IN THE SUPREME = COURT OF TEXAS

IN THE SUPREME COURT OF TEXAS

════════&#= 9552;═══

No. 04-0865

════════λ= 2;═══

In re Merrill = Lynch Trust=20 Company FSB, Merrill Lynch Life Insurance Company, and Henry Medina,=20 Relators

════════λ= 2;══════════&= #9552;═════════_= 52;══════════= ══════════ = 552;═

On Petition for Writ of = Mandamus

════════&#= 9552;═════════λ= 2;══════════&= #9552;═════════_= 52;══════════= ══

Argued March 23,=20 2005

&= nbsp; Justice=20 Brister delivered the opinion of the Court, in which Chief Justice Jefferson, Justice Green, and Justice Willett joined, and in = which=20 Justice Hecht and Justice Medina joined as to = Parts I,=20 III-A, and IV, Justice = O=92Neill=20 joined as to Parts I, III, and IV, and Justice Wainwright and Justice Johnson joined as to = Parts I,=20 II, and IV.

=20

=20 Justice Hecht = filed an=20 opinion concurring in part and dissenting in part, in which Justice Medina joined, and in = Part I of=20 which Justice O=92Neill = joined.

&nbs= p;=20

&nbs= p;Justice Johnson filed an opinion concurring = in part=20 and dissenting in part, in which Justice=20 Wainwright = joined.

&nbs= p;=20 In considering referral to arbitration, the question is not which forum = is=20 quicker, cheaper, or more convenient, but which one the parties = picked.[1] Here, the plaintiffs agreed to = arbitrate=20 with Merrill Lynch, but not the employee or affiliates they have sued. = Because=20 their claims against the employee are in substance claims against = Merrill Lynch,=20 we hold those claims must be arbitrated. Because there is no contract = theory=20 that ties the affiliates to the same agreement, we hold those claims do = not. And=20 to the extent these separate proceedings overlap, we hold the litigation = must be=20 stayed until the arbitration is completed.

I. Background

&nbs= p;=20 Juan Alaniz was severely injured in a refinery explosion. He and his = wife filed=20 suit and recovered a settlement of more than $2 million. To preserve = this=20 recovery, they engaged Merrill Lynch, Pierce, Fenner & Smith Inc. = through=20 its employee Henry Medina to provide financial and investment services. = In=20 September 1993, the Alanizes opened a series of cash and investment = accounts=20 with Merrill Lynch. For each account, the Alanizes agreed to arbitrate = any=20 disputes that might arise with Merrill Lynch:

I agree=20 that all controversies which may arise between us, including but not = limited to=20 those involving any transaction or the construction, performance, or = breach of=20 this or any other agreement between us, whether entered into prior, on = or=20 subsequent to the date hereof, shall be determined by arbitration.

&nbs= p;=20 As a part of their financial plan, the Alanizes set up an irrevocable = life=20 insurance trust with Merrill Lynch Trust Company as trustee, which then=20 purchased a variable life policy from Merrill Lynch Life Insurance = Company. Both=20 of these Merrill Lynch affiliates had their own contracts with the = Alanizes,=20 neither of which contained an arbitration clause. The Alanizes = transferred more=20 than $200,000 from their Merrill Lynch accounts to ML Trust to pay = premiums to=20 ML Life. ML Life paid a commission on the sale to Merrill Lynch, which = then paid=20 Medina, a=20 licensed agent for ML Life and other insurers.

&nbs= p;=20 In April 2003, the Alanizes sued ML Trust, ML Life, and Medina =97 but = not Merrill=20 Lynch =97 alleging a dozen multifarious claims, all related to the = insurance=20 trust, and all asserted against the defendants collectively without=20 differentiating the actions of each. The defendants moved to stay the = litigation=20 and compel arbitration, which the trial court denied. The Thirteenth = Court of=20 Appeals denied mandamus relief.[2]

&nbs= p;=20 The parties agree that the Federal Arbitration Act applies.[3] Accordingly, mandamus relief is = appropriate if the trial court abused its discretion in failing to stay = the=20 litigation and compel arbitration.[4]

II. Arbitration with Corporate Employees: Henry = Medina

&nbs= p;=20 The claims against Merrill Lynch=92s employee, Henry Medina, must go to=20 arbitration for two reasons.

&nbs= p;=20 First, =93parties to an arbitration agreement may not evade arbitration = through=20 artful pleading, such as by naming individual agents of the party to the = arbitration clause and suing them in their individual capacity.=94[5] Corporations can act only = through human=20 agents, and many business-related torts can be brought against either a=20 corporation or its employees.[6] If a plaintiff=92s choice = between suing the=20 corporation or suing the employees determines whether an arbitration = agreement=20 is binding, then such agreements have been rendered illusory on one = side.[7] As we recently noted, this = would not=20 place arbitration agreements on equal footing with other contracts:

When=20 contracting parties agree to arbitrate all disputes =93under or with = respect to=94 a=20 contract (as they did here), they generally intend to include disputes = about=20 their agents=92 actions because =93[a]s a general rule, the actions of a = corporate=20 agent on behalf of the corporation are deemed the corporation=92s = acts.=94 If=20 arbitration clauses only apply to contractual signatories, then this = intent can=20 only be accomplished by having every officer and agent (and every = affiliate and=20 its officers and agents) either sign the contract or be listed as a = third-party=20 beneficiary. This would not place such clauses on an equal footing with = all=20 other parts of a corporate contract.[8]

&nbs= p;=20 Second, the substance of the plaintiffs=92 suit here is against Merrill = Lynch,=20 even though it has not been named as a party. While the plaintiffs = allege they=20 are suing Medina=20 only for his actions while wearing =93the hat of the insurance agent,=94 = brokers do=20 not change employers every time they sell someone else=92s product. The = commission=20 on this insurance transaction was paid directly to Merrill Lynch, not = Medina; if the = latter was=20 acting as an agent for ML Life or ML Trust, then so was the former. As = there is=20 no question Medina was acting in the course and = scope of=20 his employment, if he is liable for the torts alleged against him, then = Merrill=20 Lynch is too.[9]

&nbs= p;=20 While the plaintiffs have not sued Merrill Lynch yet, they have not = =93disavowed=94=20 such claims (as Justice Hecht asserts). They have never so stipulated = under oath=20 or in their pleadings, and their appellate brief says only that the=20 defendants have not shown that Merrill Lynch has any potential = liability,=20 thus carefully leaving the door open for the plaintiffs to pursue = precisely that option.[10] Nor do the plaintiffs=92 trial = court=20 pleadings =93focus solely=94 on the insurance sale (again per Justice = Hecht); to the=20 contrary, they focus entirely on the alleged misrepresentations, = omissions, and=20 fiduciary breaches leading up to it. While only ML Trust might be liable = for the=20 transaction itself, Medina and his employer would both be = liable=20 for the preliminary tort and statutory claims the plaintiffs have = actually=20 alleged.[11]

&nbs= p;=20 Finally, the plaintiffs also assert their arbitration agreements were = illusory=20 as Merrill Lynch could modify or rescind those agreements at any time. = As this=20 defense relates to the parties=92 entire contract rather than the = arbitration=20 clause alone, it is a question for the arbitrators.[12] Additionally, the = plaintiffs=92 testimony=20 that they failed to read the arbitration provisions until this dispute = arose is=20 not a valid ground for setting aside their signed agreements.[13]

&nbs= p;=20 We do not hold today that employees can always invoke an employer=92s = arbitration=20 agreement. When actions outside the course of employment cannot be = attributed to=20 an employer, the latter would have no need to invoke its arbitration=20 protections.[14] But under both Texas and = federal law,=20 arbitrability turns on the substance of a claim, not artful pleading.[15] Because the plaintiffs=92 = claims against=20 Medina are in=20 substance claims against Merrill Lynch, they must abide by their = agreement to=20 arbitrate those claims.[16]

III. Arbitration with Affiliates: ML Life and ML = Trust

A. The Agreements

&nbs= p;=20 Merrill Lynch=92s cash management agreements referred to some affiliates = and third=20 parties, but not ML Trust or ML Life. Those affiliates signed their own=20 contracts with the plaintiffs, which had no arbitration clauses. As = allowing=20 these affiliates to compel arbitration would effectively rewrite their=20 contracts, we hold they cannot.

&nbs= p;=20 =93A corporate relationship is generally not enough to bind a = nonsignatory to an=20 arbitration agreement.=94 [17] Unlike a corporation and its = employees,=20 corporate affiliates are generally created to separate the businesses,=20 liabilities, and contracts of each. Thus, a contract with one = corporation =97=20 including a contract to arbitrate disputes =97 is generally not a = contract with=20 any other corporate affiliates.[18]

&nbs= p;=20 Of course, if two corporations are actually operated as one, many courts = recognize an alter-ego exception that will bind one to the arbitration=20 agreements of the other.[19] But there are no such = allegations here,=20 and the exception itself illustrates that arbitration agreements = generally do=20 not apply to all corporate affiliates. Thus, we hold ML Trust and ML = Life are=20 not covered by the plaintiffs=92 arbitration agreements with Merrill = Lynch.

B. Concerted-Misconduct Equitable Estoppel

&nbs= p;=20 ML Life and ML Trust also assert that they can invoke Merrill Lynch=92s=20 arbitration agreements through an estoppel theory based on substantially = interdependent and concerted misconduct.

&nbs= p;=20 Estoppel is one of five or six instances in which the federal circuit = courts=20 require arbitration with nonsignatories.[20] We too have applied estoppel = when=20 nonsignatories seek a direct benefit from a contract with an arbitration = clause.[21] But we have never compelled = arbitration=20 based solely on substantially interdependent and concerted misconduct,[22] and for several reasons we = decline to do=20 so here.

&nbs= p;=20 First, the United States Supreme Court has never construed the Federal=20 Arbitration Act to go this far. It has repeatedly emphasized that = arbitration=20 =93is a matter of consent, not coercion,=94 [23] that the Act =93does not = require parties=20 to arbitrate when they have not agreed to do so,=94[24] and its purpose is to make = arbitration=20 agreements =93as enforceable as other contracts, but not more so.=94[25] Thus, arbitration is not = required merely=20 because two claims arise from the same transaction, as the Court made = clear in=20 Moses H. Cone Memorial Hospital v. Mercury Construction Corp.[26] In that case, a hospital sued = a=20 contractor (with whom it had an arbitration agreement) and an architect = (with=20 whom it did not) alleging the two had improperly agreed to waive the = deadline=20 for claiming extra construction costs without the hospital=92s consent. = Despite=20 these allegations of substantially interdependent and joint misconduct, = the=20 court held that the nonsignatory architect could not be forced into=20 arbitration:

The=20 Hospital points out that it has two substantive disputes here =97 one = with=20 Mercury, concerning Mercury=92s claim for delay and impact costs, and = the other=20 with the Architect, concerning the Hospital=92s claim for indemnity for = any=20 liability it may have to Mercury. The latter dispute cannot be sent to=20 arbitration without the Architect=92s consent, since there is no = arbitration=20 agreement between the Hospital and the Architect.[27]

Recognizing=20 the =93misfortune=94 inherent in resolving these related issues in two = different=20 places, the Court nevertheless held that considerations of efficiency = and=20 convenience cannot override either a signatory=92s arbitration agreement = or a=20 nonsignatory=92s right to a jury trial:

It is true,=20 therefore, that if Mercury obtains an arbitration order for its dispute, = the=20 Hospital will be forced to resolve these related disputes in different = forums.=20 That misfortune, however, is not the result of any choice between the = federal=20 and state courts; it occurs because the relevant federal law requires = piecemeal resolution when necessary to give effect to an arbitration = agreement. Under the Arbitration Act, an arbitration agreement must be = enforced=20 notwithstanding the presence of other persons who are parties to the = underlying=20 dispute but not to the arbitration agreement. If the dispute between = Mercury and=20 the Hospital is arbitrable under the Act, then the Hospital=92s two = disputes will=20 be resolved separately =96 one in arbitration, and the other (if at all) = in=20 state-court litigation.[28]

&nbs= p;=20 While the Fifth Circuit has recognized concerted-misconduct estoppel, = the theory=20 is far from well-settled in the federal courts. Despite hundreds of = federal=20 appeals involving arbitration,[29] it appears in only 10 reported = opinions.=20 In the two leading cases, Grigson v. Creative Artists Agency = L.L.C.[30] and MS Dealer Service Corp. = v.=20 Franklin,[31] the Fifth and Eleventh = Circuits held=20 that both direct-benefits and concerted-misconduct = estoppel were=20 present, so it is unclear what the latter theory added to the result.[32] Of the remainder, the theory = was found=20 inapplicable in 4,[33] and it was not reached in 2 = more.[34] In only 2 cases did the result = hinge on=20 the exception =97 and in those the Fifth Circuit compelled arbitration = in one=20 and refused to do so in the other.[35]

&nbs= p;=20 In the latter case, Hill v. G E Power Systems, Inc., the Fifth = Circuit=20 found that =93Grigson=92s second prong is met=94 (direct-benefits = being the=20 first estoppel prong and concerted-misconduct the second), and at the = same time=20 that =93the district court did not abuse its discretion=94 in refusing = to compel=20 arbitration because =93the district court is better equipped to make the = call than=20 this court, and we do not lightly override that discretion.=94[36] But the right to a jury trial = is not=20 discretionary. Nor is the right to have an arbitration contract = enforced. If the=20 parties have not agreed to arbitration, no trial court has discretion to = make=20 them go; if they have agreed to arbitration, no trial court has = discretion to=20 let one wriggle out.[37] This Court has already = rejected the=20 argument that equitable estoppel allows trial judges to send cases to=20 arbitration or litigation depending on which they think would be fair.[38]

&nbs= p;=20 It is true that other federal circuit courts have estopped signatory = plaintiffs=20 from avoiding arbitration with nonsignatories using an = =93intertwined-claims=94=20 test. For example, the Second Circuit has compelled arbitration when a=20 nonsignatory defendant has a =93close relationship=94 with one of the = signatories=20 and the claims are =93intimately founded in and intertwined with the = underlying=20 contract obligations.=94 [39] But the =93close = relationship=94 requirement=20 has generally limited this exception to instances of strategic pleading = by a=20 signatory who, in lieu of suing the other party for breach, instead sues = that=20 party=92s nonsignatory principals or agents for pulling the strings.[40] As discussed above with = reference to=20 employees, allowing litigation to proceed that is in substance against a = signatory though in form against a nonsignatory would allow indirectly = what=20 cannot be done directly. By contrast, the concerted-misconduct test has = no=20 =93close relationship=94 component, and would sweep independent entities = and even=20 complete strangers into arbitration agreements.[41]

&nbs= p;=20 Similarly, while Texas law has long recognized that = nonparties=20 may be bound to a contract under traditional contract rules like agency = or alter=20 ego,[42] there has never been such a = rule for=20 concerted misconduct. Conspiracy is a tort, not a rule of contract = law.[43] And while conspirators consent = to=20 accomplish an unlawful act,[44] that does not mean they = impliedly=20 consent to each other=92s arbitration agreements. As other contracts do = not become=20 binding on nonparties due to concerted misconduct, allowing arbitration=20 contracts to become binding on that basis would make them easier to = enforce than=20 other contracts, contrary to the Arbitration Act=92s purpose.[45]

&nbs= p;=20 Until the United States Supreme Court clarifies whether = concerted-misconduct=20 estoppel correctly reflects federal law, or even whether federal or = state law=20 governs the issue,[46] today=92s decision must remain = somewhat=20 tentative. But we find nothing in Texas contract law, and no settled = principles=20 of federal arbitration law, that would require the plaintiffs to = arbitrate with=20 Merrill Lynch=92s affiliates.

IV. Stay of Litigation Pending Arbitration

&nbs= p;=20 In addition to moving to compel arbitration, ML Trust and ML Life moved = to stay=20 the plaintiffs=92 litigation against them. Assuming the same issues must = be=20 decided both in arbitration (against Medina) and in court (against the = affiliates),=20 we hold the latter must be stayed until the former is completed.

&nbs= p;=20 Trial judges cannot deny a party its day in court, but they have always = had wide=20 discretion to say when that day will be. Both the Federal and Texas = Arbitration=20 Acts require courts to stay litigation of issues that are subject to=20 arbitration.[47] Without such a stay, = arbitration would=20 no longer be the =93rapid, inexpensive alternative to traditional = litigation=94[48] it was intended to be, so long = as one=20 could find a trial judge willing to let the litigation proceed for = awhile. The=20 Federal Arbitration Act was passed precisely to overcome such judicial=20 hostility.[49]

&nbs= p;=20 Thus, when an issue is pending in both arbitration and litigation, the = Federal=20 Arbitration Act generally requires the arbitration to go forward first;=20 arbitration =93should be given priority to the extent it is likely to = resolve=20 issues material to this lawsuit.=94 [50] This has been the practice in = all the=20 federal courts.[51] As Judge Posner has noted:

[There]=20 are cases in which a party to an arbitration agreement, trying to get = around it,=20 sues not only the other party to the agreement but some related party = with which=20 it has no arbitration agreement, in the hope that the claim against the = other=20 party will be adjudicated first and have preclusive effect in the = arbitration.=20 Such a maneuver should not be allowed to succeed . . . [and] would = require the=20 court to stay the proceedings before it and let the arbitration go = forward=20 unimpeded.[52]

&nbs= p;=20 We encountered the problem in different circumstances in In re = Kellogg Brown=20 & Root, Inc., in which a nonsignatory=92s litigation of a lien = claim was=20 abated while arbitrators decided who owned the equipment to which the = lien claim=20 attached.[53] Once arbitration was = completed, we held=20 the litigation could proceed.[54] The case illustrates one of = many=20 circumstances in which litigation must be abated to ensure that an issue = two=20 parties have agreed to arbitrate is not decided instead in collateral=20 litigation. In this case, if the alleged=20 misrepresentations and omissions by Medina must be arbitrated, that = proceeding must=20 be given priority so that it is not rendered moot by deciding the same = issues in=20 court. After the arbitration is completed, the plaintiffs=92 claims = against ML=20 Trust and ML Life can then be litigated (to the extent they survive) = without=20 infringing the arbitration agreement. In the interim, a stay of = litigation=20 ensures that the Alanizes do not =93both have [their] contract and = defeat it=20 too.=94 [55]

*=20 * *

&nbs= p;=20 Accordingly, we hold the trial court abused its discretion in failing to = compel=20 arbitration of the plaintiffs=92 claims against Henry Medina, and in = failing to=20 stay their litigation against ML Trust and ML Life until that = arbitration was=20 concluded. We conditionally grant the writ of mandamus and order the = trial court=20 to vacate its order and enter a new order in accordance with this = opinion. We=20 are confident the trial court will comply, and our writ will issue only = if it=20 does not.

&nbs= p; = ; = &= nbsp; &n= bsp; =20 __________________________________

&nbs= p; = ; = &= nbsp; &n= bsp; =20 Scott Brister

&nbs= p; = ; = &= nbsp; &n= bsp; =20 Justice

OPINION DELIVERED: = August 24,=20 2007

^[1]=20 See First Options of Chicago, Inc. v. Kaplan, 514 = U.S. = 938, 947=20 (1995).

^[2]=20 159 S.W.3d 162, 165.

^[3]=20 See 9 U.S.C. =A7=A7 1-16.

^[4]=20 In re D. Wilson Constr. Co., 196 S.W.3d 774, 780 (Tex. 2006); In re Weekley Homes, L.P., = 180 S.W.3d=20 127, 130 (Tex.=20 2005).

^[5]=20 Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309, 1318 (11th = Cir. 2002)=20 (internal quotations omitted); accord, Pritzker v. Merrill Lynch, = Inc., 7=20 F.3d 1110, 1121 (3d Cir. 1993) (=93Because a principal is bound under = the terms of=20 a valid arbitration clause, its agents, employees, and representatives = are also=20 covered under the terms of such agreements.=94); In re Vesta Ins. = Group,=20 Inc., 192 S.W.3d 759, 762-63 (Tex. 2006).

^[6] = See,=20 e.g., Miller v. Keyser, 90 S.W.3d 712, 717 (Tex. 2002) (noting =93Texas=92 longstanding rule that a corporate = agent is=20 personally liable for his own fraudulent or tortious acts=94); Liberty Mut.=20 Ins. Co. v. Garrison Contractors, Inc., 966 S.W.2d 482, 486 (Tex. = 1998)=20 (holding both insurer and its employees may be liable for Insurance Code = violations); Weitzel v. Barnes, 691 S.W.2d 598, 601 (Tex. 1985) = (holding=20 both corporation and its individual agents may be liable under DTPA);=20 Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 375 = (Tex.=20 1984) (holding both corporation and its agents may be liable for=20 defamation).

^[7] = See In re=20 Dillard Dep=92t Stores, Inc., 198 S.W.3d 778, 782 (Tex. 2006); In re Halliburton Co., 80 = S.W.3d 566,=20 569 (Tex.=20 2002).

^[8] = In re=20 Vesta, 192 S.W.3d at 762 (quoting Holloway v. Skinner, 898 = S.W.2d=20 793, 795 (Tex.=20 1995) (citation omitted)).

^[9] = See Minyard=20 Food Stores, Inc. v. Goodman, 80 S.W.3d 573, 577 (Tex. 2002) (=93The = general=20 rule is that an employer is liable for its employee=92s tort only when = the=20 tortious act falls within the scope of the employee=92s general = authority in=20 furtherance of the employer=92s business and for the accomplishment of = the object=20 for which the employee was hired.=94); GTE Sw., Inc. v. Bruce, = 998 S.W.2d=20 605, 617=9618 (Tex. 1999) (=93Generally, a master is vicariously liable = for the=20 torts of its servants committed in the course and scope of their = employment.=20 This is true even though the employee=92s tort is intentional when the = act,=20 although not specifically authorized by the employer, is closely = connected with=20 the servant=92s authorized duties.=94) (citations omitted). =

^[10]=20 See, e.g., Hennigan v. I.P. Petroleum Co., 858 = S.W.2d 371,=20 372 (Tex. 1993) (per curiam) (holding plaintiff did not abandon gender=20 discrimination claim by testifying at her deposition that she did not = believe=20 she had been fired because of her gender). Accordingly, such a statement = is=20 neither a judicial admission (=93a formal waiver of proof usually found = in=20 pleadings or the stipulations of the parties=94), nor even a = quasi-admission (=93[a]=20 party=92s testimonial declaration[]=94 that is evidentiary but =93not = conclusive=94).=20 Id.

^[11]=20 See, e.g., Liberty Mut. Ins. Co., = 966 S.W.2d=20 at 486 (holding both insurer and its employees may be liable for = Insurance Code=20 violations); Weitzel, 691 S.W.2d at 601 (holding both corporation = and its=20 individual agents may be liable under DTPA); see also Tex. Rev. Civ. Stat. art. = 581-33, =A7=A7=20 A(2), F(1) (holding one who offers securities and those who directly or=20 indirectly control them liable for securities fraud).

^[12] = See=20 Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006) (=93We reaffirm = today that . .=20 . a challenge to the validity of the contract as a whole, and not = specifically=20 to the arbitration clause, must go to the arbitrator.=94); In re = FirstMerit=20 Bank, N.A., 52 S.W.3d 749, 756 (Tex. 2001).

^[13] = See In re=20 AdvancePCS Health L.P., 172 S.W.3d 603, 608 (Tex. 2005); EZ Pawn Corp. v. Mancias, 934 = S.W.2d=20 87, 90 (Tex.=20 1996) (=93Gonzalez=92 failure to read the agreement does not excuse him = from=20 arbitration. We presume a party, like Gonzalez, who has the opportunity = to read=20 an arbitration agreement and signs it, knows its = contents.=94).

^[14]=20 See, e.g., McCarthy v. Azure, 22 F.3d 351, 362-63 = (1st Cir.=20 1994) (refusing to allow nonsignatory owner acting in his own interest = from=20 invoking arbitration clause signed by his wholly owned=20 corporation).

^[15] = See Am.=20 Bankers Ins. Group, Inc. v. Long, 453 F.3d 623, 626-28 (4th Cir. = 2006);=20 Ford v. NYLCare Health Plans of Gulf Coast, Inc., 141 F.3d 243, = 250 (5th=20 Cir. 1998); Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., = 10 F.3d=20 753, 757=9658 (11th Cir. 1993); Bonny v. Soc=92y of Lloyd=92s, 3 = F.3d 156, 162=20 (7th Cir. 1993); Letizia v. Prudential Bache Sec., Inc., 802 F.2d = 1185,=20 1188 n.4 (9th Cir. 1986); In re Weekley Homes, L.P., 180 S.W.3d = 127,=20 131=9632 (Tex. 2005).

^[16] = We disagree=20 with the plaintiffs=92 alternative argument that if New York law = applies,=20 this result would be any different. Compare Hirschfeld Prods. v. = Mirvish,=20 630 N.Y.S.2d 726, 728 (N.Y. App. Div. 1995) (=93The attempt to = distinguish=20 officers and directors from the corporation they represent for the = purposes of=20 evading an arbitration provision is contrary to the established policy = of this=20 State . . . . If it were otherwise, it would be too easy to circumvent = the=20 agreement by naming individuals as defendants instead of the entity = Agents=20 themselves.=94) (quotations and citations omitted), with In re Vesta = Ins.=20 Group, Inc., 192 S.W.3d 759, 762 (Tex. 2006) (=93When contracting = parties agree to=20 arbitrate all disputes . . . they generally intend to include disputes = about=20 their agents=92 actions because =91as a general rule, the actions of a = corporate=20 agent on behalf of the corporation are deemed the corporation=92s = acts.=92 If=20 arbitration clauses only apply to contractual signatories, then this = intent can=20 only be accomplished by having every officer and agent (and every = affiliate and=20 its officers and agents) either sign the contract or be listed as a = third-party=20 beneficiary. This would not place such clauses on an equal footing with = all=20 other parts of a corporate contract.=94) (citation = omitted).

^[17] = Zurich Am.=20 Ins. Co. v. Watts Indus., Inc., = 417 F.3d=20 682, 688 (7th Cir. 2005).

^[18]=20 See, e.g., S. Union Co. v. City of Edinburg, 129 = S.W.3d 74,=20 86 (Tex. 2003) (holding franchise tax = agreement=20 inapplicable to corporate affiliate under single-business-enterprise = theory);=20 Bell Oil & Gas Co. v. Allied Chem. Corp., 431 S.W.2d 336, 341=20 (Tex. 1968)=20 (holding corporation not liable for affiliate=92s = debts).

^[19]=20 See, e.g., Am. Bankers, 453 F.3d at 627 n.3; = Bridas=20 S.A.P.I.C. v. Gov=92t of Turkmenistan, 447 F.3d 411, 416 (5th Cir. = 2006);=20 Comer v. Micor, Inc., 436 F.3d 1098, 1101 (9th Cir.=20 2006).

^[20] = See=20 Bridas, 447 F.3d at 415; Comer, 436 F.3d at 1101; Zurich = Am.,=20 417 F.3d at 687; Denney v. BDO Seidman, L.L.P., 412 F.3d 58, 71 = (2d Cir.=20 2005); Trippe Mfg. Co. v. Niles Audio Corp., 401 F.3d 529, 532 = (3d Cir.=20 2005); InterGen N.V. v. Grina, 344 F.3d 134, 145-46 (1st Cir. = 2003);=20 Javitch v. First Union Sec., Inc., 315 F.3d 619, 629 (6th Cir. = 2003);=20 Employers Ins. of Wausau v. Bright Metal Specialties, Inc., 251 = F.3d=20 1316, 1322 (11th Cir. 2001); Int=92l Paper Co. v. Schwabedissen = Maschinen &=20 Anlagen GMBH, 206 F.3d 411, 416-17 (4th Cir. 2000); see also In = re=20 Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex.=20 2005).

^[21] = See In re=20 Weekley Homes, L.P., 180 S.W.3d 127, 131=9632 (Tex. 2005); Kellogg, 166 = S.W.3d at=20 741.

^[22] = We noted=20 allegations of concerted misconduct in Meyer v. WMCO-GP, LLC, 211 = S.W.3d=20 302, 306=9607 (Tex. 2006), but compelled = arbitration because=20 the plaintiff=92s claims depended on the underlying agreement, and thus = were=20 governed by principles of direct-benefits estoppel.

^[23] = Volt Info.=20 Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 = U.S.=20 468, 479 (1989).

^[24] = EEOC v.=20 Waffle House, Inc., 534 U.S. 279, 293 (2002) (quoting Volt, = 489=20 U.S. at = 478).

^[25] = Prima=20 Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S.=20 395, 404 n.12 (1967).

^[26] = 460=20 U.S. 1 = (1983).

^[27] = Id. at = 19-20.

^[28] = Id. at = 20=20 (emphasis in original).

^[29] = =93The federal=20 courts of appeal are currently publishing more than one hundred cases = per year=20 substantially dealing with arbitration.=94 Frank Z. LaForge, Note, = Inequitable=20 Estoppel: Arbitrating with Nonsignatory Defendants Under Grigson v. = Creative=20 Artists, 84 Tex. L. = Rev. 225,=20 225 (2005).

^[30] = 210 F.3d 524,=20 528-31 (5th Cir. 2000).

^[31] = 177 F.3d 942,=20 947 (11th Cir. 1999).

^[32] = Though the=20 Grigson court stated that equitable estoppel =93is much more = readily=20 applicable when the case presents both independent bases,=94 210 F.3d at = 527, if=20 the two bases are independent and each alone is sufficient, it is hard = to see=20 why either is made =93more applicable=94 by having both. See also In = re Humana=20 Inc. Managed Care Litig., 285 F.3d 971, 976 (11th Cir. 2002) (=93The = plaintiff=92s actual dependance on the underlying contract in making out = the claim=20 against the nonsignatory defendant is therefore always the sine qua = non=20 of an appropriate situation for applying equitable=20 estoppel.=94).

^[33] = See=20 Brantley v. Republic Mortgage Ins. Co., 424 F.3d 392, 396 (4th = Cir.=20 2005); Bridas S.A.P.I.C. v. Gov=92t of Turkmenistan, 345 F.3d = 347,=20 360-61 (5th Cir. 2003); Westmoreland v. Sadoux, 299 F.3d 462, 467 = (5th=20 Cir. 2002); Humana, 285 F.3d at 976.

^[34] = See Am.=20 Bankers Ins. Group, Inc. v. Long, 453 F.3d 623, 627 n.3 (4th Cir. = 2006);=20 Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 706 (5th Cir. = 2002)=20 (noting that exception was applied by district court but that appeal = addressed=20 other issues).

^[35] See Brown v. Pac. Life Ins. = Co., 462=20 F.3d 384, 399 (5th Cir. 2006) (compelling arbitration); Hill v. G E = Power=20 Sys., Inc., 282 F.3d 343, 349 (5th Cir. 2002) (refusing to compel=20 arbitration).

^[36] Hill, 282 F.3d at = 349.

^[37] Shearson/American Express, = Inc. v.=20 McMahon, 482 U.S. 220, 225 (1987) = (citation=20 omitted) (noting that Federal Arbitration Act was specifically enacted = to=20 overcome =93judicial hostility to arbitration agreements=94).

^[38] See Meyer v. WMCO-GP, LLC, = 211=20 S.W.3d 302, 308 (Tex. 2006) (=93WMCO also argues that = the trial=20 court had discretion not to apply equitable estoppel, even if it could = be=20 applied in the same circumstances. We disagree. A trial court has no=20 =91discretion=92 in determining what the law is or applying the law to = the facts.=94)=20 (internal quotations omitted).

^[39] Thomson-CSF, S.A. v. Am. = Arbitration=20 Ass=92n, 64 F.3d 773, 779 (2d Cir. 1995) (internal citations = omitted);=20 accord, Denney v. BDO Seidman, L.L.P., 412 F.3d 58, 70 (2d = Cir.=20 2005); JLM Indus., Inc. v. Stolt-Nielsen SA, 387 F.3d 163, 177 = (2d Cir.=20 2004); Astra Oil Co., v. Rover Navigation, Ltd., 344 F.3d 276, = 279 (2d=20 Cir. 2003); Choctaw Generation Ltd. P=92ship v. Am. Home Assurance = Co., 271=20 F.3d 403, 406 (2d Cir. 2001); Smith/Enron Cogeneration Ltd. v. Smith=20 Cogeneration Int=92l, Inc., 198 F.3d 88, 97=9698 (2d Cir. = 1999).

^[40] See CD Partners, LLC v. = Grizzle, 424=20 F.3d 795, 799 (8th Cir. 2005) (allowing nonsignatory owners of signatory = franchisor to invoke its arbitration clause); JLM Indus., 387 = F.3d at 177=20 (allowing nonsignatory owners of subsidiary to invoke its arbitration = clauses);=20 Astra, 344 F.3d at 279 (allowing nonsignatory affiliate that = acted as=20 agent for signatory corporation to invoke its arbitration clause);=20 Smith/Enron, 198 F.3d at 97=9698 (allowing nonsignatory = affiliates and=20 assignors of signatory corporations to invoke their arbitration = clauses);=20 Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 758 = (11th=20 Cir. 1993) (allowing nonsignatory parent to invoke subsidiary=92s = arbitration=20 clause); J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, = S.A., 863=20 F.2d 315, 321 (4th Cir. 1988) (same); see also E.I. DuPont de Nemours = and Co.=20 v. Rhone Poulenc Fiber and Resin Intermediates, S.A.S., 269 F.3d = 187, 201=20 (3d Cir. 2001) (=93In essence, a non-signatory voluntarily pierces its = own veil to=20 arbitrate claims against a signatory that are derivative of its=20 corporate-subsidiary=92s claims against the same signatory.=94); cf. = Choctaw=20 Generation, 271 F.3d at 406 (allowing nonsignatory surety to invoke = debtor=92s=20 arbitration clause); but see Denney, 412 F.3d at 70 (allowing=20 unaffiliated nonsignatories to invoke arbitration by estoppel); = McCarthy v.=20 Azure, 22 F.3d 351, 362=9663 (1st Cir. 1994) (refusing to allow = nonsignatory=20 owner of signatory corporation to invoke its arbitration clause). =

^[41] Cf. In re Vesta Ins. = Group,=20 Inc., 192 S.W.3d 759, 763 (Tex. 2006) (=93We agree with Cashion = that he=20 would not be required to arbitrate a tortious interference claim against = a=20 complete stranger to his contract and its arbitration = clause.=94).

^[42] See In re Weekley Homes, = L.P., 180=20 S.W.3d 127, 131 (Tex. 2005).

^[43] See Tilton v. Marshall, 925 S.W.2d 672, 680=9681 = (Tex. 1996). =

^[44] See Triplex Commc=92ns, Inc. = v. Riley,=20 900 S.W.2d 716, 719 (Tex. 1995).

^[45] See Prima Paint Corp. v. Flood = &=20 Conklin Mfg. Co., 388 U.S. 395, 404 n. 12 (1967); In re Kellogg = Brown=20 & Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005).

^[46] See Weekley, 180 S.W.3d at = 130;=20 Kellogg, 166 S.W.3d at 738=9639.

^[47] 9 U.S.C. =A7 3; Tex. Civ. Prac. & Rem. Code = =A7=A7=20 171.025, 172.174.

^[48] Jack B. Anglin Co., Inc. v. = Tipps,=20 842 S.W.2d 266, 272=9673 (Tex. 1992).

^[49] Shearson/American Express, = Inc. v.=20 McMahon, 482 U.S. 220, 225=9626 = (1987).

^[50] AgGrow Oils, L.L.C. v. Nat=92l = Union Fire=20 Ins. Co., 242 F.3d 777, 783 (8th Cir. 2001).

^[51] See, e.g., Volkswagen Of Am., = Inc. v.=20 Sud=92s Of Peoria, Inc., 474 F.3d 966, 972 (7th Cir. 2007); Waste = Mgmt.,=20 Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339, = 345=20 (5th Cir. 2004); Hill v. G E Power Sys., Inc., 282 F.3d 343, 348 = (5th=20 Cir. 2002); Harvey v. Joyce, 199 F.3d 790, 796 (5th Cir. 2000); = Subway=20 Equip. Leasing Corp. v. Forte, 169 F.3d 324, 329 (5th Cir. 1999);=20 WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 76 (2d Cir. 1997); = IDS=20 Life Ins. Co. v. SunAmerica, Inc., 103 F.3d 524, 530 (7th Cir. = 1996); Sam=20 Reisfeld & Son Import Co. v. S.A. Eteco, 530 F.2d 679, 681 (5th = Cir.=20 1976).

^[52] IDS Life Ins. Co., 103 = F.3d at=20 530.

^[53] 166 S.W.3d 732 (Tex. 2005). =

^[54] Id. at 742.

^[55] In re Weekley Homes, L.P., = 180=20 S.W.3d 127, 135 (Tex.=20 2005).