the provision

that incorporates the AAA Rules. So the

carveout goes to the scope of the [arbitration]

agreement—a question that the agreement

otherwise delegates to the arbitrator—not the

scope of the arbitrator’s authority to decide

questions of “arbitrability.”

962 F.3d at 848.30

30 See generally Tamar Meshel, “A Doughnut Hole in the Doughnut’s

Hole”: The Henry Schein Saga and Who Decides Arbitrability, 73 RUTGERS U.L.

REV. 83, 97 (2020) (“According to the delegation principle, . . . a challenge to

the validity of the delegation clause itself is to be resolved by the court while a

challenge to the arbitration agreement in which the delegation clause is

contained is to be resolved by the arbitrator.”); see also Tamar Meshel, Digging

A Deeper Hole in the Doughnut’s Hole: SCOTUS and Who Decides Arbitrability,

2021 U. ILL. L. REV. ONLINE 158, 165 (2021) (“[I]f the court finds that

incorporating the AAA rules constitutes clear and unmistakable evidence that

43

We thus conclude that the fact that the parties’ arbitration

agreement may cover only some disputes while carving out others does

not affect the fact that the delegation agreement clearly and

unmistakably requires the arbitrator to decide whether the present

disputes must be resolved through arbitration.

IV.

The Applicable Agreement

Having concluded that the delegation provision contained within

the arbitration agreement, which in turn is contained within the System

Operating Agreement, clearly and unmistakably requires the arbitrator

to decide questions of arbitrability, we are left with Total E&P’s

argument that the System Operating Agreement does not apply in this

case at all. More specifically, Total E&P contends that the System

Operating Agreement’s arbitration provision is irrelevant here because

it filed this suit seeking only a construction of the Cost Sharing

Agreement, which does not contain an arbitration clause.

The parties’ arguments on this point are extensive and detailed. 31

But we need not address them all because we again agree with the court

the parties intended to delegate arbitrability questions, the court should refer

the scope question to the arbitrator.”).

31 Total E&P contends, for example, that the System Operating

Agreement does not incorporate the Cost Sharing Agreement as an exhibit and

the Cost Sharing Agreement is therefore not part of the “Agreement” to which

the System Operating Agreement’s arbitration provision refers. MP Gulf notes,

however, that the Cost Sharing Agreement expressly incorporates the System

Operating Agreement “for all purposes” and makes it a “part of” the Cost

Sharing Agreement, and it contends that the arbitration agreement is

therefore “part of” the Cost Sharing Agreement. In response, Total E&P

contends that, even if the System Operating Agreement is “part of” the Cost

44

of appeals, which concluded that Total E&P’s position “ignores the

reasoning of the arbitration provision and that arbitrability, including

which agreement is at issue, has been delegated to the arbitrators.”

647 S.W.3d at 102 n.4; see also id. at 102 n.5 (“[W]hether the dispute

arises under the Chinook Agreement or the [System Operating

Agreement], under this broad arbitration provision, is a determination

of arbitrability to be made by the arbitrator.”).

We recognize that because arbitration is a matter of contract,

courts must decide in the first instance whether a valid arbitration

agreement exists. Henry Schein, 139 S. Ct. at 530. Total E&P argues

that no valid arbitration agreement exists as to the claims it has

asserted in this suit. See, e.g., Field Intel. Inc v. Xylem Dewatering Sols.

Inc., 49 F.4th 351, 356–57 (3d Cir. 2022) (holding that a court was

required to decide whether parties superseded a valid arbitration

agreement by entering into a subsequent agreement). But this

argument collapses two separate inquiries.

Sharing Agreement, it still only requires AAA arbitration of claims “arising out

of” the System Operating Agreement, which does not include the Cost Sharing

Agreement.

Meanwhile, MP Gulf contends that Total E&P’s claims nevertheless

“arise out of” the System Operating Agreement because Total E&P filed this

suit only as a defense against MP Gulf’s demand that Total E&P pay $41

million, which MP Gulf contends is an obligation the System Operating

Agreement imposes. According to MP Gulf, these claims ultimately arise out

of the System Operating Agreement because it is that Agreement, not the Cost

Sharing Agreement, that “authorized [MP Gulf] to invoice the $41 million in

costs, obligates Total [E&P] to pay them, and provides [MP Gulf’s] remedies

when Total [E&P] ‘fails to pay.’” Although Total E&P agrees that its “ultimate

payment obligation is enforced through the System Operating Agreement,” it

contends that the claims it filed here—to construe the Cost Sharing

Agreement—nevertheless do not arise out of the System Operating Agreement.

45

“A party seeking to compel arbitration must establish the

existence of a valid arbitration agreement and that the claims at issue

fall within the scope of that agreement.” Henry v. Cash Biz, LP,

551 S.W.3d 111, 115 (Tex. 2018). This is a two-step process, requiring

the party to “first establish the existence of an arbitration agreement”

and then establish that “the arbitration agreement covers” the claims

asserted. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 753 (Tex. 2001).

Importantly, an arbitration agreement does not “have to be included in

each of the contract documents it purports to cover,” and “[s]o long as

the parties agreed to arbitrate this dispute, it does not matter which

document included that agreement.” In re AdvancePCS Health L.P.,

172 S.W.3d 603, 606 (Tex. 2005); see also Romero v. Herrera, No.

04-18-00845-CV, 2019 WL 2439107, at *3 (Tex. App.—San Antonio June

12, 2019, no pet.) (“[T]he scope of an arbitration agreement turns on its

terms, not on the particular written instrument in which the arbitration

agreement appears.”).

We have resolved the first inquiry here by concluding that a valid

arbitration agreement exists between these parties. Total E&P’s

argument focuses on the second inquiry, contending that the valid

arbitration agreement does not apply to the claims it asserted in this

suit because those claims do not arise out of the agreement that contains

the valid arbitration agreement. This argument challenges the scope of

the arbitration agreement, which (as we have explained) courts must

resolve unless the parties have clearly and unmistakably delegated that

issue to the arbitrators. Baby Dolls, 642 S.W.3d at 586; Robinson,

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590 S.W.3d at 525, 532.32 And as we have explained, these parties have.

We therefore agree with the court of appeals that the parties’ agreement

to delegate arbitrability issues requires the arbitrator to decide whether

their arbitration agreement requires arbitration of the claims asserted

in this suit.33

V.

Conclusion

We hold that the parties clearly and unmistakably delegated to

the AAA arbitrator the decision of whether the parties’ controversy must

be resolved by arbitration. We express no opinion on the merits of the

parties’ controversy or on whether the arbitrator or the courts must

resolve them. We therefore affirm the court of appeals’ judgment.

Jeffrey S. Boyd

Justice

32 See also Jody James Farms, 547 S.W.3d at 631; Henry Schein,

139 S. Ct. at 530; Howsam, 537 U.S. at 83; First Options, 514 U.S. at 944;

AT&T Techs., 475 U.S. at 649.

33In affirming the court of appeals’ judgment on this ground, we do not

reach the “alternative” ground that JUSTICE BLAND addresses in her

concurring opinion. She would affirm even if the parties did not agree that the

arbitrator must resolve arbitrability issues because, in her view, the parties

did agree to arbitrate the underlying controversies in this case. Post at ___

(BLAND, J., concurring). But if—as we conclude—the parties delegated

arbitrability issues to the arbitrator, this Court “possesses no power to decide

the arbitrability issue.” Henry Schein, 139 S. Ct. at 529. To be clear, we do not

hold that the parties agreed to arbitrate their underlying controversy. Because

the parties delegated that issue to the arbitrator, the arbitrator must make

that determination.

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OPINION DELIVERED: April 14, 2023

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