Raheel Khan v. Dell Inc , 669 F.3d 350 ( 2012 )


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  •                                           PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    No. 10-3655
    RAHEEL AHMAD KHAN,
    individually and on behalf of others similarly situated
    v.
    DELL INC.,
    Appellant.
    On Appeal from the United States District Court
    for the District of New Jersey
    (D.C. No. 3:09-cv-03703)
    District Judge: Honorable Joel A. Pisano
    Argued on April 28, 2011
    Before: SLOVITER, GREENAWAY, JR and ROTH, Circuit
    Judges
    (Opinion filed January 20, 2012)
    Kristine M. Brown, Esquire (Argued)
    Derin B. Dickerson, Esquire
    Alston & Bird, LLP
    1201 W. Peachtree Street
    One Atlantic Center
    Atlanta, Georgia 30309
    Craig Carpenito, Esquire
    Alston & Bird, LLP
    90 Park Avenue
    New York, NY 10016-1387
    Counsel for Appellant
    F. Paul Bland, Jr., Esquire (Argued)
    Public Justice
    1825 K Street, N.W., Suite 200
    Washington, D.C. 20006
    Elizabeth Berney, Esquire
    Eduard Korsinsky, Esquire
    Shannon Hopkins, Esquire
    Levi & Korsinsky, LLP
    30 Broad Street, 15th Floor
    New York, NY 10004
    Michael Korsinsky, Esquire
    Law Office of Michael Korsinsky
    30 Broad Street, 15th Floor
    New York, NY 10004
    Counsel for Appellees
    2
    ___________
    OPINION
    ___________
    ROTH, Circuit Judge:
    This appeal involves a matter of first impression for
    this Circuit – whether Section 5 of the Federal Arbitration Act
    (FAA) requires the appointment of a substitute arbitrator
    when the arbitrator designated by the parties is unavailable.
    Dell, Inc., appeals from the District of New Jersey‟s denial of
    Dell‟s Motion to Compel Arbitration and Stay Plaintiff‟s
    Claims. Dell contends that the District Court erred in denying
    its motion to compel arbitration based on the District Court‟s
    belief that the arbitration provision was rendered
    unenforceable because it provided for the parties to arbitrate
    exclusively before a forum that was unavailable when Khan
    commenced suit. The District Court also refused to appoint a
    substitute arbitrator, finding that it could not compel the
    parties to submit to an arbitral forum to which they had not
    agreed.
    I. FACTUAL BACKGROUND
    Dell designed, manufactured, and distributed the 600m
    computer from 2003 to 2006. Khan purchased a Dell 600m
    computer in September 2004 for approximately $1,200.
    Khan purchased the computer online through Dell‟s website,
    www.Dell.com. To complete the purchase, Khan was
    required to click a box stating “I AGREE to Dell‟s Terms and
    Conditions of Sale.” Just beneath the box was a notice
    stating:
    3
    The Terms and Conditions of Sale
    contain        very       important
    information about your rights and
    obligations as well as limitations
    and exclusions that apply to you.
    They contain limitations of
    liability and warranty information.
    They also contain an agreement to
    resolve       disputes      through
    arbitration, rather than through
    litigation.    Please read them
    carefully.
    As Dell‟s notice indicated, its Terms and Conditions of Sale
    contained an arbitration provision that reads as follows:
    13. Binding Arbitration. ANY
    CLAIM,         DISPUTE,        OR
    CONTROVERSY (WHETHER
    IN CONTRACT, TORT, OR
    OTHERWISE,             WHETHER
    PREEXISTING, PRESENT OR
    FUTURE, AND INCLUDING
    STATUTORY, COMMON LAW,
    INTENTIONAL TORT AND
    EQUITABLE                CLAIMS)
    BETWEEN CUSTOMER AND
    DELL, its agents, employees,
    principals, successors, assigns,
    affiliates    (collectively     for
    purposes of this paragraph,
    “Dell”) arising from or relating to
    4
    this Agreement, its interpretation,
    or the breach, termination or
    validity thereof, the relationships
    which result from this Agreement
    (including, to the full extent
    permitted by applicable law,
    relationships with third parties
    who are not signatories to this
    Agreement), Dell‟s advertising, or
    any related purchase SHALL BE
    RESOLVED          EXCLUSIVELY
    AND FINALLY BY BINDING
    ARBITRATION
    ADMINISTERED            BY     THE
    NATIONAL           ARBITRATION
    FORUM (NAF) under its Code of
    Procedure then in effect (available
    via the Internet at http://www.arb-
    forum.com, or via telephone at 1-
    800-474-2371). The arbitration
    will be limited solely to the
    dispute or controversy between
    customer and Dell. NEITHER
    CUSTOMER            NOR       DELL
    SHALL BE ENTITLED TO JOIN
    OR CONSOLIDATE CLAIMS
    BY OR AGAINST OTHER
    CUSTOMERS, OR ARBITRATE
    ANY        CLAIM           AS    A
    REPRESENTATIVE OR CLASS
    ACTION OR IN A PRIVATE
    ATTORNEY                 GENERAL
    CAPACITY.         This transaction
    5
    involves interstate commerce, and
    this provision shall be governed
    by the Federal Arbitration Act 9
    U.S.C. sec. 1-16 (FAA). Any
    award of the arbitrators shall be
    final and binding on each of the
    parties . . . . Information may be
    obtained and claims may be filed
    with the NAF at P.O. Box 50191,
    Minneapolis, MN 55405.
    Rule 1 of the NAF‟s “Code and Procedure,” referred to
    in paragraph 13 above, provided that “[t]his Code shall be
    administered only by the National Arbitration Forum or by
    any entity or individual providing administrative services by
    agreement with the National Arbitration Forum.” Also, as we
    can see in paragraph 13, the arbitration provision did not
    designate a replacement forum in the event that NAF was
    unavailable for any reason. But, as we see, the Terms and
    Conditions did incorporate the Federal Arbitration Act.
    In addition, the Terms and Conditions provided that
    Texas law would govern interpretation of the Agreement and
    of any sales. The Terms and Conditions did not contain a
    severance provision and any alterations to the Terms and
    Conditions required the signature of both parties.
    Khan alleged that his 600m suffered from design
    defects, causing his computer to overheat and thereby destroy
    the computer‟s motherboard. Khan replaced the motherboard
    multiple times. After the third replacement, Dell refused to
    issue another replacement, claiming the warranty had expired.
    The 600m allegedly suffered from other design defects, which
    6
    prevented it from being used in a manner consistent with
    Dell‟s marketing.
    On July 24, 2009, Khan filed a putative consumer class
    action on behalf of himself and other similarly situated
    purchasers and lessees of defectively designed 600m
    computers sold from approximately 2003 through 2006.
    Khan asserted seven claims for (1) violations of the New
    Jersey Consumer Fraud Act, (2) breach of express warranty,
    (3) breach of implied warranty of merchantability or fitness
    for particular purpose, (4) fraud, (5) negligent
    misrepresentation, (6) breach of implied covenant of good
    faith and fair dealing, and (7) unjust enrichment. At the time
    the lawsuit was filed, the NAF had been barred from
    conducting consumer arbitrations by Consent Judgment,
    which resolved litigation brought by the Attorney General of
    Minnesota.1 The Consent Judgment “barred [the NAF] from
    the business of arbitrating credit card and other consumer
    disputes and [ordered the NAF to] stop accepting any new
    consumer arbitrations or in any manner participate in the
    processing or administering of new consumer arbitrations.”
    This was the result of government investigations revealing
    that the NAF engaged in various deceptive practices that
    1
    See generally “„Arbitration’ or ‘Arbitrary’: The
    Misuse of Mandatory Arbitration to Collect Consumer Debts”
    Before the Subcomm. on Domestic Policy, Oversight and
    Government Reform Comm. 3-5 (2009) (statement of
    Minnesota        Attorney    General      Lori     Swanson),
    http://oversight.house.gov/images/stories/Hearings/pdfs/2009
    0722Swanson.pdf (recounting Minnesota Attorney General‟s
    findings).
    7
    disadvantaged consumers.
    According to Khan, such practices included:
    (1) representing to consumers
    and the public that it was
    neutral;
    (2) convincing        credit   card
    companies         and     other
    creditors to include exclusive
    arbitration forum provisions
    in their contracts and making
    representations       to  such
    entities that it would favor
    the      entities      in   the
    arbitrations; and
    (3)     identifying and appointing
    anti-consumer     arbitrators
    and withholding referrals to
    arbitrators who decided
    cases against companies.
    Khan also alleged that the Minnesota investigations
    found that these practices encouraged some corporations to
    select the NAF as their arbitration forum because of this
    prospect of favorable results. However, although Khan
    suggested that Dell must have chosen the NAF based on its
    corporate-friendly disposition, the record does not show that
    Dell was aware of these practices at the time that it selected
    the NAF as the arbitral forum governing Khan‟s purchase or
    that Dell selected the NAF for any improper reason.
    8
    On October 2, 2009, Dell moved to compel arbitration,
    arguing that the arbitration provision was binding and
    covered all of Khan‟s claims. Khan did not dispute that the
    Terms and Conditions governed the contract. Khan did,
    however, assert that the arbitration provision was
    unenforceable because the NAF, which the arbitration
    provision designated as the arbitral forum, was no longer
    permitted to conduct consumer arbitrations. Khan further
    contended that the NAF‟s designation was integral to the
    arbitration provision. He argued, for that reason, that, because
    the NAF could not perform its function, the arbitration
    provision in the Terms and Conditions should not be enforced
    and the parties should proceed to litigation.
    On August 18, 2010, the District Court denied Dell‟s
    motion to compel arbitration and stay claims. See Khan v.
    Dell, Inc., No. 09-3703 (JAP), 
    2010 WL 3283529
    (D.N.J.
    August 18, 2010). After surveying the relevant case law, and
    acknowledging that “the Third Circuit has not spoken on the
    issue,” 
    id. at *3,
    the District Court found that the clause in the
    Terms and Conditions – “SHALL BE RESOLVED
    EXCLUSIVELY AND FINALLY BY BINDING
    ARBITRATION AND ADMINISTERED BY THE
    NATIONAL ARBITRATION FORUM (NAF) under its
    Code of Procedure then in effect” – demonstrated “the
    parties‟ intent to arbitrate exclusively before a particular
    arbitrator, not simply an intent to arbitrate generally.” 
    Id. at *4.
    The District Court noted that “[s]ome courts have held
    that § 5 [of] the Federal Arbitration Act (“FAA”) provides a
    mechanism for the appointment of an arbitrator when a
    chosen arbitrator is unavailable”, 
    id. at *2,
    but that the
    designation here of the NAF as the arbitrator was “integral”
    to the arbitration clause. 
    Id. (citing Carideo
    v. Dell, Inc., No.
    9
    C06-1772JLR, 
    2009 WL 3485933
    (W.D. Wash. Oct. 26,
    2009), and Ranzy v. Extra Cash of Texas, Inc., No. H-09-
    3334, 
    2010 WL 936471
    (S.D. Tex. March 11, 2010)). The
    court concluded that granting Dell‟s motion to compel and
    appointing a substitute arbitrator would improperly force the
    parties to “submit to an arbitration proceeding to which they
    have not agreed.” 
    Id. at 4.
    II. JURISDICTION AND STANDARD OF REVIEW
    A district court decides a motion to compel arbitration
    under the same standard it applies to a motion for summary
    judgment. Par-Knit Mills, Inc. v. Stockbridge Fabrics Co.,
    Ltd., 
    636 F.2d 51
    , 54 & n.9 (3d Cir. 1980). “The party
    opposing arbitration is given the benefit of all reasonable
    doubts and inferences that may arise.” Kaneff v. Delaware
    Title Loans, Inc., 
    587 F.3d 616
    , 620 (3d Cir. 2009) (internal
    quotations omitted). We exercise plenary review of questions
    concerning the “validity and enforceability of an agreement to
    arbitrate.” Edwards v. HOVENSA, LLC, 
    497 F.3d 355
    , 357
    (3d Cir. 2007). Although we subject underlying factual
    matters to the clearly erroneous standard, 
    id., the “legal
    question whether the [appellee] may be compelled to arbitrate
    [his] claims” is reviewed under the plenary standard. Pritzker
    v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 
    7 F.3d 1110
    ,
    1113 (3d Cir. 1993).
    III. ANALYSIS
    In this appeal, we must determine whether the
    provision in the Terms and Conditions that the NAF be the
    arbitrator is exclusive to the NAF and is an integral part of the
    agreement between Dell and Khan, thus preventing the
    10
    appointment of a substitute arbitrator. Because this is a
    question of arbitrability, it is governed by the FAA. Puleo v.
    Chase Bank USA, N.A., 
    605 F.3d 172
    , 180 (3d Cir. 2010).
    Congress passed the FAA “in response to widespread judicial
    hostility to arbitration agreements.” AT&T Mobility LLC v.
    Concepcion, __ U.S. __, __, 
    131 S. Ct. 1740
    , 1745 (2011).
    The FAA reflects a “liberal federal policy favoring
    arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr.
    Corp., 
    460 U.S. 1
    , 24 (1983).          The Supreme Court has
    unequivocally stated “that questions of arbitrability must be
    addressed with a healthy regard for the federal policy
    favoring arbitration.” 
    Id. However, the
    FAA respects the
    “fundamental principle that arbitration is a matter of
    contract,” Rent-A-Center, West, Inc. v. Jackson, __ U.S. __, __,
    
    130 S. Ct. 2772
    , 2776 (2010), and that “arbitration „is a matter
    of consent, not coercion,‟” Stolt-Nielsen S.A. v. AnimalFeeds
    Int’l Corp., __ U.S. __, __, 
    130 S. Ct. 1758
    , 1773 (2010)
    (quoting Volt Info. Sci., Inc. v. Bd. of Trs. of Leland Stanford
    Junior Univ., 
    489 U.S. 468
    , 479 (1989)).
    The particular problem presented in this case – the
    unavailability of the NAF – is addressed in section 5 of the
    FAA, which provides a mechanism for substituting an
    arbitrator when the designated arbitrator is unavailable.2 See
    2
    Section 5 provides:
    If in the agreement provision be made for a method of
    naming or appointing an arbitrator or arbitrators or an umpire,
    such method shall be followed; but if no method be provided
    therein, or if a method be provided and any party thereto shall
    fail to avail himself of such method, or if for any other reason
    there shall be a lapse in the naming of an arbitrator, or
    arbitrators or umpire, or in filling a vacancy, then upon the
    11
    Brown v. ITT Consumer Fin. Corp., 
    211 F.3d 1217
    , 1222
    (11th Cir. 2000) (“Where the chosen forum is unavailable . . .
    or has failed for some reason, § 5 applies and a substitute
    arbitrator may be named.”). In determining the applicability
    of Section 5 of the FAA when an arbitrator is unavailable,
    courts have focused on whether the designation of the
    arbitrator was “integral” to the arbitration provision or was
    merely an ancillary consideration. See, e.g., Reddam v.
    KPMG LLP, 
    457 F.3d 1054
    , 1061 (9th Cir. 2006), abrogated
    on other grounds by Atlantic Nat'l Trust LLC v. Mt. Hawley
    Ins. Co., 
    621 F.3d 931
    (9th Cir. 2010); 
    Brown, 211 F.3d at 1222
    . As the Eleventh Circuit has articulated the standard:
    “[o]nly if the choice of forum is an integral part of the
    agreement to arbitrate, rather than an „ancillary logistical
    concern,‟ will the failure of the chosen forum preclude
    arbitration.” 
    Id. In other
    words, a court will decline to
    appoint a substitute arbitrator, as provided in the FAA, only if
    the parties‟ choice of forum is “so central to the arbitration
    agreement that the unavailability of that arbitrator [brings] the
    agreement to an end.” 
    Reddam, 457 F.3d at 1061
    . In this
    light, the parties must have unambiguously expressed their
    intent not to arbitrate their disputes in the event that the
    designated arbitral forum is unavailable.
    application of either party to the controversy the court shall
    designate and appoint an arbitrator or arbitrators or umpire, as
    the case may require, who shall act under the said agreement
    with the same force and effect as if he or they had been
    specifically named therein; and unless otherwise provided in
    the agreement the arbitration shall be by a single arbitrator.
    12
    According to Khan, this standard has been met because
    the Terms and Conditions designate the NAF as the exclusive
    arbitral forum, implying that disputes should not be arbitrated
    if the NAF is unavailable. Khan relies on the contract
    language that states that all disputes “SHALL BE
    RESOLVED EXCLUSIVELY AND FINALLY BY
    BINDING ARBITRATION ADMINISTERED BY THE
    NATIONAL ARBITRATION FORUM.”
    In our view, this language is ambiguous:
    “EXCLUSIVELY” could be read to modify “BINDING
    ARBITRATION,” “THE NATIONAL ARBITRATION
    FORUM,” or both.
    Khan, however, points out that the NAF‟s rules are
    incorporated into the contract, and that these rules provide
    that all arbitrations must be conducted by the NAF or an
    entity having an agreement with it. We conclude, however,
    that this requirement is also ambiguous as to what should
    happen in the event that the NAF is unavailable. The NAF‟s
    rules provide that they shall be interpreted in a manner
    consistent with the FAA and that, if any portion of the NAF
    rules are found to be unenforceable, that portion shall be
    severed and the remainder of the rules shall continue to apply.
    Our finding of ambiguity is confirmed by the
    conflicting interpretations of this language adopted by the
    courts that have considered it.
    The court in Brown supports Dell‟s position that
    “exclusively” modifies “binding arbitration.” The arbitration
    agreement in Brown was interpreted as demonstrating an
    intent to arbitrate that trumped the designation of a particular
    13
    arbitrator who was no longer available. In Brown, a former
    ITT employee argued that the arbitration clause between the
    parties – which was virtually identical to the clause here –
    was void because the NAF had been dissolved. 
    Id. at 1220,
    1222. The Eleventh Circuit found that the unavailability of
    the NAF did not destroy the arbitration clause because
    Section 5 of the FAA provided a mechanism for appointing a
    replacement arbitrator. 
    Id. at 1222.
    The court did note the
    “integral” exception but found that there was no evidence
    supporting the employee‟s claim that the forum provision was
    integral to the arbitration clause. 
    Id. Adler v.
    Dell, Inc., 
    2009 WL 4580739
    (E.D. Mich.
    Dec. 3, 2009), also supports Dell‟s position. The facts and
    arguments proffered in Adler are identical to those before us.
    After noting the “integral” exception, the Adler court
    articulated the presumption in favor of enforceability of
    Section 5 of the FAA as follows: “when the arbitrator named
    in the arbitration agreement cannot or will not arbitrate the
    dispute, the court does not void the arbitration agreement.
    Instead, it appoints a different arbitrator, as provided in the
    Federal Arbitration Act.” 
    Id. at *2.
    In addition, the Adler
    court found the clause “SHALL BE RESOLVED
    EXCLUSIVELY AND FINALLY BY BINDING
    ARBITRATION ADMINSTERED BY THE NATIONAL
    ARBITRATION FORUM” was ambiguous on the issue of
    whether the NAF‟s exclusive designation was integral to the
    provision or whether the intent to arbitrate superseded the
    NAF‟s designation. 
    Id. The court
    concluded that the
    arbitration provision did not meet the standard that an
    arbitration provision will fail only when the designation of an
    arbitrator is “as important a consideration as the agreement
    itself.” 
    Id. at *3.
    14
    On the other hand, in Carideo v. Dell, Inc., No. C06-
    1772JLR, 
    2009 WL 3485933
    (W.D. Wash. Oct. 26, 2009), a
    case factually similar to this one, the plaintiff who had bought
    an allegedly defective Dell computer, brought suit against
    Dell. Dell moved to compel arbitration, pursuant to the
    arbitration provision that designated the NAF as the arbitral
    forum. Applying the Ninth Circuit‟s decision in Reddam, the
    court in Carideo held that the parties‟ selection of the NAF
    was integral to the arbitration agreement. Carideo, 
    2009 WL 3485933
    at *4. Because the court found that the selection of
    the NAF and of its rules was integral to the arbitration
    provision, it concluded that appointing a substitute arbitrator
    would be a wholesale revision of the arbitration agreement.
    
    Id. at *6.
    In coming to its conclusion, however, the court
    stated that “[i]n general, the FAA provides that where the
    chosen arbitrator is unavailable, the court may appoint a
    substitute arbitrator.” 
    Id. at *3
    (emphasis added). We do not
    agree with the language used by the Carideo court. We note
    that Section 5 provides that in the case of an unavailable
    arbitrator, “upon the application of either party to the
    controversy the court shall designate and appoint an
    arbitrator.” 9 U.S.C. § 5 (emphasis added). The difference
    between may and shall significant. We do not find Carideo
    persuasive.
    Although courts are divided on the issue, we conclude
    that the “liberal federal policy in favor of arbitration”
    counsels us to favor the Brown line of cases. The language
    relied on by Khan is at best ambiguous as to whether the
    parties intended to have their disputes arbitrated in the event
    that NAF was unavailable for any reason. Because of the
    ambiguity, it is not clear whether the designation of NAF is
    ancillary or is as important a consideration as the agreement
    15
    to arbitrate itself. See 
    Brown, 211 F.3d at 1222
    . Therefore,
    we must resolve this ambiguity in favor of arbitration. See
    Seus v. John Nuveen & Co., Inc., 
    146 F.3d 175
    , 186 (3d Cir.
    1998), overruled on other grounds by Green Tree Fin. Corp.
    Al. v. Randolph, 
    531 U.S. 79
    (2000).
    We note moreover that the arbitration provision in the
    Terms and Conditions specifically incorporated the FAA, 9
    U.S.C. §§ 1-16, suggesting that, in the event of the NAF's
    unavailability, the FAA's procedures for addressing such a
    problem should apply. Finally, we note the notice, provided
    to Khan when he accepted the Terms and Conditions, which
    stated that they “contain an agreement to resolve disputes
    through arbitration, rather than through litigation.”
    Khan, however, argues that, even if the NAF‟s
    designation as the arbitral forum was not integral to the
    Terms and Conditions, Section 5 of the FAA nevertheless did
    not apply here because NAF‟s unavailability was not a
    “lapse” within the meaning of statute. In support of this
    argument, Kahn cites In re Salomon Inc. S’holders’
    Derivative Litig., 
    68 F.3d 554
    , 560 (2d Cir. 1995), a case in
    which the arbitral forum, the NYSE, had refused to arbitrate.
    Khan argues that the word “lapse” in Section 5 of the FAA
    means “a lapse in the naming of the arbitrator or in the filling
    of a vacancy on a panel of arbitrators or some other
    mechanical breakdown in the arbitrator selection process,”
    not the NYSE‟s refusal to arbitrate the dispute – or the NAF‟s
    unavailability to do so.
    We find In re Salomon unpersuasive. First, we do not
    see why the NAF‟s unavailability is not a “mechanical
    breakdown in the arbitrator selection process.” Apparently,
    16
    the NAF‟s Consent Judgment with the State of Minnesota
    prevents it from acting as an arbitrator. This unavailability
    appears to us to be a breakdown in the mechanics of the
    appointment process. To take a narrower construction of
    Section 5 would be inconsistent with the “liberal federal
    policy in favor of arbitration” articulated in the FAA.
    We conclude therefore that the unavailability of NAF
    to hear the disputes between Khan and Dell constitutes a
    “lapse” within the meaning of Section 5.3
    IV. CONCLUSION
    The contract‟s language does not indicate the parties‟
    unambiguous intent not to arbitrate their disputes if NAF is
    unavailable. Section 5 of the FAA requires a court to address
    such unavailability by appointing a substitute arbitrator. The
    District Court‟s contrary conclusion is at odds with the
    fundamental presumption in favor of arbitration. We will
    therefore vacate the judgment of the District Court and
    remand this case for further proceedings consistent with this
    opinion.
    3
    Because the District Court denied Dell‟s motion to
    compel arbitration, it did not address Khan‟s alternative
    argument that the arbitration provision in the contract is
    unconscionable. We leave it to the District Court to address
    this argument on remand.
    17
    Raheel Ahmad Khan v. Dell, Inc., No. 10-3655
    SLOVITER, Circuit Judge, dissenting.
    The majority opinion acknowledges that the Supreme
    Court has stated the “fundamental principle that arbitration is
    a matter of contract,” Rent-A-Center, West, Inc. v. Jackson,
    ____ U.S. ____, 
    130 S. Ct. 2772
    , 2776 (2010). Indeed it has
    so stated more than once. I dissent because the majority has
    given mere lip service to this “fundamental principle,” and its
    holding as applied in this particular case violates that
    principle. There is no ambiguity in the arbitration agreement.
    The plain text of the arbitration agreement clearly
    states that the selection by Dell of the NAF as arbitrator was
    integral to the agreement, and leads me to conclude that
    Section 5 of the FAA is inapplicable and the unavailability of
    the NAF precludes arbitration.
    The arbitration clause in Dell’s Terms and Conditions
    of Sale states:
    13. Binding Arbitration. ANY CLAIM, DISPUTE,
    OR CONTROVERSY (WHETHER IN
    CONTRACT, TORT, OR OTHERWISE,
    WHETHER PREEXISTING, PRESENT OR
    FUTURE, AND INCLUDING STATUTORY,
    COMMON LAW, INTENTIONAL TORT AND
    EQUITABLE CLAIMS) BETWEEN CUSTOMER
    AND DELL, its agents, employees, principals,
    successors, assigns, affiliates, (collectively for
    purposes of this paragraph, “Dell”) arising from or
    relating to this Agreement, its interpretation, or the
    breach, termination or validity thereof, the
    relationships which resulted from this Agreement
    (including, to the full extent permitted by applicable
    law, relationship with third parties who are not
    signatories to this Agreement), Dell’s advertising, or
    any related purchase SHALL BE RESOLVED
    EXCLUSIVELY AND FINALLY BY BINDING
    ARBITRATION ADMINISTERED BY THE
    NATIONAL ARBITRATION FORUM (NAF) under
    1
    its Code of Procedure then in effect (available via the
    Internet at http://www.arb-forum.com, or via
    telephone at 1-800-474-2371). The arbitration shall
    be limited solely to the dispute or controversy
    between customer and Dell. NEITHER
    CUSTOMER NOR DELL SHALL CONSOLIDATE
    CLAIMS BY OR AGAINST OTHER
    CUSTOMERS, OR ARBITRATE ANY CLAIM AS
    A REPRESENTATIVE OR CLASS ACTION OR
    IN A PRIVATE ATTORNEY GENERAL
    CAPACITY. This transaction involves interstate
    commerce, and this provision shall be governed by
    the Federal Arbitration Act, 9 U.S.C. sec. 1-16
    (FAA). Any award of the arbitrator shall be final
    and binding on both of the parties . . . . Information
    may be obtained and claims may be filed with the
    NAF at P.O. Box 50191, Minneapolis, MN 55404.
    App. at A67.
    The majority reasons that this language is
    “ambiguous” because “‘EXCLUSIVELY’ could be read to
    modify ‘BINDING ARBITRATION,’ ‘THE NATIONAL
    ARBITRATION FORUM,’ or both,” see Majority Opinion
    supra page 13, and that the “liberal federal policy in favor of
    arbitration” thus compels the court to resolve this
    “ambiguity” in favor of arbitration. See Majority Opinion
    supra page 15. However, “the FAA’s proarbitration policy
    does not operate without regard to the wishes of the
    contracting parties.” Mastrobuono v. Shearson Lehman
    Hutton, Inc., 
    514 U.S. 52
    , 57 (1995). The majority’s
    conclusion focuses solely on the language used rather than
    giving appropriate weight to the additional clues that
    demonstrate the parties’ clear intent.
    The phrase “EXCLUSIVELY AND FINALLY BY
    BINDING ARBITRATION ADMINISTRATED BY THE
    NATIONAL ARBITRATION FORUM” is written in all
    capital letters yet surrounded by clauses written in lower case
    letters. This aesthetic prominence indicates the parties’ intent
    for the entire phrase to be read together and emphasized as an
    essential part of the agreement. Moreover, as noted by the
    District Court, “[t]he NAF is expressly named, the NAF’s
    2
    rules are to apply, . . . no provision is made for an alternate
    arbitrator [, and the] language used is mandatory, not
    permissive.” App. at A12. The agreement also states that
    “[i]nformation may be obtained and claims may be filed with
    the NAF at P.O. Box 50191, Minneapolis, MN 55404,” again
    illustrating the central role that NAF was intended to play in
    arbitrations pursuant to this agreement.
    Given “the consensual nature of private dispute
    resolution,” courts must respect the principle that “parties are
    generally free to structure their arbitration agreements as they
    see fit.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S.
    Ct. 1758, 1774 (2010) (internal quotation marks and citation
    omitted). Here, the parties agreed only to binding arbitration
    administered by the NAF. Full analysis of the plain text of
    the agreement as a whole shows that the selection of the NAF
    as arbitrator was an integral part of the agreement to arbitrate.
    Therefore, Section 5 of the FAA is inapplicable and the
    unavailability of the NAF precludes arbitration. I respectfully
    dissent.
    There is yet another reason why Dell’s request to
    proceed via arbitration rather than trial should not be granted,
    and that reason applies to this defendant in this case. The
    majority avoids any discussion of the underlying reason why
    arbitration by NAF is unavailable. In an action pending in
    Minnesota, the Minnesota Attorney General made public the
    results of its year-long investigation that showed that NAF,
    far from being the neutral arbitration forum contemplated by
    Congress when it enacted the Federal Arbitration Act,
    represented to corporations that it would appoint anti-
    consumer arbitrators and discontinue referrals to arbitrators
    who decided cases in favor of consumers. See Amicus Curiae
    Br. at 8, 13-15; see also Arbitration or “Arbitrary”: The
    Misuse of Mandatory Arbitration to Collect Consumer Debts:
    Hearing Before the H. Domestic Policy Subcomm. of Comm.
    on Oversight and Gov’t Reform, 111th Cong. (July 22, 2009).
    Rather than disputing the allegations, NAF accepted a
    consent judgment that barred it from administering and
    participating in all consumer arbitrations. See 
    id. (testimony of
    Lori Swanson, Minnesota Attorney General, at 3) (“Under
    the Consent Judgment, [NAF] is barred from the business of
    3
    arbitrating credit card and other consumer disputes and must
    stop accepting any new consumer arbitrations or in any
    manner participate [sic] in the processing or administering of
    new consumer arbitrations.”); see also App. at A273-76. It
    cannot be insignificant that Dell named NAF as the exclusive
    forum in its arbitration clauses. It followed that the District
    Court refused Dell’s request to designate a substitute
    arbitrator. It was certainly not error for the District Court in
    this case to deny substitution at the behest of Dell. Even
    assuming that in the usual case, substitution of a neutral
    arbitrator would be an acceptable alternative, it is evident that
    this is not an ordinary case and we should affirm the District
    Court’s denial of Dell’s motion.
    4