PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
               _______________

                    No. 16-1975
                  _______________

        ALIMENTS KRISPY KERNELS, INC.,
                     Appellant

                           v.

NICHOLS FARMS a/k/a NICHOLS FAMILY FARMS a/k/a
            NICHOLS PISTACHIOS

                          ___

    On Appeal from the United States District Court
               for the District of New Jersey
               (D.C. Civ. No. 3:13-cv-5995)
    District Judge: The Honorable Peter G. Sheridan
                     _______________

   Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                 November 18, 2016

  Before: AMBRO, SHWARTZ, and FUENTES, Circuit
                    Judges

           (Opinion Filed: March 21, 2017)
Andrea L. D’Ambra, Esq.
John F. Tully, Esq.
Norton Rose Fulbright
1301 Avenue of the Americas
New York, NY 10019

Jami M. Vibbert, Esq.
Venable
1270 Avenue of the Americas
24th Floor, Rockefeller Center
New York, NY 10020

Counsel for Appellant

Samuel Feldman, Esq.
Orloff Lowenbach Stifelman & Siegel
101 Eisenhower Parkway
Suite 400
Roseland, NJ 07068

Counsel for Appellee
                       _______________

                          OPINION
                          _________


FUENTES, Circuit Judge.

       The plaintiff, Aliments Krispy Kernels, brought this
suit to enforce an arbitration award it received against the
defendant, Nichols Farms, in a contract dispute. The award,




                                 2
based on an alleged breach of contract, was in the sum of
$222,100. Claiming that the parties never agreed to arbitrate,
Nichols Farms did not attend the arbitration. Aliments filed a
petition to confirm the arbitration award and Nichols cross-
petitioned to vacate it. The District Court denied Aliments’
petition to confirm and granted Nichols’s petition to vacate.
Because we find that an issue of material fact exists as to
whether the parties agreed to arbitrate, we will vacate the
District Court’s judgment and remand for further
proceedings.

I.    Background

       In August 2012, Aliments, a Canadian snack purveyor,
contacted its American broker, Sterling Corporation, to
purchase thousands of pounds of raw pistachios. Sterling, in
turn, contacted Pacific/Atlantic Crop Exchange, another
agricultural commodities broker. Learning of Aliments’
interest in purchasing pistachios, Pacific called Nichols, a
pistachio grower in California. Nichols agreed to the
proposed quantity and price. One month later, in September
2012, Sterling contacted Pacific with a second order of
pistachios from Aliments. Pacific reached out to Nichols
once again. Nichols agreed to the proposed quantity and
price of this second order.

       To confirm the two orders, Sterling issued sales
confirmations for the August and September orders and sent
copies to Aliments and Pacific. Pacific did not forward the
Sterling sales confirmations to Nichols, however, and instead
issued its own set of sales confirmations, which were sent to




                              3
Nichols and Sterling. 1 Neither Aliments nor Nichols was
aware that two sets of sales confirmations existed. The two
sets contained the same terms, including a thirty-day credit
term.     However, while Sterling’s sales confirmations
contained arbitration clauses, it appears that some but not all
of the sales confirmations generated by Pacific contained
arbitration clauses.2

       Aliments evidently believed that the Sterling sales
confirmations, though unsigned by either party, represented a
binding contract to purchase pistachios from Nichols, on
credit with payment due thirty days from delivery, “as
usual.”3 Nichols, on the other hand, thought that the thirty-
day credit term was but a placeholder, as were all the terms in
the Pacific sales confirmations except for the price and
quantity terms. In support, the president of Nichols submitted
a declaration explaining that “[w]hen Nichols receives a
request from a customer to purchase product on credit, [it]
obtain[s] a credit report and then [he, the president of
Nichols, is] the one who makes the decision about whether to

1
  A 257-58 (Pacific never forwarded the sales confirmations
from Sterling to Nichols because it is its business practice “to
not forward to the seller unsigned confirmations. Instead, [it]
wait[s] to receive (and pass on) either a written purchase
order or a signed confirmation from the buyer, which [it] then
forward[s] to the seller, and/or a written contract or sales
acknowledgement from the seller, reflecting a firm offer to
purchase product.”); A 47 (president of Nichols declaring that
he had never seen the Sterling sales confirmations).
2
  There is a dispute as to which versions of the sales
confirmations were sent to Nichols and Sterling.
3
  A 101-02.




                               4
sell product on credit and on what terms and conditions.”4
The president of Pacific corroborated this practice, and
submitted a separate declaration, stating that he had no
authority from Nichols “to commit to any credit terms or to
bind Nichols to any credit terms.” 5 He avers that he created
the sales confirmations based on a “template,” changing only
the amount and price to reflect this particular transaction,
leaving “product description, packaging, addresses, and
terms” as-is from a prior transaction.6 “Based on [his] many
years in the commodity brokerage business,” the president of
Pacific “understood that Nichols, in response to [Aliments’]
offer, had the right to perform a credit check on [Aliments],
and require security or advance payment if it thought it to be
necessary.”7

        After the sales confirmations were created, Nichols
requested, and Aliments submitted, a credit application. This
credit application was denied due to Aliments’ previous late
payments to Nichols, its involvement in a lawsuit with
another farmer, and the increased difficulty of collection with
any foreign corporation. In short, Nichols would not deliver
its pistachios until it received payment from Aliments first.

       Aliments protested that advance payment is a highly
irregular request that is inconsistent with Nichols’s past
practices with Aliments and with industry standards.
Nonetheless, it continued to attempt to work with Nichols to
come to an amiable resolution. However, the parties were

4
  A 45.
5
  A 74.
6
  

                              5
ultimately unable to come to an agreement on a payment
method. Finally, Aliments bought pistachios from another
vendor at a higher price. Seeking to recoup the extra cost,
Aliments initiated arbitration proceedings in accordance with
the arbitration clauses contained in the Sterling sales
confirmations that were unseen and unsigned by Nichols.

        Despite being notified of the arbitration, Nichols
elected not to attend. Aliments was awarded $222,100 in
damages against Nichols by the arbitration panel. Sent a copy
of this award, Nichols refused to satisfy it. Finally, Aliments
filed a petition to confirm the arbitration award in the District
of New Jersey. In response, Nichols cross-petitioned to
vacate the arbitration award.

       After months of discovery, the District Court denied
Aliments’ petition and granted Nichols’s cross-petition to
vacate because no genuine issue of material fact existed as to
whether the parties failed to enter into “an express
unequivocal agreement” to arbitrate.8 We disagree, and for
the reasons set forth below we will vacate and remand for
further proceedings.9


8
  A 9.
9
  The District Court had diversity jurisdiction pursuant to 28
U.S.C. § 1332(a)(2) and 9 U.S.C. § 9. We have jurisdiction
to hear this appeal pursuant to 28 U.S.C. § 1291 and 9 U.S.C.
§ 16(a). “On appeal from a district court’s ruling on a motion
to confirm or vacate an arbitration award, we review its legal
conclusions de novo and its factual findings for clear error.”
Opalinski v. Robert Half Int’l Inc., 

, 330 (3d Cir.
2014) (emphasis added) (quoting Sutter v. Oxford Health




                               6
II.    Discussion

        On appeal, Aliments argues that the District Court
made two legal errors: first, the Court “erred in using a legal
standard requiring ‘an express unequivocal agreement’ to
arbitrate prior to binding a party to arbitration”;10 and second,
it erred in finding, as a matter of law, that the parties did not
enter into such an agreement to arbitrate. We will address
each of these arguments in turn.

       A.     Legal Standard

        The parties’ dispute regarding the proper legal
standard for determining whether the parties have made an
agreement to arbitrate is the result of courts’ changing attitude
towards the Federal Arbitration Act (“FAA”). In 1980, we
held in Par-Knit Mills, Inc. v. Stockbridge Fabrics Co. that
“[b]efore a party to a lawsuit can be ordered to arbitrate and
thus be deprived of a day in court, there should be an express,
unequivocal agreement to that effect.”11 In 1994, we
reiterated this standard in Kaplan v. First Options.12 That
case was appealed to the Supreme Court; and, in a decision
affirming on other grounds, the Court held that, “[w]hen
deciding whether the parties agreed to arbitrate a certain
matter . . . , courts generally . . . should apply ordinary state-


Plans LLC, 

, 219 (3d Cir. 2012), aff’d, 133 S.
Ct. 2064 (2013)).
10
   Appellant’s Br. at 2
11
   

, 54 (3d Cir. 1980).
12
   

, 1512 (3d Cir. 1994) (internal quotations
omitted).




                                7
law principles that govern the formation of contracts.”13
Though the Court’s holding appears to be a departure from
our express and unequivocal standard, that standard was
never expressly overruled.

       Over a decade later, we reexamined the express and
unequivocal standard in Century Indemnity Company v.
Certain Underwriters at Lloyd’s, London.14 We reviewed
how we have used the express and unequivocal standard in
the past, and acknowledged that the express and unequivocal
language has been used, confusingly, to establish two
different standards:

       On the one hand, we have stated the “express”
       and “unequivocal” requirement to explain that
       genuine issues of fact as to whether there is an
       agreement to arbitrate preclude compelling a
       party to submit to arbitration; on the other, we
       have used this language to state a substantive
       standard that applies to the determination of an
       arbitration agreement’s enforceability as a
       general matter.15

        In Century Indemnity, we held that the latter use of
express and equivocal as a substantive standard is no longer
valid after the Supreme Court’s decision in First Options of
Chicago, Inc. v. Kaplan held that courts should generally look
to the relevant state contract law to determine whether a valid

13
   First Options of Chi., Inc. v. Kaplan, 

, 944
(1995).
14
   

(3d Cir. 2009).
15
   

(footnote omitted).




                               8
agreement to arbitrate exists.16 But we did not strike down
the use of the express and unequivocal requirement to the
extent that it “requires that there not be a genuine issue of
material fact as to an arbitration agreement’s existence before
a district court may determine whether the agreement exists
as a matter of law.”17 Furthermore, in Century Indemnity, we
repeatedly made clear that, despite the express and
unequivocal language, “when determining whether there is a
valid agreement to arbitrate between the parties . . . we apply
ordinary state-law principles of contract law,” and no more.18

       Here, the District Court clearly used the express and
unequivocal standard to explain that it will decide the petition
to confirm the arbitration award and motion to vacate as a
matter of law only if there is no “genuine issue of fact
concerning the formation of the contract.”19 Therefore, to the
extent that the District Court meant to impose no more
stringent standard on the arbitration agreement than that
permissible under state law, it did not err. However,
Aliments’ confusion on this matter is understandable, and we
recommend that district courts avoid using the “express and

16
   

(citations omitted).
17
   

.
18
   

see also 

(“When deciding whether the
parties agreed to arbitrate a certain matter . . . , courts
generally . . . should apply ordinary state-law principles that
govern the formation of contracts. The relevant state law
here, for example, would require the court to see whether the
parties objectively revealed an intent to submit the
arbitrability issue to arbitration.” (quoting First 

)).
19
   A 10.




                               9
unequivocal” language. The legal standard is simply that we
apply the relevant state contract law to questions of
arbitrability, which may be decided as a matter of law only if
there is no genuine issue of material fact when viewing the
facts in the light most favorable to the nonmoving party.20

       Having established that the District Court, despite
unclear language, used the correct standard, we turn next to
Aliments’ second question on appeal: whether the District
Court correctly determined that the parties did not enter into
an agreement to arbitrate as a matter of law.

       B.     Analysis

        As previously stated, the ultimate inquiry of whether
the parties agreed to arbitrate is governed by the applicable
state law. In this case, the question of which state law should
apply is muddled. Aliments is a Canadian company seeking
to confirm an arbitration award issued in New Jersey by an
arbitration panel that used New York law against Nichols
Farms, a California company, for breach of a contract to
deliver goods in California that was largely negotiated by a
broker based in Georgia and a broker based in California.
Before the District Court, Aliments argued for New York law
to apply, and Nichols argued for California law to apply. The
District Court, however, made no findings about which state
law applied. Instead, based solely on general principles of
contract law, it granted Nichols’s petition to vacate the

20
  See Flintkote Co. v. Aviva PLC, 

, 219-20 (3d
Cir. 2014); In re Nortel Networks Inc., 

, 270 (3d
Cir. 2013); Invista S.A.R.L. v. Rhodia, S.A., 

, 84
(3d Cir. 2010).




                              10
arbitration award due to “a lack of evidence that any
agreement or sales confirmation was ever entered,” and
because “there is nothing to demonstrate that Nichols Farms
intended to arbitrate the matter.”21 We disagree with this
terse analysis.

       Because we look to applicable state law to determine
whether the parties agreed to arbitrate, we begin with a
choice-of-law analysis. To determine the applicable state
law, we use the forum state’s choice-of-law rule. The first
step in any choice-of-law inquiry under New Jersey law
requires the court to determine whether there is an actual
conflict between the laws of the potential forums.22 “That is
done by examining the substance of the potentially applicable
laws to determine whether there is a distinction between
them.”23 If there is no actual conflict, “the inquiry is over
and, because New Jersey would apply its own law in such a
case, a federal court sitting in diversity must do the same.”24
If there is an actual conflict, then the court must determine
“which forum has the most significant relationship with the
parties and the contract.”25




21
   A 9.
22
   Maniscalco v. Brother Int’l (USA) Corp., 

,
206 (3d Cir. 2013).

. ex rel. T.V. v. Camp Jaycee, 

, 460 (N.J.
2008) (citation and internal quotation marks omitted).
24
   Lebegern v. Forman, 

, 428 (3d Cir. 2006).
25
   Forestal Guarani S.A. v. Daros Int’l, Inc., 

,
401 (3d Cir. 2010) (citing State Farm Mut. Auto. Ins. Co. v.
Estate of Simmons, 

, 491 (N.J. 1980)).




                              11
        On appeal, the parties continue to rely on different
state laws: Aliments relies on New York law and Nichols
relies on New Jersey law.26 Both parties, however, agree that
there is no actual conflict between New York law and New
Jersey law.27 Consequently, we will apply New Jersey law on
contract formation.

       Under New Jersey law, “[a]n enforceable agreement
requires mutual assent, a meeting of the minds based on a
common understanding of the contract terms.”28 A party who
assents to a contract, however, is bound by all the terms of a
contract, even those terms that the party did not read or
specifically discuss.29 In addition to mutual assent, the New
Jersey Uniform Commercial Code requires that “a contract
for the sale of goods for the price of $500 or more” be set
forth in writing and “signed by the party against whom
enforcement is sought or by his authorized agent or broker.”30
But where the sales agreement is between merchants, the
signature requirement is satisfied “if within a reasonable time
a writing in confirmation of the contract and sufficient against
the sender is received and the party receiving it has reason to
know its contents,” and the receiving party does not give a




26
   Appellant Supp. Ltr. Br. at 2; Appellee Supp. Ltr. Br. at 1.
27
   Appellant Supp. Ltr. Br. at 2; Appellee Supp. Ltr. Br. at 2.
28
   Morgan v. Sanford Brown Inst., 

, 1180 (N.J.
2016) (citing Atalese v. U.S. Legal Servs. Grp., L.P., 

, 312-13 (N.J. 2014)).
29
   See Henningsen v. Bloomfield Motors, Inc., 

,
84 (N.J. 1960).
30
   N.J. Stat. Ann. § 12A:2-201(1).




                              12
“written notice of objection to its contents . . . within ten days
after it is received.”31

        Here, neither party has persuaded us that, under New
Jersey law, no issues of material fact exist as to whether the
parties agreed to arbitrate. We turn to appellant Aliments’
arguments first. Aliments asserts that Nichols “clearly
intended to be bound by the [Pacific sales confirmations] and
never mentioned any dispute regarding the arbitration clause”
contained therein.32 Specifically, Aliments points to evidence
in the record suggesting that Nichols acted as though it were
under a contractual obligation to sell the pistachios to
Aliments. For example, during the negotiations that took
place in an effort to resolve their dispute, Nichols suggested
that Aliments “void[] the existing purchase orders issued by
Pacific Atlantic”33 and sign a new agreement with
substantially similar sales terms but requiring pre-payment.
Separately, in an internal email from the CEO of Nichols, the
sales team was told to “delete the contract obligation.”34

        Aliments’ argument fails due to at least two issues of
material fact. First, as Nichols points out, there is a factual
dispute as to whether the Pacific sales confirmations that were
actually emailed to Nichols and Aliments contained
arbitration clauses.35 The record contains versions of the
Pacific sales confirmations that do include the arbitration


31
   

32
   Appellant’s Br. at 18.
33
   A 210.
34
   A 213
35
   See Appellee Supp. Ltr. Br. at 3.




                               13
clauses,36 and versions that do not.37 Second, the record
suggests that even though Nichols may have referred to the
sales confirmations as “purchase orders” or “contract
obligation[s],”38 that does not necessarily mean that Nichols
viewed the Pacific sales confirmations as binding contractual
agreements. For example, Nichols’s Regional Sales Manager
stated that it is his understanding that Nichols does not
“accept” buyers’ offers to purchase until they pass a credit
check.39 Indeed, after Nichols received the Pacific sales
confirmations, it continued to request a credit application
from Aliments.       Furthermore, the president of Pacific
corroborated the fact that, to the best of his knowledge based
on industry standards, the parties did not enter into a binding
contract because neither party ultimately signed the sales
confirmations.40 In sum, we cannot hold definitively that
Nichols assented to binding sales agreements containing
arbitration clauses.

        At the same time, Nichols’s arguments asking us to
affirm the District Court’s grant of its petition to vacate the
arbitration award also fail. Nichols makes three categories of
arguments. First, it relies on the fact that neither party signed
any of the sales confirmations and that the rules imposed by
the Association of Food Industries, the chosen arbitrator,
required “the presence of signatures by both parties.”41 This
reliance is misplaced. As reiterated above, under New Jersey

36
   A 29; A 31.
37
   A 237; A 243.
38
   A 210; A 213.
39
   A 84.
40
   A 75.
41
   Appellee’s Br. at 11.




                               14
state law, bills of sale between two merchants need not be
signed in order to be binding as long as certain other
conditions are met. The arbitrator’s own procedural rules,
such as requiring both parties’ signatures, are to be decided
by the arbitrator, rather than the court, unless otherwise
provided for in the contract.42 The lack of signatures clearly
did not prevent the arbitrator in this case from concluding that
Aliments and Nichols entered into a binding sales contract,
and that is not a conclusion that we have been asked to
review. Thus, our review is limited to examining whether,
within the bounds of New Jersey state law, the parties made
an agreement to arbitrate, and under New Jersey law, a lack
of a signature in an agreement between two merchants is
simply not dispositive.

      Second, Nichols argues that the Pacific sales
confirmations “fail to satisfy the merchant’s exception to the
general signature requirement”43 because they are not


42
   Howsam v. Dean Witter Reynolds, Inc., 

, 84
(2002) (While, generally, “a gateway dispute about whether
the parties are bound by a given arbitration clause raises a
question of arbitrability for a court to decide . . . .
[P]rocedural questions which grow out of the dispute and bear
on its final disposition are presumptively not for the judge,
but for an arbitrator, to decide.”(internal quotations and
citations omitted)); see also BG Grp., PLC v. Republic of
Arg., 

, 1207 (2014) (“[C]ourts presume that
the parties intend arbitrators, not courts, to decide disputes
about the meaning and application of particular procedural
preconditions for the use of arbitration.”).
43
   Appellee Supp. Ltr. Br. at 4.




                              15
writings “in confirmation of the contract[s].”44 Specifically,
Nichols argues that the Pacific sales confirmations fail
because they “bear blank signature lines for the buyer and
seller and still require sales confirmation numbers from
Nichols Farms.”45 We disagree with Nichols’s proposition
that these deficiencies rendered the Pacific sales
confirmations incomplete as a matter of law where the sales
confirmations included all the essential terms of a sales
contract: price, quantity, delivery, and payment method.46

44
   N.J. Stat. Ann. § 12A:2-201(2).
45
   Appellee Supp. Ltr. Br. at 4.
46
   Cf. Berg Agency v. Sleepworld-Willingboro, Inc., 

, 422 (N.J. Super. Ct. App. Div. 1975) (“[P]arties may
effectively bind themselves by an informal memorandum
where they agree upon the essential terms of the contract and
intend to be bound by the memorandum, even though they
contemplate the execution of a more formal document.”).
Nichols also argued that we should not address any arguments
relying on the Pacific sales confirmations because “Aliments
did not rely on the [Pacific] sales confirmations in its petition
to confirm” before the District Court. Appellee’s Br. at 12.
This is simply a misrepresentation of the facts. Aliments, in
its original petition to confirm arbitration award, specifically
referenced, and attached, the Pacific sales confirmations as
bases for confirming the award. Mem. of Law in Support of
Petition to Confirm Final Arbitration Award, Aliments Krispy
Kernels v. Nichols Farms, No. 3:13-cv-5995 (D.N.J. Oct. 8,
2013), ECF No. 1-1. There may, however, exist a question as
to whether the Pacific sales confirmations satisfy the
merchant’s exception to the general statute of frauds as
writings “in confirmation of the contract[s]” because they
may not sufficiently make reference to prior oral agreements.




                               16
       Third and last, Nichols argues that the merchant’s
exception does not apply because Nichols “advised [Pacific]
before and after the confirmations issued that it wanted
payment terms not reflected therein and, the day before the
second confirmation, told [Pacific] to have ‘[its] buyer’
comply with the terms Nichols Farms wanted.”47 The
merchant’s exception applies to unsigned written


See Trilco Terminal v. Prebilt Corp., 

, 1240
(N.J. Super. Ct. App. Div. 1979) (holding that the merchant’s
exception in N.J. Stat. Ann. § 12A:2-201(2) is satisfied only
if the written confirmation indicates “that a binding or
completed transaction has been made”). Nichols did not
make this argument, however, and has thereby conceded that
the Pacific sales confirmations sufficiently reference a prior
oral agreement between the parties. Moreover, New Jersey’s
interpretation of N.J. Stat. Ann. § 12A:2-201(2) is in direct
conflict with New York’s interpretation of the same Uniform
Commercial Code provision. In Bazak International Corp. v.
Mast Indus., Inc., 

, 636 (N.Y. 1989), the New
York Court of Appeals explicitly “reject[ed] the exacting
standard proposed by Trilco and Norminjil [a subsequent
federal case applying Trilco] as inconsistent with the letter
and spirit of the relevant UCC sales provisions.” Instead, the
Court of Appeals held that written confirmations are
sufficient to satisfy the merchant’s exception so long as “they
afford a basis for believing that they reflect a real transaction
between the parties.” 

Here, Nichols explicitly
conceded that “there is no conflict between the applicable
New York and New Jersey rules,” and so we can only
surmise that Nichols does not wish to apply Trilco to this
case. Appellee Supp. Ltr. Br. at 1.
47
   Appellee Supp. Ltr. Br. at 7.




                               17
confirmations “unless written notice of objection to [their]
contents is given within ten days after [they are] received.”48
Nichols posits that its repeated requests for Aliments to
complete a credit application satisfy, as a matter of law, the
exception to the exception. We cannot so find because the
record before us lacks evidence of any written notice of
objection. Instead, we have an email from Nichols to Pacific,
dated one day before the September Pacific sales
confirmation was sent, requesting Pacific to “remember to
send the credit application to [its] buyer at the same time [it]
sends [Nichols] the P[urchase] O[rder].”49 In deposition
testimony, the president of Nichols stated that he assumes that
“there would either have been something in writing or
something over the phone” to inform Pacific that, though
Nichols had agreed to the quantity and price as reflected in
the sales confirmations, it did not agree to sell the pistachios
on credit with payment due in 30 days.50 He then added that
“[q]uite often it’s done verbally.”51 However, he also
testified that there was correspondence “from the beginning
of August into the end of November about Aliments [and] the
credit process with Aliments,” suggesting that, perhaps, there
may have been writings between the parties but it is not clear
from this testimony that any of them embody the “written
objection” required under New Jersey law.52 In short, there
remains an issue of material fact as to whether Nichols sent a
written notice of objection regarding the Pacific sales
confirmations within ten days after they were received.

48
   N.J. Stat. Ann. § 12A:2-201(2).
49
   A 89.
50
   A 183.
51
   

184.




                              18
                           * * *

       In sum, contrary to the District Court’s analysis that
there is “a lack of evidence that any agreement or sales
confirmation was ever entered,” we find that multiple issues
of material fact exist, precluding us from entering judgment
in favor of either party.53




53
     A 9.




                             19
III.   Conclusion

       For the foregoing reasons, we will vacate and remand
to the District Court for further proceedings.




                            20