Shivkov v. Artex Risk Solutions, Inc., No. 19-16746 (9th Cir. 2020)Annotate this Case
The Ninth Circuit affirmed the district court's order compelling individual arbitration and dismissing a putative class action alleging violations of the Racketeer Influenced and Corrupt Organizations Act and Arizona law. Pursuant to agreements entered into by the parties, Artex and Tribeca formed and managed captive insurance companies that plaintiffs owned, and to which plaintiffs paid insurance premiums. Plaintiffs claimed the payments as tax-deductible business expenses without recognizing them as taxable income. After the IRS audited plaintiffs, it issued delinquency notices and sought to impose penalties. Plaintiffs settled with the IRS and then brought this putative class action against defendants.
First, the panel held that the agreements are not unenforceable on the grounds that plaintiffs raise. Addressing an issue of first impression concerning the survival of arbitration obligations following contract termination, the panel held that the agreements do not expressly negate the presumption in favor of post-termination arbitration or clearly imply that the parties did not intend for their arbitration obligations to survive termination. Second, the panel held that the Arbitration Clause encompasses all plaintiffs' claims. Third, the panel joined seven of its sister circuits in holding that the availability of class arbitration is a gateway issue that a court must presumptively decide. In this case, the agreements do not clearly and unmistakably delegate that issue to the arbitrator. Because the agreements are silent on class arbitration, the panel held that they do not permit class arbitration. Finally, the panel held that all non-signatory defendants may compel arbitration pursuant to the agreements.