In re N.A. RUGBY UNION LLC and Douglas Schoninger, Plaintiffs:
v.
UNITED STATES OF AMERICA RUGBY FOOTBALL UNION, Rugby International Marketing, Nigel Melville, Daniel Payne, and Robert Latham, Defendants
Page 860
Original Proceeding Pursuant to C.A.R. 21, Boulder County
District Court Case No. 18CV30533, Honorable Thomas Francis
Mulvahill, Judge
Formerly Represented by Counsel (Counsel Permitted to
Withdraw after Briefing Complete): N.A. Rugby Union LLC,
Douglas Schoninger
Attorneys
for Defendant Rugby International Marketing: Hutchinson Black
and Cook, LLC, Daniel D. Williams, Christopher W. Ford,
Lauren E. Groth, Boulder, Colorado
No
appearance on behalf of United States of America Rugby
Football Union, Nigel Melville, Daniel Payne, or Robert
Latham.
OPINION
GABRIEL,
JUSTICE
Page 861
[¶1]
In this original proceeding pursuant to C.A.R. 21, we must
determine whether a nonsignatory to an arbitration agreement
can be required to arbitrate under that agreement by virtue
of the fact that it is a purported agent of a signatory to
the agreement. Specifically, we are asked to decide whether
the district court erred when it entered an order requiring
petitioner Rugby International Marketing ("RIM"),
which is a defendant below and a nonsignatory to a
Professional Rugby Sanction Agreement (the "Sanction
Agreement"), to arbitrate pursuant to an arbitration
provision in that Agreement that covered the parties and
their agents. The court found that because RIM was an agent
for United States of America Rugby Football Union
("USAR"), a signatory of the Sanction Agreement,
RIM fell "squarely within the broad language of the
arbitration provision."
[¶2]
We issued a rule to show cause and now make the rule
absolute. Although we have not yet opined on the issue, the
weight of authority nationally establishes that, subject to a
number of recognized exceptions, only parties to an agreement
containing an arbitration provision can compel or be subject
to arbitration. Here, because RIM was not a party to the
Sanction Agreement and because respondents N.A. Rugby Union
LLC d/b/a Professional Rugby Organization ("PRO
Rugby") and Douglas Schoninger, who are the plaintiffs
below, have not established that any of the recognized
exceptions apply, we conclude that the district court erred
in determining that RIM is subject to arbitration under the
Sanction Agreement.
I. Facts and Procedural History
[¶3]
Schoninger, a New York financier, was interested in launching
a professional rugby league in the United States. Toward that
end, he formed PRO Rugby and approached USAR, which was the
national governing body for rugby in the United States.
[¶4]
Ultimately, PRO Rugby and USAR entered into the Sanction
Agreement, which authorized PRO Rugby to establish a
professional rugby league in the United States.
[¶5]
As pertinent here, section 2.1 of the Sanction Agreement
provided:
g. N.A. Rugby Union LLC agrees to appoint Rugby International
Marketing as its exclusive Player Representation agency
through which it will contract with all Players and Coaching
staff on a to be agreed fee basis (it being understood that
such agency shall be the subject of an agency agreement and
shall not be effective until such agency agreement has been
executed by N.A. Rugby Union LLC and Rugby International
Marketing)....
h. N.A. Rugby Union LLC agrees to appoint Rugby International
Marketing as a non-exclusive agency to present the commercial
rights of the Competition to potential sponsors on a to be
agreed fee basis (it being understood that such agency shall
be the subject of an agency agreement and shall not be
effective until such agency agreement has been executed by
N.A. Rugby Union LLC and Rugby International Marketing).
[¶6]
Notably, it appears undisputed that as of the date of this
Agreement, RIM did not yet exist (it was not established
until two months later).
Page 862
[¶7]
The Sanction Agreement also contained an arbitration
provision that stated, in part:
[T]he parties agree that any claim or dispute between them or
against any agent, employee, successor, or assign of the
other, whether related to this Agreement or otherwise, and
any claim or dispute related to this agreement or the
relationship or duties contemplated under this Agreement,
including the validity of this arbitration clause, shall be
resolved by binding arbitration by the American Arbitration
Association under the Commercial Arbitration Rules then in
effect.
[¶8]
RIM was not a party to the Sanction Agreement. Moreover,
notwithstanding the fact that the Agreement states that PRO
Rugby agreed to appoint RIM as its agent for player
representation ...