United States Court of Appeals For the First Circuit

No. 19-1865

KARA BILLER, as attorney in fact for Joan M. McKenna; JOAN M. MCKENNA

Plaintiffs, Appellees,

v.

S-H OPCO GREENWICH BAY MANOR, LLC, a/k/a Brookdale Greenwich Bay; BROOKDALE SENIOR LIVING COMMUNITIES, INC., a/k/a Brookdale Senior Living, Inc.; BKD HB ACQUISITION SUB, INC.; BKD TWENTY- ONE MANAGEMENT COMPANY, INC.; S-H TWENTY-ONE OPCO, INC.

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

[Hon. John J. McConnell, Jr., U.S. District Judge]

Before

Howard, Chief Judge Thompson and Barron, Circuit Judges.

Joseph H. Desmond, with whom Morrison Mahoney LLP was on brief, for appellants. Anthony R. Leone, II, with whom Leone Law LLC was on brief, for appellees.

June 5, 2020 THOMPSON, Circuit Judge. Joan M. McKenna and her

daughter, Kara Biller, brought this lawsuit against McKenna's

former assisted living facility, Brookdale Greenwich Bay (we'll

call it "Brookdale"),1 because (they allege) Brookdale agreed to

take responsibility for administering McKenna's thyroid medication

(methimazole) but dropped the ball. Without her medication,

McKenna's thyroid levels spiraled "out of control," she suffered

health complications, and she had to be hospitalized. In answer,

Brookdale sought to have the case sent to arbitration, fingering

an arbitration clause in McKenna's residency agreement. But at

Biller and McKenna's urging, the district court denied arbitration

and kept the case in court. In its view, the arbitration agreement

had expired in 2017, so there was nothing left to enforce.

On appeal, Brookdale argues (as it did below) that the

Federal Arbitration Act (FAA) required the district court to send

this case to arbitration. According to Brookdale, it was the

arbitrator's job to decide when the residency agreement

terminated; and even if the rest of the contract did expire, that

doesn't mean the arbitration clause lapsed along with it. On this

record, we have to agree; given our precedent, we could hardly do

otherwise. As such, we conclude that the arbitration agreement

1 Biller and McKenna also sued several related parent, holding, and management companies, including Brookdale Senior Living Communities, Inc., BKD HB Acquisition Sub, Inc., BKD Twenty- One Management Company, Inc., and S-H Twenty-One Opco, Inc.

- 2 - remains in effect and binds McKenna and Biller to arbitrate their

claims.

I. Background2

McKenna moved into Brookdale's Greenwich Bay facility in

March 2016. When she got there, Brookdale gave her a contract

(the parties call it the "residency agreement") that set out a

payment schedule for the services she'd get during her stay --

though Brookdale (and only Brookdale) reserved the "right to modify

fees, rates and charges, [and] amend services provided" without

another writing signed by both parties. The contract said that it

would continue indefinitely, but that either party could terminate

it "immediately upon written notice in the event of [McKenna's]

death or if [she] must be relocated due to [her] health."3

Among other provisions, the residency agreement also

contained an arbitration clause, which read:

Any and all claims or controversies arising out of, or in any way relating to, this Agreement or any of your stays at the

2 This appeal arises from an order on a motion to compel arbitration in connection with a motion to dismiss, so we draw the relevant facts from "the complaint and the parties' submissions to the district court" on the motion. Bekele v. Lyft, Inc.,

(1st Cir. 2019).

3 There were also other ways to terminate the agreement: McKenna could end it for any reason by 30 days' written notice, and the company could do so for various stated reasons (like if McKenna required care Brookdale couldn't provide, or if her or her visitors' behavior "interfere[d] with the orderly operation of the Community." Neither of those other termination provisions are at issue here, however.

- 3 - Community, excluding any action for involuntary transfer or discharge or eviction, and including disputes regarding interpretation, scope, enforceability, unconscionability, waiver, preemption and/or violability of this Agreement, whether arising out of State or Federal law, whether existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of contract, tort or breach of statutory duties, irrespective of the basis for the duty or the legal theories upon which the claim is asserted, shall be submitted to binding arbitration, as provided below, and shall not be filed in a court of law. The parties to this Agreement further understand that a judge and/or jury will not decide their case.

The clause added that any arbitration would be held before an

unbiased arbitrator chosen by the parties, and the parties would

divide the costs equally.

Presented with this residency agreement, McKenna's

daughter and attorney-in-fact Kara Biller signed on her mother's

behalf, and McKenna began her stay.

Things didn't go as planned. When McKenna arrived at

Brookdale in March 2016, she was under a doctor's order to take

methimazole to treat a thyroid condition. At the time, her family

members handled her medication; the residency agreement didn't

mention it. Some months later, though (in July 2016), Brookdale

agreed to take on the task of administering McKenna's meds,

including methimazole. But they didn't follow through. According

to the plaintiffs, Brookdale didn't give McKenna methimazole for

- 4 - over a year -- from July 2016 until August 2017. As a result, her

thyroid stopped functioning properly and she suffered health

complications.

In July 2017, McKenna was transferred from Brookdale's

assisted living unit to the facility's memory care unit, a locked

ward for patients with dementia. When they moved her, Brookdale

gave McKenna and Biller an updated residency agreement for Biller

to sign.4 A month later, McKenna was admitted to a hospital, where

she and her family first learned that she had not been taking

methimazole. Shortly after she left the hospital, McKenna moved

out of Brookdale for good.

Two years later, she and her daughter sued Brookdale in

Rhode Island state court. Biller and McKenna brought state-law

claims for negligence; negligent hiring, training, and

supervision; corporate negligence; respondeat superior; and breach

4 At the hearing on the motion to compel arbitration, the record wasn't clear on whether McKenna or Biller ever signed the proposed 2017 agreement; the only evidence was a draft agreement signed by Brookdale, with a blank space for McKenna or her representative. After the district court denied the motion to compel arbitration, however, Brookdale discovered a fully executed copy of the July 2017 agreement, which contained a similar arbitration provision and both parties' signatures. Brookdale quickly moved the district court to reconsider its denial of the motion to compel under Rule 59(e) of the Federal Rules of Civil Procedure, but the district court denied the motion. Brookdale appeals that ruling as well. But since we conclude that the district court erred in denying the motion to compel arbitration based on the evidence presented at the initial hearing, we need not decide whether it should have granted Brookdale's later request to reconsider that denial.

- 5 - of contract. These claims were all based on Brookdale's alleged

failure to administer methimazole from July 2016 to August 2017.

Brookdale timely removed the suit to federal district

court based on diversity jurisdiction and moved to compel

arbitration. Brookdale argued that the state-law tort claims and

state-law contract claims were unequivocally within the scope of

the arbitration agreement.5 So as Brookdale saw it, the FAA

obligated the district court to refer the claims to an arbitrator.

In opposition, Biller and McKenna did not dispute that

the arbitration agreement purported to cover their state-law tort

and contract claims. Rather, they argued that the arbitration

agreement was not "in effect between the parties" for three

relevant reasons. First, they argued that the July 2017

"relocation to the new unit due to Ms. McKenna's health

terminate[d] the March 2016 residency agreement" that contained

the arbitration clause. Second, they argued that the parties

formed a new, implied-in-fact "common-law" contract in July 2017

that "supersede[d] the earlier agreements between the parties

and . . . d[id] not contain a signed forced arbitration

provision." Third, they argued that "the forced arbitration

provision that the defendants seek to enforce is unconscionable."

5 Preemptively, Brookdale also argued that to the extent that the plaintiffs disputed the scope or enforceability of the arbitration agreement itself, the parties had clearly delegated such disputes to the arbitrator.

- 6 - In reply, Brookdale contended that Biller and McKenna

had simply raised further disputes as to the scope or

enforceability of the arbitration agreement itself. Because the

parties had agreed to have an arbitrator decide those threshold

disputes, Brookdale argued, the FAA obligated the district court

to refer them to an arbitrator.

In the alternative, Brookdale argued that even if the

district court were to adjudicate these disputes, it should

conclude that the arbitration clause in the March 2016 residency

agreement remained in effect. In Brookdale's view, the termination

clause in the residency agreement had not been triggered, because

McKenna merely "receiv[ed] different services over time at the

same facility" throughout her stay; and there was no superseding

agreement, because the March 2016 residency agreement contemplated

additional services and fees. Therefore, Brookdale argued, the

2016 agreement was still in effect and compelled arbitration.

After a hearing, the district court denied the motion to

compel arbitration from the bench. It concluded that "there is no

signed agreement containing an arbitration clause which would

otherwise be enforceable by this Court," because "[t]he March '16

agreement terminated when Ms. McKenna was moved to a memory unit

from her assisted living unit where she had been before." The

district court therefore refused to send "any question to an

arbiter." Brookdale timely appealed. See

(a)(1)(B).

- 7 - II. The FAA

The Federal Arbitration Act provides: "A written

provision in . . . a contract . . . to settle by arbitration a

controversy . . . shall be valid, irrevocable, and enforceable,

save upon such grounds as exist at law or in equity for the

revocation of any contract."

. Designed to counter

"widespread judicial hostility to arbitration," Am. Express Co. v.

Italian Colors Rest.,

(2013), the Act makes

arbitration "a matter of contract, and courts must enforce

arbitration contracts according to their terms," Henry Schein,

Inc. v. Archer & White Sales, Inc.,

(2019).

"We review both the interpretation of arbitration agreements and

orders compelling arbitration de novo." S. Bay Bos. Mgmt. v. Unite

Here, Local 26,

(1st Cir. 2009).

"A party seeking to compel arbitration under the FAA

must demonstrate 'that a valid agreement to arbitrate exists, that

the movant is entitled to invoke the arbitration clause, that the

other party is bound by that clause, and that the claim asserted

comes within the clause's scope.'" Dialysis Access Ctr., LLC v.

RMS Lifeline, Inc.,

(1st Cir. 2011) (quoting

InterGen N.V. v. Grina,

(1st Cir. 2003)). If

the movant makes that showing, the court has to send the dispute

to arbitration "unless the party resisting arbitration

specifically challenges the enforceability of the arbitration

- 8 - clause itself . . . or claims that the agreement to arbitrate was

'never concluded.'" Granite Rock Co. v. Int'l Bhd. of Teamsters,

, 301 (2010) (quoting Buckeye Check Cashing, Inc. v.

Cardegna,

, 444 n.1 (2006) (cleaned up)). Those

issues, which implicate "[w]hether or not a dispute is arbitrable,"

are typically for the court to decide. Dialysis,

.

III. Our Take

Here, the parties dispute when the contract terminated.

Biller and McKenna assume that if (as they urge) it expired in

July 2017, the arbitration clause no longer binds the parties, and

the district court was right to keep this case for itself. As

below, Brookdale disagrees. In Brookdale's view, it was the

arbitrator's job -- not the district court's -- to decide when the

contract terminated. In any event, says Brookdale,

Biller/McKenna's argument rests on a false premise: that the

arbitration agreement expired when the residency agreement did.

In fact, the parties' obligation to arbitrate claims about the

residency agreement and McKenna's stay at Brookdale survives to

this day, even if the rest of the residency agreement expired. We

agree with Brookdale.

To explain why, we start with a gateway issue -- whether

we (rather than the arbitrator) should interpret the arbitration

clause in the first place to decide which disputes it covers

(spoiler alert: we must). Once that's out of the way, we'll take

- 9 - Biller/McKenna's "termination" argument on its own terms. In doing

so, we conclude that the plain text of the arbitration clause makes

it the arbitrator's job (not the district court's) to interpret

the residency agreement and decide when it terminated. In any

event, however, even if the residency agreement expired in 2017,

the arbitration agreement would still compel the parties to

arbitrate their disputes "arising out of" or "relating to" the

residency agreement or "any of [McKenna's] stays" at Brookdale's

facility, including Biller and McKenna's claims in this case. We

save Biller and McKenna's last two contentions -- that the parties

overwrote the 2016 arbitration provision with a new agreement, and

that the provision was unconscionable -- for last.

A. Gateway Issue: Who Picks the Decider?

First things first. As a threshold matter, Brookdale

argues that the parties agreed to have an arbitrator interpret the

arbitration clause itself and (therefore) to decide all disputes

about arbitrability. If Brookdale is right, then the arbitrator

must resolve even the gateway question of who (a court or the

arbitrator) should decide the parties' core disputes, including

their fight over contract termination. And as part of that

threshold question, the arbitrator would have to decide (as we do

later) whether the arbitration clause is enforceable at all.

But we see no such agreement. It is true that "parties

may agree to have an arbitrator decide not only the merits of a

- 10 - particular dispute but also '"gateway" questions of

"arbitrability," such as whether the parties have agreed to

arbitrate or whether their agreement covers a particular

controversy.'" Schein,

(quoting Rent-A-Ctr.,

W., Inc. v. Jackson,

, 68–69 (2010)). They must do so,

however, by "clear and unmistakable" evidence. Id. at 530 (quoting

First Options of Chi., Inc. v. Kaplan,

(1995)).

This standard is "demanding." Patton v. Johnson,

(1st Cir. 2019). And here's the kicker: it "requires more

than simply saying that the arbitrator determines the meaning of

any disputed contractual terms." Peabody Holding Co., LLC v.

United Mine Workers of Am., Int'l Union,

(4th

Cir. 2012) (reaffirming that an arbitration clause "committ[ing]

all interpretive disputes 'relating to' or 'arising out of' the

agreement" does not pass the "clear and unmistakable" test)

(quoting Carson v. Giant Food, Inc.,

(4th

Cir. 1999)); accord Commc'n Workers of Am. v. Avaya, Inc.,

(10th Cir. 2012). So, for example, in AT & T

Technologies, Inc. v. Communications Workers of America, the Court

held that even though the arbitration clause committed "any

differences arising with respect to the interpretation of this

contract or the performance of any obligation hereunder" to

arbitration, it was still "for the court, not the arbitrator, to

- 11 - decide in the first instance whether the dispute was to be resolved

through arbitration."

, 650–51 (1986).

Likewise, Brookdale's arbitration clause does not supply

clear and unmistakable evidence that the parties agreed to have an

arbitrator decide whether to arbitrate their disputes, because the

clause could reasonably be interpreted to cover only controversies

over the underlying residency agreement and the circumstances of

McKenna's stay at Brookdale but not disputes over the arbitration

provision itself. To be sure, the clause does cover "controversies

. . . relating to[] this Agreement," and "disputes regarding

interpretation, scope, enforceability, unconscionability

. . . and/or violability of this Agreement." But the phrase "this

Agreement" could reasonably (and likely does) refer only to the

underlying residency agreement; indeed, that is how the parties

use the phrase throughout the rest of the contract.6 We have

6 See Appellant's Add. at 26 ("This Agreement ('Agreement') dated March 18, 2016 is made by and between S-H OpCo Greenwich Bay Manor, LLC . . . and Joan McKenna."); id. ("We will provide you with the following Basic Services, which are included in the Basic Service Rate, subject to the terms of this Agreement"); id. at 27 ("The available Select Services and Therapeutic Services as well as the associated prices are found on Exhibit X and Exhibit Y to this Agreement"); id. at 28 ("For your safety and comfort, our associates must be permitted to enter your Suite to provide services under the terms of this Agreement."); id. at 30 ("You agree that we may use and disclose Resident Data . . . to provide to you services covered by this Agreement."); id. ("Unless prohibited by law, you agree we may offset such refunds by any amount due under the terms of this Agreement."); id. at 31 ("This Agreement begins on the date set forth above and continues until terminated as provided below."); id. 32 ("Either party may

- 12 - demanded more specific language before concluding that the parties

delegated all questions of arbitrability to the arbitrator. See

Awuah v. Coverall N. Am., Inc.,

, 10–12 (1st Cir. 2009)

(finding the arbitration agreement delegated those threshold

questions to the arbitrator because it incorporated rules

authorizing the arbitrator to determine the "existence, scope or

validity of the arbitration agreement"; but noting that "where the

parties merely agree that the validity of the contract should be

subject to arbitration, this does not commit to the arbitrator a

dispute about whether the arbitration clause is valid"). A

"typical, broad arbitration clause" like this one doesn't pass the

test. Carson,

(quoting Va. Carolina Tools, Inc.

v. Int'l Tool Supply, Inc.,

, 117 (4th Cir. 1993)).7

terminate this Agreement immediately upon written notice in the event of your death or if you must be relocated due to your health."); id. at 36 ("You understand and agree to assume the risks inherent in this Agreement."); id. ("This Agreement is not assignable without our prior written consent.").

7 We realize that the Second Circuit has held that "[b]road language expressing an intention to arbitrate all aspects of all disputes supports the inference of an intention to arbitrate arbitrability[.]" Metro. Life Ins. Co. v. Bucsek,

(2d Cir. 2019). But it is far from obvious that a typical commitment to arbitrate matters "arising out of or relating to" the parties' underlying contractual relationship evinces a "clear and unmistakable" intent to arbitrate all aspects of all disputes between the parties, including the "arcane" question of "the scope of [the arbitrator's] own powers." First Options,

. Holding that boilerplate to be sufficient would threaten to flip the presumption in AT & T Technologies and First Options on its head. In any event, Brookdale does not urge us to apply the Second Circuit's test. In fact, it does not identify what language

- 13 - B. Who Decides When the Contract Terminated?

Since the parties didn't delegate the threshold "who

decides" question to the arbitrator, it's up to us to interpret

the arbitration clause and determine whether it gives the

arbitrator the duty to decide when the residency agreement ended.

We conclude that it does. The arbitration clause gives him or her

the power to decide all "disputes regarding interpretation . . .

of th[e] Agreement" (meaning the residency agreement). And

unfortunately for Biller/McKenna, that describes their dispute

over the contract's "termination" to a T. On the one hand, the

duo argue that the contract expired (and the arbitration clause

with it) by its own terms: the clause providing that either party

could terminate the residency agreement if McKenna had to "be

relocated due to [her] health." In Biller/McKenna's view, the

parties triggered this clause when they transferred McKenna from

the assisted living unit to the memory care unit. Not so, says

Brookdale. The plaintiffs keep using that word ("relocate"), but

in the arbitration clause clearly tasks arbitrator to decide questions of arbitrability. Instead, it argues flatly that Schein held that "all disputes over the applicability and enforcement of arbitration agreements must be delegated to an arbitrator." Appellant's Br. at 13–14. But of course, Schein did not overrule (in fact, it reaffirmed) the well-established rule that courts must decide arbitrability unless the parties "clear[ly] and unmistakabl[y]" delegated that threshold question to the arbitrator. 139 S. Ct. at 530–31 (quoting First Options,

, and "express[ing] no view about whether the contract at issue . . . in fact delegated the arbitrability question to the arbitrator").

- 14 - it does not mean what they think it means. Rather (Brookdale

elaborates), a resident is not "relocated due to [her] health" if

she does not "leave the facility," and McKenna just "receiv[ed]

different services over time at the same facility" throughout her

stay. To figure out who's right, someone needs to decide what the

word "relocate" means in the residency agreement. As the

arbitration clause makes clear, interpretive disputes like that

must go to the arbitrator.

In fact, our precedent compels that conclusion. Most

recently, in Unite Here Local 217 v. Sage Hospitality Resources,

an employer made a similar argument to the one Biller and McKenna

advance here: that a labor agreement had terminated before the

dispute arose and the union invoked arbitration.

,

258–59 (1st Cir. 2011). The parties there had agreed to arbitrate

"any dispute over the interpretation or application" of the labor

agreement, which had a duration clause that said the agreement

would be "in full force and effect . . . until thirty months from

the full public opening" of a hotel.

. Just as

McKenna/Biller/Brookdale dispute the meaning of the word

"relocate," the parties in Unite Here disputed the date of the

hotel's "full public opening."

at 257–58. We held that their

"dispute over the meaning of language in the duration clause" of

the underlying agreement was "a classic issue of contract

- 15 - construction and one the parties clearly contemplated would be

resolved by an arbitrator."

. So it is here.

In defense of the order below, Biller and McKenna argue

that it was district court's job to decide when the contract

terminated. That must be so, they say, because before a court can

send any dispute to the arbitrator, the court has to make sure

"there exists a written agreement to arbitrate" that dispute.

Cullinane v. Uber Techs., Inc.,

(1st Cir. 2018)

(quoting Combined Energies v. CCI, Inc.,

(1st

Cir. 2008)). The FAA only "place[s] arbitration agreements upon

the same footing as other contracts"; it "does not require parties

to arbitrate when they have not agreed to do so."

(internal

quotation marks omitted). So, Biller/McKenna explain (correctly),

the question of whether the arbitration clause terminated and no

longer binds the parties is an issue of arbitrability which (when

properly presented and not clearly and distinctly delegated to the

arbitrator), the court must decide. See Granite Rock, 561 U.S. at

299–300; Dialysis,

. So far so good. But here's

where they go off track. According to Biller and McKenna, if the

residency agreement terminated, then the arbitration clause died

with it; there no longer "exists a written agreement to arbitrate,"

Cullinane,

; and the court can't compel arbitration.

Therefore (conclude Biller and McKenna), before the court could

send any dispute between the parties to the arbitrator, it had to

- 16 - decide whether the contract (and therefore the arbitration clause)

remains in effect. But that's not correct.

In fact, we faced and rejected the same argument in Unite

Here. See 642 F.3d at 258–60. There, the hotel (like Biller and

McKenna) argued that "whether [the underlying] Agreement was in

effect at the time it was invoked by the Union" was a question of

"arbitrability" for the court to decide.

But there, as here

(with the exception of Biller/McKenna's unconscionability

challenge, which we'll discuss later), "the parties d[id] not

contest that the [arbitration] [a]greement was valid, that they

were subject to its requirements, and that the substantive scope

of the arbitration clause" -- covering disputes over how to

interpret the underlying contract -- was "clear." Id. at 262. We

explained that in such cases, the question of when the underlying

contract terminated "concerns neither the validity of the

arbitration clause nor its applicability to the underlying dispute

between the parties"; and as such, it is "not a substantive

question of arbitrability but a 'matter of contract interpretation

. . . for the arbitrator, not the courts, to decide.'" Id.

(quoting Green Tree Fin. Corp. v. Bazzle,

(2003)

(plurality opinion)); see also Int'l Bhd. of Elec. Workers, Local

1228, AFL-CIO v. Freedom WLNE-TV, Inc.,

(1st Cir.

1985) ("Where, however, the determination of whether a contract is

still in effect depends solely upon construction of the collective

- 17 - bargaining agreement, the issue of contract termination may

appropriately be decided by the arbitrator.").

But how can that be? -- demand Biller and McKenna. If

the contract terminated, as they say it did, then the arbitration

clause must die with it, and the arbitrator would lack the power

to decide the termination dispute in the first place, wouldn't he?

But that's where they go wrong; in fact, even if the rest of the

residency contract terminated, that would not mean that

arbitration agreement lapsed with it. To see why, we review two

basic principles of arbitration law that help explain the outcomes

in Unite Here, Freedom WLNE-TV, and (ultimately) this case.

C. Post-expiration Arbitration

First off, unless the parties provided otherwise, an

arbitration provision "is severable from the remainder of the

contract." Buckeye,

(citing Prima Paint Corp. v.

Flood & Conklin Mfg. Co.,

(1967) (holding that

"except where the parties otherwise intend," "arbitration clauses

as a matter of federal law are 'separable' from the contracts in

which they are embedded")). To avoid arbitration, then, a party

must ordinarily make a targeted, "independent challenge" to the

arbitration clause itself. Large v. Conseco Fin. Servicing Corp.,

(1st Cir. 2002) (quoting Unionmutual Stock Life

Ins. Co. v. Beneficial Life Ins. Co.,

(1st Cir.

1985)). When the arbitration-resister "specifically challenges

- 18 - the enforceability of the arbitration clause itself" (again,

unless another provision clearly delegated the issue to the

arbitrator) the court must decide that challenge before it can

compel arbitration. Granite Rock, 561 U.S. at 301. So, a

properly-developed argument that the arbitration clause lapsed --

for example, because the arbitration agreement provides that it

will expire on some condition, or because the parties later agreed

to submit their disputes to a court -- would be the court's to

decide. On the other hand, when someone argues (as Biller/McKenna

do in their termination-clause-based challenge) that a broad

arbitration clause is invalid or unenforceable only "on a ground

that directly affects the entire agreement" that challenge is

ordinarily for the arbitrator to decide. Rent-A-Ctr., 561 U.S. at

70–71 (quoting Buckeye,

) ("[A] party's challenge

to another provision of the contract, or to the contract as a

whole, does not prevent a court from enforcing a specific agreement

to arbitrate"; "the basis of challenge [must] be directed

specifically to the agreement to arbitrate before the court will

intervene.").8

Biller and McKenna acknowledge that this severability

principle governs their unconscionability challenge. But in this

8 As we noted above, there is an important exception: when the challenger argues that no "agreement between the parties 'was ever concluded,'" the court must decide that challenge. Rent-A- Ctr., 561 U.S. at 70 n.2 (quoting Buckeye,

n.1).

- 19 - circuit, "[t]he basis of the underlying challenge to the contract

does not alter the severability principle." Unionmutual,

. And we've applied it to compel arbitration in other cases

where one party asserted the underlying contract terminated. In

Large and Unionmutual, the parties challenging arbitration claimed

that they had rescinded the underlying contract, and the

arbitration agreement with it, based on frustration of purpose,

Unionmutual,

, and their rights under state statute

(claiming that the bank broke the statute's disclosure rules),

Large,

. In both cases, we held that the arbitration

provisions at issue still compelled the arbitrator to decide if

and when the underlying contract was properly rescinded. See

Biller and McKenna's challenge -- that the arbitration clause no

longer binds the parties because the rest of the contract

terminated -- is not meaningfully different. Even if the rest of

the parties' contractual rights and obligations ended (whether

based on a general termination clause or a rightful rescission)

that would not mean their duties to arbitrate their contract-

related disputes ended, too.

Second -- although it didn't come up in Unionmutual or

Large -- when deciding (when we must) whether the parties'

arbitration duties have expired, we presume that the arbitration

clause (independent as it is) survives the underlying contract.

In theory, this presumption reflects commercial custom: When two

- 20 - parties commit to arbitrate disputes arising under a contract,

they ordinarily mean to bind each other to arbitrate such disputes

even if the grievant doesn't complain until after the contract

expires. See Litton Fin. Printing Div., a Div. of Litton Bus.

Sys., Inc. v. N.L.R.B.,

, 208 & n.3 (1991) ("We

presume as a matter of contract interpretation that the parties

did not intend a pivotal dispute resolution provision to terminate

for all purposes upon the expiration of the agreement." (citing

Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionary Workers

Union,

(1977))). Taking our cues from Litton

and Nolde Bros., we have compelled parties to a broad arbitration

agreement to arbitrate post-expiration disputes that have their

"real source" in the underlying contract unless "postexpiration

arbitration of the issue was negated expressly or by clear

implication." S. Bay Bos. Mgmt.,

(quoting United

Parcel Serv. v. Unión De Tronquistas de Puerto Rico, Local 901,

(1st Cir. 2005)).

Taken together, these two related principles help

explain our decisions in Unite Here, Freedom WLNE-TV, Large, and

Unionmutual -- and they compel Biller/McKenna to arbitrate their

claims against Brookdale. As in those cases, Biller and McKenna

argue that the arbitration agreement expired only on the grounds

that the contract containing the arbitration agreement terminated.

But as we've explained, to successfully argue that an arbitration

- 21 - agreement terminated and no longer governs any claim, Biller and

McKenna had to mount an "independent" challenge to the arbitration

agreement itself, Large,

(quoting Unionmutual,

) -- for example, by identifying evidence that the

parties intended not only the residency agreement but also their

arbitration obligations to lapse when McKenna relocated (or at

some other time before Brookdale sought to invoke arbitration).

See Litton,

; Nolde Bros.,

; S. Bay

Bos. Mgmt.,

. They didn't meet that burden here.9

IV. Plaintiffs' Other Arguments

Biller and McKenna present two back-up reasons to affirm

the denial of the motion to compel arbitration. First, they urge

that the parties entered a brand-new agreement in July 2017, when

McKenna moved, and that this new deal superseded the original 2016

residency agreement and extinguished its arbitration clause.

Second, they claim that the arbitration agreement was

unconscionable and unenforceable. No doubt, we "can affirm on any

9 Biller and McKenna argue that Brookdale forfeited its argument that the arbitration agreement survived the termination of the contract by not raising the argument in its motion to compel arbitration below. However, once Brookdale pointed to a valid agreement to arbitrate that covered their interpretive dispute, it was Biller and McKenna's burden to make "an independent challenge" to the arbitration clause itself to explain why it was no longer enforceable. Large,

; see Rent-A-Ctr., 561 U.S. at 72–73; see also Unite Here,

(explaining that when the arbitration agreement covers disputes over the interpretation of the underlying contract, the issue of when the contract terminated is presumed to be for the arbitrator).

- 22 - ground appearing in the record -- including one that the [district]

judge did not rely on." Rivera-Colón v. AT&T Mobility Puerto Rico,

Inc.,

(1st Cir. 2019) (quoting Lang v. Wal-Mart

Stores E., L.P.,

(1st Cir. 2016)). But neither

argument convinces us to do so.

A. Replacement Contract

Biller and McKenna first argue that we should affirm

because when the parties had McKenna moved to the memory care unit

and raised her monthly fee (from $4,224 to $5,007) in July 2017,

they impliedly abandoned the March 2016 residency agreement (along

with its arbitration clause) by forming a new, unwritten contract

that wiped out the old one. See Dasher v. RBC Bank (USA),

(11th Cir. 2014) ("[C]ontracting parties are free

to revoke an earlier agreement to arbitrate by executing a

subsequent agreement the terms of which plainly preclude

arbitration." (quoting Applied Energetics, Inc. v. NewOak Capital

Mkts., LLC,

(2d Cir. 2011)). Since this

replacement contract had no arbitration provision (the theory

goes), the district court was right keep this case for itself.

Unlike an argument that the main-event contract

terminated by its terms, a claim that two parties later agreed to

extinguish their arbitration pledge (specifically) is for the

courts to decide. See id.; accord Jaludi v. Citigroup,

(3d Cir. 2019) (explaining that "the question of whether

- 23 - a later agreement supersedes a prior arbitration agreement is

tantamount to whether there is [still] an agreement to arbitrate"

in the first place); Applied Energetics, 645 F.3d at 525–26. In

Dasher (on which Biller and McKenna mainly rely), the Eleventh

Circuit held that this is true even if the challenger alleges (as

Biller and McKenna do) that the parties agreed to replace both the

underlying contract and the arbitration clause in one fell swoop

-- with a new deal that excludes arbitration. See 745 F.3d at

1121–23 (holding that when a new agreement that "entirely

supersed[es]" the old "is silent on arbitration, arbitration

cannot be compelled even if [the] prior agreement contained an

arbitration clause"). Brookdale doesn't quibble with Dasher's

approach, and we see no reason to, either. Because in the end,

Biller and McKenna give us no reason to think that the parties

ever agreed to replace the 2016 residency agreement with an

"entirely superseding" contract that snuffed out their arbitration

duties.

Under Rhode Island law (which we're urged to apply), a

"substituted contract" claim like theirs rests on a "factual

determination" that two parties "mutual[ly] agree[d]" to

"extinguish" their "rights and obligations" under an earlier

contract and replace them with new ones. Weaver v. Am. Power

Conversion Corp.,

(R.I. 2004) (quoting Salo

Landscape & Const. Co. v. Liberty Elec. Co.,

, 1382

- 24 - (R.I. 1977)). Generally, however, when a later bargain between

the same parties "completely cover[s] the same subject-

matter . . . as an earlier agreement" but "contain[s] terms

inconsistent with the former contract, so that the two cannot stand

together," it replaces the "earlier contract and becomes the only

agreement of the parties on the subject." Carlsten v. The Widecom

Grp., Inc., C.A. No. 97-1425,

, at *8 (R.I. Super.

July 1, 2003)(quoting De Blois v. Boylston & Tremont Corp.,

(1933)); see also Jaludi,

(applying

the same rule "[u]nder Pennsylvania law": that "the later of two

agreements between the same parties as to the same subject matter

generally supersedes the prior agreement"); Applied Energetics,

(same under New York law).

Biller and McKenna do not contend that the parties

entered a new written agreement, or even an oral one. But they do

suggest that Brookdale's actions -- moving McKenna and raising her

monthly fee -- and Biller/McKenna's choice to go along with them

(agreeing to the move and paying a higher fee) reflected what's

called an "implied in fact" contract: i.e., an agreement gleaned

from the "parties' conduct, actions, and correspondence" rather

than their words. Cote v. Aiello,

(R.I. 2016)

(quoting Marshall Contractors, Inc. v. Brown Univ.,

(R.I. 1997)); see also Bailey v. West,

(R.I.

1969) (explaining that "essential elements of contracts 'implied

- 25 - in fact' are mutual agreement[ ] and intent to promise, but [where]

the agreement and the promise have not been made in words and are

implied from the facts").

In the end, though, this "new contract" theory doesn't

save Biller and McKenna's claims from arbitration. They offer no

evidence that the parties did anything to "extinguish" the 2016

arbitration agreement, Weaver,

, or strike a new

deal that "completely cover[ed] the same subject-matter" and was

"inconsistent with" that agreement, Carlsten,

, at

*8. Unlike in Dasher, the parties did not sign a new arbitration-

clause-free contract that expressed a "clear and definite" intent

to "entirely supersede" the 2016 residency agreement including the

arbitration clause. 745 F.3d at 1118–20. Brookdale does not

dispute that the changes to McKenna's fees and services reflect

modifications to the underlying contract. See

(distinguishing cases in which the parties merely "amend[ed]

portions of the prior [substantive] agreement" but left the

arbitration clause alone).10 But the arbitration clause itself

10Brookdale adds that the 2016 residency agreement reserved for Brookdale the "right to modify fees, rates and charges, [and] amend services provided" without a new written contract. And in their response, Biller and McKenna made no attempt to address that point or explain why the changes to McKenna's fees and services were anything other than "modific[ations]" or "amend[ments]" contemplated under the original agreement that left the arbitration provision intact. That language in the original contract may well provide another ground for concluding that the changes to McKenna's fees and services did not entirely supersede

- 26 - indicates that it would apply even if the terms of the underlying

contract changed: it covered (remember) any dispute "arising out

of, or in any way relating to" not just the 2016 agreement, but

also "any of [McKenna's] stays at the Community" (emphasis added)).

And the chief evidence on which Biller and McKenna rely -- a draft

residency agreement dated to July 2017 -- was unexecuted by Biller

or McKenna, and in any event, it contained an identical arbitration

agreement. So that draft new agreement can't show the parties

meant to end their clear commitment to arbitrate disputes related

to the 2016 agreement or McKenna's stays at Brookdale, either.

Rather, the evidence points to only one conclusion: that the 2016

arbitration agreement remains in effect.

B. Unconscionability

Biller and McKenna finally argue that we should affirm

because the district court could have concluded that the

arbitration agreement was unconscionable under Rhode Island law.

This dispute is also for the courts to resolve, because under the

FAA, an arbitration agreement may still "be invalidated by

'generally applicable contract defenses, such as fraud, duress, or

unconscionability.'" Rent-A-Ctr., 561 U.S. at 68 (quoting Dr.'s

Assocs., Inc. v. Casarotto,

(1996)). Where a

it. But since (as we've already explained) the parties left it for the arbitrator to interpret terms (like "modify" and "amend") in the original contract, we don't rely on those provisions here.

- 27 - party challenges the validity of an arbitration agreement

specifically, absent a clear intent to commit the dispute to the

arbitrator, the court has to resolve that dispute. Granite Rock,

561 U.S. at 299-300.11 This validity assessment entails

"consideration of the enforceability of the agreement and if it is

void or voidable" under state law. Nat'l Fed'n of the Blind v.

The Container Store, Inc.,

(1st Cir. 2018).

Here, Biller and McKenna have not shown the arbitration

agreement in the March 2016 residency agreement is unconscionable.

As we've read it, Rhode Island law requires the party opposing

arbitration to prove both procedural and substantive

unconscionability: procedurally, that the party had no

"meaningful choice" but to sign the contract, and substantively,

that "the challenged contract terms are unreasonably favorable to

the other party." Britto v. Prospect Chartercare SJHSRI, LLC,

(1st Cir. 2018) (quoting E.H. Ashley & Co. v. Wells

Fargo Alarm Servs.,

(1st Cir. 1990)). The

11 Of course, "the validity of an arbitration clause is itself a matter for the arbitrator where the agreement so provides." Awuah,

. (Although, even then, we still must consider any challenge to "the precise agreement to arbitrate at issue," namely the agreement providing for arbitration of the validity of the arbitration clause. Rent-A-Ctr. 561, U.S. at 71). But as we have discussed, there is no clear and unmistakable evidence that the parties agreed to delegate disputes over the enforceability or unconscionability of the arbitration agreement itself.

- 28 - party challenging an arbitration agreement as unconscionable bears

the burden to show both prongs are met. See

Biller and McKenna argue that the arbitration agreement

was procedurally unconscionable because (among other things)

McKenna had no meaningful opportunity to negotiate its terms;

Brookdale foisted the agreement on her only after she'd moved in

with all her belongings. But even if the agreement was

procedurally unconscionable (which we don't decide),

Biller/McKenna haven't produced evidence that could reasonably

show the arbitration agreement is unconscionable in substance.

When it comes to substantive unconscionability, Rhode

Island law sets a daunting standard: the "inequality of the

bargain [must be] so manifest as to shock the judgment of a person

of good sense," and the "terms [must be] so unreasonable that 'no

man in his senses and not under delusion, would make on the one

hand, and as no honest and fair man would accept on the other.'"

Grady v. Grady,

(R.I. 1986) (quoting Hume v.

United States,

(1889)). On its face, Brookdale's

arbitration agreement doesn't seem to flunk that test: as

Brookdale points out, it says the arbitration will take place in

Rhode Island (in "the county in which the Community is located"),

the arbitrator will be impartial and apply the Rhode Island Rules

of Civil Procedure and Rhode Island law, and the parties will

choose an arbitrator together and split the costs evenly.

- 29 - In response, Biller and McKenna take a scattershot

approach. They list twelve one-sentence challenges to support

their position that the arbitration agreement is unconscionable.

We treat the overwhelming majority of them as waived for lack of

development. See United States v. Zannino,

(1st

Cir. 1990) ("[I]ssues adverted to in a perfunctory manner,

unaccompanied by some effort at developed argumentation, are

deemed waived."). But two arguments call for further discussion.

First, Biller and McKenna argue that the arbitration

agreement is substantively unconscionable because "the parties

share the cost of the arbitrator." The Rhode Island high court

has not spoken directly to the unconscionability of arbitration-

cost-sharing. But, addressing an analogous challenge that an

arbitration agreement prevented the "effective vindication" of

federal statutory rights, the Supreme Court held that "where, as

here, a party seeks to invalidate an arbitration agreement on the

ground that arbitration would be prohibitively expensive, that

party bears the burden of showing the likelihood of incurring such

costs." Green Tree Fin. Corp.-Ala. v. Randolph,

, 90–

92 (2000). Taking their cues from Green Tree, most state courts,

in their tests for substantive unconscionability, also require the

party alleging that arbitration would be too expensive to produce

evidence of the financial burden the arbitration is likely to

- 30 - impose.12 For example, we recently noted that in neighboring

Massachusetts, "an arbitration-fee-splitting arrangement is not

substantively unconscionable when the arbitration fees a plaintiff

would owe amount to less than the damages the plaintiff claims."

Bekele v. Lyft, Inc.,

(1st Cir. 2019).

But Biller and McKenna point to no evidence of their

financial condition or of the potential costs of arbitrating their

dispute with Brookdale. Nor do they give us any reason to think

that the courts of Rhode Island -- which gives arbitration a

"favored status," Pepin v. Am. Universal Ins. Co.,

(R.I. 1988) (citing R.I. Gen. Laws § 10–3–2) -- would adopt a rule

that fee splitting is always unconscionable in cases like this

one.13 With so little to go on, we can't conclude the fee-splitting

12 See, e.g., Larsen v. Citibank FSB,

(11th Cir. 2017) ("[U]nder Washington law, the party challenging a fee-splitting provision must provide specific information about the arbitration fees it would be required to pay and describe why those fees would be prohibitive."); Tompkins v. 23andMe, Inc.,

(9th Cir. 2016) (describing California law as "adopt[ing] 'an ability-to-pay approach' to arbitration fees in the consumer context, requiring a 'case-by-case determination of affordability' for consumers, and a rejection of the . . . categorical approach"); Kai Peng v. Uber Techs., Inc.,

(E.D.N.Y. 2017) (noting correctly that "[c]ourts applying New York law have refused to find that fee-splitting provisions in arbitration agreements are unenforceable where plaintiffs have not affirmatively demonstrated that the fee-splitting provisions would preclude them from pursuing their rights in the arbitral forum" (citing Brady v. Williams Capital Grp., L.P.,

(2010)).

13In Brookdale Senior Living Communities v. Allen, the United States District Court for the District of Oregon held that a

- 31 - provision makes the arbitration agreement here substantively

unconscionable under Rhode Island law.

Second, Biller and McKenna argue that "the requirement

of confidentiality perpetuates the bad conduct Brookdale engaged

in here and places other people at risk of similar injuries."14 In

similar fee-splitting provision in one of Brookdale's arbitration agreements, along with other one-sided provisions, rendered the agreement unconscionable. No. 15-1400-CL, slip. op. at *11 (D. Or. Dec. 1, 2015). In that case, though, the challenger submitted an affidavit estimating likely arbitration fees.

The court nonetheless held that "such a showing [was] not necessary . . . where it is undisputed that the [consumer] would have to pay all or part of the arbitrator's fees," citing decisions in the Ninth and D.C. Circuits holding that cost-sharing provisions are unconscionable as applied to statutory claims because they "impose[ ] on some consumers costs greater than those a complainant would bear if he or she would file the same complaint in court."

(citing Ting v. AT & T,

, 1151 (9th Cir. 2003); Cole v. Burns Int'l Sec. Servs.,

(D.C. Cir. 1997)). After Green Tree, however, the D.C. Circuit has declined to extend Cole to common-law claims like Biller/McKenna's, Brown v. Wheat First Sec., Inc.,

, 825–26 (D.C. Cir. 2001), and the Ninth Circuit (based on subsequent state law developments) has limited the rule in Ting to the employment context, see Tompkins,

. Thus, we are not persuaded that the Rhode Island courts would adopt such a per se rule. So we conclude that Biller and McKenna have not shown that Brookdale's arbitration clause is substantively unconscionable for fee-splitting reasons.

14 The confidentiality provision stated:

The arbitration proceeding shall remain confidential in all respects, including the Demand for Arbitration, all arbitration filings, deposition transcripts, documents produced or obtained in discovery, or other material provided by and exchanged between the parties and the arbitrator's findings of fact and conclusions of law . . . . Further, the parties to the arbitration also agree not to discuss the amount of the arbitration award or any settlement, the names of the parties, or

- 32 - a similar vein, the Ninth Circuit (applying California law) has

held that a contractual provision requiring "all arbitration" to

"remain confidential" was unconscionable as applied to a putative

class of millions of consumers because it unreasonably favored

corporate repeat players like (potentially) Brookdale, who could

learn from the results of prior arbitrations, over first-timers

who (due to the gag provision) would lack access to information

about past arbitrations against the company involving similar

issues. See Ting, 319 F.3d at 1151–52; see also Pokorny v.

Quixtar, Inc.,

(9th Cir. 2010) (reasoning that

an agreement not to discuss the plaintiffs' claims with other

employees could also handicap their "ability to investigate their

claims and engage in meaningful discovery"); Larsen,

(invalidating a similar agreement under Washington law

because the company's "informational advantage" could

"discourag[e] consumers from pursuing valid claims").

More recently, however, other courts have recognized

that "[c]onfidentiality can be desirable to customers in some

circumstances," holding that similar mums-the-word provisions

don't always make the arbitration agreement unconscionable.

Iberia Credit Bureau, Inc., v. Cingular Wireless LLC, 379 F.3d

name/location of the Community except as required by law.

- 33 - 159, 175 (5th Cir. 2004) (applying Louisiana law and citing

Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

, 8 n.4 (1st Cir. 1999), where we noted in dicta that both sides

of a dispute may "prefer arbitration because of the confidentiality

and finality that comes with arbitration"); Caley v. Gulfstream

Aerospace Corp.,

(11th Cir. 2005) (applying

Georgia law). The Ninth Circuit has since joined this club,

applying later developments in California law to uphold

confidentiality provisions similar to Brookdale's and limiting

Ting (if it survives at all) to cases involving thousands or

millions of consumers. See Poublon v. C.H. Robinson Co.,

, 1265–67 & n.4 (9th Cir. 2017) (citing Kilgore v. KeyBank,

Nat'l Ass'n,

, 1059 n.9 (9th Cir. 2013) (en banc));

accord Machado v. System4 LLC,

, 415 (Mass. 2015)

(upholding confidentiality requirement in a contract that affected

only "a relatively small and known quantity" of workers).

Against this background, Biller and McKenna's uphill

attack on the confidentiality provision can't succeed. They don't

address any facts (like the number of residents subject to the

agreement) that bear on the strength of Brookdale's repeat-player

advantage; they don't argue that the confidentiality provision is

broad enough to stymie their evidence-gathering efforts; and, most

importantly, they don't marshal any Rhode Island caselaw

suggesting the Ocean State courts would hold such provisions

- 34 - unconscionable despite the state's policy favoring arbitration as

a means of dispute resolution. See Pepin,

. As

such, they haven't established that the arbitration agreement here

signed is unenforceable.

V. Wrap up

For these reasons, the district court's order denying

arbitration is reversed, each side to bear its own costs. We

remand to the district court with instructions to compel

arbitration over all disputes remaining in this case.

- 35 -