BRICE v. 7HBF (2021)

MEMORANDUM **

Defendants-appellants 7HBF NO. 2, LTD et al. appeal from the district court's denial of their motion to compel arbitration.¹ We have jurisdiction under 9 U.S.C. § 16(a)(1)(A), (C), and we reverse and remand with instructions to stay the case and compel arbitration. We resolve this case for the reasons set forth in Brice v. Haynes Investments, LLC, No. 19-15707, ––– F.4th ––––, 2021 WL 4203337 (9th Cir. Sept. 16, 2021), a companion case involving different defendants but the same Borrowers, materially similar loan agreements, and the same underlying dispute over the enforceability of the arbitration agreements contained in Borrowers’ loan agreements.

Here, as in Haynes Investments, we conclude that the parties agreed to arbitrate both their substantive disputes and any gateway questions regarding the arbitration agreement's “validity, enforceability, or scope.” See ––– F.4th at ––––, slip op. at 31, 2021 WL 4203337; see also Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010). The latter agreement—the delegation provision—does not prevent Borrowers from challenging enforceability based on prospective waiver or otherwise waive their rights to pursue federal statutory remedies. See Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 235, 133 S.Ct. 2304, 186 L.Ed.2d 417 (2013). Therefore, we conclude that the delegation provision is not itself invalid as a prospective waiver and that it is for an arbitrator, not the court, to decide whether the parties’ arbitration agreement is enforceable.

REVERSED and REMANDED with instructions to stay the case and compel arbitration.

For the reasons given in my dissent in Brice v. Haynes Investments, LLC, No. 19-15707, ––– F.4th ––––, 2021 WL 4203337 (9th Cir. 2021), I strongly but respectfully dissent.

FOOTNOTES

1.   This case was originally consolidated with another similar appeal, Brice v. Sequoia Capital Operations LLC, No. 19-17414, but the parties to that appeal settled after oral argument. The appeals were then severed, and No. 19-17414 was dismissed.