## Facts

- Douglas Schoninger formed N.A. Rugby Union LLC (PRO Rugby) to launch a professional rugby league in the United States.
- PRO Rugby and the United States of America Rugby Football Union (USA Rugby) entered into a Professional Rugby Sanction Agreement authorizing the league.
- The Sanction Agreement required binding arbitration of “any claim or dispute” between PRO Rugby and USA Rugby, including disputes about arbitrability.
- The agreement referenced a contemplated agency relationship: PRO Rugby would appoint Rugby International Marketing, Ltd. (RIM) as its agent for player representation and commercial rights upon execution of a separate agency agreement.
- RIM did not exist when the Sanction Agreement was signed, did not sign it, and no separate agency agreement between PRO Rugby and RIM was executed.
- After one season the league folded, and PRO Rugby and Schoninger sued multiple parties, including USA Rugby and RIM, asserting contract and tort claims that included breach of the Sanction Agreement.
- Following dismissals and orders compelling arbitration as to signatories, PRO Rugby and RIM remained as the only parties in the district court case.
- PRO Rugby moved to stay the remaining court proceedings and compel arbitration against RIM based on the Sanction Agreement’s arbitration clause.
- The district court stayed the case in favor of arbitration against RIM, reasoning that RIM, as an alleged agent of USA Rugby, fell within the clause’s broad coverage of the parties and their agents.
- RIM sought extraordinary relief in the Colorado Supreme Court to vacate the order compelling it to arbitrate.

## Issues

1. Whether a nonsignatory alleged to be an agent of a signatory may be compelled to arbitrate under a contract’s arbitration clause without proof that a recognized nonsignatory-enforcement doctrine applies.
2. Whether the district court erred by compelling RIM to arbitrate based solely on its purported agency relationship with a signatory and the clause’s reference to “agents.”

## Decision

- The Colorado Supreme Court accepted original jurisdiction and made the rule to show cause absolute.
- The Court vacated the district court’s order requiring RIM to arbitrate.
- The Court held RIM could not be compelled to arbitrate because it was not a party to the Sanction Agreement and the plaintiffs failed to establish any recognized exception binding a nonsignatory to an arbitration agreement.

## Legal Principles

- Arbitration is contractual; a party may not be required to arbitrate a dispute absent agreement to do so.
- As a general rule, only parties to an agreement containing an arbitration clause may compel arbitration or be compelled to arbitrate, subject to limited, recognized exceptions.
- Recognized nonsignatory theories include incorporation by reference, assumption, agency in limited circumstances, veil-piercing/alter ego, equitable estoppel, and third-party beneficiary status; each requires proof of its doctrinal elements.
- A contract’s reference to “agents” in an arbitration clause does not, by itself, create an enforceable agreement to arbitrate between a signatory’s nonsignatory agent and a third party.
- Alleged agency status alone is insufficient to compel a nonsignatory into arbitration without an applicable nonsignatory doctrine such as equitable estoppel or clear third-party beneficiary intent.

## Conclusion

The Colorado Supreme Court held that a nonsignatory cannot be forced into arbitration merely because it is alleged to be a signatory’s agent and an arbitration clause mentions “agents”; absent proof of a recognized exception binding the nonsignatory, the order compelling arbitration must be vacated.


N.A. Rugby Union LLC v. U.S. Rugby Football Union, 442 P.3d 859 (Colo. 2019)