Delegating Scope of Contract Issue to Arbitrator

The Texas Supreme Court recently issued a significant ruling concerning the enforcement of arbitration agreements, particularly those containing delegation clauses. In Cerna v. Pearland Urban Air, LLC, 714 S.W.3d 585 (Tex. 2025), the Court clarified the critical distinction between challenges to the existence of an arbitration agreement (which courts must decide) and challenges to its scope or applicability (which can be delegated to an arbitrator). The ruling mandates that where parties clearly and unmistakably delegate questions of scope to an arbitrator, courts must compel arbitration, even if the dispute involves the agreement's duration or whether it applies to a subsequent transaction.

Case Background

This case arose from an injury sustained by a child at an amusement park. On August 30, 2020, Abigail Dalila Cerna, acting as Next Friend of R.W., visited the Pearland Urban Air Trampoline and Adventure Park. Upon entry, Cerna signed a "Customer Release, Assumption of Risk, Waiver of Liability, and Indemnification Agreement" (referred to by the Court as the August Agreement).

The August Agreement contained a broadly worded arbitration clause. Crucially, this clause stipulated that any dispute or claim arising out of or relating to the Agreement, personal injury, property damage, or "the scope, arbitrability, or validity of this arbitration agreement (Dispute)" must be settled by binding arbitration. No clause in the agreement provided express language regarding the agreement’s duration.

Approximately three months later, on November 21, 2020, Cerna and her child returned to the park and did not sign a new release. Cerna alleges that during this second visit, her child was seriously injured.

Cerna filed suit against Pearland Urban Air, LLC, which subsequently moved to compel arbitration based on the August Agreement. Cerna countered that the August Agreement could not apply to the November visit because it lacked durational language, thus asserting that no agreement to arbitrate existed for the specific incident.

The trial court denied the motion to compel arbitration, but the Court of Appeals for the Fourteenth District reversed that ruling.

The Texas Supreme Court’s Holding

The Texas Supreme Court affirmed the judgment of the court of appeals.

The Court held that Cerna’s challenge concerning whether the agreement extended to the second visit was a challenge to the scope of the signed release, not its existence. Because the parties had clearly and unmistakably agreed to delegate such scope issues to an arbitrator, the trial court erred in declining to compel arbitration. The Court remanded the case to the trial court to issue an order compelling arbitration.

Legal Analysis: Existence vs. Scope

The Court relied on established arbitration law requiring a two-step process:

1. Existence Inquiry (For the Court): A party seeking to compel arbitration must first establish that a valid agreement to arbitrate exists. Courts must decide challenges related to the "very existence of an agreement". Cerna did not dispute the formation of the August Agreement or that it bound her for the August visit, nor did she invoke a superseding agreement.

   
   

2. Scope Inquiry (Delegable): Once an agreement exists, the court examines whether the claims fall within the agreement’s scope. Parties may, however, agree to delegate this scope question to an arbitrator. Courts enforce delegation provisions only if they "clearly and unmistakably" delegate matters of scope to an arbitrator.

Cerna attempted to frame her challenge—that the August Agreement did not apply to the November visit—as one going to the existence of a contract for that specific visit.

The Court definitively rejected this reframing, holding that Cerna’s challenge concerns the extent of the agreement’s applicability, which is a recognized issue of scope. The Court reiterated its stance from TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, that reframing a scope challenge as an existence challenge "collapses two separate inquiries". An argument about an agreement's "existence," when confined to a particular claim, crosses the threshold into scope.

Crucially, the August Agreement contained clear delegation language: it required arbitration for any dispute regarding the "scope, arbitrability, or validity of this arbitration agreement". The Texas Supreme Court has recognized similar language as sufficient to enforce delegation.

Because Cerna conceded the existence of the August Agreement, and the agreement contained a clear delegation clause, the arbitrator must decide whether the agreement's lack of durational language means it governs beyond the initial visit. The Court noted that allowing judicial inquiry into this dispute would subsume scope questions into existence questions, thus eroding enforcement of the delegation provision.

Implications

• Delegation is Powerful: If a contract contains a clause that clearly and unmistakably delegates questions of scope and arbitrability to the arbitrator, Texas courts must compel arbitration once a valid foundational agreement is established.

• Duration is Scope: Disputes over the duration or applicability of an existing, valid arbitration agreement to subsequent visits or transactions will generally be treated as questions of scope, not existence, and will therefore be decided by the arbitrator if properly delegated.

• Judicial Restraint: The Court affirmed that it "must respect" the agreement that the arbitrator decides whether the August Agreement applies to subsequent visits. The Court explicitly stated it expressed "no opinion on whether the August Agreement governs the November visit".