The “Checked-Box Rule”: Sixth Circuit Confines Non-Signatories’ Power to Compel Arbitration

1. Introduction

ORG Holdings Ltd. v. BMW Financial Services NA, LLC, No. 24-3929 (6th Cir. Aug. 21, 2025) presented a deceptively simple question: may a non-signatory servicer (BMWFS) force a lessee (ORG Holdings) into arbitration when the operative lease contains express language identifying another entity (FSVT) as the “Lessor’s assignee” via a prominently checked box?

The facts arose from a high-end car lease destroyed in a crash, leaving an insurance surplus. BMWFS—tasked only with servicing—kept the surplus. ORG responded with a single, state-law unjust-enrichment claim in Ohio court that BMWFS removed to federal court. BMWFS then sought to compel arbitration under the lease. Both the district court and, on appeal, the Sixth Circuit refused, forging a clear rule: when contract text unambiguously allocates arbitration rights to identified parties, courts will not bend policy preferences to let a disclaimed non-signatory arbitrate.

2. Summary of the Judgment

Writing for a unanimous panel, Judge Clay affirmed the district court’s denial of BMWFS’s motion to compel arbitration. Key holdings include:

The lease’s arbitration clause bound only the “Lessee,” the “Lessor,” and the entity ticked as “Lessor’s assignee.”
The dealership’s choice, done by checking a box, deliberately excluded BMWFS and substituted FSVT; that textual choice governed.
Under Ohio contract law, BMWFS was neither (i) an intended third-party beneficiary, (ii) an affiliate with enforcement rights, (iii) an agent entitled to enforce despite the express limitation, nor (iv) a party entitled through equitable estoppel.
Arguments raised for the first time in a reply brief below (equitable estoppel) were forfeited on appeal.

Accordingly, the unjust-enrichment claim proceeds in court.

3. Analysis

3.1 Precedents Cited and Their Influence

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) — Reiterated the FAA’s policy favouring enforcement “according to their terms.” The panel invoked Concepcion to underscore that policy goals cannot override text.
EEOC v. Waffle House, Inc., 534 U.S. 279 (2002) — Offered the foundational principle that federal policy aids arbitration only when the parties actually agreed to it.
Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) — Confirmed that state contract law decides “who” is bound by arbitration clauses. The court thus applied Ohio law.
AtriCure, Inc. v. Meng, 12 F.4th 516 (6th Cir. 2021) — Provided Sixth Circuit guidance on non-signatories using third-party-beneficiary and agency theories. The panel quoted AtriCure for the “neutral state-law rule” limiting enforcement.
Ngo v. BMW of N. Am., LLC, 23 F.4th 942 (9th Cir. 2022) — A strikingly similar auto-lease case. The Sixth Circuit leaned on Ngo to illustrate why merely being “close” to the transaction is not enough to imply intended benefit.
Smith v. Javitch Block, L.L.C., 2021 WL 4340805 (Ohio Ct. App.) — Ohio precedent where limiting language defeated an agency-based bid to compel arbitration. The Sixth Circuit treated it as directly analogous.
I Sports v. IMG Worldwide, Inc., 813 N.E.2d 4 (Ohio Ct. App. 2004) — Guided the equitable-estoppel analysis; mere “but-for” relation to a contract is insufficient.

3.2 Court’s Legal Reasoning

a. Contract Text Controls (“Checked-Box Rule”)

Section 2 of the lease supplied two potential assignees; the dealership checked the FSVT box, thereby sidelining BMWFS. The arbitration paragraph mirrored that nomenclature. The court treated this mechanical act—checking a box—as conclusive evidence of intent.

b. Rejection of Non-Signatory Theories

Third-Party Beneficiary. Ohio law requires intent to benefit the third party. The clause authorised only the parties named in the definition of “you.” Inclusion of BMWFS elsewhere (administration power) could not trump the explicit limitation on arbitration rights.
Affiliate Relationship. Simply being “related” to a signatory does not create contractual rights; Ohio confines enforcement to contracting parties or intended beneficiaries.
Agency. Even a duly appointed agent cannot override explicit contractual language conferring rights solely on the principal. Smith v. Javitch supplied persuasive Ohio authority.
Equitable Estoppel. (i) Argument deemed forfeited, and (ii) in any event, unjust-enrichment did not rely on lease terms—only on the factual relationship—so the estoppel test failed.

c. Policy v. Party Autonomy

The opinion repeatedly emphasises that FAA policy “moves only with the contract.” By cabining that policy, the court reinforced the primacy of party autonomy—a theme consistent with Volt and Waffle House.

3.3 Likely Impact

Transactional Drafting. Auto-finance and other consumer-finance contracts often list default assignees and checkboxes. This decision warns drafters: a simple checkbox carries dispositive weight; if servicers need arbitration rights, the document must say so expressly.
Arbitration Litigation. Non-signatory defendants—especially affiliated finance or servicing entities—now face a higher hurdle in the Sixth Circuit. They must demonstrate both privity and explicit arbitration authority.
Clarification of Ohio Law. By synthesizing disparate intermediate-court decisions (e.g., Sutherland, Smith v. Javitch), the opinion offers a consolidated roadmap for when non-signatories cannot invoke arbitration.
Class Actions. Plaintiff-side counsel pursuing surplus-insurance or total-loss disputes will cite this ruling to keep actions in court, increasing exposure for auto-finance companies.

4. Complex Concepts Simplified

Non-Signatory. A person or entity that did not sign the contract containing an arbitration clause.
Third-Party Beneficiary. Someone who is not a party but whom the contracting parties intended to benefit directly. Ohio distinguishes “intended” (enforceable) from “incidental” (not enforceable) beneficiaries.
Agency. A legal relationship where one party (agent) acts on behalf of another (principal). Ordinarily the agent may share the principal’s contract rights, unless the contract expressly limits them.
Equitable Estoppel in Arbitration. Prevents a signatory from avoiding arbitration when its claims rely on a contract containing the clause, or when it alleges intertwined misconduct between signatory and non-signatory.
FAA Policy. The Federal Arbitration Act favours arbitration but does not supersede contract language; it is a policy of enforcing agreements as written, not forcing arbitration where none was promised.

5. Conclusion

ORG Holdings v. BMWFS crystallises a straightforward yet powerful proposition: when contracting parties speak clearly—here, by ticking a single box—the courts will not permit policy arguments, agency labels, or creative estoppel theories to rewrite that choice. The “Checked-Box Rule” therefore stands as a sharp reminder: entity status (servicer, affiliate, agent) is irrelevant unless the contract bestows arbitration power. Going forward, stakeholders in asset-backed securitizations, leasing, and consumer finance must scrutinise their document suites; otherwise, they may find themselves litigating in court despite the broader industry trend toward arbitration.