# Stewart Title Co. v. Qualia Labs, Inc. Supreme Court of Texas, No. 25-0686 **Stewart Title Co. v. Qualia Labs, Inc., No. 25-0686, is before the Supreme Court of Texas. Key issue: Justice Busby dissented from the denial of review in a dispute over whether a contract's arbitration clause (incorporating the AAA Rules) or its separate "notwithstanding anything to the contrary" provision reserving injunctive-relief claims for court controls the threshold question of who decides arbitrability.** Practice areas: arbitration ## Key issues - Justice Busby dissented from the denial of review in a dispute over whether a contract's arbitration clause (incorporating the AAA Rules) or its separate "notwithstanding anything to the contrary" provision reserving injunctive-relief claims for court controls the threshold question of who decides arbitrability. - He argued Texas courts of appeals need guidance on what limiting language defeats delegation of arbitrability to an arbitrator, since this contract's notwithstanding clause should override the AAA Rules under ordinary contract-interpretation principles, and he would have granted the petition to resolve it. ## Factual History Stewart Title Company (STC) paid millions of dollars for a perpetual, irrevocable license to Qualia Labs, Inc.'s title-production software, which about 4,000 STC employees use daily; it says Qualia threatened to terminate the license to extract a higher payment (Petition for Review (Petitioner), PDF pp. 13-14). The agreement's dispute-resolution clause requires arbitration "using the then-current rules of" the American Arbitration Association (AAA), but a separate provision says "[n]otwithstanding anything to the contrary in this Agreement" either party may seek injunctive or other equitable relief in court when that is the only appropriate relief, and a "Remedies" provision lets either party seek injunctive relief in court if it would be unable to operate its business (Petition for Review (Petitioner), PDF pp. 11, 13-14; Busby, J., dissenting, PDF p. 1). STC sued for injunctive and declaratory relief and Qualia commenced arbitration at nearly the same time (Petition for Review (Petitioner), PDF p. 14). ## Procedural History This is a petition for review of a court of appeals judgment. In March 2024 the trial court (11th District Court, Harris County) denied Qualia's motion to abate, stayed and enjoined the arbitration, and granted STC summary judgment permanently enjoining Qualia from terminating the agreement; it later awarded STC part of its attorney's fees, making the orders final (Petition for Review (Petitioner), PDF pp. 8, 14-15). The Fourteenth Court of Appeals reversed on May 29, 2025, holding that incorporating the AAA rules clearly and unmistakably delegated all arbitrability issues, including arbitrability of injunctive relief, to the arbitrator, and denied rehearing (Petition for Review (Petitioner), PDF pp. 8, 16; Response to Petition (Respondent), PDF p. 16). The Court denied review on September 25, 2026, with Justice Busby dissenting (Busby, J., dissenting, PDF pp. 1, 9). ## Issues Presented STC presents one issue: whether the parties clearly and unmistakably delegated arbitrability of injunctive relief to the arbitrators when the remedies provisions allowing injunctive relief in court make no reference to arbitration rules (Petition for Review (Petitioner), PDF p. 11). Qualia frames the issue as whether, when the arbitration provision adopts the AAA rules and a provision addressing injunctive relief does not expressly reserve arbitrability to a court, the arbitrator decides arbitrability (Response to Petition (Respondent), PDF p. 9). ## Standard(s) of Review The petition relies on the presumption that courts, not arbitrators, decide arbitrability unless there is clear and unmistakable evidence of delegation, and on the rule that a contract must be read as a whole so that no provision is meaningless (Petition for Review (Petitioner), PDF pp. 17, 29). Justice Busby states the same presumption (Busby, J., dissenting, PDF pp. 2-3). ## Legal Arguments **Whether the parties delegated arbitrability of injunctive relief to the arbitrator.** **Petitioner (STC):** The parties did the opposite of clearly delegating the issue to the arbitrator: two standalone remedies provisions, neither mentioning the AAA rules, allow injunctive relief in court, and courts may not ignore a "notwithstanding anything to the contrary" clause; reading the contract as a whole, the presumption that courts decide arbitrability prevails (Petition for Review (Petitioner), PDF pp. 17, 29; Reply to Response (Petitioner), PDF p. 6). *TotalEnergies* is distinguishable because it involved a carve-out inside the arbitration clause itself and an agreement to arbitrate "in accordance with" the AAA rules, whereas here the contract says only "using the then-current rules of" the AAA (Reply to Response (Petitioner), PDF p. 15). **Respondent (Qualia):** Section 13.1.2 incorporates the AAA rules, which under Texas law means the arbitrator decides arbitrability; the injunctive-relief provisions address only the scope of arbitrable claims and are silent on who decides arbitrability, and "notwithstanding" does not isolate them from the rest of the agreement, so *TotalEnergies* directly controls (Response to Petition (Respondent), PDF pp. 17-18). **Whether review is warranted.** **Respondent (Qualia):** The petition raises only case-specific questions about this contract's language, resolved by *TotalEnergies*, and so presents no question important to the jurisprudence of the State; courts have already supplied guidance on limiting delegation (Response to Petition (Respondent), PDF pp. 8, 18, 29). **Justice Busby (dissenting from the denial):** The notwithstanding provision controls over the conflicting adoption of the AAA rules under *G.T. Leach*, and *TotalEnergies* is different because the language there created a condition precedent to incorporating the AAA rules, while here a notwithstanding clause is an even stronger signal that a court decides (Busby, J., dissenting, PDF pp. 2, 4-6). ## Stated Reasons the Court Should Take the Case STC argued that the case presents an important question *TotalEnergies* left open, how parties can limit their delegation of arbitrability to certain claims or remedies, that no appellate court has since found a successful limitation, and that review would give guidance to drafters, litigants, and courts (Petition for Review (Petitioner), PDF pp. 9-10; Reply to Response (Petitioner), PDF p. 4). Justice Busby makes the same point, noting that the courts of appeals cannot agree on what limiting language is sufficient (Busby, J., dissenting, PDF pp. 2, 8). ## Practice Area Tags arbitration ## Procedural Posture/Vehicle Petition for review from the Fourteenth Court of Appeals, denied September 25, 2026, with a dissent from the denial by Justice Busby (Busby, J., dissenting, PDF pp. 1, 9). ## Amicus Involvement None ## Court's Reasoning The Court gave no reasons for denying review; the only writing is Justice Busby's dissent, which is one Justice's view, not a holding (Busby, J., dissenting, PDF p. 1). He wrote that had the case been filed in federal court in Texas, a court rather than an arbitrator would have decided arbitrability under the Fifth Circuit's *Archer & White* decision, and that although this Court has split from the Fifth Circuit, it has recognized that parties can contractually limit the delegation of arbitrability to certain claims (Busby, J., dissenting, PDF p. 2). American courts are sharply divided on whether a limited incorporation of the AAA rules still clearly delegates arbitrability, and in *TotalEnergies* he dissented because the language there created a condition precedent to incorporating the AAA rules (Busby, J., dissenting, PDF pp. 3-5). Here the parties used a notwithstanding provision, which under Texas contract law prevails over any conflicting provision, so it controls over the adoption of the AAA rules; he criticized the Tenth Circuit's *Brayman* and the Kentucky Supreme Court's *Ally Align* for treating such a clause as a mere carve-out, and said courts must first confirm the claim falls outside the notwithstanding provision before sending arbitrability to an arbitrator (Busby, J., dissenting, PDF pp. 5-7). He could not say the parties clearly and unmistakably delegated arbitrability, and he would have granted review to explain what contractual language successfully limits a delegation (Busby, J., dissenting, PDF p. 8). ## Disposition Petition for review denied (Busby, J., dissenting, PDF p. 9). ## Vote Breakdown Justice Busby dissented from the denial of the petition for review; no other Justice is shown joining (Busby, J., dissenting, PDF p. 1). --- Source: The SCOTX Report, https://scotxreport.com/cases/25-0686. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.