But Can You Delegate the Legality of the Delegation to the Arbitrator?

Nielsen v. Contracting v. Applied Underwriters, Inc., No. D072393M (D4d1 May 23, 2018) 

It is well-settled that an arbitration agreement can delegate questions of arbitrability to an arbitrator, but only if it specifically says so. But even if the agreement contains a delegation clause, a court still must resolve challenges to the delegation clause itself in the first instance. The Court here holds that courts’ responsibility to address delegation issue remains even when a party’s defense to delegation clause would also be a defense to the entire agreement to arbitrate. 

Here, the delegation clause was invalid because it was contained in an insurance contract whose form had not been approved by the Insurance Commissioner. And the arbitration agreement more generally was also invalid for the same reason. So the trial court didn’t err in denying a motion to compel arbitration.

Affirmed.