Usually, it is up to a court to determine if parties to an
agreement have decided to let an arbitrator decide disputes under that
agreement. But not always.
Simply Wireless sells cellular telephone goods and services
to consumers and provides advertising, marketing, and distribution services to
other businesses in the telecommunications industry. Simply Wireless is the
registered owner of multiple trademarks using the name SIMPLY WIRELESS. Simply
Wireless is also the originator and owner of the trademark SIMPLY PREPAID in
connection with the sale of cellular telephone goods and services.
T-Mobile also provides cellular services. Although T-Mobile
and Simply Wireless compete, they have partnered on several projects. T-Mobile and Simply Wireless partnered on a
project by executing a contract referred to as the "HSN/QVC Agreement."
This agreement included an arbitration clause that said:
19.1.1. Submission to Arbitration.
Any claims or controversies . . . arising out of or relating to this Agreement ("Dispute") shall be resolved by
submission to binding arbitration. The arbitration shall be administered and
hearings shall be held in Seattle, Washington before a single neutral
arbitrator from the offices of Judicial Arbitration & Mediation Services. The arbitration shall be administered
pursuant to the JAMS Comprehensive Rules and Procedures then in effect. . . .
Notwithstanding any choice of law provision in this Agreement, the parties
agree that the Federal Arbitration Act, 9 U.S.C. §§ 1-15, not state law, shall
govern the arbitrability of all disputes under this Agreement.
T-Mobile filed several trademark applications with the
United States Patent and Trademark Office ("USPTO") to trademark SIMPLY
Simply Wireless brought an action against T-Mobile relating
to the trademarks. T-Mobile filed a Notice of Intent to Seek Arbitration and
moved to dismiss Simply Wireless's complaint on two separate grounds: First,
T-Mobile argued that, based upon provisions in the HSN/QVC Agreement, Simply
Wireless's failure to provide contractually required notice of its claims and
to initiate arbitration in a timely manner warranted dismissal with prejudice
under Federal Rule of Civil Procedure 12(b)(6). Second, T-Mobile argued that
the HSN/QVC Agreement's express incorporation of the JAMS Comprehensive Rules
and Procedures ("JAMS Rules") "clearly and unmistakably" endowed an
arbitrator—as opposed to the court—with the authority to resolve all
arbitrability disputes. The district court granted T-Mobile's motion to dismiss
Simply Wireless's complaint. An appeal followed.
Because empowering an arbitrator to determine arbitrability
in the first instance cuts against the normal rule that arbitrability disputes
are for the court to resolve, a court must find by 'clear and unmistakable'
evidence that the parties have chosen to give arbitrability questions to an
Here, the parties agreed to submit "[a]ny claims or
controversies . . . arising out of or relating to this Agreement ... to binding
arbitration." T-Mobile argued that this contractual language showed the
parties' clear and unmistakable intent to submit all arbitrability disputes to
an arbitrator, but the appeals court disagreed.
However, the HSN/QVC Agreement incorporated the JAMS Rules,
which empower an arbitrator to resolve arbitrability disputes. In particular,
Rule 11(b) of the JAMS Comprehensive Arbitration Rules & Procedures
Jurisdictional and arbitrability disputes, including disputes over the formation,
existence, validity, interpretation or scope of the agreement under which
Arbitration is sought... shall be
submitted to and ruled on by the Arbitrator. The Arbitrator has the
authority to determine jurisdiction and arbitrability issues as a preliminary
Two other circuits have concluded that the incorporation of JAMS
Rules constitutes "clear and unmistakable evidence" of the parties' intent to delegate
questions of arbitrability to the arbitrator.
The appeals court also noted that other circuits have
concluded that the incorporation of arbitral rules substantively identical to
those found in JAMS Rule 11(b) constitutes clear and unmistakable evidence of
the parties’ intent to arbitrate the issue of arbitrability.
The court of appeals held that, in 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. Because the JAMS Rules expressly delegate
arbitrability questions to the arbitrator, the district court erred when it
determined the arbitrability of Simply Wireless’s claims. Nevertheless, the
court affirmed dismissal of the complaint on the alternate ground of allowing
the arbitrator to resolve all arbitrability disputes.
case is Simply Wireless Inc. v. T-Mobile US, Inc., 877 F.3d 522 (4th
· Michael R. Lied· Howard & Howard Attorneys PLLC· One Technology Plaza, 211 Fulton Street, Suite 600, Peoria, IL 61602· (309) 999-6311· MLied@howardandhoward.com