Kara Sandler worked for Modernizing Medicine, Inc. (ModMed), a Delaware corporation. Her employment contract required that any employment-related disputes be resolved through binding arbitration under the Federal Arbitration Act, following the procedures of the California Arbitration Act. The contract further specified that arbitration would be administered by JAMS (Judicial Arbitration & Mediation Services, Inc.), whose rules provide that an arbitrator — not a court — must decide threshold questions about the validity and enforceability of the arbitration agreement itself. The contract also contained a generic severability clause stating that if “a court or other body of competent jurisdiction” found any provision invalid, the offending provision would be enforced to the maximum extent permissible and the remainder of the agreement would survive.
Sandler filed suit against ModMed in the Southern District of California, asserting state and federal claims of age and disability discrimination. ModMed moved to compel arbitration. Sandler opposed the motion, arguing the arbitration agreement was unconscionable.
The district court denied ModMed’s motion. While it acknowledged that the incorporation of JAMS rules constituted a delegation of validity questions to the arbitrator, the court relied on several California state-court decisions to conclude that the severability clause undermined that delegation. The court’s reasoning was that because the severability clause referenced “a court,” the parties may not have clearly intended for an arbitrator to be the one deciding whether the arbitration agreement was enforceable. Having claimed authority to decide the question itself, the district court then ruled the arbitration agreement unconscionable and refused to sever the offending provisions.
The Ninth Circuit reversed. The panel in the published case of Sandler v. Modernizing Medicine, Inc. No. 24-6623 (March 2026) and took issue with the district court’s reliance on California state-court opinions, and held that the district court misapplied federal law and should never have reached the unconscionability question at all.
The court began with settled precedent: when parties incorporate JAMS (or AAA) rules into an arbitration agreement, that incorporation constitutes “clear and unmistakable” evidence of an intent to delegate questions of arbitrability to the arbitrator. The panel cited Patrick v. Running Warehouse, LLC, 93 F.4th 468, 481 (9th Cir. 2024), and Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015), as controlling authority on that point.
The central question was whether a generic severability clause mentioning “a court” introduced enough ambiguity to negate that otherwise clear delegation. The Ninth Circuit held it did not. The panel reasoned that the two clauses can coexist: the delegation clause sends disputes — including validity disputes — to the arbitrator, while the severability clause merely provides a contingency mechanism if a court were to interpret the contract for any reason. The court emphasized the “cardinal principle of contract construction” from Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63 (1995), that contract clauses should be read as consistent with one another rather than in conflict. Letting the severability clause swallow the delegation clause would render the latter superfluous, a result disfavored under Trident Center v. Connecticut General Life Insurance Co., 847 F.2d 564, 566 (9th Cir. 1988).
The panel also took issue with the district court’s reliance on California state-court opinions. Whether parties clearly and unmistakably intended to delegate arbitrability is a question of federal law under the FAA, as established in Brennan, 796 F.3d at 1129, and First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Any state rule that uses a severability clause to negate an otherwise clear delegation would be preempted by the FAA, under the reasoning of Kindred Nursing Centers Limited Partnership v. Clark, 581 U.S. 246, 251 (2017), and AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). The Fifth and Sixth Circuits have reached the same conclusion. See Arnold v. Homeaway, Inc., 890 F.3d 546, 552 (5th Cir. 2018); Blanton v. Domino’s Pizza Franchising LLC, 962 F.3d 842, 846–47 (6th Cir. 2020).
The Ninth Circuit vacated the unconscionability ruling, reversed the denial of the motion to compel, and remanded with instructions to grant the motion and stay the case pending arbitration.