Who Decides Who Decides?
Arbitration law has no shortage of disputes over who decides whether a dispute belongs in arbitration.
Usually, a delegation clause provides the answer. If the parties clearly agreed that an arbitrator will decide threshold questions of arbitrability, courts generally honor that choice.
But what happens when the party invoking the arbitration agreement never signed it?
The Supreme Court recently had an opportunity to address that increasingly important question. It declined.
On October 13, 2026, the Court denied the petition for certiorari in FCA US LLC v. Jeffrey Olson, No. 26-228 (U.S. Oct. 13, 2026), leaving intact the Ninth Circuit’s decision in Olson v. FCA US, LLC, No. 24-6527, 176 F.4th 612 (9th Cir. 2026).
The result does not establish a national rule. A denial of certiorari is not an endorsement of the decision below. But it does mean that, at least for now, federal courts remain divided over a fundamental arbitration question: when a signatory sues a nonsignatory and the underlying arbitration agreement contains a delegation clause, does a court decide whether the nonsignatory can invoke the agreement—or must that question itself go to the arbitrator?
For lawyers drafting arbitration provisions or litigating motions to compel, the answer may still depend on where the case is filed.
A Jeep Lease, a Headrest, and an Arbitration Clause
Jeffrey Olson leased a Jeep Grand Cherokee from an automobile dealership. The lease contained an arbitration agreement covering certain disputes between Olson and the dealership, along with a delegation provision assigning questions concerning the validity, scope, and interpretation of the arbitration agreement to arbitration.
FCA US LLC manufactured the Jeep. But FCA did not sign the lease.
Olson later became the named plaintiff in litigation against FCA alleging defects in certain vehicle headrests. His claims included California consumer-protection and warranty claims and claims involving FCA’s own manufacturer warranty. They did not arise from an alleged breach of the lease itself.
FCA nevertheless moved to compel arbitration.
Its threshold argument was important. FCA did not simply ask the court to decide that it could enforce the dealership’s arbitration provision. Instead, FCA argued that the lease’s delegation clause meant an arbitrator had to decide whether FCA, as a nonsignatory, could invoke the arbitration agreement.
That produced the now-familiar arbitration question inside another arbitration question:
Who decides whether FCA has the right to ask an arbitrator to decide whether Olson must arbitrate?
The Ninth Circuit Said the Court Decides
The district court denied FCA’s motion, and the Ninth Circuit affirmed.
The Ninth Circuit concluded that the delegation provision did not contain clear and unmistakable evidence that Olson had agreed to arbitrate arbitrability with FCA. The agreement was framed around disputes between Olson and the dealership and certain specified related parties. FCA was not the dealership, and it did not claim to be the dealership’s employee, agent, successor, or assign.
Accordingly, the court itself could determine whether FCA had a right to enforce the arbitration agreement rather than automatically sending that threshold question to an arbitrator.
The Ninth Circuit also rejected FCA’s independent arguments that the lease itself covered Olson’s claims and that equitable estoppel allowed FCA to compel arbitration. The latter was particularly significant because Olson’s product-defect and warranty claims arose from California law and FCA’s manufacturer warranty rather than obligations created by the dealership lease.
The Supreme Court petition, however, focused on the delegation issue.
FCA’s Argument: The Arbitrator Should Decide
FCA framed the dispute principally through Henry Schein, Inc. v. Archer & White Sales, Inc., No. 17-1272, 586 U.S. 63 (2019).
Under Henry Schein, when parties validly delegate arbitrability questions to an arbitrator, a court ordinarily cannot decide those questions itself—even if the court believes the argument for arbitration is exceptionally weak.
FCA argued that Olson unquestionably entered into a valid arbitration agreement containing a valid delegation clause. From FCA’s perspective, the dispute over whether that agreement extended to claims against FCA was precisely the kind of question about “scope” and “interpretation” that the parties had delegated.
The court’s job, FCA argued, was not to answer whether FCA could ultimately enforce the agreement. The court first had to ask who was authorized to answer that question. Because the contract delegated scope and arbitrability questions, FCA maintained that the answer was the arbitrator.
FCA characterized the federal appellate authorities as a 5-4-1 split. Its petition placed the Fourth, Fifth, Seventh, Eighth, and Ninth Circuits on the court-decides side; the Second, Third, Sixth, and Tenth Circuits on the arbitrator-decides side; and the First Circuit in a third category requiring a preliminary or “prima facie” showing before referring the nonsignatory issue to arbitration.
FCA also stressed that nonsignatory disputes are hardly unusual. They arise when affiliates, parent companies, manufacturers, franchisors, staffing companies, agents, assignees, and others seek to invoke arbitration agreements they did not personally sign.
In FCA’s view, allowing the applicable rule to vary by circuit encourages forum shopping and forces parties to spend substantial time litigating the forum before ever addressing the underlying dispute.
Olson’s Response: There Is No Agreement With FCA to Delegate
Olson framed the issue differently.
Before asking whether an arbitrator decides arbitrability, he argued, someone must establish that the party demanding arbitration has a contractual right to invoke the delegation provision in the first place.
FCA had never signed Olson’s lease. Indeed, FCA had asserted elsewhere in the litigation that it lacked contractual privity with Olson.
For Olson, that made this fundamentally a contract-formation and contract-enforcement problem rather than merely a scope question.
A delegation clause is itself based on consent. The fact that Olson agreed with the dealership to arbitrate certain gateway questions did not necessarily mean that every third party could rely on that agreement and require an arbitrator to decide whether the third party was entitled to enforce it.
Olson also disputed FCA’s characterization of the circuit split.
According to Olson, many decisions FCA placed on the “arbitrator decides” side involved materially different circumstances—for example, nonsignatories claiming rights as assignees, successors, or parties having some substantial relationship to the original contracting party. Others involved procedural failures to challenge the delegation provision properly.
In other words, Olson argued that those courts had not adopted the sweeping proposition that an unrelated stranger to a contract may invoke its delegation clause simply because one litigant signed it.
The distinction is important.
FCA viewed the question as: Who decides whether the nonsignatory may enforce the agreement?
Olson viewed the antecedent question as: What gives this nonsignatory the contractual right to invoke the delegation clause at all?
That difference in framing largely explains why courts have reached different results.
An Amicus Brief Highlighted the Practical Problem
An amicus brief filed by arbitration scholar Dr. Tamar Meshel supported Supreme Court review and described the authorities as reflecting three different approaches.
Some courts treat the nonsignatory issue as an agreement-existence question that courts must decide. Others characterize it as an arbitrability question that can itself be delegated. Still others ask whether the delegation provision clearly and unmistakably extends to disputes involving nonsignatories.
The brief also provided some perspective on how frequently the issue arises.
An empirical study examining 1,132 contested motions to compel arbitration found that approximately one-third involved nonsignatory issues. About half of those involved consumer arbitration, roughly one-quarter involved employment disputes, and almost one-fifth involved commercial arbitration. Approximately one-third of the nonsignatory cases also involved a delegation provision.
So this is not simply an automobile-warranty issue.
The same question can surface whenever the commercial relationships surrounding a contract extend beyond the names appearing on its signature page.
What the Supreme Court’s Denial Means—and What It Does Not Mean
The Supreme Court’s one-line denial is easy to misunderstand. It does not mean the Court agreed with the Ninth Circuit. It does not resolve whether FCA’s interpretation of Henry Schein was right or wrong. And it does not eliminate the disagreements among the federal circuits.
A denial of certiorari simply means the Supreme Court chose not to review this particular case. The Court ordinarily provides no explanation for that decision.
The immediate consequence is that Olson v. FCA US, LLC, No. 24-6527, 176 F.4th 612 (9th Cir. 2026), remains controlling Ninth Circuit law. Within that circuit, a standard delegation clause does not automatically require an arbitrator to decide whether a nonsignatory can enforce the arbitration agreement. Courts can first examine whether there is clear and unmistakable evidence that the contracting party agreed to delegate arbitrability disputes involving that nonsignatory.
Elsewhere, the analysis may be different.
That means the same contract and substantially the same nonsignatory relationship can still produce different procedural results depending on the governing circuit.
The Drafting Lesson May Be More Important Than the Litigation Lesson
There is an obvious practical response to some of this uncertainty. Draft for the parties who may actually need the arbitration agreement.
Businesses frequently operate through networks of related but legally distinct entities—parents, subsidiaries, affiliates, dealerships, franchisors, franchisees, staffing companies, vendors, agents, manufacturers, and service providers.
If those entities are intended to receive the benefit of an arbitration provision or its delegation clause, the agreement should say so as clearly as possible. A broad statement that “questions of arbitrability are delegated to the arbitrator” may not answer the separate question of who is entitled to invoke that delegation.
That is the lesson of Olson.
Delegation language answers “who decides?” only after one knows who is entitled to rely on the delegation language. And, at least for now, federal courts remain divided on how that preliminary question should be answered.
The Supreme Court Has Left the Question for Another Day
The interesting part of FCA US LLC v. Jeffrey Olson, No. 26-228, may ultimately be the question the Supreme Court did not answer.
There is substantial agreement that arbitration rests on consent. There is also substantial agreement that parties can delegate questions of arbitrability to an arbitrator. The difficult issue is what happens when those principles collide—when someone who never signed the contract invokes a delegation provision against someone who did. The Ninth Circuit says a court can first determine whether the delegation extends to that nonsignatory.
Other courts have taken different paths. For now, the Supreme Court has allowed those different approaches to continue.
So the next time a nonsignatory moves to compel arbitration, counsel should not ask only whether the underlying claims fall within the arbitration agreement.
There is an earlier question that may decide everything: who gets to decide who gets to decide?
Nationwide ADR® provides arbitration, mediation, and other dispute-resolution services designed to bring clarity and practical judgment to demanding disputes. Unlocking Solutions for Demanding Cases®.